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Maurizio's avatar

I'm not familiar enough with the Sierra group to be sure, but I think you are severely strawmanning their position.

The point is not to make the consumers worse off, but to do "more with less". People don't care how much electricity is entering their home, they care how much "services" they get out of it. Heating, light, air conditioning, etc.

You would much prefer a LED light that illuminates more (say 500 lux) and consumes 20 watts rather than an incandescent that's dimmer (300 lux) but consumes 100 watts.

The best kW Is the one not spent *while you are also getting the same light, heat or highway distance*

"Efficiency" plays are not in contrast with increasing the supply side. We can plan to have plentiful and cheap energy while also making it "go farther".

The tricky things is that cheap supply does not encourage efficiency, it encourages waste. See the effect of low gasoline price in the middle east or the USA itself.

So it makes sense for government to encourage households to save through the price lever and higher consumer prices. But these "extra profits" should be reinvested in the grid and in extra production, to have even more plentiful energy in the future.

Family Dinner's avatar

Kind of a weird article that oversimplifies a lot of legitimate complications. Yes, electrifying everything will require more infrastructure, but how much of it is generation (merchant, competitive) vs transmission and distribution (regulated monopoly) depends on the policy paradigm. T&D utilities make more money the more they build, and a lot of public utilities commissions are inclined to approve their proposed investments, the cost of which is all rate based.

As for dynamic pricing and demand response, they absolutely can reduce the need for new infrastructure investments. They don't decrease the total demand for energy - they can actually increase it - but they shift it around in time to utilize the system more efficiently.

Mike's avatar

Imagine if we could get everyone up in arms about datacenter water usage to actually care about water usage, we’d be able to make actual progress on energy policy and so many other things.

Kevin's avatar

This confirms my impression that "affordability" is a Malthusian nightmare. Abundance all the way.

Mr. Toucan's avatar

The Rocky Mountain Institute built its headquarters on undeveloped rural land next to a river in the middle of the Rockies such that their employees have to commute by car and yet they have the audacity to instruct people about environmentalism…

What in Tarnation's avatar

Small point but electrifying trains is actually very easy, we had fully electric freight and passenger lines more than 100 years ago including an electrified transcontinental railroad. Locomotives use a Diesel engine to make electricity to power electric motors, you can just string wires up and dump the diesel engine. We almost did this in the 1970s during the oil crisis. Most class 1 railroads hate capital expenditures so they don't do it in the United States, but we've had that technology working since before we had gasoline cars that could haul cargo.

Alan Nogee's avatar

Matt fundamentally misunderstands Lovins and Stokes. Lovins has always been about delivering MORE ENERGY SERVICES using less energy. That is his definition of efficiency, and it is not contrary to energy abundance, just wasteful abundance.

And Stokes is correct that high rates of return have always and continue to distort utility investments into gold-plated options that are not the most economical or efficient way of delivering energy services. You will see, as one example, that as the infatuation that Matt and many others now have with nuclear leads to lots of waste and stranded assets and the collapse of the nuclear soufflé, to borrow an analogy that Michael Liebreich coined to refer to the collapse of the over-hyped hydrogen economy that we are already seeing.

If Small Modular [nuclear] Reactors actually end up delivering manufacturing economies of scale, great! But they are still vaporware. And a lot of the hype and investment in 300 MW reactors, and talk of reviving new 1,000 MW reactor construction, is not about SMRs, or Gen IV technology, but same old same old technology driven by poor utility incentives, and is going to go bust as it has before.

Work by the Sierra Club, Lovins, Stokes, NRDC, and others Matt would deride has helped lead to far greater energy efficiencies and the achievement of economies of manufacturing scale of solar and wind and batteries that can actually enable an abundance agenda in energy services.

Pierre Delecto's avatar

I work for a major electricity supplier, analyzing and forecasting electricity consumption. I have done this work for over a dozen years. It is still interesting after all this time because of all of the changes in the industry.

One thing that has stayed constant: my company's millions of residential customers have, on average, been reducing their usage every year. The drop is between 0.5 and 1% annually. This is true everywhere we have customers - TX, NY, you name it.

The reason for this is straight up energy efficiency, which hasn't decreased anyone's living standards. Today's air conditioning units are more efficient (have a higher SEER rating) and make spaces more comfortable than older units. New TVs are both larger and better, but also more energy efficient. The same is true for pretty much every appliance in your house.

As a corollary to this, demand response and time of use pricing work really well. These are slam dunk ways to get more bang per buck spent on your electric bill.

I totally agree that we need to construct more power plants, and that EE, DR, and TOU rates are not sufficient to power our electrical transition, but it these tools have their place and are an important part of a well outfitted policy toolkit.

Kevin Matthews's avatar

So it is absolutely true that some environmental groups have degrowth/pastoral tendencies and this is incredibly problematic in decarbonizing quickly and building low carbon infrastructure we need, but Amory Lovins should never be confused as someone who is promoting this and I wonder how anyone could actually be familiar with what he's written if they think this. Saul Griffith is another person who has explained these topics very well. Oil and gas an inherently wasteful!

Edward Scizorhands's avatar

> People aren’t going to switch to electric cars and electric home heating if doing so raises their fuel costs,

They will if we make the other forms illegal.

Steve Robins's avatar

Figured this might be the place to get smartest comments - If the regulated rate of return on equity is equivalent to the cost of equity capital, why do most utilities trade above book value of equity?

Victoria Harmon's avatar

This post misses a number of things...

1. It's not about building less infrastructure its about more efficient utilization of what we have. The utility business model favors capital investment, not capital efficiency. Yes, we need more electricity but to deal with both the demand and affordability issues, the fastest and often cheapest solutions are distributed since they avoid upgrades in transmission and distribution.

2. Utilities always have an unlimited amount of capital that they can deploy. The business challenge for a utility is that purely on economics, a utility will invest in capital that will be fully utilized. Since costs are allocated based upon usage, if it is fully used, there is no impact on rates, but the aggregate amount of utility profit increases since there is an increase in the rate base. Utilities can't follow pure economics because there are investments that meed to be made that don't have high utilization (think, for example, new EV charging infrastructure or upgrades in anticipation of future demand. The point here isn't to require utilities to earn a lower rate of return, but by increasing capacity utilization, utilities can earn more profit while having a moderating effect on rates.

3. Of course, some of the solutions required to increase capacity utilization would require some change in both utility behavior and business model. As it is now, utility financial incentives are not directly aligned with customer bills; they are instead related to capital deployment. Betting alignment would mean creating financial incentives not just for energy efficiency but also for balancing the load. It does cost more to produce electricity at different times of the day and the infrastructure required to build for peak demand is very expensive. Customers also pay for wholesale generation capacity that is hardly used as well. In restructured markets, utilities would need to partner with distributed solutions providers to reduce peak power costs, capacity payments, line losses and O&M costs; these are all cost savings opportunities for the benefit of all customers and also provide additional non rate based compensation for the utility.

Joe's avatar

This is a cartoonish, hippie-punching fiasco of an article that would take an entire day to refute at equal or greater length (which I'm sure somebody on the internet will do shortly), so I will confine myself to commenting on the grotesque and inaccurate presentation of Amory Lovins and his work. Start by noting that the graph MY reproduces is from Soft Energy Paths, which was published in 1976 (in the depths of the 1970s "Energy Crisis"), and that the graph does not indicate anything about "degrowth" -- it posits that a shift to non-fossil fuels as energy sources could support total US energy use in 2025 at the level of about 65 quadrillion BTUs ("Quads") of total energy (the graph is a little hard to read).

Fast forward to 2023, when the Lawrence Livermore National Lab's famous Sankey chart shows the US using about 93 Quads of "primary" energy, while receiving only 32.1 Quads of useful energy services but wasting 61.5 Quads of primary energy, almost all of which are heat losses from the combustion of fossil fuels. The most thorough estimates of our hypothetical current energy use under the "soft path" of using non-fossil electrification to replace fossil fuels for all forms of combustion-based energy are about 50% of the status quo.

In other words, we'd use 50% less primary energy (or 46.5 Quads) to get the same 32.1 Quads of energy services. That's almost 20 Quads LESS than Lovins's "projection", reflecting the fact that "soft path" technologies and related improvements in process and design have delivered even more efficiency than Lovins could have predicted... 50 years ago. Lovins's projection of about 65 Quads of "soft path" energy would support a much bigger economy that we have today. MY's claim that this chart reflects a "no-growth" of "1975" sized economy is just false.

And in fact, economic growth decoupled from growth in energy use is what Lovins's work has always been about. Anybody who has seriously looked at his work (rather than digging into the wayback machine for what he hoped would be an embarrassing anecdote from half a century ago) will be struck by relentlessly obsessed he is with the efficient use of energy, not conservation. "Efficiency" is the delivery of the same end services of similar or higher quality using less primary energy. "Conservation" is the use of fewer end services (turning down the thermostat, walking instead driving, etc.). MY seems deeply confused about the difference between these two concepts, so lashes out wildly in an attempt to lump people who want to pursue greater levels of efficiency with hippies who want to live in yurts. The latter do not consult with major corporations on how to build millions of square feet of office and manufacturing space to produce more GDP with fewer units of primary energy through better designs and better engineering, which was Lovins's and RMI's primary activity for many decades.

This was a sorry, sloppy, intellectually dishonest piece in a number of dimensions, but the stuff about Lovins is truly absurd. Many people believe that MY is a huge fossil booster/apologist and is happy to see the world burn as long as the Dems hold Pennsylvania. I'm not quite there yet, but shitty work like this really makes me wonder.

Dan Schroeder's avatar

I'm not ready to praise Lovins quite so much. He was dead wrong about nuclear power, and he turned out to be wrong about ultralight fuel-cell "hypercars" (he underestimated improvements in batteries). More broadly, when I look back on his early writing I just find it to be full of exaggerations. But in the 1970s the energy system really was incredibly wasteful, so he was right to point out the environmental *and economic* benefits of efficiency.

Joe's avatar

Fair enough about nuclear power, which I also wish we had more of today. But note that Lovins's opposition was at least in part an economic efficiency argument that has proven to be true since at least Three Mile Island. The hypercar argument was about weight v energy for propulsion, which still holds true for ICEV and EV (and HV for that matter). Ultra-lighted EVs using carbon fiber body panels and other parts would be more efficient that what we drive today, which would be particularly useful for EVs trying to extend range and lower total battery size/weight/cost. While it's true that a massive increase in battery capability and production capacity has swamped the light-weighting argument...for now, it remains a relevant consideration and may yet re-emerge. It's more dependent on the particulars of mass-manufacturing carbon fiber parts than on the relationship between mass and the energy required to propel it. The thrust (NPI) of Lovins's overall claims about the power of efficiency gains over time is that they compound in multiple places simultaneously with good engineering, even if it's hard to predict exactly which branch of tech or manufacturing discipline takes the lead at any particular point in time.

Dan Schroeder's avatar

Those are all good points.

I would still argue that most of Lovins' work has been tainted by motivated reasoning. He tends to assume that the unknowns will be resolved in the direction he wants.

It's certainly true that coal is cheaper than nuclear (if we ignore externalities), but that wasn't the only argument against nuclear that Lovins made. Even before climate was on the radar, he should have been more concerned with the toxic emissions of coal. And he should have been more realistic in his assumptions about how soon renewables could affordably replace coal.

When I first read about hypercars (I think he briefly called them supercars), I was sold, for the same physics reasons you cite. But I know nothing about manufacturing costs, or the finer points of auto safety, or a myriad of other engineering details that go into car design.

Joe's avatar

I would argue that in both cases Lovins was motivated by technology trends, and that over the course of 50 years everybody's assumptions about what is going to work and what is going to fail will be imprecise. In the mid 70s, there was huge enthusiasm for coal gasification ( a Carter administration thing encouraged by Lovins) because coal is what we had and the great fear was a global shortage of liquid fuels derived from petroleum, which is what we used (we had both a lower level of electrification throughout the economy and higher dependence on petroleum back then). The objective was to reduce petroleum dependence because it was scarce, not to promote coal per se. As for motivated reasoning... not sure that this applies to much except perhaps a negative attitude toward nuclear. I think the motivation from the beginning has been to point out the many ways in which better design and implementation of efficiency measures leads to cheaper energy "generation". That vision has been vindicated, with the US economy producing every unit of GDP with about 65% less primary energy than it used in the 70s. Many of those efficiencies came from domains that did not even exist in that era, but have yielded gains by under the basic principles Lovins articulated long ago.

Juliet Bishop's avatar

The part about California being a standout, especially around electricity efficiency, could be investigated a bit further. California is basically the only state that has decoupled the revenue the investor owned utility can make from the amount of electricity it sells.

This aligns incentives in California, much more than other states, to push for greater electricity efficiency because the utility's revenue model isn't tied to selling more electricity to the consumer.

That has other perverse incentives though around lack of capital investment in the system, in transmission and distribution as well as generation capabilities. Which, considering the rise of wildfires in California, might signal a problem with this method of decoupling.

Natural gas is a pretty spooky path to go down, and short term is constrained by the lack of turbine availability (massive backlogs). That does mean solar + storage is likely the quickest to deploy firm(ish) power option.

Marc Robbins's avatar

Today is another instance where the comments are far superior to the original post.

Great community here on SB.

Dan Schroeder's avatar

The word "rationing" seems unfair and I think it'll keep a lot of people who should read this essay from reading it.