RMI Report: Energy Efficiency is Fundamentally Undervalued

December 05, 2018

A new paper by the co-founder and chief scientist of the Rocky Mountain Institute (RMI) seeks to challenge conventional wisdom when it comes to energy efficiency, positing that the size and cost of the potential resource base is much larger and cheaper than previously believed. The misunderstanding is fundamental, according to physicist Amory Lovins. By examining individual energy-consuming technologies, rather than the whole buildings, vehicles and factories which they power, the industry is significantly underestimating the resource. 

Much of today's climate change thinking argues that the world has to use energy at least 3% more productively each year in order keep the planet from warming more than 2 degrees Celsius over pre-industrial levels, explains RMI. Lovins' research argues the world can sustain those rapid efficiency savings — slightly above the 2015 peak of 2.8% per year — far easier than was previously thought. 

EE Picture

There are a wide range of existing estimates on efficiency savings potential and Lovins' paper does not come to a specific conclusion in terms of dollars saved or megawatt-hours conserved. Instead, he aims to illustrate that the resource potential is fundamentally misunderstood and growing larger, rather than shrinking.

Take this idea, contrasting efficiency with oil deposits:

"Oil deposits and orebodies are finite assemblages of atoms; mining and dispersion deplete their negentropy," Lovins writes. "But energy efficiency resources are infinitely expandable assemblages of ideas that deplete nothing but stupidity — a very abundant if not expanding resource."

Lovins repeatedly contrasts efficiency with the oil and gas sector, where only demonstrated and measured reserves are counted and more expensive resources are omitted.

"Most traditional analysts and deployers of energy efficiency see and use only a modest fraction of the worthwhile efficiency resource," Lovins writes. "In energy efficiency as in geology, total reserves exceed proven reserves, and the resource base, increasingly exploitable as exploration and extraction techniques improve, far exceeds both."

The paper does not seek specific energy or economic conclusions of efficiency's potential, RMI Principal Mark Dyson told Utility Dive in an email. However, he said RMI sees evidence of an energy efficiency resource potential that is two to three times larger than typically expected, "and often at lower costs, when using integrative design approaches."

The paper's conclusions aim to unlock some relatively straightforward solutions, along with cracking tougher nuts. 

Simple changes, said Dyson, could include directing utilities to utilize efficiency whenever it is the cheapest resource, aligning earnings incentives with least-cost service provisions from all resources. That "would go a long way toward removing some of the structural barriers associated with the current efficiency marketplace."

Other issues are more complex, he said.

"There is a fundamental difference in mindset between incremental, piecemeal efficiency engineering, on the one hand, and integrative design practices," Dyson said, explaining that it will take some time to reconcile new ideas with utility training and goals.

"Not an easy set of solutions but the upside, we believe, is worth it," said Dyson.

This article was originally published on UtilityDive.com and was authored by Robert Walton