On my recent travels through the American mid-west (my favourite and a much maligned part of the US) I was asked the question, “who is ahead in energy efficiency, the US or Europe?”. This is an interesting question I have thought about a lot over the last few years. The first part of my answer is that the grass always looks greener on the other side. On an earlier visit to the USA to attend the 2012 ACEEE financing forum I was intrigued by the general reaction to the UK situation which was characterised as, ‘you guys over there have it so good because of all the advanced policies you have’. I explained that what may look like great policy from afar doesn’t always look like that when you see it up close and have to work within it. As we know the UK energy efficiency policy has evolved a lot in the last 2 years but it is still far for ideal, with a multiplicity of policies and programmes and still much uncertainty, particularly about using the Electricity Market Reform to boost demand for demand side activities.

So back to the question. The next part of the answer is of course is that the USA is actually 50 countries with a common currency and generally a common language whereas Europe is 27 countries with no common language and 23 with a common currency. This makes if difficult to compare the US and Europe. Anyway, having caveated the answers with all of the above here is my take on the question.

In parts of the US (and an increasing number of places) the realisation that energy efficiency is a huge opportunity to create value has sunk in and as always when that happens in the US a lot of very talented people and a lot of investment flows into the opportunity. Secondly efficiency has been decoupled from the climate change issue which removes a lot of debate and allows believers or non-believers in climate change just to get on with it. Thirdly the link between efficiency and job creation is really starting to be taken seriously, more so than in Europe. Some US (and Canadian) cities are making great progress on long-term energy plans based on efficiency and linked to economic development. Energy efficiency financing is more advanced in the USA where the market is growing and transforming itself from a publicly funded activity (mainly stimulus and rebates) to a privately financed activity. In Europe my take is that most often ‘energy efficiency financing’ implies public funding of some kind.

There is probably more potentially transforming technologies coming out of the US than Europe, and that is everything from systems that seriously reduce the cost of re-lamping with LEDs to totally radically data centre cooling technologies. That just reflects the huge scale of R&D in the US and the interest of the Venture Capital industry. The UK and Europe is better at energy management, particularly around Monitoring & Targeting (M&T) and motivation programmes. On the subject of policy the answer depends entirely on what you are comparing. There is little doubt that advanced US states like Massachusetts are way ahead in areas such as decoupling electricity revenues for volumes. They now appear to have decoupled electricity demand growth from economic growth. Europe (although not the UK) is ahead on integrated utilities selling power and heat generated in efficiency CHP and Dh stations.

So at the end of the day, it depends which jurisdictions you are comparing, what you are comparing and where you are looking from. There are examples of bets practice in both the USA and Europe. I can’t help feeling though that ‘Yankee ingenuity’ and the pursuit of value will in time produce better rates of improvement (from different bases) in the USA than in Europe.

When I was doing my PhD I met Brenda Boardman who was doing her PhD investigating the then little known or understood problem of fuel poverty. Brenda and I were both funded by the joint committee of what was then the Science and Engineering Research Council and the Economic and Social Research Council (I think those were the proper names) – anyway – it was radical stuff for the early 1980s having inter-disciplinary people combining technical subjects with economic and social subjects.

Since then, in a large part down to Brenda and her excellent work, fuel poverty has become an industry and I mean that in a positive way. Of course it should have been an industry that worked itself out of a job by solving the problem. In 2000 the government set a legal target of eliminating fuel poverty among vulnerable consumers by 2010 and all households in England by 2016 (2018 for Wales).

So how are we doing? The numbers in fuel poverty are going up – an estimated 6 million people now spend more than 10% of their income on energy and some estimate it could be 9 million within 3 years. That is shocking. It is a crisis with huge costs to individual health as well as to the health service.

Even more shocking – ‘On average, at least 7,800 people die every year from living in cold homes – more than four times the number of people who die on British roads.’

The solution is clear. Use the money from the carbon tax it collects to super insulate homes in fuel poverty. The Energy Bill Revolution has got it right. Sign the petition and tell the government to ‘just do it’.

http://www.energybillrevolution.org/whats-the-campaign/

The ‘Aspen Daily News’ reported yesterday that the city’s energy efficiency programme is ‘working too well’. To be fair the comment was journalistic and the Mayor of Aspen actually said the issue is ‘a good problem to have’. Aspen’s electricity demand has been declining by 1.3 per cent annually since 2008 even while the number of electricity accounts has gone up by about 2 per cent a year. Two years ago the city had estimated that electricity consumption would fall by 1 per cent a year. Although the article doesn’t give data on the state of the Aspen economy over the period a quick internet search suggests that the upmarket ski resort is doing well – employment has risen 7.38 per cent in the last year (compared to a US average of 0.35 percent) and tourism continues to thrive with a 10 per cent increase in lodging occupancy in the year from July 2011.

The impact on electricity demand seems to have been achieved by a combination of a tariff structure in which large users pay higher rates – sometimes as much as four times more than the base rates – and energy efficiency programmes including weather proofing, energy audits and the installation of upgraded equipment. The effect on the city’s utility was that electricity revenues were 5 per cent ($370,000) down on budget – a ‘significant shortfall’ – and as a result rates will have to be increased.

The interesting thing about this story is that Aspen’s experience shows that it is possible to decouple electricity usage and growth in the economy – something that is still considered impossible by many energy analysts. Other cities (and countries) should look closely at the Aspen example.

As soon as there is discussion of energy efficiency and the potential for improving energy efficiency, someone counters with the argument that reducing energy use per unit of output only leads to more energy use as people and firms spend some (or all) of the money saved by greater efficiency on more consumption, resulting in more energy use. This is the Jevons Paradox – first put forward by William Stanley Jevons in 1865 in his book, ‘The Coal Question’. Jevons pointed out that coal consumption in England soared after James Watt introduced his steam engine which greatly improved on the energy efficiency of existing steam engines which used Thomas Newcomen’s technology.

Numerous referred papers, articles, blog posts and even whole books have been dedicated to the Jevons paradox and some people have used it without really understanding it to rubbish energy efficiency. I don’t want to start any more debates but I would say that that we don’t say the same things about the use of other resources e.g. metals – you do not hear the argument that we shouldn’t improve productivity of metal use as it will only result in more metals use. It may be equally true in metals as it is in energy but the argument isn’t made nearly so often.

Fundamentally improving the productivity of resource use, whether it be metals or energy or land, is one of the basic drivers of increasing wealth. Another driver is our ability to create resources out of ‘thin air’ by creative thinking, for example, turning something that has no value or is currently thought of as waste into a productive resource.

There is an interesting area for research, as yet under-researched, on the importance of improving energy efficiency in driving economic growth. Some recent research from the American Council for an Energy Efficient Economy suggest that it may be more important than we generally think. For some more information see the work of Skip Laitner and the ACEEE here and here.

I saw a video of a great TED talk today by Justin Hall-Topping, ‘Freeing energy from the grid’.

The video, along with my current re-reading for the nth plus 1 time of one of Arthur C. Clarke’s great science fiction novels, ‘Imperial Earth’, reminded me of the expression ‘the future isn’t what it used to be’ – usually attributed to the famous baseball player and manager Yogi Berra. If we look back only twenty years, and certainly when we look back forty years ago, the future and specifically the energy future looked very different to what it looks like now. Official energy forecasts in the UK in the 1980s foretold of a future based on ‘CoNucCo’ – coal, nuclear and conservation, and increasing energy demand. As it turned out energy demand in 2011 was pretty similar to energy demand in 1970, despite very significant growth in real GDP. Coal use has declined but still makes up a significant proportion of power generation and of course the use of gas grew dramatically. It seems as if we serious under-estimated the effects of improved energy efficiency.

Anyway, back to the theme of the future. I am a technological optimist and the presentation by Justin Hall-Topping focused on the fascinating area of nanomaterials for energy. Examples given included materials that are only a few molecules thick but could convert windows into active components that can allow energy into a building or let it out at will (an old idea which is also being worked on using some other technologies), super efficient water filtration systems, and super-efficient storage systems. Friends of mine at the University of Illinois in Urbana-Champaign have developed and are commercializing self-healing materials – itself an amazing technology. Now they have applied them to batteries and have technology that can extend battery life and prevent battery fires (note to Boeing – you should check this out for the 787 problem).

It doesn’t matter whether the specific technologies described in any examples are really viable, that is the nature of new technology development, some will be winners and a lot will be losers (along with their early investors). The point is that world-wide there is an incredible number of new and amazing technologies, many of which will change the world’s energy system and greatly improve energy efficiency, either at the level of individual devices or by completely changing the way we do things. These are the ‘unknown unknowns’ I referred to in an earlier post that will change the future. It is likely that the energy future in twenty years time will look very different to what it looks like now as some of these technologies – particularly in smart and nano-materials – will have emerged and started to be widely applied. I suspect the future vision then won’t include such basic and archaic technologies as combustion based systems of all kinds, nuclear fission, wind turbines and photovoltaics as we know them today. I look forward to seeing that exciting future.