What is the potential?

The latest in a series of blogs inspired by my 1985 PhD

There have been many, many studies over the years discussing the potential for energy efficiency, in fact there are almost as many studies on potential as there are on the barriers to energy efficiency. As I sometimes joke, if I had ten pounds for each of those I could probably retire. However, very few of the studies on potential really define potential.

The question of what is the potential for energy efficiency, both the meaning and the quantum, was an important element of my research which set out to review the feasibility of achieving a low energy future. As the work progressed, it became obvious that potential, when used in anything other than its pure physical science meaning, is a ‘soft’ concept that needs to be defined. Leach et.al., in their “A Low Energy Strategy for the UK’, along with many other studies of potential made no effort to different types of potential.

Potential is not static, it is continually being altered by technological and economic developments – it is a dynamic just like reserves and resources of oil and gas. At any time, and in any particular site, and site specificness is very important, there are the following types of potential.

• There is a totally theoretical potential based on the laws of physics without any consideration of practical available technology.
• There is the potential for improving energy efficiency that derives from the physics of the process or installation using known concepts i.e. not magic, which is also a theoretical potential. 
• A sub-set of this potential is the potential that can achieved by applying available, existing technology. 
• This sub-set, at any one time, is further divided into potential that is economic and potential that is not economic. 

It is the latter that is actionable by the firm. It can be defined as the potential resulting from those investment possibilities that:

• are capable of being developed and implemented by the host organisation (or householder) or vendor/supplier/contractor
• meet the financial criteria set by the organisation making the investment
• are appropriate in context i.e. other considerations at the time.

The schema of potentials can also be divided into that available from retro-fitting and that available from installing new plants or processes.

Obviously the size of the potential depends on judgements and decisions outside the usually accepted boundaries of energy management. Clearly two organisations operating similar facilities could have different investment criteria due to differing decisions on priorities for capital or differing return requirements by their owners, giving different potentials even if their underlying facilities are identical.

Furthermore, and overlaid on these potentials are the perceptions and performance of management.  Differences in perceptions may come from two sources, differences in the quality of internal and external information flows, and differences in the selective perception of information by actors in the process. Internal information includes energy performance information but also other information about the wider business. External information includes many things including information on the availability of technology and hardware, and views on future energy prices. For example, in one site the possibility of a certain energy efficiency measure may not be perceived at all due to a lack of knowledge. In another similar site that particular measure may be considered unrealistic because of a prior bad experience. Such ‘biases’ are important in determining what is considered achievable and appropriate by management. Perceptions filter objective reality. 

As prices and available technologies change, the potentials change. Thus any attempt to estimate or measure potential will always be fuzzy. A real measurement of potential requires blending detailed engineering work with management views and perspectives – sometimes called an Investment Grade Audit. Gathering this level of detail is an expensive exercise with an ephemeral result. It is only worthwhile going to the expense if management believe a measure is likely to be implementable and investable.   

The factors that influence the potential in any one site at any point are shown in the soft systems inspired diagram.

This analysis emphasises the fact that potential for energy efficiency is analogous to that for energy resources and reserves, something that I explored in this 2015 blog, ’Energy Efficiency as a Resource’

The next time anyone talks about or writes about the potential for energy efficiency ask what is their definition of potential.