Sixteen years ago Amory Lovins and his team at the Rocky
Mountain Institute (RMI) wrote Natural
Capitalism. For me, the book was an
inspiring investigation into how the environmental movement could be married to
the capitalist agenda. While the great
majority of environmental books at the time spent their energy attempting to
scare readers into believing the threat of climate change (lest we forget how
powerful environmental sceptics were), here was a philosophy that argued for
working within the current model; using the competitive markets and intelligent regulation to propel clean energy and to deploy ubiquitous energy efficiency. Fast-forward to 2011 and Reinventing Fire, I am pleased to say, finishes what the first book
started. By focusing our efforts on four
main sectors: transportation, buildings, industry and electricity, Lovins and
his team has delivered a near-complete blueprint for increasing prosperity and
reducing carbon emissions while simultaneously reducing energy insecurity,
expanding choices and harnessing innovation.
Due to the sheer volume of ideas contained within the Reinventing Fire plan, I’ve chosen to
break this review into two parts: part one will cover transportation, buildings
and industry while part two will cover electricity.
Transportation
[DISCLAIMER: the statistics referred to in this book, and
subsequently by me, usually relate to the U.S.
The book is unashamedly aimed at a U.S. audience, however, the lessons are
applicable to any open market.]
The first sector ripe for transition is the transportation
sector. The mass adoption of the cars,
trucks, trains and airplanes has led to levels of independence that were
unimaginable 100 years ago. But the
practice of using combustion engines and heavy materials has seriously polluted
the atmosphere and is becoming increasingly uncompetitive. Lovins argues that the key innovation needed
within the sector will be radical efficiency via a shift to ultralight but
ultrastrong auto-bodies, made of advanced materials.
The key enablers of these new generation vehicles will be:
(1) integrative, whole-system design optimised for (2) ultralight materials,
particularly advanced composites (primarily carbon-fibre). Adding (3) an electrified powertrain creates incredibly
efficient vehicles that are much less fuel-intensive.
By using integrative design Lovins utilises one of the key
concepts of his first book, Natural
Capitalism. When the energy
intensity of a process is dealt with as far upstream as possible, then gains
are compounded as they flow back downstream, and ever smaller parts are
required at each juncture. Consequently,
“a lighter auto needs less power, so its powertrain can be smaller and
simpler. That makes the auto even
lighter, so in the next design go-round, the engine can be made yet smaller and
lighter. The weight savings multiply
with each component, from brakes to suspension parts, and with each turn around
the design cycle. Parts and systems can
even disappear entirely: put an electric motor in each wheel, for instance, and
suddenly there’s no need for a transmission, clutch, driveshaft, axles, universal
joints, or differentials. Their
disappearance in turn triggers still more weight savings. Lightness multiplies.”
Electric motors are lighter, smaller, cheaper, quieter,
cleaner, more rugged and reliable, and severalfold more efficient than modern
fuel engines, while still enabling sizzling acceleration. Furthermore, electric drive can automatically
recover for storage and reuse (accelerating the auto) up to 70% of the energy
otherwise wasted as heat by the brakes.
When your vehicle can save, and even sell, excess energy the payback period,
in comparison to traditional vehicles, becomes very short.
Using advanced carbon fibre technology, composites with
greater tensile and impact strength than steel can be affordably produced for
all vehicle types, cutting the weight by up to 70%. There is a perception that
safety requires weight but Lovins presents studies proving that it is size –
due to having more crush space to absorb impacts – not weight that is the
primary indicator of a vehicle’s safety.
Consequently, Lovins makes a marked departure from traditional
environmental transportation ideology wherein the cars of the future are tiny
cars like the Gwiz or the Tata Nano.
Should advanced composites continue their progress in reducing body
weight, large vehicles like SUVs and planes need not be the target of
environmental derision.
So far, first movers regarding the pursuit of the compound
benefits of lightweighting plus electrification include: Audi, BMW, Volkswagen
and Toyota. No U.S. automakers appear on
that list for two reasons: first, U.S. auto efficiency standards and offerings
still lag behind most first world economies; secondly, historically cheap
gasoline (due to low fuel taxes and large public subsidies) make the U.S. the only
auto-making country where inefficient cars can still be affordably fuelled
(petroleum is one-half to one-third the price in comparison to most other
countries). Start-ups like Tesla and
rapidly emerging Asian competitors can and will adopt the latest manufacturing
technology in order to gain competitive advantage.
This is one the first instances in which we can see how the
market would gain from more ambitious regulations. At present, global fuel efficiency standards
lag technology in a major way. By 2016,
most countries will have set policies regarding vehicle fuel efficiency at
roughly 30 mpg and have agreed and 54.5 mpg for 2025. Yet attractive 125-240 mpg autos can be
achieved within a decade. Countries who
set ambitious fuel efficiency targets, while admittedly suffering short-term
pain, will capture the global transportation market in the long run.
Another tool the RMI team advocate using to speed the
transition to ultralight and efficient vehicles is something they’ve termed, “feebates”. Feebates make efficient autos cheaper to buy
and inefficient autos costlier. The idea
is that if you buy a fuel hog you’d pay an up-front fee, right on the sticker price,
which climbs as its fuel economy declines.
But choose a fuel sipper instead and you’d get a rebate funded by others’
fees: the more efficient the auto, the bigger the rebate. In this way choices are not limited, but the
market and our aspiration to reduce carbon emissions work hand-in-hand. Personally, I think it’s a brilliant idea
that encourages movement along the innovation curve without increasing public
sector spending. However, it does not
take much imagination to consider the political difficulties of passing such a
law given that, in the short term, fuel-intensive industries (such as logistics
and agriculture) would have to shoulder a large burden.
Further ideas that permeate the chapter are that: (1) sharing
transportation can radically reduce fuel-intensity and (2) creating more
self-sufficient communities reduces the need for transportation. Lovins makes the analogy that “buying a car
to get mobility is like buying a three-star restaurant to get a good meal” and
comments that “most people believe that the alternative to autos is better
transit – in truth, it’s better neighbourhoods.”
When the book was written in 2011, the online sharing
economy was only just getting started, but in 2015 we can already see the
incredible efficiency gains promoted by businesses such as Uber, AirBnB, Zipcar
and countless cycle hire programmes throughout cities worldwide (led by
Europe). As the migration of people to
major metropolitan areas continues throughout the world, the quality of public
transportation will take on increased importance. Generally public transportation requires
great investment, but the book highlights spades of smart thinking, such as the
“surface subway” system pioneered in Curitiba, Brazil, providing subway-like
rapid bus systems that provide mass efficient transport and reduce congestion
at a tenth of the cost of even surface light rail (rapid bus/surface subway
systems are now found in more than 80 cities, chiefly in South America, but now
headed for Los Angeles).
On the more expensive end of public transportation, the
Chinese and Japanese bullet-trains still have the capacity to inspire incredible
change if they can realise the tested speeds of over 300 mph (see this recent news report). Such technology could displace thousands of
flights per year with a cheaper and greatly more fuel-efficient
alternative. While working on the
technology, based on magnetic levitation, engineers have even invented a way
for passengers to enter and leave without the train stopping, via a “connector
cabin” that the train drops off at each station while picking up a new one.
However, this is not to say that the transition will be
easy. The mass lightweighting and
electrification of the world’s transportation will also require an infrastructure
to recharge them (preferably from renewables).
By some estimates, each new electric vehicle will require about 1.1
charging stations – though 80% will be at homes and paid for (costing about
$1,500) by the auto buyer.
But the important lesson is that the technology is available
and simple regulatory changes can spur investment that leads to enormous
fuel-savings and greatly more competitive companies. The chapter aims to complete the transition
by 2050 but takes pains to explain that the nation will still need liquid fuel
– lots of it, falling over decades. Unlike
cars and trains, planes and heavy trucks can’t yet be cost-effectively
electrified.
The ambitious goal of using three-fourths less fuel and an entirely
oil-free auto fleet by 2050 is necessary and achievable. Reinventing
Fire’s plan to transform vehicles through highly integrative design,
electric engines and electric fuelling that draws on renewable sources is
considered and visionary.
Buildings
Buildings are energy hogs.
They consume 42% of the US’s energy (more than any other sector) and 72%
of its electricity. Much of that energy
is simply wasted. Buildings primarily
use energy in six ways: space heating, water heating, space cooling, lighting,
electronics and appliances.
Lovins argues that this is a serious economic
opportunity. According to the RMI team,
by 2050 the realisable savings from energy-efficiency in buildings is at least
$1.4 trillion in net present value.
Those savings are worth four times the cost of capturing them. Generally speaking, energy efficiency measures
in buildings cost less than half as much as the energy they save within three
years.
Such a mass focus on improving the energy efficiency of
buildings could “create new business opportunities and strong new industries as
companies gear up to install insulation in inner-city homes or to manufacture
easy-to-install efficient office lighting systems. This expanded economic output means that reducing
the energy used in our homes, offices, warehouses, theatres, shopping malls,
and other structures could revitalise the real-estate sector and help
rejuvenate the national economy.
Consider the multiplicative effect of putting all this cash (and added
value) back in the hands of businesses and consumers. In a sector that needs new ideas, energy
efficiency in buildings creates exceptional opportunities for growth in jobs,
new goods and services, and finance.”
Lovins argues that the biggest opportunities lie in
designing new buildings right and retrofitting the existing buildings that
waste the most energy. While I agree with the assessment, unfortunately there
are few cookie-cutter or blanket solutions.
Upgrading existing buildings will need to be done one building at a time
and every building has a different set of requirements.
However, the book outlines a spate of emerging technologies
that are making our buildings cleaner, more efficient and, frankly, cooler
places to be that could soon make the process much more appealing.
One of my favourites, that I can see becoming commonplace
within the next decade or two is the smart window. Smart windows darken in response to a small
electric current or heat (see firms like Pleotint and RavenBrick). Serious Energy’s “AdaptivE” windows will use
a printable liquid-crystal coating to vary the amount of incoming heat energy
depending on the temperature of the outer pane of glass, while letting in the
same amount of visible light. In warm
climates, this will eliminate the trade-off between being well-lit and being
cool.
Phase-change materials could soon be found in the outer
walls of most buildings. Phase-change
materials absorb heat by melting as the temperature rises. Used in walls or on roofs, they slow the
build-up of heat in a house on a hot day.
The stored heat is then gradually released at night meaning that you
reduce the need for air-conditioning during the day and heating at night.
I could go on, but it suffices to say other technologies
such as enhanced evaporative cooling, radical insulation, light emitting diodes,
Fibonacci series rotors and combined heat and power (CHP) pumps are meaning
that we can do much more with less (look these technologies up if you have the
time, some of their energy savings are incredible).
Yet, despite the prevalence of these cost-saving
technologies, the biggest problem is that the path to making money from energy
savings isn’t always considered, monitored or incentivised appropriately. Few firms track their energy use as a line
item for which profit centres are accountable (the utility bill is usually just
factored in as a constant in overhead costs).
Landlords have no financial incentive to weatherise homes,
since the energy savings would go to their tenants’ pockets, not theirs. The tenants, in turn, are unlikely to invest money
to improve a house they don’t own and may not live in for long. The same problem stands in the way of
upgrades to many commercial buildings, since 45% of them are not
owner-occupied.
Historically, utility regulation has tied revenue to the
amount of energy sold and the capital invested to provide it. Investing more money to build more
energy-supplying infrastructure to sell more energy was the golden road to
revenues and profits. Indeed, utilities
and their investors tacitly preferred that customers be inefficient, since inefficiency
could raise profits.
Consequently, the most important piece to the buildings’
efficiency jigsaw is the mass adoption of decoupling regulations. Decoupling breaks the link for electricity
providers between earnings and total energy sold. To sweeten the pot, many regulators should also
reward utilities for cutting customers’ bills or beating efficiency goals. Unfortunately, though, this new business
model for utilities is taking hold slowly.
The RMI team present evidence that in more than half of U.S. states,
electric and gas utilities are still penalised for cutting your bill and
rewarded for selling you more energy.
That’s just as odd as it sounds: it rewards exactly the opposite of what
we want, so that’s what we get.
Should decoupling become the new norm, energy efficiency
measures would become incredibly profitable and allow some of the following
best practices to proliferate.
One brilliant technique advocated by the book is simply to
provide more information in order to change behaviour. For instance, letting people know how their
energy consumption compares to their neighbours’ can stir competitive juices
and reduce use markedly.
Smart controls can automatically turn down the thermostat
when you’re gone, or run your dishwasher or washing machine at a time that’s
convenient for you but cuts your cost.
They’d also let an office building start precooling earlier on a hot
day, when electricity costs less than in afternoon peak hours. Such unobtrusive technology can deliver the
same or even better services at lower cost with no inconvenience or loss of
amenity.
A Danish study, highlighted in the chapter, found that the
pumps used to circulate hot water in normal European homes are 5-10 times
bigger than needed and 4-8 times less efficient than they should be. Gradually replacing 120 million household
circulating pumps across Europe over a decade would eliminate the need for 8.5
one-billion-watt power plants and achieve one-sixth of Europe’s Kyoto
carbon-reduction obligation.
Integrative design, just as in the transportation chapter, is
a crucial component to unlocking the energy savings. Instead of just upgrading, say, conventional
lights or heating systems with more efficient equipment, integrative design
starts by asking whether there are smarter ways to design the whole building and
all its interacting systems together.
Integrative design combines technologies (old and new) in novel
ways. But as before, switching to
integrative design isn’t easy. It
requires architects, engineers, contractors and owners to collaborate more effectively.
The resolution here is twofold – first, let businesses,
homeowners and government entities seek solutions to reduce their own energy
use and develop services and products to help others do the same. Second, enable those solutions through smart
policies that remove persistent barriers, open new opportunities, level the
playing field, and align incentives.
Buildings are the future hub of energy storage, energy
production and energy markets (as I will illuminate further in part two of the
review, focusing on electricity), consequently, it is imperative that we all
begin to harness available technology in our homes and offices.
Industry
Innovation within the industrial sector (i.e. manufacturing /
the extraction and use of raw materials) is also rooted in the concept of
efficiency via integrative design.
However, here Lovins reintroduces the concept of biomimicry (please visit my
review of Biomimicry by Janine
Benyus for further detail).
In human industry we mine ores, fashion them into products
that we use briefly, and then throw away. We use processes that extort exotic elements
from all over the world, many rare and toxic, to drive unnatural chemistries
under severe conditions inside costly furnaces and reaction vessels to heat, beat and treat and then discard most of the results as waste.
Calculations indicate that an appalling 1% of the originally
extracted materials actually make it into durable goods – and of those, only
one-fiftieth gets recycled. Therefore,
only 0.02% of the originally extracted mass flow returns to nature as compost
or to industry as a “technical nutrient” for recycling or remanufacturing. The other 99.98%, much of it toxic, is pure
waste.
According to the RMI team, global industry now makes four
times the tonnage of major engineering materials – metals, plastics, cement –
that it made 50 years ago. They forecast
that that amount is to double again within 40 years. That’s despite a 26% drop in the amount of
materials used per dollar of global GDP between 1980 and 2007. The “take-make-waste
juggernaut”, as Lovins terms it, rumbles forward. It’s hard to find a more wastefully designed
system, or a greater business opportunity, on the face of the earth.
In contrast, nature uses almost zero wasteful or aggressive
processes in manufacturing materials stronger than steel (spider silk) and
storing information more efficiently than a computer chip (DNA). We know the ability exists and biomimetic
scientists work to unlock the potential to achieve the same bounty nature has
achieved with this planet’s finite resources.
Importantly though, following Nature’s lead is not only good for the
earth; it can also bring crucial competitive advantages to business.
Over the past 40 years, U.S. industry has cut energy intensity
in half, scrubbed its stacks to reduce acid rain, greatly reduced poisonous
discharges into water, and clamped down on profligate flaring of “waste” gases. Many of industry’s advances over the past
three decades arose directly from the Nixon-era Clean Air Act and Clean Water
Act (and the Control of Pollution Act 1974 in the UK). There is no plateau suggesting that further
improvement cannot be achieved over the next 40 years.
Despite the incredible diversity of products, processes, and
plants, just two purposes account for more than three-quarters of U.S. industry’s
primary energy use. Within manufacturing
facilities, more than two-fifths of primary energy is used to heat things,
whether giant vats of steel or tiny dabs of solder on circuit boards. Another two-fifths turns shafts to drive
machines, from the clattering conveyor belts in soft-drink factories to the
robotic arms on auto assembly lines. The
rest goes into a myriad of processes and support functions, including smelting,
reduction, lighting and space conditioning.
Lovins outlines how we can design out waste in mining and
manufacturing, recapture resources now lost in extraction and manufacturing and
make products last longer – then recover, reuse, repair, remanufacture and
recycle them. By systematically
designing out waste and toxicity, and radically increasing the efficiency of
using resources, we can deliver more service per pound of material.
First, Lovins offers the plan to reduce the energy needed to
run fundamental processes. Next, reduce
the losses in the systems that distribute energy services within a
facility. Third, improve the efficiency
of devices like boilers and motors that turn energy into useful services. Finally, put energy that’s now wasted into
use (heat being the largest waste in almost all industrial processes – the U.S.’s
power plants turn fuel into one-third electricity and two-thirds heat – and
that heat is typically thrown away, wasting more energy than Japan uses for
everything, because there’s no productive use for it nearby, and old U.S. practices encourage or mandate power-only plants despite industry needing
enormous amounts of heat energy).
The beauty of these four steps is that they not only achieve
virtually every imaginable efficiency gain, but they also feed on each other. Reduce the amount of steam heat needed for a
chemical reaction, for instance, and you’ll also reduce the losses inherent in bringing
steam to heat a reaction and be able to use a smaller, cheaper, more efficient
boiler. And if you can recapture some of
that heat, the efficiency gains compound even more (again, this is integrative
design in action).
In many European countries and increasingly in Japan,
manufacturers bear a legal lifetime responsibility for their products and thus
have a strong incentive to make them easy to repair, reuse, remanufacture or
recycle.
The RMI team estimate that such additive manufacturing,
using only what it needs, can create better products with up to 90% less
material.
In order to encourage investment and spur innovation within
the sector, a few regulatory changes could arguably go a long way. They include: desubsidising fuel; mandating
producer lifecycle responsibility; allowing and encouraging waste-heat recovery
and reuse, including all forms of cogeneration; removing distortions that
favour virgin over recycled materials; letting businesses expense energy-saving
investments against taxable income (just as they now expense wasted energy)
rather than having to capitalise them; and properly pricing the commons into
which things get thrown away, whether gunk in our water, soot in our lungs or
carbon in our air.
Such deliberate, across-the-board stimuli to innovation and
adoption have long driven the competitive prowess of countries like Germany and
Japan. Their high energy prices and
strict environmental rules honed their efficiency, helped cut their healthcare
costs and resource dependence, enhanced their economies’ transparency and
choice, and sped their broad adoption of energy efficiency.
Lovins and the RMI team make a compelling argument that
biomimicry and integrative design are the two next big design revolutions. Each is important separately. Together they will transform industry and
remake our world.
Conclusion
While a lot of the efficiency measures detailed in the above
chapters are now, in 2015, becoming more commonplace, I want to applaud the
book for its comprehensive collation of such innovation. But moreover, the real
strength of the text is that it refocuses the environmental agenda in a
coherent way. Over the past decade
environmental literature has failed to speak coherently. The majority of texts pick a distinct issue
and deal with it in isolation. In Reinventing Fire I believe we have the
first coherent singular voice, cutting above the noise and delivering a clean,
equitable and prosperous vision for the environmental movement that is no longer
distracted by notions of taking down big business. By understanding the key levers of energy
efficiency and renewable energy the proper solutions are rewarded and the
political positions appear less entrenched.
In the second half of the review I’ll attempt to describe
how the plan can be power by a revolutionised electricity sector.
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