Popular media and political chatter are abuzz with a cacophony of energy news and opinion. Amid the chaos, some orderly strands can be discerned. Here are three themes that merit attention:
1. Efficiency is accelerating
Government forecasts predict U.S. energy intensity (primary energy used per dollar of real GDP) will continue to decline roughly 2 percent annually through 2040, but that the drop will be steepest in automobiles.
Motivated in part by more stringent fuel economy standards coming down the pipeline, lightweighting -- the core of the new “platform fitness” approach, which focuses on optimizing a vehicle’s structure first before addressing propulsion technology and fuel source -- has been the industry’s hottest strategic trend for several years. In short, the auto industry is finally beginning the fundamental change we’ve been advocating since 1991. And as automakers and government adopt Rocky Mountain Institute’s (RMI) fitness-first, ultralighting-focused strategy, they’re finding that making costly batteries or fuel cells fewer rather than cheaper can make electric cars more affordable with less time, cost and risk. This can save severalfold more oil than the government forecasts, use 80 percent less autobody manufacturing capital, de-risk automaking and save (in the U.S. alone) half an OPEC’s worth of oil.
Meanwhile, U.S. autos’ 4 percent average asset utilization -- that is, they sit idle 96 percent of the time -- is driving remarkable new carsharing and ridesharing programs, smartphone apps and emergent automaker business models based on leasing mobility services rather than selling autos. These developments, adopting natural capitalism’s powerful “solutions economy” business model, profoundly could reduce the need for autos to yield the same or better mobility and access at lower cost.
At the same time, efficient use of electricity -- which is used three-fourths in buildings, one-fourth in industry -- is finally starting to pull out of its decades-long doldrums. That’s a big deal for saving capital and climate, because producing and delivering electricity is extraordinarily capital intensive, and classically uses two to four units of fuel at the power plant to deliver one unit of electricity. Much of RMI’s work focuses on this effort, as the late Ray C. Anderson put it, to “turn stumbling blocks into stepping stones.” Efforts such as RMI’s RetroFit initiative -- whose toolkit, portfolio challenge and training efforts steadily gain adherents -- are key levers for scaling adoption by asset owners, financiers, tenants, designers, installers and communities.
greenbiz
