Can Energy Usage Actually Be Reduced without Hurting GDP?

I was thinking today, in Cleantech we often talk a lot about energy efficiency. Californians often cite that this state has grown its economy for the last 20 years without a significant increase in energy usage per capita, compared to the rest of the country, where GDP per capita goes up, and energy usage goes up just as much. But of course, California has lost much of its manufacturing sector over that same 20 year period, too. Perhaps no coincidence?

But if we wanted to actually do it, where could we actually save energy without impacting GDP growth, make a serious difference in our power bill, and do it in a big way - targeting say, 50% of our total power usage on a per capita basis?

• CFLs & LEDs - We are already moving aggressively towards compact fluorescent light bulbs, and the penetration rates are still low. As that trend continues, and LEDs come into the mix for more and more applications, our lighting bills should trend straight downward for the next decade. Now if we can just stop cringing at the thought of a $3 lightbulb!
• Heating and Air Conditioning - I know whenever my power bill goes higher than I like, I just watch how often I turn the heater on, and adjust the thermostat a bit. The answer here has always been some combination of improved technology, smart metering and more transparency in billing and usage, and energy prices rising high enough for consumers to feel the pinch. Oh, and did I mention insulation, California?
• Hot water heaters - Can anybody say, "tankless"?
• Power generation -If every power plant was upgraded to the latest generation of technology the impact could be staggering. In the power generation world, newer tends to equal more efficient, all else being equal . But bottom line, this means our regulators would have to approve the increase in utility capital expenditures and pass those costs on through to us in the short term. That's about as likely as George W announcing a plan to tax every SUV Detroit makes and give the money to the poor to buy solar systems.
• Solar - As for solar - which is typically sold on a "reduce your energy bill" pitch, not a chance. At $0.15 to $1.00/kwh (depending on who's counting and how they count), if we actually reduced a significant amount of our building load with solar power we'd likely send our GDP plummeting. There are lots of reasons to love solar, but decreasing energy usage per unit of GDP is not one of them. At least, not yet.

These aren't new ideas. But definitely worth repeating until we learn the lesson.

Comments

[Jack Yetiv:]

I could not disagree more with the comments about solar. It escapes me how the author concludes that solar cannot improve energy efficiency without reducing GDP. Not only can solar do so, but solar can (over the longterm), also substantially reduce our trade imbalance.

Here is why: Much of the solar industry is domestic (although a fair bit is also based abroad) and obviously, the production of panels and balance-of-system components is counted in domestic GDP.

Second, GDP includes not only goods but also services, and of course, almost every dollar spent on installation of solar systems in the US goes toward increasing domestic GDP (the exception, I guess, would be if the installation services are performed by a foreign company and the profits are re-patriated to that country, but I doubt this will amount to much).

Third, as plug-in hybrids achieving 100 mpg (and better) mileage become a substantial part of our transporation network over the next couple of decades (2010 to 2030), we will be able to reduce our dependence on foreign oil, reducing our trade deficit, while generating even more demand for domestically-produced-... solar energy.

Therefore, it seems clear to me that rolling out a new technology such as solar will both improve our environment and energy efficiency while at the same time INCREASING GDP.

Jack Yetiv

2008 Feb 17 12:00 PM

[Augustus:]

Going "All Solar" is about as likely as Bill Clinton every again having sex with Hillary.

However, the switch to LED lighting is just around the corner. The producers have just about figured out how to make the LEDs give off the white light suitable for replacement. And those will almost qualify as a permanent light bulb. Going the CFL lights is really not much of a saving. Right now it is pretty cold in much of the country. Whatever heat is generted by the incandescent bulb is not a waste. And there is none of that disposal hazard of the CFLs. CFLs can be an interim step, just not really the great solution.

I recall reading several years ago that lighting used about 30% of the electricity generated. As that converts to LED, the electricity demand may actually decrease. More likely is that demand will stay flat as more ideas for using the convenience of electricity are employed.

2008 Feb 17 12:05 PM

[GaryD:]

aaCharley is incorrect on LED efficiency, technology, and disposal.

LED lights can indeed be made white, but they are slighty less efficient than CFLs (28W CFL = 15.2% overall efficiency; LED =13% overall efficiency). For practical lighting, LEDs need to be able to draw about 1W. They are nowhere near this yet. Although they are efficient, they are not bright enough for standard lighting applications.

LEDs are not permanent. The white LEDs are particularly prone to failure due to their high phosphor content, which causes them to burn out faster.

LEDs are manufactured with heavy metals such as gallium arsenide. There is no disposal advantage over CFLs. CFLs contain elemental mercury. Although this gets people excited, it is methylmercury that is toxic, not elemental mercury. When we were kids we used to sneak into abandoned buildings and smash fluorescent lights (they make a cool popping sound) and guess what -we're all fine! In the old days people understood this. There is probably a mercury switch in your thermostat (open it up and look, it isn't hard to do). Is it killing you? Does your liver hurt?

CFLs are a huge savings over their lifespan. A $90 investment in CFLs is estimated to save $440 - $1500 over a 5 year period.

Lighting accounts for 9-15% of household electricity usage. I seriously doubt that it accounts for 30% of all electricity usage (think about it).

The argument about using incandescent bulbs to generate heat is not worth addressingsince it is typical supply-side nonsense that equates waste with economic growth and progress.

2008 Feb 17 01:50 PM

[Danny Newton:]

What is needed is not solar or energy efficiency but economic efficiency. The ratio of money going in to the money going out will determine the outcome. The square footage or better yet number of square miles required to replace our electrical capacity would not be practical to build unless it was in the desert on land that would not displace any government tax base. It would take a circular shape with a diameter from Memphis to Nashville and there would have to be a very sophisticated low loss distribution system attached to it. It would take 80 to 100 years to build and it would have to slowly replace the existing grid.

A car that gets a hundred miles to the gallon will have trade offs with safety and if there is not an effort to upgrade our road system, we will continue to burn fuel while at idle. Even if you invest in health care facilities and funeral homes, this is no way to offset the human cost of car crashes. The distance between cars is shrinking because the pace of road construction in terms of lane miles is substantially less than the growth of drivers, registered vehicles and the number of vehicle miles drive. The number of vehicle miles driven is in a 16 month slump or flattening that has never happened before since records have been kept. This shows that we can conserve by organizing trips a little better but we still depend on autos to expand the opportunities for jobs and escape high tax areas. Sprawl is driven by the tax differential between urban and rural areas.

Making people buy magic light bulbs that save the planet or energy or whatever only decreases their consumption in other areas of their lives. Pretending that it does not matter what people spend their money on is an old Keyneian philosophy that fails to come to grips with the Broken Window Fallacy. I am sure the Egyptian government is glad that the pyrimids were built because they are a great tourist attraction but it may have been a better and different history if they spent their money on building universities, hospitals and other infrastructure.

2008 Feb 18 03:06 AM