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Worldchanging Interview: Amory Lovins
Julia Levitt, 23 Mar 09

SmartGarageillo.jpgAmory Lovins is a bright green visionary. Lovins and the nonprofit Rocky Mountain Institute he leads have set pace of the debate on a number of critical innovations, from green building to hybrid cars, for almost three decades.

RMI (as it's called) takes an entrepreneurial approach, looking for opportunities to leverage changes in systems and policies to organically encourage people to choose the better car, the better home, etc., on their own.

As he told Popular Mechanics in a 2007 interview, Lovins is more confused than frustrated that the pace of change in the U.S. has yet to catch up with ideas he's been pitching since the 1970s -- ideas which are becoming commonplace in other parts of the world. It's not just about business and profits, although in best-selling books like Natural Capitalism
and Winning the Oil Endgame, Lovins has certainly made a believable and detail-rich plan for shareholder-friendly sustainability. It's also about something more intangible: the deep satisfaction that comes with elegantly solving a difficult problem.

In short, Lovins is just the person to talk to if you're in the business of envisioning a bright green future. I spoke with Lovins earlier this month about the search for elegant solutions:

Julia Levitt: What do you think is the least amount of energy that could be used to deliver a comfortable American lifestyle? For example, is the 2,000-watt society proposed by the Swiss Council of the Federal Institute of Technology a realistic projection?

Amory Lovins: It is very realistic. The Swiss work on the 2000-watt Society is excellent. I actually think that, with integrated design and even newer technologies, 1,000 watts is probably realistic -- and it may even be cheaper. We [at RMI] haven't developed that in as much detail yet as they've developed their 2,000-watt scenario, so I'm just giving you my impression from looking at the numbers, but I think it'll be closer to 1,000 than to 2,000 watts. That's counting, of course, all forms of energy for all purposes.

JL: What would that society look like?

AL: It can look like whatever you want. Because so much can be done with just technical efficiency, there's a great deal of flexibility -- in how and where people live, what houses look like, how we get around, what our settlement patterns are. For example, it's very straightforward to have uncompromised, normal-sized family cars achieving upwards of 100 miles a gallon, with improved safety and excellent economics. We know how to triple the efficiency of trucks, and we can probably do even better on planes, I think by a factor of six or so better than now.

My own house uses 1 percent the normal amount of space- and water-heating energy, and 10 percent the normal amount of electricity. The efficiency upgrades took ten months to pay for themselves in 1983. But if we were building the house now, we'd be able to save another two-thirds of the remaining electricity, and it would probably cost even less to build.

JL: So you think that the vision of a 1,000- to 2,000-watt lifestyle would look pretty similar to how we're living now.

It can if we design it that way.

Of course, you could also get to such a society with changes in settlement patterns, with more of a New Urbanist pattern where we no longer subsidize and mandate sprawl, so we have great cars but we don't need to drive them much. That could be a healthier, more convivial society with stronger families and communities. And that's a perfectly legitimate way to do it as well.

You can mix technical and social change however you want. I tend to look just at the technical change, because I'm not comfortable telling other folks how to live. But I notice that real estate developers find more demand -- and make more money serving it -- if they make a place where it's possible to live better. If you design your communities in the New Urbanist fashion so that most places you want to go are within a five-minute walk, then you will have much brisker demand for your properties, and you'll sell at a higher margin, you'll have faster absorption, all the project's economics get better and you'll have happier people living there, than if you design the place around cars instead of people.

JL: How long do you think it would take to build a carbon-neutral prosperity in America?

AL: Several decades, partially because of the amount of capital stock we have to fix up or turn over. But it's time to get started. There's a Chinese proverb that the best time to plant a tree is 100 years ago, and the second best time is today.

JL: What is the most promising energy technology that you think remains unfairly obscure?

AL: Advanced energy efficiency. By that I mean, efficiency so designed -- whether in buildings, factories or vehicles -- that very large savings are cheaper than small or no savings, so we get expanding, not diminishing, returns to investments in efficiency.

There isn't a single official study that recognizes this possibility. But in RMI's consulting practice, we've demonstrated it in scores of buildings, in 30 billion dollars' worth of factories in 29 sectors, and in a number of vehicle designs, so we think it can be generalized. I described how to do so in my March ’07 lectures on advanced energy efficiency at the Stanford Engineering School, posted at http://www.rmi.org/stanford. My five public lectures there give the basics of advanced energy efficiency in buildings, industry and transport, and then how to implement them and what they mean.

JL: We've recently covered your Smart Garage summit and Project Get Ready, an initiative from RMI's MOVE team, here on Worldchanging. What are the major blocks to these ideas when it comes to business, community and politics, and how do you think these will be overcome?

AL: Smart Garage is our shorthand for arrangements that will let electrified vehicles, buildings, and the electric grid exchange information and energy to mutual advantage.

The short answer would include that there is no standardization -- or move toward it -- in the physical connections for electrons, nor in the telecoms and software protocols needed to swap information, do financial settlements, and control the energy flows properly so that all parties benefit.

There are some interactions with existing laws that could cause confusion or counterproductive effects. There are cultural barriers within the auto industry to making cars strong but light -- but if we did that seriously and with a level of design integration beyond what they're used to, we could cut the size of the batteries required by as much as two-thirds, and thus make them rapidly much more affordable and stretch the limited supply of batteries into more vehicles. Reducing battery size would also make recharging a lot faster, so we needn’t necessarily go to 240-volt charging infrastructure.

I think we also have had some blockages in business strategy and language just in conceptualizing the evolutionary path for Smart Garage. The charrette we held last October in Portland, Oregon went a long way toward helping us all think more clearly about the evolutionary path in the industry, and it actually looks easier than most of us had thought.

I was very happy to see that, because I had thought of that notion -- of vehicles being power plants on wheels and selling power back to the grid profitably when parked -- back in ’91, but now it looks like the technologies and attitudes are coming together that will make that a reality.

There are many more details to answer this question posted in the Smart Garage Summit report at move.rmi.org.

JL: In your December statement to U.S. Energy Secretary Steven Chu, you offered the advice that the DOE take a more aggressive approach to public policy development. What are your strongest recommendations for the policies we need in the next four years to ensure a clean energy future?

AL: Well, let me mention three. First, the strongest lever in saving electricity and gas is to decouple utilities' profits from how much energy they sell, and then to let them to keep as extra profits part of what they save the customers through (for example) more efficient use. Last year, only two states had done this decoupling and shared-savings reform, even though all the states' utility commissioners unanimously agreed in ’88 to follow such a course. But they got distracted by restructuring.

Now 25 states have adopted or are adopting decoupling and shared savings, so they’ll reward utilities for cutting your bill rather than for selling you more energy. Most states still do [the latter], and it's just as dumb as it sounds.

For getting efficient cars from the drawing board to the showroom and onto the road quickly, the most powerful and attractive tool we know is called a feebate. It's a cross between a fee and a rebate. It works like this: when you go to the dealer to buy a vehicle of the size that you want, there will be more and less efficient models on offer. Buyers of the less efficient models will pay a corresponding fee, while buyers of the more efficient ones will get a corresponding rebate. The rebates are paid for by others' fees, so it's revenue-neutral, and because you do it separately in each automobile size class, it's size-neutral. Therefore, you're incentivized to buy a more efficient car of the size you want, but not to buy a different size than you want.

In practical effect, such feebates would broaden the price spread within a given size class by perhaps thousands of dollars between the most and least efficient vehicle. This would therefore cause the buyer to pay attention to how much fuel the car will save over its life, not just in the first year or two; therefore, the private buyer will make a decision that's economically efficient for society.

This has been such a success when tried last year in France that they now want to roll it out to 20 other categories of products. And the automakers will also make more profits under feebates, because of course they will want to move their offerings from the inefficient (fee) zone into the efficient (rebate) zone, and to do that they’ll add more technology content, which has a higher profit margin than the rest of the vehicle.

RMI ran a private industry seminar for a few days about a year and a half ago, and got a clearer sense from the diverse stakeholders that there’s something important here to be worked out and experimented with at the state and regional level, and then to go national. Of course, since then, the auto industry has had other things on its mind, but it’s now clear that feebates are much more effective and more politically attractive than either fuel taxes or efficiency standards.

And feebates are not limited to cars. For example, they are more powerful than building codes as a way to increase the efficiency of buildings. When you go to hook your new house or commercial building to the grid, you would pay a fee or get a rebate; which, and how big, would depend on how efficient your building is. The fees pay for the rebates, so it remains revenue-neutral, but it's much more powerful than a building code, which is obsolete before the ink is dry and gives you no incentive to do better.

The third category of important policy action is to remove the biases in our regulatory system favoring supply over efficient use; favoring big over small units; and favoring particular technologies or forms of energy. I would love to have all ways to save or produce energy enabled and required to compete fairly at honest prices regardless of their type, technology, size, location or ownership. Who wouldn’t be in favor of that? Probably the incumbents who are very satisfied with current arrangements in which they've made a major investment to influence the political system. But as we revitalize our democracy, this would be a worthy goal. It's pretty much the opposite of the energy policy that we currently have. But I think it's actually much better to take subsidies away than to add more.

In particular, I would remove the numerous obstacles to distributed electric systems. Now, to give credit where it's due, when George W. Bush was governor of Texas, his head of the Public Utility Commission of Texas, Pat Wood, put in an excellent rule, which I call "plug and play," that says, if you're making your own power, say with solar cells on your roof, and you use an inverter from an approved list -- meaning it meets the state and national safety standards -- there's nothing else that can be required of you. You can just plug it in and start sending power back to the grid, and you don't need to ask or even tell the utility that you're doing it, because they will be fully protected by the technical standards that you’ve met. I think that ought to be a national standard.

And we ought not to discriminate against decentralized sources or against cogeneration of heat and electricity. We're one of the few industrialized countries left that makes it very hard to cogenerate heat and electricity, but if we did more of that, as is common abroad, we would save half of the fuel, carbon and cost. And we lag badly, making only 6 percent of our electricity from cogeneration or distributed renewables, while a dozen other industrial countries achieve from 16 to 50-odd percent, with higher reliability and lower cost.

In general, I would put even more emphasis on barrier-busting than on getting energy prices right. Of course we should price carbon, whether through cap-and-trade or a carbon tax. The right number is not zero. But if we get the prices right and don't enable customers to respond to price, not much will happen. And I think it's even more important to turn the obstacles to buying energy efficiency into business opportunities than to fine-tune the prices. We should of course do both, but policy tends to focus, in my view, more than it should on price and less than it should on correcting market failures. There are 60 or 80 market failures in buying energy efficiency, and each can be turned into a business opportunity. It's not easy, but it's immensely rewarding, because in the United States we know how to save half of our oil at about one-third or one-fourth of its price; half of our natural gas at less than one-fifth of its price; and three-fourths of our electricity at about one-eighth of its price. So what are we waiting for? We're the people we've been waiting for.

JL: So, really it seems that you just favor an approach helping people make more and smarter decisions for themselves.

Yes, subject to realizing that people have other things going on in their lives and can't afford the time or other hassle of becoming an efficiency expert, so efficiency needs to pervade what business offers in the market. It's not more difficult than doing things inefficiently, but changing the technologies on offer does require relentless patience, meticulous attention to detail, and fearlessness. And none of those is a very common trait.

The cornucopia of efficiency is real, but it's the manual model: we actually have to go turn the crank. It's not easy, but it's easier than not doing it. And if we do get serious about using energy in a way that saves money, some big problems like oil dependence, climate change, and the spread of nuclear weapons will go away, not at a cost but at a profit, because efficiency is cheaper than fuel. That's a prize worth working hard to capture.

Image source: RMI Smart Garage Charrette Report


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Comments

if we had people like Paul Krueger and Amory Lovins advising our glorious leader instead of the "bankers" who created this mess, hope would be more than just a poster slogan.


Posted by: lao2su on 23 Mar 09

One example: Arrange underground heat storage for your building per the "annualized geo solar" pattern, add a heat pump to move heat from the attic to said storage, put on a Solarwall(tm) south roof to increase the amount of heat available, and add the Solarwall(tm) photovoltaic modules. You get about 70% efficiency in collecting solar energy, the heat is collected in summer when most available, and you can also run the heat through hot water prewarming before using underground storage. Easiest to do with a new building, but can be retrofitted to an old one with enough work, as I am doing with my house.


Posted by: Douglas Hvistendahl on 24 Mar 09

Tripling cars' fuel economy without giving anything up turns out to be rather hard. Knowing this, oil promoters like to talk about highly efficient fuel cells, sometimes using the same factor-of-three factoid Lovins uses above. However, fuel cells that beat the efficiency of IC engines burning the same fuel, at the same power-to-mass ratio, turn out not to exist. This makes unsurprising the fact that the range attained by the new Honda Clarity is only 10-20 km more than what the BMW 520h was doing, 30 years ago, on internal hydrogen combustion.

And hydrogen still comes from oil and gas, and cars still burn less of those fuels if they just burn them, rather than first converting them to hydrogen, onboard or off. So a huge amount of R&D has done no harm at all to the fossil fuel income prospects of persons who get government or fossil-industry money.

I say cars will become clean through internal combustion's becoming continent. This will make them much safer and more desirable at the cost of increasing their primary energy consumption.


Posted by: G. R. L. Cowan on 24 Mar 09

To G. R. L. Cowan,

I'm a bit confused by your remarks. I think we are reading different books. :) I though Hydrogen can be made from water... using power from the sun for example... then where is the oil? Also in terms of efficiency, you should really read Amory's book about Winning the Oil End Game, or have a look at the numerous projects that are doing it for the X Factor prize. It is defiantly possible and the technology is here today.


Posted by: Jeremy Johnson on 25 Mar 09

In a 2,000 watt society, in Seattle, all the electricity you would ever need would be provided by pico-hydro in your downspouts.


Posted by: Scott Schreffler on 27 Mar 09

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