Greater energy efficiency has been recognised as the most important weapon in the struggle to secure energy sources and battle climate change, but the debate over its potential still rages on. Mindsets and perceptions are limiting our understanding of the potential of energy efficiency.
The usual practice is to take an economic or engineering view of energy efficiency. By definition, a typical engineer would calculate a higher energy efficiency potential than an economist who considers cost (including non-energy) as an input to the same task. However, this does not mean the engineer's point of view is more accurate or less pragmatic than the economist's. What is needed is a more holistic and systemic perspective to understanding energy efficiency and its potential.
Price does drive market forces, but not always
Mainstream economists argue against a high energy efficiency potential on the basis of price-driven market forces, which assume the market will automatically capture the benefits of cost-efficient actions. Price does drive market forces, but not always. From 1996 to 2001, the US saw a decline in its energy intensity against a falling energy price. Also at the same time, a chemical company, DuPont, experienced lower energy efficiencies in its European plants than it did its US plants, despite a higher energy price in Europe. The price-driven market forces assumption holds totally true in a perfect market, and so, an imperfect market is why the assumption could fail. There is, in fact, no perfect market in real-life for real life "systems" are very complex with a large number of variables.
An energy system is an example of a large and complex system in which the interplay of social and technical factors weakens the influence of price on decisions. For example, in the early 1990s, Chicago was unable to reduce electricity consumption as much as Seattle despite having an electricity tariff that was twice as high. Seattle's success was due to a conservation programme which increased awareness of energy and allowed the public to make better energy efficiency choices.
When a systematic view helps
On the other hand, engineers sometimes fall into the trap of their own expertise. With vast amounts of experience, they often lack a systemic view of processes and architectures due to over-familiarity or specialisation. They tend to approach energy efficiency from a component or activity-specific angle (such as retrofitting), which may not lead to overall improvement. This is attributed to interactions among the different components of the system in which they exist. To put it simply, a system is more than the sum of its parts, and hence component improvements do not necessarily lead to a system improvement.
To take a real example from industrial practice, power consumption can be cut without installing a more efficient or sophisticated pump in a heat-transfer pumping loop. It can be done simply by rearranging the pipelines and pumps. Energy efficiency need not always be achieved by new forms of technology. Innovative systems thinking will sometimes do the trick.
Ticking off the five efficiencies
Another example is the notion of compound efficiency. According to Amory Lovins, Chairman and Chief Scientist of the Rocky Mountain Institute, there are at least five efficiencies along a conversion chain: Extraction; conversion; distribution; end use; and hedonic efficiencies. The total energy efficiency should be considered from supply to end-use demand. The product of all the efficiencies is termed "compound efficiency". But engineers tend to focus on how much they can get from a resourceā€”conversion--and more efficient use of the energy by the consumer at the other end. However, these are concerns that target only a specific component.
A broader approach would, for instance, try to remove the need for that energy in the first place.
Increasingly, in the area of transport energy efficiency, analysts are working to take vehicles, which will inevitably consume energy, out of the equation. What people really need is access, rather than mobility. Vehicles provide mobility, which leads to access. Can we access a place without a vehicle"font-size: medium;">Potential energy efficiency has no cap
Contrary to the popular faith in the law of diminishing returns, it is interesting to note that Dow Chemicals in Louisiana saved more energy in its later years of energy savings implementation. There is, in fact, no limit to the potential of energy efficiency. Because if there is, what do we do when we have achieved that numerical potential? Do we stop pursuing energy efficiency?
A holistic and systemic perspective to energy efficiency is needed to reach its potential. However, the challenge with seeing the big picture is that few people truly own the entire system: They exercise control only over their particular areas of involvement.
By : Catrina Yeo, Energy Analyst at the Energy Studies Institute, National University of Singapore