The stakes for energy efficiency may be much higher than generally realized. President Bush's assertion in 2001 that the US economy could not afford Kyoto may not have considered the vulnerability of the electric grid and other costs of hurricanes intensified by global warming (Ivan in 2004 was a 2500 year storm and was followed by an even more intense Katrina in 2005). Governments seeking to mitigate climate change without rewarding efficiency are increasing local energy prices and could well damage their own economies. Spending US$10.8 trillion to supply global electric load growth over the next 30 years with central generation will greatly worsen CO2 emissions and will, according to the International Energy Agency, still leave over 1.4 billion people in energy poverty (IEA, 2002). The world would be better off deploying local generation with doubled efficiency, saving US$5 trillion in the process, and then using some of the savings to extend energy services to all people.
There is no reason to settle for current energy inefficiencies: energy recycling is already economically advantageous using existing technology. The best way to improve energy system efficiency is for governments to heed the lessons of economics and to fully expose the power industry to market forces, which would automatically improve economic and energy efficiency. Failing such full deregulation, performance can be improved by eliminating regulatory biases against local generation and by encouraging energy recycling. Once the public sees the benefits, support will grow for more comprehensive changes.
It should be emphasized that there is no need to eliminate existing central generation capacity. A great deal of new local generation is needed to just meet the world's expected electric load growth and retirement of the aging fleet of central plants. Nor is there any reason to weep for the established utilities. Nothing should prevent these organizations from participating in the inevitable (and profitable) new market for decentralized power plants that recycle energy.
Was this article helpful?