The first cracks: energy efficiency

I don’t often agree with the chief of the International Energy Agency and those who follow this newsletter are probably chuckling right now. But in evidence that no one is always wrong just as no one is always right, I came across IEA’s energy efficiency report recently and I have to say I agree with what Fatih Birol says.

What he says is “We consider energy efficiency to be the ‘first fuel’ as it still represents the cleanest and, in most cases, the cheapest way to meet our energy needs.” He then goes on to talk about net zero and its impossibility without energy efficiency but that’s not important. The important thing is that energy efficiency is getting some headline space. And this means the first cracks in the net-zero narrative are beginning to show.

Now, you might argue the cracks have been there all along and you’re probably right but this sounds more dramatic so I’m sticking with it. So, the cracks are beginning to show and what they are showing is just how futile, albeit expensive, this whole net-zero rush is or would be if it overlooks the consumption side of the energy equation.

Currently, international bodies such as the IEA, environmentalist organisations and other lobby groups, governments and businesses are spewing report after report and forecast after forecast about energy supply and how we are going to make it all green and emission-free so everyone will live a better — and more environmentally friendly —life. At the same time, the same organisations —and also others — openly talk about the expected growth in global energy demand.

The U.S. Energy Information Administration, for instance, sees global electricity generation at 45 trillion kWh in 2050 in response to much higher demand. That’s up from 20 trillion kWh in 2018, so a more than twofold increase. That was last year. This year, the EIA is blunter: it has forecast a 47% increase in global energy demand between now and 2050, the net-zero year.

The argument that this increase in demand can be met by just building more solar farms and wind parks — and hydrolysers for green hydrogen, of course — is undefendable. These require land and resources, and while resources can be recycled land is finite and unrecyclable. Also, we need it to grow food. Short of a major breakthrough in solar panel efficiency or energy storage costs, renewables won’t be enough to meet the coming demand for energy.

When you encounter a limit on the supply side, then, it’s natural to look to the demand side and this is exactly what the IEA has done. The report I mentioned earlier warns that basically energy efficiency has become unfashionable and as such, nobody is paying much attention to it anymore.

This is the problem with trendy, well, trends. The important things often get overlooked in favour of unimportant but buzzy things such as the outrageous abuse of the phrase “climate change” and its relatives “climate crisis”, “climate emergency”, “climate disaster”, and “climate catastrophe”.

“There is no plausible pathway to net zero emissions without using our energy resources much more efficiently,” the IEA’s Birol said and, again, I wholeheartedly agree. This is essentially admitting that we can’t cover the whole planet with solar panels, wind turbines, and electrolysers, and even if we do we still wouldn’t have enough energy without another quarter of a planet with battery energy storage.

Yet admitting that we need to use less energy — which is what energy efficiency means — is one thing and it is the simpler thing. Actually getting people to use less energy, all in the quest for a net-zero human civilisation, meaning for everyone’s own good — would be a lot trickier.

It is a universal truth that getting accustomed to better living standards is much easier than the other way round. I’ve been used to regular and reliable water supply my whole life so the two times I experienced water outages lasting for more than 24 hours the blow was severe.

Life without running water is unpleasant, annoying, and uncomfortable. And there are millions of people living that precise life right now. They have never had access to running water 24/7. And their chances of getting such access may become slimmer if the energy efficiency narrative gains traction. Because although energy efficiency is a great idea, once it is turned into a narrative, it becomes a manipulation tool.

I’ve used water as an example but water and energy are intimately related. Water supply in most parts of the world relies on electric pumps rather than nature to reach households. That’s essential electricity that we absolutely need. But is all the electricity we consume essential? This is the question that the energy efficiency issue poses. And answers will vary wildly based on people’s perception of need versus want. Anyone who touches this perception and tries to adjust it is in for some very interesting times indeed.

I am currently sitting in my living room with the air conditioner on because it’s 2 degrees Celsius outside. I have lived at 2 degrees Celsius outside without heating and all I can say is this is not an experience I would want to go through twice. The temperature in the room averages 20-21 degrees Celsius. With a couple of thin layers of clothing under a good sweater this temperature makes for a cosy winter in the city. I do know people, however, who maintain temperatures of 24 and more degrees at home.

Now, I can go from 21 to 19 to save energy, although I do not believe this is necessary given that our AC does not work 24/7 (See? My perception is that I am not wasting energy by keeping the house as warm as I do.). We try to not waste energy because we pay for it and nobody likes huge utility bills. Can those people who like their winters warm and tropical go to 19 from 24? They probably could but they would need to be forced to do it. Wherein lies the biggest challenge for potential energy efficiency warriors in the climate change army.

Why the war metaphor? Because judging by the discourse on climate change, to many people, both in power and regular citizens, it is akin to a holy crusade to reduce humankind’s carbon footprint. Crusades are wars.

When people get used to a certain style of life it is a challenge to make them change that style of life in such a way as to become less rather than more comfortable. Heat pumps instead of gas heating is one such example and what makes this example quite amusing for observers who are observing from a safe distance of several thousand miles is that heat pumps are not only worse at heating than gas systems, they are also more expensive. Some would probably argue that this is the case of renewables all around but that’s another topic.

Back to energy efficiency. The IEA report contains data on energy efficiency investments, which are on the rise. I know, this does sound surprising after Birol’s warning from above but that’s what the data shows. But it’s not data about people opting to consume less energy. It’s data about a rise in energy efficiency investments in things such as retrofitting buildings.

By the way, switching ICE cars for EVs for some reason also counts as energy efficiency in the IEA report. It could be an example of the age-old bureaucratic habit of “if it sounds relevant, put it in so the figures make sense”. It could be a genuine inclusion of EVs into the list of things we can use to consume less energy although the argumentation is flimsy and sounds more like trying to change the meanings of things.

Anyway, retrofitting buildings sounds great, only at some point buildings eligible for retrofitting will run out. What then? Maybe heat pumps for all: a recent study says it has found a combination of heat plump plus solar to be quite effective at heating up homes in the U.S. Upper Midwest. The news story doesn’t say anything about the level of comfort the heat pump provides relative to propane but I trust the researchers have checked their calculations and the conclusions are accurate — and they state the competitiveness of the heat pump-solar combo depends on electricity prices in the area.

Ultimately, energy efficiency is about consuming less energy, in absolute, rather than relative terms. It’s a pretty simple concept but turning it into a practice for more than a billion people — if we look at Europe, the U.S., and Canada — would be a lot tougher. In fact, I’d go as far as to say it would be impossible to make it work without some serious enforcement action from governments. What’s even worse, the governments themselves may be forced to take that action when energy supply gets tight. They will just not have another choice when all the fossil fuel power plants get retired.