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The Psychology of Energy Efficiency
Tom Konrad, CRES 2007 Board Treasurer
March 2007 Efficiency is unquestionably the
largest, cheapest, and cleanest
wedge among the many we need de-carbonize our energy
economy. Energy efficiency tends to cost just 1 to 3 cents per kWh
saved, far less than even coal-fired generation. Every renewable
technology, from wind to solar, to biomass, has trade-offs. At the
very least, we have to decide if the energy we are using for one
purpose is not better used for something else.
Energy efficiency is the exception to this rule:
you can not use a kilowatt-hour or a BTU over and over again. Given
these advantages over generation, it’s amazing that energy
efficiency is nevertheless so extremely cheap. Given an even
moderately efficient (pun intended) market, you would expect that
all the cheap energy efficiency measures would long ago have been
taken until the marginal price of the next efficiency measure was
above the marginal price of added electricity generation.
So why hasn’t it?
Why is Tri-State planning three large new coal
plants in the next 15 years,
more than its own projections seem to justify, the face of
opposition
from some of its own member coops when, for a fraction of the
cost, they could instead pay to help people insulate their homes,
change to more
efficient air conditioners, and replace energy efficient
lighting and save as much power as they plan to generate with the
coal plants without any cost for fuel and harm to the environment
from mining and emissions?
For that matter, why don’t Tri-State’s customers
(and the rest of us) take these steps ourselves, when the internal
return on investment is many time what we can rationally hope to
achieve in the financial markets, and in many cases is even higher
than the interest borrowers with the worst credit ratings pay on
their credit cards. (Like most financial advisors, I hate debt,
especially credit card debt, but even if you’re drowning in $30,000
of credit card debt at 25% APR, it still makes sense for you to buy
a pack of CFL’s at $3 each on that high-interest credit card, and
replace every incandescent light bulb in your house that you use
more than 2 hours a day.)
Here’s a
blog which does a good job outlining the usual answers: lack of
financing, perverse incentives, and disinterest on the part of
people for whom energy is only a tiny part of the budget (all of
which are true.) He goes on to outline prescriptions that will
undoubtedly help to break down the barriers to the adoption of many
Energy Efficiency measures.
I see other barriers that lie behind these. Not
just a failure of normal market forces, but conceptual problems.
While energy in general is a fuzzy concept to most people, using
less energy is even less tangible. You just can’t drop energy
efficiency on your foot. You’re not even at risk of electrocution
from it.
The pernicious consequence of systems of
measurement is always that things we can’t measure go unnoticed. If
you have a hammer, everything looks like a nail, but even more
insidiously, things that will never look like nails no matter how
hard you squint disappear from your vision altogether. It is this
psychological quirk that makes energy efficiency go unnoticed.
What image comes to your mind when I say “wind
power”? If you’re anything like me, you probably had a image of a
forest of giant wind turbine blades turning gracefully on the
horizon like ballet dancers. Or, you might be like my wife, who
would also have an image of a wind farm, but thinks they are ugly
(although not so ugly as the haze from a distant coal plant) despite
recognizing their necessity. She wishes they were painted to
camouflage them into the background. Whatever your attitude towards
wind power, you probably saw an image.
Now try “energy efficiency.” It’s a lot trickier,
isn’t it? I think about energy efficiency all the time, the way a
teenage boy thinks about sex (okay, maybe not quite that much), and
even I can’t settle on an image. My mind flashes from the act of
replacing an incandescent bulb with a compact fluorescent lightbulb
(CFL) to an industrial scale
combined heat and power
facility, to
closing the blinds at night to keep the heat in.
Not only is energy efficiency hard to picture,
it’s also hard to measure. To compute the energy savings from any
activity, you have to establish a baseline: how much energy would
you have used if you had not changed your methods. Even in the
simplest case of replacing a CFL, we don’t really know that the bulb
we replace would really have stayed in the socket until the CFL
breaks: A CFL can easily last 10 years, and by that time, we may be
replacing all our bulbs with LEDs (light emitting diodes). And
that does not even begin to account for the effects on our HVAC
systems.
Is your mind spinning? That’s my point. It can be
so hard to get our minds around all the impacts of energy efficiency
that, for most people, the most people, it may actually be rational
to waste a little energy in order to avoid the headache that trying
to get their mind around efficiency may entail.
The problem is that decades of conserving brain
power has left us as a society that wastes energy egregiously.
My prescriptions, designed to make thinking about
efficiency easier:
- Measure energy use at every opportunity. Many
Prius drivers report that the real-time MPG gauge on
the dash causes them to change their driving habits to drive
more efficiently. Getting a
Kill-a-Watt
energy meter makes us
think more about our next electronics purchase.
Getting to know your electric meter can also motivate you to
track down wasted energy. A radical idea: on new homes, the
electric meter should be inside, along with the circuit
breakers. New meters can be read (and even turned on and off)
remotely, so there is no reason any longer to have them on the
side of the house where we never see them.
- Another thing we need to measure is when we
use our electricity, not just how much. Wholesale electricity
prices can vary from a few cents per kWh to 30 cents or more
during peak consumption. As we move to a grid based on renewable
energy supplies, most of which are intermittent and non-dispatchable,
we need to get used to paying the real-time price of the energy
we’re using. Wide-spread adoption of time of use metering will
drive the invention and adoption of appliances that can adapt
themselves to changing prices. There are direct, immediate
benefits to the system by shaving peak loads, but the real
benefits will come when people adopt new ways of doing things
and new devices that will cause our appliances to run and our
devices to charge when electricity is plentiful, and run only
the most essential uses of electricity when it is scarce. Xcel
is currently doing a pilot study on Time of Use Pricing in
Colorado. The preliminary result are that the right pricing
scheme encourages customers to change their energy use much more
than they had anticipated… but it still would not be “economic”
to change out meters for more sophisticated models capable of
handling this sort of billing. Their definition of “economic”
almost certainly does not include the benefits of the creativity
which realistic pricing would unleash.
- Allowing utilities to profit from selling
less rather than more. This concept, known as decoupling, is
covered well
here. It’s important to remove (or even reverse) the
incentive of utilities to sell us more electrons when we really
want them to help us use less.
Tom Konrad, Ph.D.,
serves as treasurer of the Colorado Renewable Energy Society and
manages an investment consulting firm in Denver. He also runs a blog
called EE / RE Investing.
http://www.tomkonrad.com
http://tomkonrad.wordpress.com/ |
