In the ever-growing efforts to convert our world to one powered by clean energy resources, the same renewable energy sources are typically touted as the key cogs in a patchwork solution to the pending climate crisis: solar panels installed on buildings, wind turbines built off coasts and in wide open land of the country, hydropower generation connected to nature’s rivers, geothermal resources, and other smaller renewable energy sources. And despite the controversy it sometimes arises, many people will point to nuclear power as the one carbon-free energy source that can reliably be generated 24 hours per day.
However, confining the idea of the clean energy transition to these traditional renewable energy sources is somewhat inside-the-box thinking. While it’s not without its own fair share of debate, many people have come to declare energy efficiency as the complementary piece to complete the clean energy transition puzzle. In this way, energy efficiency can be considered the invisible renewable energy source, and an essential source at that.
What does that even mean?
The idea behind calling energy efficiency an ‘invisible renewable energy source’ comes from the nature of energy efficiency savings its ability to achieve the same, and often even better, results that additional renewable energy generation would.
Put simply, the cheapest ‘method’ of energy generation would be to not need that energy to be produced in the first place. Similarly, the cheapest source of electricity could be considered simply making sure the electricity that is generated isn’t wasted. Or from a utility’s perspective: the most affordable power plant is the one that does not need to be built because total demand is kept in check.
Each of these statements are different ways of expressing the same tongue-in-cheek idea. People often see the building of new and more and better renewable energy generation sources as the only way to wean our world off the fossil fuels that are asphyxiating the climate. So, given that forecasters see a steady and continual increase in world energy use in the coming decades, especially as higher economic growth is realized in rural and developing nations, the thinking simply leads to the path that we must build more and more clean energy generation to meet these growing energy needs. However, looking at energy efficiency as the invisible renewable energy source subverts this assumed trend by noting that a cheaper, more efficient, and more environmental solution would be to offset some of the energy demand through increased efficiency. Not only is minimizing the demand through efficiency an oftentimes low-hanging fruit, but doing so represents a situation where everybody wins. Customers saving on energy save on their bills, utility companies don’t see as much strain on their resources that could force them into rolling blackouts or building expensive new generation, and the social costs of additional energy consumption are prevented. Additionally, the energy efficiency method to renewable energy is also invisible because you literally can’t see it. There are no solar panels or wind turbines to install, just wise choices and savvy investments that reduce waste and achieve the same goals as renewable energy investment.
Examples in Implementation
When people think of energy efficiency, the image that typically pops up is one of LED bulbs, ENERGY STAR rated appliances, and other energy efficiency measures that everyone can implement in their home. And without a doubt these energy efficiency efforts are critical in the battle to temper a rising global demand for energy. But energy efficiency extends well beyond the walls around you and the ceiling above you.
Efficiency in electric power generation
Regardless of the type of power generation, all can be optimized in terms of their energy efficiency. Utility-scale solar generation can create more energy for the same monetary and environmental costs through predictive maintenance and statistical performance monitoring, not to mention constant improvements to PV technologies. The wind energy sector is looking to improve efficiency through better siting and designs. Natural gas plants have been increasingly shifting from traditional simple cycle plants to the 50% more efficient combined-cycle power plants. Even coal power, the guiltiest of fossil fuels when it comes to greenhouse gas emissions, has seen significant investment in trying to maximize the amount of energy generated from the same fuel source. No matter the power type, the motivations and the answers are the same—extracting the maximum amount of power from the same amount of input not only benefits the planet but it boosts the bottom line of the power companies. In the face of increasingly stressed grid systems, utilities recognize that “saving energy is cheaper than making energy.”
Efficiency in transmission and distribution
Another source of energy waste that plagues utilities is when the electricity they generate must travel a long distance before reaching the power outlet in your home or office. Estimates place the total losses between a power plant and its customers at 8 to 15%. What that means is if the world experiences a 5% increase in power demand (a very significant amount that is already predicted to happen every handful of years), improving the transmission and distribution system could hypothetically cover those needs rather than any new natural gas plants or newly built renewable energy. Methods that have already found success to improving the energy efficiency of transmission and distribution include smart grid technology (allowing better communication between customer and utility), distributed energy resources and/or microgrids (which greatly reduce the total distance energy must travel before reaching your home and thus minimizing losses), and energy storage solutions (which smooth out peaks and valleys in supply/demand that strain the transmission system). By improving the efficiency these existing methods of transporting energy from generation to consumption, the gains represent the invisible and silent renewable energy source that cannot be overlooked.
Efficiency in energy use
As discussed earlier, the last part of the energy pathway is the final use by the customer. For residential customers, improving efficiency can take the form of more efficient household appliances, education on better habits (e.g., turning lights and power strips off when not in use), improving building envelope tightness so that heating and cooling costs drop, and more. While this again might seem like small potatoes in the grand scheme of it all, utilities are coming to realize the importance of encouraging their customers to be efficient, to the point that they are starting to invest in smart home products for customers (so that customers will be able to improve efficiency and shift their demands to non-peak hours) or even offer customers rebates on LEDs. The idea here is the same as before: if a utility can invest a small amount to improve the efficiency of their customers, it can prevent the need to invest a large amount in new generation to keep up with rising demand.
Not only that, but residential customers are just one part of the equation, with industrial and commercial sectors consuming a combined four times as much energy as the residential sector. As such, large industrial plants, retail buildings, and office parks are even more valuable with regards to their energy efficiencies.
Looking at the Big Picture
The idea that energy efficiency is valuable as a pseudo stand-in for renewable energy is not without controversy. Bill Gates has famously championed innovation in renewables rather than insulation in energy demand as the way to combat climate change. And it’s true that in certain situations renewable energy generation is more affordable than efficiency, that energy efficiency upgrades have a ceiling, that you can’t actually power your home on efficiency so it’s not actually a renewable energy source, and that energy efficiency upgrades don’t mean that your operations are not still being powered by fossil fuels.
All of these considerations need to be considered when comparing energy efficiency to renewable energy in order to recognize the differences. But the point of this is all to say that energy efficiency is a key part of the clean energy transition that’s not to be forgotten. Further, it doesn’t have to be a competition as renewable energy and energy efficiency go hand in hand to further achieve the same goals. All this to say: energy efficiency can and should be considered a key ingredient to the renewable energy stew as we identify the solutions that will clean up the energy industry and help stave off climate change.