Monday 1 June 2015

To mark my 100th blog I thought I would do a retrospective and summarise some old material – particularly for newer readers who haven’t been following since the beginning. This is actually blog number 103 since I started blogging in February 2013.


Looking back over the last two and half years there have been a number of recurring themes, interspersed with a few personal diversions such as celebrating the 45th anniversary of Apollo 11 and the attractions of Formula 1.


Energy efficiency is working – but we need to accelerate it


One of my big themes is that energy efficiency is working and we have successfully (at least in mature economies) decoupled energy use from growth of GDP. Despite the evidence this does not seem to be generally recognized and we still often hear the refrain “energy use is rising inexorably” or something like that. The fact is that it is not increasing in mature economies – but of course it is still rising in developing countries – once income per head reaches about $1,000 per year energy use ticks up sharply as more and more people buy more energy using stuff from light bulbs to cars. Decoupling of GDP and energy use is good (even great) news – although I think we achieved it without really trying through general technological improvement and some regulation. Now, the realities of the global energy situation mean we should make a more conscious effort to accelerate that reduction in energy intensity to achieve all the economic, environmental and security benefits that would come from having a larger economy with less energy use. If we achieved decoupling without really trying just imagine what we could achieve if we really try and implement tighter performance regulations and work to make energy efficiency just as investable as energy supply options. We know the economic potential is still huge.


Blogs that explored this theme include:


Asking the right questions


Surprise! You are living in a low energy future… (almost)


Consumers see the light – more evidence that energy efficiency is happening 


The energy efficiency revolution


Conscious uncoupling? 


Non-energy benefits & selling energy efficiency better


One of the major changes in the energy efficiency scene over the last few years has been the increasing recognition of the importance of, and real value of, non-energy benefits (NEBs) or co-benefits. Great work by the IEA and RAP in the US, as well as others such as Greg Kats have highlighted the real value of the NEBs. I now say that every-time we mention energy efficiency we should talk about the NEBs. Most of them such as greater productivity, increased sales in the commercial world, or improved health and well-being and economic development in the public sector, are always going to be better motivators for decision makers to take real concerted action than just energy savings, which I realized after 30 years working in the field is just really boring to most people (see my presentation launching the energy efficiency cool wall). NEBs were featured in these blogs:


How do we make energy efficiency stickier? 


The layer cake of energy efficiency 


The Association of Decentralised Energy (ADE) in the UK also did a great piece of work on highlighting both the success of energy efficiency and the value of non-energy benefits which I contributed to. The ADE work was described here:


Shining a light on Invisible Energy


Energy security


The issue of energy security suddenly came back on everyone’s radar with Russia’s actions in the Crimea and the Ukraine, as well as their increased military spending and aggression – for example flying close to UK (and that of other countries) airspace without turning on their transponders. The combination of the Russian factor and the deteriorating situation in the Middle East with the rise of the so-called Islamic State has made me more worried about energy security, and our increasing dependence on imports, than ever before. UK energy imports continue to rise and the EU imports c.€400 billion of energy a year, much of it from Russia. Even if there was no potential military threat, the growing domestic oil demand in oil producing countries, most notably Saudi Arabia, suggests that a future in which their oil exports are severely constrained is getting closer.


In all the discussion of the threat of being dependent on Russian gas supplies there was little or no mention of Russian coal which supplied 45% of UK steam coal and therefore generated 16% of our electricity supplies (admittedly an improvement from 2012). We really should look at all the factors – not just the headlines about gas. As well as coal imports the UK became a net importer of petroleum products for the first time in 2013.


The reality is that dependence on any other country or region for energy supplies seriously reduces the dependent country’s degrees of freedom in response to any geopolitical situation. Independence of energy supplies gives true independence of action – which we clearly don’t have at the moment. On top of those concerns it cannot make sense to export about €1 billion a day out of Europe and for the US to spend $0.75 billion per day keeping the US Navy in the Gulf. In addition to security concerns, in a world where we increasingly pay attention to where and how goods are made – sourcing and supply chains – surely we should be asking the same questions about our basic fuel supplies.


An energy security story that didn’t get much attention in Europe was the Metcalf sniper attack on an electrical sub-station near San Jose, California. The perpetrators of this “sophisticated” attack by a team of snipers, which damaged 17 transformers and resulted in $15 million of repair work, have still not been apprehended. However, as a result security on the electrical infrastructure is being upgraded across the US (and one would hope the UK and Europe).


I am interested in how language shapes our thoughts and actions, at both an individual and corporate or national level. We always talk about energy security but as we know, no-one actually wants to buy energy they want the services that come from the use of energy, whether it be warmth, coolth, motive power, light or sound. In talking about energy security all the time we remain focused on the physical security of the flows of energy commodities. We should be talking about the security of energy services and when you do that it focuses the attention more on where the services are needed (close to home) and on improving energy efficiency. Retrofitting just the Soviet era housing in Central & Eastern Europe would significantly reduce Europe’s import dependence – perhaps we should put it on the defense budget?


The following blogs looked at energy security issues.


Energy Security for the UK and and Europe


More on US energy security


Don’t mention energy security again


Making a real market for energy efficiency


One of the problems with energy efficiency is that somehow it is regarded as “special” – and at one level it is because of the fundamental nature of energy. However the view that energy efficiency is something that can only be regulated or implemented through some kind of government programme or subsidized utility programme (still prevalent in Europe and even the US) is a hangover from the 1970s. Energy efficiency is a resource for meeting demands for energy services, like any other energy resource whether it be coal, oil, gas, nuclear or renewables. In fact, it is the resource that has provided more energy services than any other over the last forty years – this is still not widely recognized by policy makers and analysts.

The more we can create a real market in which energy efficiency actually competes with energy supply the more efficiency will be purchased – it really is cheaper, quicker and cleaner. In energy supply we have standardized ways of developing projects, an ecosystem of developers, constructors and operators of projects and multiple sources of finance. We don’t see that in energy efficiency but rather the idea that government, either directly or indirectly through utility programmes, should organize large-scale, top-down programmes to implement energy efficiency projects. This always results in higher costs and bureaucracy, however much energy efficiency is improved. We need to get away from this 1970s, statist thinking and move towards creating a true market in which efficiency. The Investor Confidence Project which I am involved in seeks to make efficiency a more investable asset class. The following blogs touched on this theme.


Making a market for energy efficiency


Moving energy efficiency from a public good to a market commodity


Thank you to all my readers over the last two and a half years. Part 2 of the retrospective will follow next time. Please subscribe to updates from and follow me on Twitter @DrSteveFawkes


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Dr Steven Fawkes

Welcome to my blog on energy efficiency and energy efficiency financing. The first question people ask is why my blog is called 'only eleven percent' - the answer is here. I look forward to engaging with you!

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