by Richard T. Stuebi
I sometimes receive criticism for not sufficiently promoting energy efficiency as a means of reducing our reliance on fossil fuels. I don’t think that the criticism is justified – I do strongly support the pursuit of energy efficiency – but I am willing to admit that I spend more time and attention focusing on energy supply technologies.
This is for two reasons. One is that we can’t realistically shrink our way to zero energy requirements – or even close. Yes, we must stop wastage, but for continued human progress over the centuries to come, we will always need a substantial supply of energy, from more benign and everlasting sources than the fossil fuels we depend upon today.
Second, and more subtly, the adoption of energy efficient technologies often begets a perverse reaction from the market – increased energy consumption — due to the effect of the economic concept of income elasticity.
This concept is illustrated by a paper entitled “Solid-State Lighting: An Energy-Economics Perspective” by Dr. Jeff Tsao and colleagues at Sandia National Laboratories in the Journal of Physics D: Applied Physics, assessing the long-run implications of the adoption of more efficient lighting technologies. Their study indicates that, by 2030, LED lighting will be three times more efficient than fluorescent lights – but that customer demand for lighting (as measured in lumens) will increase by a factor of ten, meaning that electricity requirements to supply lighting demand would have to double, even with elimination of incandescents and replacement with LEDs.
Again, I support the transition to LEDs. It should be noted that LEDs have much less of a thermal footprint, so even if the paradoxical results suggested by Dr. Tsao et al come to pass, there may still be a substantial reduction in energy requirements associated with air conditioning as LEDs come to replace incandescent lights.
The moral of this story is that energy efficiency is not a panacea for our environmental challenges. It is easy for advocates of energy efficiency to overlook consumer behavior when considering the aggregate impacts of a new technology – and thereby may overstate the potential environmental benefits associated with energy efficiency innovations. As a result, the search for new and better energy supply approaches remains an imperative – even while more aggressively promoting more efficient energy consumption technologies.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.