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THE ‘quiet revolution’. That’s how Jose Goldemberg, professor of physics
at the University of Sao Paulo and a past president of three of Brazil’s
electricity utilities, describes energy efficiency. Unlike the oil-linked
conflicts in the Gulf or the insecurities over nuclear power that resulted
from the Chernobyl disaster, energy efficiency has received little publicity
and no generous research budget. And yet in little more than the decade
that followed the first energy crisis of 1973, it has transformed the energy
debate and the economic fortunes of many countries. It appears also to offer
one of the best opportunities for reducing the impact of global warming
from the greenhouse effect.

Energy efficiency works. The world has saved energy worth $300 billion
per year since 1973 when the price of oil escalated and forced energy planners
to rethink their strategies. In the 21 countries belonging to the International
Energy Agency (IEA), founded in 1974 under the aegis of the OECD, economic
output grew on average by 32 per cent between 1973 and 1986 and yet energy
demand rose by just 5 per cent. In the US, which consumes a quarter of the
world’s fuels, the annual demand for energy is still below that of 1973
even though the country’s gross domestic product (GDP), an indicator of
economic activity, is up by 40 per cent. Japan has gone one better. The
country used 6 per cent less energy last year than it did in 1973 even though
its GDP grew by 46 per cent over the 15 years. The savings have further
sharpened Japan’s commercial edge, according to Art Rosenfeld, senior research
fellow in the Energy Systems Analysis Group of the Lawrence Berkeley Laboratory,
California. He estimates that as a result of the country’s low energy intensity,
the amount of energy needed to produce economic growth, Japanese exports
are 2 per cent cheaper than American ones. These results have dispelled
the myth that rising energy consumption runs hand in hand with economic
growth. Without the improvements, we would now be burning the equivalent
of an extra 1.4 billion tonnes of coal, and producing more than 3 billion
tonnes of carbon dioxide, every year.

Low fuel prices since the mid-1980s have greatly discouraged improvements
in energy efficiency, admits Gerald Leach, senior fellow at the Swedish
Environmental Research Institute: ‘But there is still a lot more inefficiency
in the energy system to get rid of.’ The IEA estimates that if energy conservation
measures that are now economically viable were fully implemented by the
year 2000, energy efficiency would be more than 30 per cent higher than
current levels. The European Commission wants to improve energy efficiency
in its member states by 20 per cent over the decade to 1995. David Olivier,
an independent energy consultant, calculates that Britain could reduce its
demand for electricity by 70 per cent simply by switching to the most efficient
appliances, motors and lights on sale.

We waste around 60 per cent of the energy available as lumps of coal,
crude oil, gas and uranium ore before we extract a useful service such as
motion, heat or light. And yet governments have become complacent as fuel
prices have dropped, slowing the progress of efficiency measures, such as
the improved thermal insulation of buildings, better systems of heat recovery
and recycling and the development of more productive appliances. Since 1986,
the British government has halved the budget of its Energy Efficiency Office,
to Pounds sterling 15 million this year; there are further cuts in the pipeline.
In the US, spending on efficiency programmes has fallen by two-thirds over
the same period, to $165 million this year.

Energy efficiency is not simply an option for the industrialised world.
Although consumption is often low in the developing world, there are still
huge inefficiencies in its energy system. For example, the Pakistan National
Energy Conservation Centre estimates that more efficient use of energy could
reduce the projected growth in electricity demand within the country by
at least 30 per cent over the next 15 years. In China, there has been a
rapid increase in coal consumption; although the government has achieved
an average decrease of 3.7 per cent per year in energy intensity since 1979,
more needs to be done. In developing countries, low fuel prices have simply
provided a temporary respite from crippling import bills for diesel.

The United States Agency for International Development (USAID) highlighted
the scale of the problem in its study on half the countries receiving aid,
Power Shortages in Developing Countries: magnitude, impacts and solutions,
published in 1988. Without the introduction of improvements in the way energy
is supplied and used, the report says these countries will need to spend
$3000 billion between now and 2010. The loans for such an expansion, even
if the recipients could afford them, are simply not available. And yet the
international lending agencies still prefer to provide more than nine times
as much money to increase the supply of electricity than they do to conserve
what is already produced.

According to George Henderson, head of energy, economics and statistics
in the building energy efficiency division of Britain’s Building Research
Establishment, saving energy is ‘mainly a matter of doing a number of simple
and relatively boring things well’. This is particularly true in buildings,
which consume more than 40 per cent of the total demand for energy in most
industrialised countries. In the northern hemisphere, three-quarters of
the energy heats space and water. Stricter building regulations, which set
the maximum heat losses allowed through walls, roofs, windows and floors,
are part of the answer. Older buildings, however, need substantial renovation.
Improvements must include thicker insulation, greater control of the heating
systems and making buildings more airtight.

In the 21st century, homes are likely to be super-insulated buildings;
only a few of them exist today. These structures have thick insulation,
which varies from 150 to 200 millimetres in walls, to 300 millimetres in
roofs to 100 millimetres in floors, and they are more airtight. This means
less than one-tenth of the air is changed every hour, which is one-tenth
of the average rate at the moment. Judicious control of the system helps
also to reduce heating bills by more than 80 per cent, even for large houses
in harsh climates. More than half of the new dwellings in Saskatchewan,
Canada are now super-insulated: one group of houses in the north of the
province requires no heating even when temperatures fall to -30 Degree C.

Milton Keynes is undoubtedly Britain’s most energyefficient city. It
has developed its own Energy Cost Index, which assesses how efficiently
a proposed building will use energy. Developers can only erect buildings
in the city that match the requirements of the index, which are more stringent
than the national building regulations. A super-insulated home costs more
to build than a standard one, but the price is not extravagant. Builders
erected four super-insulated homes, designed in Finland, in one day in Milton
Keynes in 1986. The measures to improve the energy efficiency of the buildings
added Pounds sterling 2000 to the cost of each home, but annual fuel bills
are around Pounds sterling 30 compared with Pounds sterling 250 for a home
built to the national standards.

Thermostatic and time controls are another simple way of ensuring that
heating, cooling and lighting occur at the right place and the right time.
Building Energy Management Systems (BEMSs), as these devices are known,
are suitable for commercial and public buildings, and for use by industry.
At its simplest, a BEMS is an electronic circuit in a box that controls
all the heating and lighting systems in a building: one for a bank or a
medium-size office costs less than Pounds sterling 1000. At the other extreme,
in a chemical factory for instance, a computer constantly feeds data from
thousands of gauges monitoring temperature, lighting and processes to operators
of VDU screens, who can adjust conditions so that energy is used more efficiently.

Oak Ridge National Laboratory, Tennessee, published a report late last
year entitled Energy Technology R&D: What Could Make a Difference?.
Of the 50 technologies identified as likely to contribute to ‘improving
the US energy system’, four would improve the efficiency of transport, seven
concern building efficiency, eight would make industry more energy efficient
and two would improve electrical appliances. Another four would improve
the efficiency of fuel combustion in power stations.

In the transport sector, the laboratory says engineers could redesign
transmissions so that engines always run at their most efficient speeds.
In the building sector, the report advocates better heat pumps, ‘smart’
control systems that automatically determine the need for space conditioning
and lighting, and computer-assisted design of the structure of a building
to make the most of the benefits of thick insulation. Within the industrial
sector, the laboratory sees its proposals complementing existing techniques,
such as heat recovery and combined heat and power. The researchers suggest
new catalysts in chemical reactions and more robust sensors and controls
to work in harsh environments. They also propose the development of new
separation processes, such as those involving the use of membranes and supercritical
fluids, whose properties can be manipulated in extreme conditions, to replace
less efficient ones, such as chemical distillation.

More efficient appliances, compact fluorescent lighting and advanced
industrial motors are the other main areas for savings. The running cost
of the least efficient domestic appliance, such as a fridge or cooker, is
almost three times that of the most efficient. With, on average, a kilogram
of carbon dioxide released for every kilowatt-hour of electricity produced
from a fossil fuel, the small losses in individual households quickly add
up to an enormous waste of energy and cash. Environmentalists in the US
expect tremendous results from the National Appliance Efficiency Standards
Act, which came into force in March 1987. By the year 2000 they predict
that the act, which requires new domestic appliances to meet stringent energy-efficiency
standards, will be reducing electricity consumption by 53.5 billion kilowatt-hours
per year: this is equivalent to one-fifth of Britain’s energy demand last
year. They say that the fall in peak demand will make 22 large power stations
redundant, reducing emissions of carbon dioxide by 50 million tonnes per
year, or about 3 per cent of the volume released in the US.

So why don’t individuals, companies and governments conserve more energy?
Adding up the advantages of energy efficiency invariably leads to the conclusion
that spending Pounds sterling 1 on efficiency measures, rather than on new
sources of supply, is much more cost-effective. The answer lies mainly in
the lack of financial incentives and the reels of red tape. We need to consider
the large subsidies our energy industries receive, the negative value of
the pollution that energy generation causes, and our inertia over energy-efficiency
measures.

Squandering the subsidies

Energy subsidies are enormous. In 1984, they totalled $44 billion in
the US alone: that is more than $500 for every household in the country.
Around 93 per cent of them go to traditional technologies, such as those
exploiting nuclear, coal and gas power: less than 2 per cent assist energy
efficiency. In Britain, the government has given the nuclear industry more
than Pounds sterling 16 billion towards R&D since the late 1950s. The
coal industry has also received large subsidies to develop new mines and
to help with its corporate restructuring. Such market distortions lead to
bad economic and technological decisions.

In the developing world and in Comecon states, the situation is even
more extreme. Mark Kosmo, research associate of the World Resources Institute,
an independent environmental policy group based in Washington DC, found
that coal in China costs one-quarter of what it does elsewhere in the world.
The subsidies have caused excessive demand and frequent supply shortages,
which has led to idle plant and equipment in industry. In Comecon states,
cheap fuel and extravagant power generation have caused grossly polluted
cities and dying forests. East Germany has the dubious distinction of the
highest level of carbon dioxide emissions per capita in the world. The Soviet
Union is not far behind.

Now we need to do more than just end the subsidies. According to Ernst
von Weizsacker, director of the Bonn office of the Institute of European
Environmental Policy, set up in the mid-1970s, the introduction of a ‘carbon
tax’ on fossil fuels will encourage energy efficiency and reductions in
emissions of carbon dioxide. Carlo Ripa di Meana, the Environment Commissioner
of the European Commission, supports the idea. He points out that a levy
of just 0.5 US cents per kilowatt-hour of electricity generated by fossil
fuel would produce a revenue of Pounds sterling 33.2 billion per year for
the European Community. This could be used to encourage, through subsidies,
the adoption of more efficient energy systems. The tax would probably be
applied on a sliding scale, higher for coal than for gas, to take account
of the greater emissions of carbon dioxide from coal combustion.

Institutional obstacles to energy efficiency include little consumer
information about the impact of products on energy consumption and on pollution;
restricted access to finance and expertise for new technologies; and financial
rates of return that support investment in projects that supply energy rather
than reduce demand. There is also the simple inertia among electricity utilities
that have never had to assess the option of ‘negawatts’, or energy savings,
as an alternative to the increased supply of megawatts from new power stations.

In the US, an increasing number of utilities are now beginning to spend
money to reduce, or at least hold down, energy demand rather than build
new power plants. Bonneville Power Administration, based in the Pacific
northwest, has invested more than $700 million in energy conservation over
the past 7 years. This has already meant that new generating equipment,
capable of producing 220 megawatts, has not been built, a saving that is
expected to grow to more than 3000 megawatts by 2010. According to the Electric
Power Research Institute, 23 states are either opting for or considering
conservation as part of their investment plans for the 21st century.

So, industry willing, how much can energy efficiency achieve? The world
now consumes the equivalent of more than 7 billion tonnes of oil in the
form of fossil fuels every year: 42 per cent is oil; 34 per cent is coal;
and 24 per cent is gas. Hydroelectricity provides the equivalent of a further
524 million tonnes of oil, nuclear energy another 400 million tonnes; and
biomass about an extra 2 billion tonnes. Countries belonging to the OECD
consume 55 per cent of the world’s total energy, though they support only
15 per cent of the world’s population; Comecon countries use up 38 per cent
of the total. The rest is used by ‘awakening giants’, such as China, India
and Brazil, and other developing countries where much greater consumption
of fossil fuels is likely in the absence of measures that encourage energy
to be used more efficiently.

Estimates of the future demand for energy worldwide vary enormously.
Since 1979 a variety of institutes and academics have produced more than
25 ‘low energy’ scenarios covering 14 countries. These assessments of the
‘technical potential’ for energy efficiency over the next 30 to 40 years
suggest that energy consumption could be cut by between 30 and 60 per cent.
Technical potential is not the same as the practical potential, however.

Only a few countries have shown what can be done if the efficiency message
is taken seriously. In Denmark, energy demand per unit of GDP is only 76
per cent of the 1972 value; it is expected to fall to 60 per cent by the
turn of the century. Sweden is about to embark on a journey that will tell
us how far energy efficiency can go. The country is faced with restrictions
on three fronts. Nuclear power, providing more than 50 per cent of electricity
supply, is to be phased out by 2010. Legislation now protects the country’s
four major rivers from further exploitation of their hydroelectric potential,
and the Swedish parliament passed a resolution last year restricting carbon
dioxide emissions to current levels. The only way forward in the next 20
years is energy efficiency on a vast scale. Proposals from Vattenfall, the
Swedish State Power Board, envisage a fall in electricity consumption by
between 14 and 32 per cent if this is successful.

Perhaps the key challenge in policy-making is to change popular perceptions,
or rather misconceptions, about energy saving. Rather than associating energy
efficiency with the notions of ‘switching off’ and ‘wrapping up’, people
should see it as a characteristic of high technology and advanced social
and industrial systems. According to Robert Malpas, former managing director
of BP, the petrochemicals company, and now chairman of PowerGen, the smaller
of the two utilities proposed after electricity privatisation in Britain,
the problem may lie in our negative attitudes to any form of decline. His
solution is to take the familiar energy/GDP curve, which has been falling
since 1973, and turn it on its head in order to show how nations are getting
‘more from less’. That’s one form of growth the planet desperately needs.

Stewart Boyle works for Britain’s Association for the Conservation of
Energy: he is the author of The Greenhouse Effect: a practical guide to
the world’s changing climate, published by New English Library. Ivan Vince
is an independent environmental scientist, based in London: he was born
in Hungary.