Back in the 1970′s the satirical and surreal Firesign Theater proclaimed that “Everything You Know is Wrong.” At the intersection of energy and economics, that absurdist assertion is a increasingly obvious reality that advocates, policy makers and industry must embrace.
Throughout history, there are moments when prior assumptions and core beliefs have simply stopped being accurate. Great examples include people discovering that the Earth is round, microscopic organisms cause disease, and that various substances (tobacco, asbestos, particles produced by diesel engines) are harmful. To paraphrase what John Maynard Keynes may or may not have said, when confronted with changed facts the intelligent person changes their perspective, assumptions and opinions accordingly.
In the wonky, but critically important, world of energy systems no assumption has been more ingrained than this: “over the long term, energy demand grows over time — and that the only time it stays steady or declines is when the economy is in crisis and not growing.” But this “truth” that “everyone knows” is increasingly obviously wrong: we can grow while using less. Indeed, sometimes we can do better and grow because we’re using less energy.
The good folks at the Andersen window factory in Minnesota agree with this realization that the old conventional wisdom is wrong: a recent newspaper column documenting the experience of Andersen Windows described how even though “Andersen is making and selling more of its products . . . it’s using less energy. They’ve done it by changing light bulbs, upgrading equipment, and educating employees about energy conservation.”
Here in New England we have a strong record of planning and implementing energy efficiency and it is paying off in the same way. That is the clear assessment of the sharp-penciled engineers at ISO New England (the folks who operate and plan our regional electricity system), as presented in the graph below from the final report of a working group that CLF participated in. It may seem like heiroglyphs, but let me explain.
In the graph below, ISO-NE (as it is know) presents three energy futures: the blue line is the traditional forecast of expected growth in energy demand tracking expected economic expansion, the “load growth” that traditional models expect when the economic grows. This is then adjusted in the red line to reflect energy efficiency and other demand resources that have been recognized (and purchased) in the regional electricity markets, reflecting the past wise decision to allow such resources to participate in those markets. Finally, the forecast is then further adjusted in the black line to reflect the plans and programs for efficiency and alternative energy being undertaken by the New England states.
What you see in the flat, black line is economic growth without growing energy demand. You see the kind of growth being undertaken at Andersen scaled to an entire region.
In a quiet way this is a revolution — a clear recognition that new wind turbines, solar panels, or gas fired power plants will replace existing old and dirty oil and coal fired power plants as they retire, not to meet rising demand. This is a stunning reality and success: the increasingly successful efforts to foster efficiency have ended the upward march of energy demand, allowing our economy to grow without increasing electricity demand.
Let us now hope that, as the facts change, people and organizations change their beliefs, perspectives and plans accordingly. Building and buying energy infrastructure must continue – but it can no longer assume rising demand. Our investments must be smart, targeted and build towards a cleaner, and thriving, future where we have squarely and honestly addressed our climate crisis and the challenges of economic growth. Getting this right is one of the most positive aspects of what Bill McKibben has described as the “terrifying new math” that global warming mandates – this is a real life example of where we are headed in the right direction, cutting the link between increased prosperity and increased energy use and emissions.