Why we need innovations AND insulation

Blog | February 23, 2016 - 10:00 am
By Christopher Perry , Senior Analyst, Buildings Program

Bill Gates, billionaire philanthropist and co-founder of Microsoft, marked several items off his 2015 to-do list when he announced the creation of two coalitions (one of international governments, the other of billionaire investors) for investing money in developing renewable energy innovations, while pledging one billion dollars of his own money to the effort.

In an interview last November with The Atlantic called “We Need an Energy Miracle,” Gates stressed the importance of investing in energy research and development, with a goal of expediting the development of breakthrough renewable technologies to combat climate change. His renewables-over-efficiency line of thinking can be traced back to his 2010 blog post, “Why We Need innovation, Not Just Insulation,” where he advocates focusing on renewables rather than efficiency to reach an 80% CO2 reduction by 2050.

While we applaud Gates’s championing of innovation in the energy industry, we disagree with his method of delivery, which paints energy efficiency and renewable energy as competing forces, rather than as the twin pillars of sustainable energy to be used together to reduce conventional energy consumption.

Gates’s contributions to the energy industry are welcome, and have the potential to make a sizable positive impact. But, with a growing number of individuals like him entering the energy technology arena in search of a renewable energy “silver bullet,” it is important to step back and reflect on the progress already made with energy efficiency, and renewable energy’s interdependent partnership with energy efficiency.

Energy efficiency as a stand-alone tool

By itself, energy efficiency has provided a number of benefits to the United States. From 1980 to 2014, US energy intensity dropped from 12.1 thousand Btus per dollar to 6.1, a 50% improvement, of which a conservatively estimated 60% can be attributed to energy efficiency. Overall, energy efficiency savings in 2014 totaled roughly 58 quadrillion Btus, saving about $800 billion. Not only does energy efficiency save energy and money, but it creates jobs, grows the economy, increases our nation’s security, and reduces harmful emissions of fuel combustion by-products. Within buildings, energy efficiency measures increase tenant comfort and satisfaction, which results in lower turnover rates, and in turn, increases property value.

Energy efficiency has been proven to be cheaper than making energy, and will continue to provide value for the foreseeable future as our energy consumption habits continue to grow. ACEEE estimates there is an opportunity for energy efficiency to reduce current energy use by 40 to 60% by 2050, and other organizations, such as the Rocky Mountain Institute, have estimated similar possible savings.

Synergies between energy efficiency and renewable energy

Efficiency can be viewed as renewable energy’s silent partner, enabling renewable energy technologies to scale as the market for renewables continues to develop. Skeptics may speculate that the coexistence of efficiency and renewables will inevitably cause conflict; however, in practice energy efficiency serves a complementary role to renewable energy.

For example, a case study by the Sacramento Municipal Utility District (SMUD) and the Building America Program estimated that a larger proportion of zero net energy homes’ energy was reduced through energy efficiency (35%) than was generated through solar PV renewable energy systems (25%). By first using energy efficiency (which is the cheapest utility resource) to minimize energy consumption, the remaining energy needs of the home can then be met through renewable energy systems. We will have a difficult time reaching our energy goals if we fail to recognize this cooperative relationship between energy efficiency and renewable energy.

Final thoughts

Bill Gates’s advocacy for renewable energy over energy efficiency comes from a genuine concern about climate change, and undoubtedly his actions will raise awareness of energy issues, and potentially even accelerate energy innovations. We would urge him to be mindful not to minimize the importance of energy efficiency as he advocates for a cleaner energy future. Energy efficiency has provided a variety of benefits to the US economy and population for years, and will continue to provide value as both a complement to renewable energy and a stand-alone resource.