[January 13, 2012 / No. 1526]

Recommended Reading For 2012: Rocky Mountain Institute's 'Reinventing Fire'

If a tree falls in a forest and no one is around to hear it, does it make a sound?

I've been thinking about that philosophical/scientific question, since I finished reading "Reinventing Fire: Bold Business Solutions for the New Energy Era," by Amory Lovins and the Rocky Mountain Institute.

In this context, the question becomes, if a great plan for getting the country off fossil fuels is presented and not enough people read it, does it have a chance to make a difference?

Published in late October of last year, "Reinventing Fire" presents a detailed plan for moving the U.S. economy beyond the fossil-fuel era to an economy powered by efficiency, demand-side management and renewables. Even more significant, Lovins and the other authors present a strong case for the business profitability of transitioning to such a system. Their analysis -- which doesn't include carbon pricing, an act of Congress, or any new national taxes or mandates -- finds that such a strategy would cost $5 trillion less (in 2010 dollars) than business as usual by 2050. Those savings result from adopting currently available technologies at normal rates of return, along with policy shifts that remove some of the existing barriers to adopting innovations in energy and design.

The book received favorable reviews after its release, and RMI has ordered a second printing. But a random, unscientific survey of the local utility community didn't turn up anyone who had read it yet -- and some who hadn't heard of it -- which gave rise to my question.

Perhaps I'm being impatient, and "Reinventing Fire" will gain more traction in time. After all, RMI has been working on its broader "Reinventing Fire" initiative for several years (CU No. 1497 [13]), and the book was described to me as a jumping-off point for RMI's future efforts to overcome barriers to the transformation it foresees.

RMI started its "Reinventing Fire" initiative with the goal of answering two questions: could the U.S. stop using oil and coal by 2050, and could such a transition be led by business for "durable advantage"? The 250-page book answers those questions with a resounding yes, and lays out the necessary scenarios in four sectors: transportation, buildings, industry and electricity. The book presents recommendations for key actors in each sector, starting with a column of "no-regrets" actions (no-brainer steps that are easy to take), followed by opportunistic and then innovative strategies.

Chapter highlights outline the goal for each sector, along with the business opportunities, the bottom line, types of businesses that can profit, and policy enablers.

Some of what's discussed in "Reinventing Fire" has been heard before. For example, we've known for some time that the building sector accounts for 42 percent of our energy use and 72 percent of our electricity consumption; and that in spite of significant efficiency gains, the industrial sector continues to waste a lot of energy as excess heat. "Reinventing Fire" takes the discussion further, arguing, for example, that we can reduce this primary energy use in buildings by 38 percent by 2050 and make at least $1.4 trillion in net present value energy savings at the same time.

The book also points out that many of industry's advances over the past 30 years "arose directly from the Nixon-era Clean Air Act and Clean Water Act (and a host of other laws and rules) that forced industries to slash pollution and touched off a search for innovative ways to turn waste into profit."

Perhaps because of my energy-bozo background, I found the transportation section provided the most new information and ideas. "Reinventing Fire" sees a shift to ultralight but ultrastrong auto bodies, made from advanced materials, as a key innovation. The chapter points out that an auto's weight accounts for two-thirds of the energy needed to move the vehicle and that less than 0.5 percent of the energy in auto fuel actually moves the driver. And if each wheel had an electric motor, a car wouldn't need a transmission, clutch, driveshaft, axles, universal joints or differentials.

All of it is fascinating; but the chapter on the electricity sector is no doubt of most significance to Clearing Up readers. "Reinventing Fire" analyzes four cases for the future of the electricity sector.

The Maintain case involves staying with today's system, in both supply and demand mix, through 2050. The Migrate case involves more nuclear power and coal plants with CCS -- a scenario driven by probable GHG legislation. The Renew case has renewables providing 80 percent of U.S. electricity. The Transform case takes the renew case further, throwing in more distributed generation resources like rooftop solar, CHP, fuel cells and small-scale wind.

Following the Maintain path would increase electricity-sector carbon emissions by 38 percent by 2050, during a time when climate change and public-health concerns are likely to pose "significant and potentially prohibitive risks and costs for coal-fired generation," the book predicts. It also identifies water scarcity concerns as another issue that's likely to worsen and further constrain fossil-fuel use.

"Reinventing Fire" essentially concludes that the Maintain case is an unlikely future scenario, and presents the Migrate case as "the conventional approach to 'carbon-free' electricity." It has GHG legislation moving the industry to more nuclear power and new coal plants with CCS, "all driven by the incentives of incumbent regulatory models." But this would mean building three new nuclear plants and nine CCS-equipped coal plants annually for the next 40 years, at a present-value cost of $6.5 trillion. Given the ongoing challenges to nuclear power -- including financing, safety and waste disposal -- and the not-ready-for-prime-time status of CCS technologies, the Migrate case also appears unlikely.

The Renew case presents a future electricity sector that relies on renewables for 80 percent of its resources. More generation from variable resources like wind and solar PV "makes responsive demand from residences and businesses more valuable, so they spread faster," and smart-grid innovations are key, the book indicates. Increased energy efficiency flattens electricity demand growth, prompting regulators and utilities to revise utility business models.

At the same time, additional transmission will be needed to move power from large-scale wind and solar facilities to load centers -- 116 million MW-miles, at an estimated cost of $166 billion by 2050, the analysis indicates. While there are ways to reduce the challenges associated with such a buildout, the transmission issue is one of several that "give us pause" about the Renew model, the authors write.

Meanwhile, trends including smart-grid technology innovation, increasing grid flexibility, and the growth of modular renewables create new possibilities. "The electricity sector's century-old linear value chain could morph into a complex value web where traditional roles blur, eroding the traditional cost-of-service regulation and 'natural monopoly' business model," the book says.

That's where the Transform case takes over, using the Renew scenario's confluence of trends as the "basis and momentum" to move beyond Edison's centralized grid model to a system powered by resources of varied scale, with more supply coming from distributed resources and microgrids. Such a future grid "exploits renewables' geography and technological diversity" but requires half the transmission of the Renew case.

It's no surprise that "Reinventing Fire" promotes the Transform case as the best path forward. What may be surprising is that the cost of the four cases varies by only 12 percent. But choices among such futures "should rest much less on costs, which are roughly similar and all uncertain, than on risks, whose nature, gravity and management differ profoundly," the authors add.

They also point out that our economy wastes over a half-trillion dollars' worth of energy every year.

Cost-effective energy efficiency and switching from fossil fuels to renewables would save a gross $9.5 trillion by 2050 and cost an additional $4.5 trillion in capital investments, for a net savings of $5 trillion over the next 40 years. While that may seem small in a $15-trillion-per-year economy, "it's the opposite of the economic collapse that some pundits predict," the authors say.

"Reinventing Fire" really got me fired up; but as an energy bozo, I'm probably an easy target. There's way more substance to this book than I can address in this column, of course; but take my word for it -- this is a good, worthwhile read.

And after you've read it -- please let me know what you think. I'd like to broaden the discussion [Jude Noland].

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