Amory Lovins (Rocky Mountain Institute Co-founder) – India Smart Grid Week (Jun 2016)
Chapters
00:01:22 Electricity Systems for the India of the Future
Understanding India’s Electricity Needs: India aims to provide secure, clean, and affordable electricity to all its citizens. Determining the actual electricity needs of the population and businesses is crucial for designing an effective electricity system. Exploring this question will influence the types and quantities of electricity supply to be built.
Rapid Technological Advancements: Electricity is undergoing revolutionary changes on both the demand and supply sides. Lighting technology has seen significant efficiency improvements, particularly with the advent of white LEDs. Photovoltaics (PVs) are disrupting utilities by making solar power more cost-effective than fossil fuels. Wind power is also becoming increasingly competitive, leading to the shutdown of older coal, gas, and nuclear plants.
Competitive Renewable Energy Prices: The January solar auction in Rajasthan yielded competitive prices for solar power, making it cheaper than imported coal. Prices for unsubsidized solar and wind power have fallen even further in recent auctions. India’s wind power prices are expected to decrease with fully competitive auctions. India’s offshore wind potential has the potential to increase the wind resource tenfold.
00:04:29 Energy Efficiency and Renewable Power Potential in India
Efficiency Potential: India has a modest potential for energy efficiency according to most Indian experts. Previous studies estimate efficiency potential in a narrow range of 30% to 34% savings by 2030. A more comprehensive analysis might reveal a higher potential for efficiency gains.
Balanced Effort Scenario: A balanced effort scenario prioritizes the most cost-effective energy efficiency measures. This approach could result in significant energy savings, reducing the need for new electricity generation. It could also lead to lower capital costs and total costs compared to traditional scenarios.
Energy Efficiency in Developed and Developing Economies: Both developed and developing economies can improve energy efficiency. Developing economies typically waste less energy in absolute terms but more in percentage terms. Fast-moving economies should focus on measuring success by results rather than overbuilding supply.
Renewable Energy and Grid Efficiency: Renewable energy is likely to account for most of India’s new capacity additions in the next five years. Grid losses are falling, which could lead to a surplus of electricity if energy efficiency is improved. This surplus could occur sooner than expected, as seen in other countries.
Historical Energy Use in the United States: The United States has reduced its total primary energy use by more than half since 1975. Total renewable output has doubled, but its cumulative impact is less than the energy savings achieved through efficiency. Energy savings are often overlooked because they are invisible.
Future Energy Efficiency Potential: Innovations in technology, design, regulation, financing, and marketing can further increase energy efficiency. The potential for efficiency gains is even greater than previously estimated. A combination of technological, design, policy, and business strategy innovations can lead to disruptive changes and leapfrog national development.
The Reinventing Fire Book: The Reinventing Fire book proposed a scenario for the United States to transition to a clean energy future by 2050. This transition could be achieved through increased energy efficiency and renewable energy without requiring new inventions or acts of Congress. The savings from energy efficiency would outweigh the costs.
Current Progress in the United States: The United States is on track to meet the energy efficiency goals set out in the Reinventing Fire book. Primary energy intensity and electric intensity are falling as expected. This progress is driven by the private sector’s recognition of the economic benefits of energy efficiency.
A Roadmap for China: A roadmap for China, developed by Chinese and American experts, offers a detailed and rigorous plan for a clean energy transition. This roadmap could serve as an instructive model for developing countries, including India.
Background: China is the world’s largest carbon emitter, energy user, and coal user. The Chinese government has called for a revolution in energy production and consumption.
Collaboration: Four organizations came together to develop a roadmap for the efficient and profitable deployment of efficiency and renewables in China. Key energy authors of the 13th five-year plan were among the customers.
Findings: China’s economy could grow 6.9-fold by 2050 while using the same amount of primary energy as in 2010. A sevenfold gain in energy productivity is possible through technical efficiency, structural shifts, and the transition to renewable power. Non-fossil energy sources would account for over half of the supply, increasing carbon productivity 12-fold by 2050. Coal burn in the power sector would decline by 60-80%.
Cost Savings: The net present value cost of the transition is 22 trillion renminbi or 3.7 trillion U.S. dollars lower than business as usual. The efficient and clean scenario for China can cost less, not more.
Environmental Benefits: Carbon emissions would fall by two-fifths below current levels. Conventional air pollution would decrease by 85-90% before implementing additional cleanup measures.
Electricity Sector: GDP growth would require less than a doubling of 2015 electricity use. Most savings would be used to electrify autos and industrial processes. Non-fossil technologies would take over 83% of electricity generation.
Macroeconomic Impact: Saving electricity could be a powerful lever for Indian development due to hidden capital leverage. Investing in electricity-saving technologies could reduce the capital needs of the power sector by 10,000-fold. The power sector could become a net exporter of capital for other development needs.
Applicability: The findings are relevant to the US, China, Europe, and other countries seeking sustainable and cost-effective energy solutions.
00:15:39 Energy Efficiency Innovations for India's Building Sector
Energy Problem Solution: Integrate energy solutions across sectors to solve the energy problem. India has immense solar and wind resources, as well as energy efficiency potential.
Six Examples of Energy Efficiency: Rohan Parikh’s Infosys office buildings: Uses 4/5 less energy than Indian norm with 10-20% lower construction costs and improved comfort. Reduced cooling capacity by 60% with successive improvements. 100% daylighting with no glare, leading to cost savings and increased comfort. Retrofits: Infosys saved $100 million by cutting OPEX and electricity consumption. Re-engineering the chiller plant saved 30% energy and 45% equipment cost. White roofs paid back in two years. Design Professionals: Rewarding design professionals for savings, not expenditures, leads to better performance. Labeling buildings with measured efficiency, like restaurant health inspections, can drive continuous improvement. Allowing super-efficient buildings to go to the head of the queue for approvals can save time and money for developers.
Residential Cooling: Improved building envelopes and passive cooling techniques can significantly reduce the need for air conditioning. A convectively vented double wall can provide 6-12 degrees Celsius of passive cooling at an extra cost of around 2%. Proper ceiling height and a good ceiling fan can add another 5 degrees of comfort range. Airtight fiberglass casements, coated windows, and better interior cross ventilation can further improve comfort. Modern and well-enforced efficiency standards could save 40 gigawatts of peak load from urban households’ air con by 2030.
Appliances: Today’s best market technologies can make appliances significantly more efficient. Ceiling fans can be over twice as efficient, refrigerators sevenfold, and televisions sixfold. A home package of a color television, four LED lamps, a radio, and a mobile phone charger can draw only 18 watts DC total.
00:24:50 Integrated Solutions: Enhancing Efficiency in Energy and Water Usage
Agriculture: Indian agriculture faces challenges with inefficient irrigation practices, leading to strained grid capacity, limited connections, and revenue loss for DISCOMs. Efficient irrigation systems and business models can double or triple motor pump system efficiency, enabling demand response and surplus power dispatch. Reduced pipe friction and bundling solar pumping with drip irrigation can further enhance efficiency and cost savings. Advanced technologies like sensors and optimized irrigation practices can increase crop value and profitability. A policy dream is to phase in water and pumping efficiency improvements as subsidies are phased out, eliminating the need for subsidies and freeing up funds for other investments.
Motors: Motors are India’s biggest electricity users, with significant potential for improvement. Comprehensive analysis identified 35 motor system opportunities between the meter and the input shaft. Implementing the first seven measures can unlock the remaining 28 as free byproducts, resulting in substantial electricity savings. Pumps and fans offer additional savings opportunities.
Data Centers: Data centers experience compounding losses from power generation to server utilization. Starting from the downstream end, improvements can be made in code efficiency, server efficiency, cooling and power supply, and utility loss reduction. Elegant and terse code can result in 100-fold savings on compute cycles. Servers can be made four times more efficient, leading to reduced cooling and power supply needs. Fuel cell tri-generation can halve utility loss.
00:31:04 Design for Efficiency: Achieving Energy Savings in Buildings and Industry
Energy-Saving Building Designs: A building in Germany uses two-fifths the energy of the Rocky Mountain Institute office, with rooftop solar cells generating five times the electricity used. The Rocky Mountain Institute office saves 90-100% of cooling energy with better comfort and lower costs. Buildings in the United States built for low-income people produce more energy than they use. A house in Colorado with no heating system saves 99% of its space heating energy and 90% of its electricity. A house in Bangkok saves 90% of its air conditioning energy with normal construction costs and improved comfort.
Energy-Efficient Industrial Design: Industry uses half of the world’s energy. Dow Chemical saved over $9 billion by investing $1 billion in energy efficiency. Replacing long, thin, crooked pipes with fat, short, straight pipes in industrial pumping systems can save 86% of energy. This pipe redesign would save half the coal-fired electricity in the world. Energy savings in pipes compound, leading to significant fuel cost and pollution reductions.
Efficient Piping Layout: Poor pipe layout increases friction and energy consumption. A retrofitted efficient layout in a museum’s condenser water pumping loop cut energy use by 75% and eliminated 15 pumps. Re-piping the chilled water loop and adding a variable speed drive doubled the flow and saved 85% of energy. To minimize friction, pipe fitters were instructed to lay out supply pipes as if they were drains.
00:35:53 Innovative Energy Design and Efficiency for Sustainable Electricity Systems
Integrative Design and Energy Savings: Amory Lovins presents a holistic approach to industrial redesigns, combining various energy-saving strategies. This approach has resulted in significant energy savings, typically ranging from 30% to 60% for retrofits and 40% to 90% for new builds, with shorter payback periods and often lower capital expenditures.
Efficiency and Demand Forecast: As energy efficiency improves, electricity demand growth slows and may even reverse. Australia’s experience serves as an example, where actual demand declined despite economic growth, partly due to rooftop solar adoption.
China’s Coal Reduction and Surplus: China has successfully reduced its coal consumption while maintaining economic growth. This has led to a surplus of approximately 200 gigawatts of coal plants, resulting in cancellations.
Edison’s Vision and the Shift to Kilowatt-Hours: Thomas Edison initially sold light as a service, charging customers for the use of lamps rather than electricity consumption. The industry’s shift to selling kilowatt-hours in 1892 misaligned customer and provider interests, as customer efficiency reduced revenue instead of cost.
Decoupling and Shared Savings: Lovins suggests that India’s electricity providers consider adopting decoupling and shared savings regulatory models, which reward energy providers for reducing customer bills rather than selling more energy. This approach aligns the interests of providers and customers, promoting energy efficiency and lower electricity costs.
00:38:26 Renewable Energy Shifting the Global Energy Landscape
Decentralization and Customer Empowerment: Customers are becoming prosumers, producing and sharing their own electricity. Web platforms like Van de Bron allow customers to buy electricity from fellow customers at different prices. Utilities face challenges in competing with the personalized service and intimacy provided by peer-to-peer electricity trading.
Growth of Renewable Energy: Modern renewables, particularly wind and solar, are rapidly taking over the market globally, including in India. Policy changes such as including solar costs in home loans, net metering, and recognizing the security benefits of distributed generators can further accelerate the adoption of renewables in India. The declining cost of renewable energy and the increasing investment in these technologies are driving their rapid growth.
Battery Storage and Flexible Demand: Adding battery storage behind the meter can provide multiple benefits and allow for time-shifting of electricity production. In places like Hawaii, customers are adopting solar and battery storage, which can reduce their reliance on the grid and potentially lead to lower utility revenues. Flexible demand management strategies can further reduce the need for grid infrastructure and allow for better utilization of renewable energy.
Grid Flexibility and Variability of Renewables: The grid can accommodate the variability of wind and solar power through a combination of flexibility resources, including flexible demand, energy storage, and geographically diverse renewable portfolios. Variable does not mean unpredictable, and grid operators can accurately forecast renewable energy output. The grid is designed to handle the intermittence of power plants and can handle the variations of solar and wind power in the same way, often at lower costs.
Achieving 100% Renewable Energy: A case study from Texas demonstrates how 100% renewable energy supply can be achieved through a combination of wind, solar, dispatchable renewables, and distributed storage. Real-world examples from Europe show that countries can achieve high levels of renewable energy penetration without bulk storage and with superior reliability. The key to success is the right size for the job, with a focus on decentralized, locally owned renewable energy sources and a cellular network of islandable microgrids.
00:48:10 Silicon Revolution: Disruptive Innovation Threatens Traditional Utilities
Eight Pac-Men of the Apocalypse: Efficient use, renewables, integrative design, customer preferences, invisible optimization, storage, new rules, and new financing mechanisms are disrupting the global electricity industry.
Disruptors’ Rapid Growth: Disruptors move quickly, work together, multiply, and exponentially feed on utility revenues, creating fierce competition that traditional utilities often struggle to handle.
Union Bank of Switzerland’s Statement on Thermal Plants: In August 2014, Union Bank of Switzerland called central thermal plants obsolete and irrelevant for backup power in the long run.
Value Exceeds Price: Electric providers must ensure that the value they offer exceeds the price, or competitors with better value propositions may take their customers and revenues.
Rapid Transformation in Automotive History: The car industry’s transformation from horses to cars in the early 1900s shows how quickly a market can flip when conditions are right.
Rapid Decline in Solar Module Prices: Solar modules have become 80% cheaper in the past five years, with no end in sight, accelerating the disruption of traditional energy sources.
Insurgents’ Advantages: Insurgents are not limited by incumbents’ business models, assets, or cultures, enabling them to drive transformation.
Capital Markets’ Reaction to Disruption: Investors quickly abandon companies perceived to be facing disruption, leading to decapitalization and investment in their successors.
Energy Transformation from Carbon to Silicon: The modern age of silicon, with its microchips, telecoms, software, power electronics, and solar cells, is replacing the obsolete age of carbon.
00:53:25 Rocky and Renewable Future of Global Electricity
Big Steps Toward Fire-Free Electricity: India has made progress in adopting renewable energy sources, taking one of the two crucial steps toward a fire-free electricity system. India’s focus on energy efficiency, in addition to renewables, could lead to a future where coal and oil are no longer necessary.
Energy Access and the Deprived: Approximately 1.2 billion people, including a quarter of the population in India, live on an income of around $2 per day and lack grid power. These impoverished communities spend $38 billion annually on inefficient lighting solutions, resulting in health issues and carbon emissions comparable to the eighth-largest nation.
Introducing Efficient Lighting Solutions: Affordable lighting options, such as the Waka Waka solar-powered LED lighting package, are now available to these underserved communities. The Waka Waka provides up to 10 hours of bright illumination on a single day’s charge, or up to 150 hours on a lower setting, offering significant cost savings compared to kerosene lighting.
Transformational Impact and Opportunity: The shift towards efficient lighting solutions not only improves access to electricity but also reduces reliance on fossil fuels and kerosene, creating economic opportunities for entrepreneurs. Investing in the disruptive potential of electricity can yield significant profits and contribute to a sustainable future.
Discussion and Concluding Remarks: The presentation concludes with a Q&A session facilitated by Dr. Rahul Tongia, who replaces Shri Pujari due to an urgent ministry meeting.
Abstract
Electricity System Transformation and the Renewable Energy Revolution in India: A Roadmap to Sustainable Development
Introduction: The Future of Energy in India
In a transformative era for electricity systems globally, India stands at the forefront of adopting innovative technologies and practices in renewable energy and energy efficiency. This article examines the paradigm shift in India’s energy landscape, driven by technological advancements, competitive renewable energy auctions, and comprehensive efficiency measures. The adoption of LEDs, photovoltaics (PVs), and wind power is not just changing the dynamics of electricity demand and supply but also revolutionizing the way energy is consumed and generated. This shift promises a future of secure, clean, and affordable energy for all, challenging traditional energy paradigms and setting a new standard for sustainable development.
The Catalysts of Change in India’s Energy Sector
Rapid technological advancements in lighting and solar energy are redefining India’s energy needs. The widespread adoption of LEDs and PVs, coupled with the increasing affordability of wind power, is leading to the shutdown of older fossil fuel plants and paving the way for a greener future. Integrating energy solutions across sectors is crucial for solving the energy problem. India has immense solar and wind resources, as well as energy efficiency potential.
Competitive renewable energy auctions have showcased the potential for highly competitive prices, altering the economics of energy generation. India’s untapped offshore wind potential further amplifies this capacity, marking a significant step towards energy independence.
Despite its modest potential according to most Indian experts, a more comprehensive analysis of India’s energy efficiency potential could reveal a higher potential for efficiency gains. A balanced effort scenario, prioritizing cost-effective measures, could lead to substantial energy savings and lower overall costs.
Efficiency measures play a pivotal role in reducing energy consumption, often overshadowing the impact of renewable energy. The United States’ experience exemplifies the significant impact of efficiency measures, reinforced by innovations in technology, policy, and business strategy.
The interplay between different energy-using sectors, coupled with disruptive innovations, can leapfrog national development. This synergistic approach is vital in accelerating energy savings and sustainability.
China’s comprehensive and empirically grounded roadmap for energy transition offers valuable insights and lessons for developing countries like India, underscoring the importance of a holistic and empirically informed approach.
Implementing Energy Efficiency: Strategies and Success Stories
Amory Lovins’ holistic approach to tackling the energy problem leads to remarkable results, challenging conventional beliefs and unlocking new possibilities. India, with its abundant solar and wind resources, a skilled workforce, entrepreneurial spirit, and government support, is uniquely positioned to adopt global best practices in energy efficiency and leapfrog to more advanced solutions.
Integrative Design and Energy Savings:
Lovins’ approach presents a holistic outlook on industrial redesigns, combining various energy-saving strategies. It has resulted in significant energy savings, ranging from 30% to 60% for retrofits and 40% to 90% for new builds.
Success stories like Infosys demonstrate the feasibility and benefits of energy-efficient building designs, leading to reduced energy consumption and cost savings. Policy recommendations, such as linking floor area ratio to measured efficiency, labeling buildings, and prioritizing super-efficient buildings, can catalyze the adoption of energy-efficient designs and technologies.
Big Steps Toward Fire-Free Electricity:
India has made progress in adopting renewable energy sources, taking one of the two crucial steps toward a fire-free electricity system. India’s focus on energy efficiency, in addition to renewables, could lead to a future where coal and oil are no longer necessary.
Energy Access and the Deprived:
Approximately 1.2 billion people, including a quarter of the population in India, live on an income of around $2 per day and lack grid power. These impoverished communities spend $38 billion annually on inefficient lighting solutions, resulting in health issues and carbon emissions comparable to the eighth-largest nation.
Introducing Efficient Lighting Solutions:
Affordable lighting options, such as the Waka Waka solar-powered LED lighting package, are now available to these underserved communities. The Waka Waka provides up to 10 hours of bright illumination on a single day’s charge, or up to 150 hours on a lower setting, offering significant cost savings compared to kerosene lighting.
Transformational Impact and Opportunity:
The shift towards efficient lighting solutions not only improves access to electricity but also reduces reliance on fossil fuels and kerosene, creating economic opportunities for entrepreneurs. Investing in the disruptive potential of electricity can yield significant profits and contribute to a sustainable future.
Six key examples of energy efficiency include:
– Rohan Parikh’s Infosys office buildings:
– Use 4/5 less energy than the Indian norm with 10-20% lower construction costs and improved comfort.
– Reduced cooling capacity by 60% with successive improvements.
– 100% daylighting with no glare, leading to cost savings and increased comfort.
– Retrofits:
– Infosys saved $100 million by cutting OPEX and electricity consumption.
– Re-engineering the chiller plant saved 30% energy and 45% equipment cost.
– White roofs paid back in two years.
– Design Professionals:
– Rewarding design professionals for savings, not expenditures, leads to better performance.
– Labeling buildings with measured efficiency, like restaurant health inspections, can drive continuous improvement.
– Allowing super-efficient buildings to go to the head of the queue for approvals can save time and money for developers.
The adoption of passive cooling strategies in residential buildings and the availability of highly efficient appliances like ceiling fans, refrigerators, and smart-chip enabled air conditioners represent significant opportunities for energy savings.
Energy Access and Efficiency: A Comprehensive Approach
India’s struggle to provide reliable and efficient energy access, especially in rural areas, highlights the need for innovative solutions. Addressing the high energy consumption in agriculture through efficient irrigation systems and solar-powered pumps can significantly reduce energy and water wastage. Targeting sectors like motor systems and data centers for efficiency improvements can lead to considerable electricity savings. A comprehensive approach that encompasses various sectors and technologies is essential for achieving substantial energy savings and improved energy access.
The Global Context: Renewable Energy Growth and Grid Flexibility
The global surge in modern renewables, particularly wind and solar, is driven by falling costs and increasing efficiency. India’s policy environment can further bolster this growth, integrating renewable energy into the financial and infrastructural fabric of the nation. The integration of battery storage and flexible demand strategies into residential and commercial systems is crucial for maximizing the benefits of distributed energy resources and reducing dependence on grid-supplied electricity. Grid flexibility and reliability with renewables are key challenges that require innovative solutions and policy frameworks.
Efficiency, Innovation, and the Future of Electricity Demand:
The industry’s shift to selling kilowatt-hours in 1892 misaligned customer and provider interests, as customer efficiency reduced revenue instead of cost. Lovins suggests decoupling and shared savings regulatory models, aligning provider and customer interests, promoting energy efficiency, and lowering electricity costs.
The Future of Electricity: Decentralization, Renewables, and Customer Empowerment:
Customers are becoming prosumers, producing and sharing electricity. Utilities face challenges in competing with the personalized service provided by peer-to-peer electricity trading. Modern renewables, particularly wind and solar, are rapidly taking over the market globally, including in India. Policy changes like including solar costs in home loans, net metering, and recognizing the security benefits of distributed generators can accelerate renewable adoption.
Battery storage behind the meter provides multiple benefits and allows for time-shifting of electricity production. Flexible demand management strategies further reduce the need for grid infrastructure. The grid can accommodate the variability of wind and solar power through flexibility resources, including flexible demand, energy storage, and geographically diverse renewable portfolios.
Eight Disruptors Threatening Electric Utilities:
Disruptive forces like efficient use, renewables, customer preferences, storage, and new financing mechanisms are reshaping the global electricity industry. These disruptors move quickly, work together, and multiply, posing challenges for traditional utilities. Capital markets react swiftly to perceived disruption, leading to decapitalization and investment in successors.
Energy Transformation from Carbon to Silicon:
The modern age of silicon, with its microchips, software, and solar cells, is replacing the obsolete age of carbon.
Efficiency measures and renewable energy sources are complementary strategies for achieving a sustainable energy future, while grid flexibility and distributed benefits are key to integrating renewables into the energy system....
Energy efficiency and renewable sources are key to a sustainable energy future, offering environmental and economic benefits. Embracing integrative design, innovative technologies, and flexible energy systems can help achieve this transition....
The energy sector is transitioning from centralized fossil fuel systems to distributed, renewable, and customer-focused solutions, driven by efficiency, renewables, and evolving customer preferences. The shift towards renewable energy sources offers a viable solution to energy needs for underserved communities, promising a more sustainable and equitable energy future....
Amory Lovins emphasizes integrative design principles and efficiency measures to optimize energy systems, while Michael Liebreich highlights the need for a systemic view to balance energy efficiency and renewable energy development....
Amory Lovins proposes a comprehensive plan for a sustainable energy future, emphasizing efficiency, renewable sources, and integrative design, promising significant cost savings and environmental benefits. Global trends and national initiatives indicate a growing shift towards renewables and energy efficiency, driven by economic advantages and policy innovations....
Technological innovations, market dynamics, and environmental imperatives are driving a transformative shift in the global energy landscape, leading to a decline in traditional energy models and a rise in efficiency and renewable alternatives. The future of energy hinges on the ability of incumbents and new entrants to adapt to these...
Amory Lovins emphasizes energy efficiency and renewable energy integration as key to a sustainable future, while electric vehicles and innovative battery technologies can disrupt traditional energy industries....