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Fri October 21, 2011
Reinventing Fire: Getting Beyond Fossil Fuels
IRA FLATOW, host: This is SCIENCE FRIDAY. I'm Ira Flatow. Imagine you no longer have monthly utility bills. All that money you use to spend on gas and electricity, still in the bank. Instead you get a check every month for making electricity using your solar shingles on your roof and pumping that surplus electricity back into the grid.
Or imagine pulling into a gas station, but it no longer sells gasoline. Instead, you can top off your car with electricity, hydrogen, biofuels, whatever. To those of you who already have solar panels on your roofs or an electric car in the garage, this may not sound so far-fetched. For the rest of us, this is the future.
Let's talk about the year 2050 as imagined by my next guest. He says we can quit using oil and coal to power our country by 2050 and not just for the health of the environment but for national security, creating jobs, and saving money, motivations that he says transcend politics.
But is this really possible? Is it reasonable to expect politicians, automakers and big oil and coal to innovate and disrupt, quote, business as usual? How is all this stuff going to get done and save or create jobs? Those answers are all in my next guest's book, "Reinventing Fire: Bold Business Solutions for the New Energy Era." Amory Lovins is author of this book. He is co-founder, chairman and chief scientist at Rocky Mountain Institute in Snowmass, Colorado. Welcome back to SCIENCE FRIDAY.
AMORY LOVINS: Thank you, good to be back.
FLATOW: You have a bold plan here, and you always think boldly, Amory.
LOVINS: I always try, and this is a pretty ambitious effort because three-quarters of our staff have been at it for about a year and a half.
FLATOW: Well, sketch out the plan for us.
LOVINS: Yeah, well, first what we found is you can run a very prosperous U.S. economy, 2.6 times today, in 2050, with no oil, no coal, also no nuclear energy and a third less natural gas. It's $5 trillion cheaper in that present value than business as usual. The transition requires no new inventions, no acts of Congress, and it's led by business for profit.
And to get there, we took seriously some advice attributed to General Eisenhower, that if a problem cannot be solved, enlarge it until the bigger system boundary includes more options, energies, degrees of freedom, whose absence made it insoluble when you had too small a view of the problem.
So we integrated all four sectors that use energy, in which we've worked in equal depth, namely transportation, buildings, industry and electricity, and indeed did find that, for example, it's much easier to solve the automobile and electricity problems together than separately.
We also integrated four kinds of innovation, not just in technology and policy but also in design, the way technologies are combined, and in new business models and competitive strategies. And together, those give much more than the sum of the parts, especially in creating very disruptive business opportunities.
FLATOW: So there are job creations here, because you hear always the opponents of new energy, alternative energy, saying that they're going to lose jobs, or if we build green products, those jobs are going overseas. There was, you know, talk this week about some American solar panel makers complaining to the U.S. government that it was unfair trade practices, the Chinese dumping all these solar panels here below cost and that there should be tariffs on them. How do you get past those arguments?
LOVINS: Well, you could just look at what's happening in much of the rest of the world. In Germany, for example, there's fuller employment now than there was before the Great Recession, and that is due in substantial part to the conservative Chancellor Angela Merkel's, I think, smart bet that it's a better deal to invest in your own engineers, installers and manufacturers than to keep, say, buying Russian gas, because then you get the jobs.
And similarly, the more we innovate in solar, wind power and the other world market winners, the more we will get the manufacturing jobs not just the installation jobs, which of course cannot be offshored because your roof isn't going anywhere.
FLATOW: Are you saying in your book, because it's subtitled "Bold Business Solutions," "Reinventing Fire: Bold Business Solutions for the New Energy Era," that it's not difficult to convince businesses that this is a money maker for them?
LOVINS: Well, that is our - the initial reaction that we're getting. The book only launches, actually, on October 27, next Thursday, and in fact we'll be officially releasing it at a free public event that day hosted by the National Geographic. So if you go to Amoray.org/natgeo, you can find out more and register.
But I've been giving a sneak preview, as I am with you today, to some business audiences recently, and they're very interested, particularly when they learn there's $5 trillion net on the table, not counting any externalities, positive or negative. We assume those are all worth zero, which is a conservatively low estimate.
And of course if we counted those hidden costs, the business case would get stronger, but businesses are interested in enhanced revenues, avoided risks and gains in competitive advantage, and our approach to all four sectors is very rich in those things.
FLATOW: One of the - one of the scenarios that people envision is that public transportation will be modernized, streamlined, cars will run in tandem on highways, maybe buses and trains too. But that also means that you may be putting some people out of jobs, are you not, who might be driving those buses or riding – or those trains?
LOVINS: There would actually be more buses and trains. Our scenario does not depend heavily on transit, although it does count IT-enabled ways to enhance transit car-sharing, ride-sharing, and also ways to make traffic free-flowing, ways to charge for road infrastructure by the mile instead of the gallon, and ways to use lucrative real estate models - smart growth, new urbanism and so on - so people are already more where they want to be.
And by doing those things, you can actually reduce driving by a surprising 46 to 84 percent and get the same or better access, but at the root of our transport suggestions is radical efficiency in vehicles, and not just the usual tripled efficiency cars and trucks that are coming at us, excuse me, trucks and planes, rather, but also a revolution in how we design and build and run automobiles.
Two-thirds of the energy it takes to move an auto is caused by its weight, and every unit of energy you can save at the wheels by taking obesity out of the car - less weight, less drag - saves an additional six units that you don't need to waste getting it to the wheels. So you actually save seven units of fuel at the tank for each unit of energy reduction in what it takes to move the vehicle.
So we focus on some new manufacturing technologies now offered by eight companies for making cars out of ultra-light but ultra-safe materials, and it turns out when you make carbon-fiber cars properly and design them in a more integrative way, it costs the same as making a regular car - that is, the ultra-lighting is free because the propulsion system gets two or three times smaller, and the manufacturing is so greatly simplified that it needs only a fifth as much capital.
FLATOW: But you're talking about the future, where cars may be cheaper. I mean, getting from here to there, the cars are still going to be more expensive at this point, will they not?
LOVINS: Well, what the ultra-lighting does right away is make electrification much more affordable, and then you're harnessing three very steep learning curves: one in the carbon fiber, one in the manufacturing, another in the propulsion system itself, cheaper batteries and fuel cells and so on.
But first of all, you use fewer batteries and fuel cells, and indeed BMW has confirmed that in its carbon-fiber electrified car entering mass production in 2013, one of three cars in the next year or two entering mass production that are carbon-fiber electrified, they say the carbon fiber is paid for by needing fewer batteries.
Now, it is true, though, that as you suggest, the electric cars are initially more expensive, even though they have a good value proposition, say, to fleet buyers, and to cope with that we suggest a very effective innovative policy called a feebate. That means rebates for efficient new autos paid for by fees on inefficient ones. And we'd like to do it not just in a revenue-neutral way but separately for each size class so that you're rewarded for buying a more efficient car of the type and size that you want but not a smaller one than you want.
FLATOW: Let me see how that would work. So somebody who drives a gas guzzler would pay some sort of tax, and you would get it to buy a more efficient car.
LOVINS: Well, this only applies to new car purchases, not to what you're driving now. So when you go to do the dealer to buy a vehicle of your choice, there are more and less efficient offerings. But the price spread between them is widened according to how efficient or inefficient each one is compared to a norm for that size, and it's trued up every year to keep it revenue-neutral. So the effect is that you will pay attention not just to the first year or two of fuel savings when you're making your purchasing decision, but to the first 15 years, the full life of the vehicle, and therefore, you'll make a choice that's more efficient for society.
There are actually five programs like this in European countries now, and the biggest one, just in its first two years, tripled the speed of improving auto efficiency. But that's even before the big effect of it kicks in, and that is that automakers will make very different offerings, so your choice as a customer will expand. You'll have a lot more efficient things to choose from.
FLATOW: 1-800-989-8255. Let's go to Andre in Jenison, Michigan. Hi, Andre.
FLATOW: Hi, there.
ANDRE: My question is, in the future, will there be triple-decker buses with, like, more than four wheels and, like, hexagonal frames designs?
LOVINS: I have no idea. A triple-decker is, I guess, can that fit underneath bridges and stuff would be a good question. And is it stable? But certainly, the double-deckers in London work just fine, and you see them in some American cities for tourism.
FLATOW: Mm-hmm. Let's talk a little bit about alternative energy generation, because I was, you know, as I follow this around the country, you see that wind energy - solar energy seems to be a local thing. You see stories of local towns, or there's now talk about putting wind generators off of Rhode Island, things like that. I was reading today a story in The New York Times this week about Texas. This was amazing. Texas is spending almost $7 billion to build power lines that will carry wind-generated electricity to other parts of the state, because they're the number one wind generating state.
LOVINS: Yeah. They were 8 percent wind-powered last year.
FLATOW: You don't get much - this doesn't get much of attention - much attention anywhere else, a lot of these little projects. And you get the idea no one's doing anything until you just dig down.
LOVINS: Well, until you start looking around the world and you realize it's not just certain states in the U.S. that are doing very well with this - Texas, one of the leaders, of course, because they want to make money. But, for example, in Portugal, in the last five years, they took their renewable electricity from 17 percent to 45 percent, while the U.S. went from nine to 10 percent. The last three years, the U.S. has actually declined from number one to number two to number three in clean-energy installations. So in this now $200 billion-a-year global market, growing tens of percent a year, we're tending to miss out. And these technologies we invented are increasingly made overseas - China being the leader in five of them, and intending to be in all.
So we risk, as Tom Friedman says, buying all the stuff we invented from China. The good news is it'll be cheaper than our tennis shoes. But it would be better to make it here. And I'm therefore dismayed that last year, congressional dithering the fifth time around cut U.S. wind power installations in half while Chinese wind installations, nearly half the total in the world, blew past their 2020 target, and they doubled their wind installations for about the fifth year running. These wounds are self-inflicted. But one of the interesting things we've found in looking at different electricity systems is that as we rebuild our dirty, insecure, obsolete-in-many-ways electricity system, which we have to do anyway over the next 40 years, it's going to cost about $6 trillion net present value, no matter what we build. So...
FLATOW: Let me just interrupt to remind everybody that I'm Ira Flatow, and this is SCIENCE FRIDAY, from NPR.
LOVINS: So we're going to have to rebuild the electricity system, anyway, and we are rebuilding it day by day. But if we look at what we could rebuild, we could do business as usual. We could do a new nuclear and so-called clean coal scenario. We could do centralized renewables, distributed renewables. And surprisingly, these four scenarios differ only immaterially in cost, but they differ profoundly in risk. And that is what is often driving investors away from the big thermal plants whose orders are withering and into the renewables, which, excluding big hydro, got worldwide $151 billion of private capital last year, and they added 60 billion watts. In fact, that's the amount of solar power (technical difficulties) - the wind - the world will be able to make every year by the end of December this year.
FLATOW: Mm-hmm. What will those, you know, stories about, like, Solyndra do to the alternative energy efforts? People point to that, saying, see? We told you.
LOVINS: We'll it's a political distraction. But of course, what Congress told the Department of Energy to do was to take risks that the private sector would not take by itself. In this case, the private sector did invest over twice as much as the taxpayers did. And the taxpayers will probably get much or most of their money back. But the reason that this company failed - it's maybe 2 percent of DOE's portfolio - is a success. The company did everything it was supposed to. Meanwhile, China dropped the price even faster. And because of that rapidly declining solar price, which was the objective of the whole exercise, the more commodity Chinese solar panels were able to undercut the price of the more advanced American technology before they could get to scale. Well, we risk having that happen to us more and more if we don't have a level playing field and fair competition and access to the grid.
But it's interesting that, last year, those commodities, solar panels, got cheap enough that, in recent months, California's private utilities had bought over four billion watts of the stuff, because it beats power from a new gas plant. And in a dozen states now, four companies will be happy to put solar panels on your roof. With no money down, it beats your utility bill.
FLATOW: All right. We'll come back and talk lots more with Amory Lovins, author of "Reinventing Fire: Bold Business Solutions for the New Energy Era." Our number: 1-800-989-8255. You can tweet us @scifri, S-C-I-F-R-I, or join our Facebook discussion, facebook/scifri, or our website at sciencefriday.com. Stay with us. We'll be right back. I'm Ira Flatow. This is SCIENCE FRIDAY, from NPR.
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FLATOW: You're listening to SCIENCE FRIDAY. I'm Ira Flatow.
We're talking with Amory Lovins, author of "Reinventing Fire: Bold Business Solutions for the New Energy Era." Our number is 1-800-989-8255. Let's see if we can go to the phones. Kelly in San Francisco. Hi, Kelly.
KELLY: Hi, Ira. This is Kelly. I'm a big fan of your show. We just recently bought - San Francisco, fixed up our house, and last year got - my husband and I built it. And it's completely solar-power. There is no gas line going in. We're getting, actually, our money back from PG&E, who's our local electrical company, probably between $300 to $400. And we got so excited, we also went out and bought our electrical car, and we're still getting money back from PG&E. So it's just sweet.
And I want to say that it's doable. It's just sad to hear all the bad news. But I do think we need some government support. That's how we got some nice government support on that regard for building our house efficient. We use whatever we could find in the market, making the house very efficient, getting the heating just right so we could actually power just solar, and we're just excited.
FLATOW: Wow. Are you...
KELLY: And I think it should be shared.
FLATOW: Are you off the grid, Kelly, or are you still on the grid?
KELLY: No, we're still on the grid. So at nighttime, when there is no solar energy, we use PG&E services. But we produce so much during the day, especially the high peak, that actually, we get money back still at the end of the month, each month. So we have money every month.
LOVINS: Yeah, we do the - we do exactly the same thing, Kelly. We use, in our house, solar in the daytime, wind power that we buy from our co-op at night. And we're a net exporter of electricity. And, also, our house is what's called islandable, which means it works with or without the grid. So when we have power failures up in the Rocky Mountains, we don't even know. We just keep going.
FLATOW: Well, thanks for calling, Kelly. Good luck to you.
KELLY: Thanks for taking my call.
FLATOW: You're welcome. What is the government's role here, Amory?
LOVINS: Well, there are some temporary subsidies which are generally political pawns to renewables. What's seldom mentioned is that there are generally bigger permanent subsidies to fossil fuel and nuclear energy. And I would like, actually, to get rid of all of them, those subsidies, and let always to save or produce energy compete fairly at honest prices, regardless of their type, technology, size, location or ownership. That's pretty much the opposite of the energy policy we have.
There's a very important government role in allowing free competition and interconnection to the grid, so there's more of a level playing field, and that is done mostly by the Federal Energy Regulatory Commission. But utilities tend to be regulated at a state level, and there it's really important, in the 34 states that haven't done this reform yet, to reward our utilities for cutting our bills, not for selling us more energy, which rewards the opposite of what we want. The - but it turns out...
FLATOW: OK. So let me just say this...
FLATOW: You think if we let them all float freely, all the different energies - coal, oil, nuclear, solar, wind, whatever - that the alternative energies could compete effectively with the other ones.
LOVINS: Yes. And, in fact, in the long run, as the higher volumes manufactured cut the cost further through learning curves, we found that unsubsidized renewables can ultimately compete even with the nonrenewable sources that would continue to get, we assume, all of the subsidies they get now. The - and also, of course, when you buy renewables or efficiency, you're getting other kinds of risk reduction that save money.
For example, there's less financial risk in building small, fast, granular projects than big, slow, lumpy ones. And when you buy solar or wind power to replace gas power, you're avoiding the volatility of the gas price, which is worth over two bucks on the gas price. So you're actually getting more value than you expected by getting a free gas price hedge. So we also look a bit at what happens if we use this kind of financial economics that takes account of risk, because that's another way of finding the extra value in the renewables.
But the real surprising thing we found is that all of the innovative policies needed in each sector to realize this transition from oil and coal to efficiency renewables can be done administratively or at a state level. So policies are needed to unlock or speed the transition, but they don't require an act of Congress. So we're end-running Washington gridlock, and we're doing that by using the most effective institutions we have. Free enterprise, in its co-evolution with civil society and accelerated by military innovation, to end-run the ineffective institutions, notably Congress.
FLATOW: So what is the block in Congress against renewables? And what - when did green become so political? I mean, we have states like Texas, you know, producing all this - you can't get a more conservative state. We listen to the - the governor is running for president, yet they have incredible renewable sources of wind there. We had the secretary of the Navy come on here to talk about how the Navy is trying to become more - greener and trying to become more energy conservative to save the lives of Marines and other soldiers in Afghanistan. How does this - there's just sort of a - there's a disconnect here, it seems.
LOVINS: Well, there is actually a lot of bipartisan support in Congress and at the state level. Many of the states with renewable portfolio standards encouraging renewables are indeed red states. And I think what you're referring to is probably that some parts of the political establishment on both sides tend to view, say, solar tax credits, wind production tax credit and so on, as a convenient point of political argument and kind of a pawn on a larger political chessboard.
But I think on both sides of the spectrum people are really pretty fed up with gridlock and want to get stuff done, which is, of course, why we work mainly with the private sector. And it's therefore very good news that in "Reinventing Fire" we don't care whether you care most about jobs and profits and competitive advantage or about national security or about health and environmental stewardship, because whatever most motivates you, let's focus on the outcomes, not the motives. And we ought to do the same things, anyway, for whatever reason. And then the stuff we don't agree about tends to become superfluous.
FLATOW: You said we need to level the playing field with - in terms of foreign competitors. What do you mean by that? Does that mean tariffs on dumping of solar panels for example?
Well, I think it's too early to tell what the evidence in on that and it's gone into a trade dispute process, and it'll be resolved there. Many governments, including China's, including our own, support different forms of energy in different ways, and that's a pretty complex, slippery slope to get out to.
What do you mean leveling the playing field?
LOVINS: Oh. Well, I was referring, for example, to allowing ways to save or produce energy to compete fairly and without undue obstacles. One of the interesting things in the case of Texas, you mentioned, actually came from Governor George W. Bush. His PUC chair, Pat Woods, put in a very nice rule that was kind of plug and play that says if the inverter attaching your solar system to the grid is on the approved list that it meets all of the technical and safety requirements, you can connect it and just start generating and sending power back to the grid without asking or even telling your utility, because you won't hurt the lineman. You won't burn down your house. Nothing more should be asked of you. And that is the kind of competition-promoting rule that I think we need a lot more of.
FLATOW: Talking with Amory Lovins, author of "Reinventing Fire: Bold Business Solutions for the New Energy Era." Let's go out to Tom in the Bay Area in California. Hi, Tom.
TOM: Hi. You know, I'm not a flat Earth guy, so I get this whole idea about renewable energy and electric cars and stuff like that. But the problem is, is that in my opinion, all that stuff is still a science experiment. We're no more efficient today than what we were 50, 60 years ago for power and - for wind power and solar. I personally think nuclear is the only option for a sustainable, different shade of green power source. And the thing is, what are all these electric cars - we've got 50 million electric cars on the road, what are all these electric cars going to plug into?
They're going to plug into an anemic, weak grid that could barely hang on the way it is right now. We need to spend trillions of dollars a year in our infrastructure just to get where it can absorb all of the renewable energy, the - our efficiency stuff that we're trying to do with electric cars and stuff like that. And at the end of the day, the one thing that you're not going to see is an electric bulldozer or an electric tractor trailer. That will never happen. So it's always going to be (unintelligible) or diesel that's going to be out there. And, you know, that's just my personal opinion.
FLATOW: Let me get - Amory, how do you react to that?
LOVINS: Well, if you'd be kind enough to look at "Reinventing Fire," and the technical backup for that will go up on the 27th at reinventingfire.com, you'll find we've documented very carefully from the actual market prices, the very dramatic manifold drops in solar and wind price and increases in effectiveness in recent years. And that is why the solar business is growing 65 percent a year for the last decade. It is why wind power contracts are now being written as low as three cents a kilowatt hour, beating the wholesale price.
We did examine the nuclear option and found, as investors have found, that it simply has no business case. That's why neither new nuclear nor new coal plants are in the official U.S. forecast for what's going to be built. They simply don't pay anymore. Better technologies have come along that do the job cheaper, more reliably, more resiliently. And when we looked in particular at a distributed renewable future, we found it could resolve all of the technical, financial, security, climate and other risks of the existing grid a lot better, and not only be equally or more reliable but be much more resilient so that we wouldn't risk in the grid we now have, which I agree is not very secure, we wouldn't risk cascading and potentially nation-shattering blackouts from solar storms or terrorism or a national disaster; rather we would make major failures impossible by design.
So I think if you look at the evidence in reinventing fire, you'll find that the technology and deployment have moved on beyond what you think is out there, but you are absolutely right that we're unlikely to have electric trucks. Heavy trucks can be tripled efficiency. They will end up running on any mixture of advanced biofuels and hydrogen, or if you like, you can run them on natural gas, but they won't need oil.
FLATOW: I'm Ira Flatow. This is SCIENCE FRIDAY from NPR. Talking with Amory Lovins. Amory, I have about a minute left. Where do we start first here?
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LOVINS: Well, I would suggest starting by really informing yourself about the very exciting business opportunities, new technologies, new designs, new policies, new business strategies that are coming at us thick and fast in oil, electricity, in buildings and industry, in every sector, because the energy use we have is the sum of millions of decisions we made. Now we have better ways to make smarter decisions to capture our piece, each of us, of that $5 trillion that's sitting on the table. And if we really do that...
FLATOW: You're saying renewable energy is really good big business now.
LOVINS: Absolutely. It's a $200 billion a year global business. We need to get our piece of it as we build for ourselves the core industries of the 21st century and efficiently use that new fire, can make energy do our work without working our undoing.
FLATOW: Thank you very much for joining us, Amory. Amory Lovins is author of "Reinventing Fire: Bold Business Solutions for the New Energy Era." Transcript provided by NPR, Copyright National Public Radio.