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Reinventing Fire: The Strategy

By Amory B. Lovins

Reinventing Fire™ has two main goals: to create a clear and practical vision of a fossil-fuel-free future for the United States, backed up by quantitative analysis, and to map a pathway to achieve that future, led largely by business.

This vision and pathway will offer a message of hope, put the spotlight on leaders, catalyze others to act, and inform and help to catalyze innovative policies.

RMI also has specific programs to reduce fossil-fuel use, and specific initiatives within those programs to attack the knottiest problems. Reinventing Fire will complement, coordinate, and synthesize those efforts and accelerate change.

Ten months ago, after focusing our strategy on the profitable transition from oil, coal, and ultimately natural gas to efficiency and renewables, RMI examined the four sectors that use fossil fuel—buildings, transport, industry, and electricity.

We analyzed each sector’s usage patterns and barriers to change, gleaned lessons from RMI’s 27-year experience, and shaped first generic programs, then specific initiatives, for each sector. These initiatives, and possibly others, are the major focus of RMI’s work and investment for the next three to five years. Here, we briefly describe the sector-level efforts and specific initiatives chosen so far; others are being developed.

The Electrical Sector

Half of U.S. and two-fifths of global electricity is made by burning coal. Despite much talk about smart grids, electric cars, and solar and wind energy, coal fueled 41 percent of the growth in U.S. electricity generation during 1990–2004 (along with 36 percent from natural gas and 23 percent from running existing nuclear plants harder).

Coal-fired generation peaked in 2005, then fell slightly while gas, nuclear, and renewables rose. But a more significant indicator may be new generating capacity, which has turned decisively away from coal; in 2008, windpower outpaced even gas-fired additions (a trend begun a year earlier in Europe).

Most proposed U.S. coal plants have lately been canceled, and most of the rest are in doubt. But while traditional analyses focus on how to keep running coal plants but somehow fix them so they emit less carbon, RMI is focusing on something far less expensive and risky—replacing coal (and eventually natural gas) plants with efficiency and renewables.

Our analysts identified at least four fundamental barriers to developing a zero carbon U.S. electricity system by 2050: no compelling vision and integrative plan on a nationwide (or an individual utility) level that demonstrates technical and economic viability, though some utilities’ plans get partway there; insufficient progress in capturing, and often even in recognizing, known energy efficiency potential; an incomplete understanding of how to manage the many transitions required for full implementation; and public ignorance and disinformation about and some siting resistance to a low- or no-carbon electrical system.

RMI is developing a key initiative focused on the first barrier, combined with elements of the third. Currently called “Next-Generation Utility” (NGU), this effort will leverage a robust but user-friendly RMI graphical model of how a utility dispatches its resources to matching changing loads.

The model is underpinned by research into each resource, and is being used in real-world exercises with large and small utilities to challenge the assumptions of many planners and operators.

This tool, plus others still to be developed, will help utilities and regulators understand the relative risks, opportunities, and economics of organic, small-step-at-a-time renewable and efficiency vs. “big-bet” nuclear or coal sequestration investments. The goal is to identify and support leading utilities in developing paths to low-and no-carbon operations. Other potential initiatives—one focused on better efficiency programs and policies, for example—are also in development.

The Built Environment

Despite new technologies, codes, and design strategies, the U.S. building stock is not much more energy efficient (though arguably more comfortable) than it was twenty-five years ago—there is considerable room for improvement—and it still relies mainly on electricity made from coal, natural gas, and, occasionally, biomass.

Three of the many barriers to efficiency that RMI has identified are the lack of a compelling “radical efficiency” business case clearly communicated to owners and tenants; a scarcity of skilled practitioners; and obsolete design processes and tools.

While these barriers apply to all commercial and residential buildings, RMI plans to focus on how they harm efficiency in existing commercial buildings and new “production” homes (built many-at-a-time to closely related or identical designs).

While both efforts are in the planning stages, RMI’s practitioners are excited by the opportunity to transform the efficiency profile of significant chunks of America’s building stock. Both initiatives will emphasize amplification techniques to drive training and put tools in the hands of a fast-growing wave of designers, engineers, and builders, and to induce building owners, managers, and tenants to demand more comfortable and operationally inexpensive buildings.

The Transportation Sector

Transportation uses 70 percent of U.S. oil. Between 1950 and 2009, consumption of petroleum fuels increased by 65 percent, and although gasoline demand in the U.S. has lately declined, the sector is still about 98 percent dependent on fossil fuels.

RMI identified five major barriers that must be overcome:

  • Vehicle-makers’ business models and cultures block radical innovation, and incumbents are technologically conservative
  • Some alternative technologies are costly and lack scale while the players pushing them are dispersed and often very small
  • Transportation requires massive infrastructure that is difficult to change and seldom optimized for energy efficiency
  • The bulk of customers have not yet embraced change
  • Some national and local policies are inimical to efficiency

RMI’s first planned transportation initiative focuses on fleet managers and owners, their choices, and policies influencing them and vehicle makers. This “Economic Buyers” initiative will help us understand the emerging market segmentation, and determine what technology options (including light-weighting) may be best suited to each segment and across segments, while helping shape fleet managers’ demands in ways that save energy and money.

These insights may, in later stages, inform additional product development, building on RMI’s extensive history. We also plan to ensure that the policy work RMI began in “Winning the Oil Endgame”—around feebates, for example—is properly carried forward.

The Industrial Sector

Industrial processes use 31 percent of U.S. energy. Chemical industries, paper, metals, materials and resources, and oil refining—powered by coal (electricity), oil, and natural gas, and a small amount of biomass—are a major fraction of this use.

Although U.S. industrial energy use declined in the last decade, efficiency has not improved uniformly and some fraction of the decline was due to outsourcing rather than technical improvement.

RMI believes that many industrial processes—as well as the goods they produce—can be made much more efficient. Outside some segments of the chemicals and materials industries, companies face two main barriers: no widely replicable strategy for driving significant step changes in process efficiency, and a cautious, risk-averse attitude throughout the value chain.

RMI’s currently planned initiative for the industrial sector will focus on manufacturing process efficiency, using a structured technique based on starting with theoretical minima (derived from process physics and chemistry, not standard practice) both for energy-intensive “heavy industry” and for key producers of renewable energy equipment, like solar panels and systems (in order to drive down supply costs more quickly).

RMI also hopes to work with one or two major players that are top industry energy consumers (chemicals, metals, papers, etc.) on transforming their business models so that they move away from extraction and/or use of virgin resources toward business models that reward both them and their customers for closing materials loops and for doing more and better with less for longer.

The Industrial initiative in particular will be linked to a design-focused initiative, already underway, called 10xE or Factor Ten Engineering. This initiative seeks to help train (and retrain) designers in the key techniques needed to simplify and drive out energy costs in practical designs.

Because energy was long reliably cheap, a whole generation of design professionals in the U.S. have, to put it delicately, underemphasized energy in their approach to problem-solving. Their tools—largely software developed in the past 20 years—often reinforce this myopia. Collaborations between RMI, universities, and industry (including software creators) are already underway to develop tools aimed at transforming how designers practice and learn.

Our field experience has shown numerous examples of radical energy efficiency at comparable or lower cost; now we aim to spread that practice very widely.

Institutional Support

These new initiatives will be supported by redesigned processes at the Institute, staffing changes, a strengthened program for outreach and practitioner education, and new accounting structures and financial and project management tools.

RMI is also developing a much stronger methodology to quantify the Institute’s work and gauge our impact on fossil-fuel use reduction. The Institute will strive to show specific results of how RMI changed perceptions and practices, and how those accomplishments have led to greater resource efficiency and a more secure, prosperous, and life-sustaining world.

In short, our strategy is a fully activated and all-encompassing set of changes that clarify the direction and accelerate the pace of RMI’s work so that the organization dramatically speeds the national and global journey beyond fossil fuels.

Amory Lovins is Cofounder, Chairman and Chief Scientist of RMI.

--Published October 2009

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