Sunday, July 4, 2010

Renewable Energy is the Real Energy Independence

Energy independence is the goal of renewable energy, it is a make or buy decision, but in the transition we will simply have gradually decreasing dependence on fossil fuels, before we achieve complete self-sufficiency from renewable sources.

Energy efficiency however, is a subgoal, and it is counter-productive if it is elevated to the primary goal, for it tends to include the unstated assumption that all our buildings can do is to consume energy, based on the recent subscription model of fossil fuel based consumption, and thus it overlooks the productive capacity which is now a reality, with increasing numbers of renewable technologies becoming available at building scale. In short investments in, or subsidies for "energy efficiency," such as is now common practice, do not optimally augment values of building stock, but are instead supportive of extending the franchise of oil companies, utilities, and constitute a subsidy of technology manufacturers, and therefore come at the expense of real estate values on the margin. Or, to put it differently from the standpoint of extending the fossil fuel franchises, energy efficiency is additive, so that in a fair world the providers of those fuels should pay for it, not the building owner.

If we focus purely on Energy Efficiency, i.e. reducing consumptions through various forms of economizing, be it through technology or sacrifice of convenience, we are locking ourselves into the consumption model, the subscription model of fossil fuels, which is the unstated assumption behind "Energy Efficiency." If instead we see energy efficiency from a production standpoint, there is a direct capital trade-off against installed capacity. Your boiler doesn't live forever, but your investment in energy efficiency by means of improvements to the building envelope directly reduces the size of your next boiler, and depending on where you are in the life-cycle of your boiler, this may be more or less relevant. Depending on what other things you undertake in your building, the economic life of your boiler may become shorter than its mechanical life expectancy.

Energy Independence with Renewable Energy will never arrive if we focus on energy efficiency only, we will merely extend the fossil fuel economy a bit longer. In this area failing to plan is definitely planning to fail. There has to be deliberate planning to shift from the consumption model, which is the model of the utilities and oil companies, to the production model, which is the model of renewable energy and of increasingly energy independent buildings. The most important aspect of renewable energy technology is that it is coming down to building scale in a variety of ways, and thus the opportunity arises to produce the energy right where it is used, and avoid high transportation costs (including some transmission losses), as well as avoiding the subscription model of energy. This is a make or buy decision, and with current technology we are shifting to a situation where the economics favor local production. This is particularly evident in metropolitan markets where the transport costs of energy are some of the highest.

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