Heating and Cooling

TIL about energy efficiency

LHF: [00:00:00] Hello and welcome to TILclimate, the podcast where you learn about climate change from real scientists and experts. I’m Laur Hesse Fisher from MIT’s Environmental Solutions Initiative.

We’re in the middle of our energy and climate series which we’re producing with the MIT Energy Initiative. And in this episode, we’re going to talk about Energy Efficiency.

We hear a lot about technologies that help us produce carbon-free electricity like wind, solar, nuclear power… but what about technologies that help us actually use less energy to begin with? How big of an impact can energy efficiency have in preventing climate change?

To explore these questions, we spoke again with Harvey Michaels, a senior lecturer in the MIT Sloan School of Management. You might remember him from our episode on the electric grid at the beginning of this season.

HM: [00:00:59] My focus area is energy management which deals with the wise use of energy, energy efficiency, smart grid and related opportunities to mitigate climate change.

LHF: [00:01:10] OK let’s dig in. First, let’s get clear on what energy efficiency is.

HM: So when we're talking about energy efficiency, we aren't talking about energy conservation, which is getting comfortable with using less. Energy efficiency is really much more focused on having the same amount of light and comfort and hot water, but using less energy to do it.

LHF: Right, energy conservation is like turning off your lights at dinner in order to save electricity. Energy efficiency is like replacing your dining room’s incandescent light bulbs with LEDs light bulbs, which produce the same amount of light, but with a lot less electricity.

In the U.S., we didn’t always care about energy efficiency.

HM: [00:01:58] We had gotten so sloppy about how we used energy because before that it had been so cheap that we used to insulate walls and homes in the 1930s and forties, and then we stopped because it didn't seem like it was worth it.

LHF: But this all changed during the oil crisis of the 1970’s, when the major oil producers in the Middle East decided to stop selling oil to the U.S.

HM: It was that oil price shock in the 1970s, where the cost of energy went up, for some fuels, four times, for other fuels, 10 times, that created so much pain. You had to wake up early and stand on line for an hour, an hour and a half to get gasoline for your car.

LHF: [00:02:47] Today, even though we’re not in an energy crisis, using energy more efficiently can still save you money.

But also, most of our energy in the U.S. is generated using fossil fuels. So, the less energy we use, the fewer CO2 emissions we put out there. Where the challenge comes in is doing this at a big enough scale.

HM: [00:03:09] This is a three part problem. There was one part which is what was technically possible to do, a second part of it, which was what really made economic sense, what would pass muster as something that was affordable. And the third part of it is, what would encourage people in big enough numbers to actually do it? What would incent people to change what they were doing…

LHF: [00:03:35] So let’s look at each of these three parts: the technical side, the economic side, and how to get energy efficiency adopted at scale . And we’re going to talk mostly about homes and commercial buildings, which use about 40% of the energy consumed in the U.S.

Ok, let’s start with the technical and economic side. We already know a lot about how to make buildings really energy efficient and how that saves us money.

HM: [00:04:04] When we address the possibilities for energy efficiency in an older building, like the ones that you have a lot of in Boston, we can probably reduce the heat requirement in that building by half by making the building insulated, reducing the amount of infiltration, improving the windows, controlling the thermostats, doing these things.

LHF: [00:04:28] And when you’re designing a building from scratch, the energy savings can be way higher.

HM: [00:04:33] And an interesting thing happens when you start designing a building to be energy efficient is the equipment you need to actually provide your heat and your hot water gets smaller and less expensive. If you brought the building down by a third in the amount of heat loss that it has, then you can bring down the size of the heat pumps you need to put in by a third, and that saves upfront costs as well as downstream energy costs. From a technical and economic standpoint, this is a solvable problem. The market issue is how do you get all these people to decide to do something pretty quickly, soon enough to stop climate.

LHF: [00:05:16] Right, that’s the third part of the problem: how do you incentivize people to value energy efficiency, when the energy costs aren’t shockingly high, like they were for people in the 1970s?

HM: [00:05:29] Probably the biggest challenge is dealing with the need to do energy efficiency on a building by building basis over the entire world. We looked once and there were over a billion independent market actors in the building sector.

LHF: [00:05:48] Yeah we’re talking about billions of homeowners, renters, landlords, and commercial real estate owners -- all making decisions about how energy is being used in their buildings.

In some cases, like for homeowners, the cost savings are pretty straight-forward. If you spend the time to make some home upgrades now -- like install more energy efficient appliances -- then you’ll recoup those costs over the years as you save on energy. And many utilities offer loans or other incentives to help cover this upfront cost.

In other cases, it’s not so obvious. For example, most landlords wouldn’t benefit from investments in energy efficiency, because it’s their renters who pay the heat and electricity bills. In that case, people have gotten creative.

HM: [00:06:40] There are commercial companies like Boston Properties that now have Green Lease arrangements with a lot of the renters they have in their office buildings. And the idea would be that the landlord, if they made improvements to your unit in a way that reduced your energy costs, could essentially add onto your rent an amount of money that was less than the amount you saved by their improvement of the unit.

LHF: [00:07:13] There are a ton of other ways that governments, utilities, nonprofit organizations, and companies are trying to increase the energy efficiency of the world’s buildings. You can check out our show notes for just a few of these examples.

But, overall, how are we doing?

HM: [00:07:31] Industry has been moving towards efficiency since the 1970s. Commercial buildings are pretty good at it. The building operators and managers know that energy efficiency is important to their bottom line. And they’ve increasingly been moving in that direction. Homes have been probably the slowest to move. And the place where that’s been the most slow has been in the multifamily urban areas because it’s challenging and you have the landlord/renter problem that we discussed.

LHF: [00:08:05] Getting residential buildings on board in a big way will be especially important to help people afford the next big change in our energy system: electrifying everything.

HM: [00:08:17] To stop climate change we need to switch off of using gas for heat and hot water. We need to stop using as much gasoline for automobiles and use more electricity for those things.

LHF: [00:08:30] Yeah because we want to switch from fossil fuels to clean electricity. Electric cars are already cheaper to run than gas cars, but right now, it’s cheaper to heat your building using natural gas than electricity. There are some really cool, cutting-edge experiments happening at MIT on this, like one on using an underground loop of water that people across the neighborhood can tap into to help heat their homes.

OK so our need for electricity will go up, and at the same time, we need this electricity to also come from clean sources that don’t emit CO2.

HM: [00:09:12] We need to encourage and move towards solar and wind energy as fast as we can. It's a lot easier to get there if you don't need as much. If you find ways to reduce the entire electric draw in the system with energy efficiency, then you have a smaller hill to climb.

LHF: [00:09:33] So, if we can do it at scale, energy efficiency is like a triple whammy: it helps us burn fewer fossil fuels, it helps us with the transition to clean electricity, and it also helps us afford to fully electrify our homes.

HM: [00:09:48] Energy efficiency’s important role is not so much for its own sake, but as to make those other things possible. Hopefully we get ahead of the game by finding market solutions that people are comfortable with and policy solutions that remove the pain to the people who are disadvantaged and unable to respond with the investment required to make those kinds of changes sooner rather than later. Because electrification is happening and the, the policies and, and markets and solutions that we’re promoting for climate change are taking hold.

LHF: [00:10:28] If you’re interested in more about energy efficiency and in examples of incentive programs that are available, we’ll have some resources for you to check out in our show notes. And you work in the energy efficiency sector, in buildings, transportation or industry, and have some stories to share, send them our way! Email TILclimate@mit.edu or send us a message on Twitter @tilclimate.

Stay tuned because we have more on the way.

Thank you to Harvey Michaels for joining us again on the podcast and thank you for listening.