How China Will Transform The Energy Industry 0


When I started in the energy business back in the early 1980’s, the utility paradigm was to continually build more power plants to serve growing customer loads.  This lead to environmental and economic difficulties, especially as the cost of completing planned nuclear power plants skyrocketed.

At the utility where I worked, Pacific Gas and Electric, an outside scientist named Amory Lovins gained notoriety by forcefully suggesting an alternative path that included energy efficiency and renewable power.  As the story went around the company (and I don’t know if it is actually true), PG&E executives would hide when Lovins came in the building so they wouldn’t have to listen to him telling them over and over that they needed to change their business model.  Ultimately the California regulators did listen, and both California and PG&E have transformed their energy systems into one of the more efficient and renewable-based markets in the world. And in most U.S. states, at least energy efficiency has become a key focus of electric utilities [1].

But in the U.S. the debate still rages on concerning the right energy future.  Should other states follow California’s lead with use of renewables, or is it better to focus on more traditional energy sources?  Is climate change real, and should we change our energy mix to reduce carbon emissions?  It seems that in Washington, we just aren’t capable of consensus for action at this point.  Instead it’s possible the impetus for change will come from outside.

As we suggested in a recent blog post, behind-the-scenes efforts to work with China may result in that country leading significant movement toward a cleaner energy mix. [2]  One such effort is being led by Amory Lovins’ Rocky Mountain Institute (RMI).  Lovins recent book, Reinventing Fire, laid out RMI’s views on how the U.S. could transform its energy mix.  RMI is now working with high-level officials and organizations in China to develop a blueprint for how China might lead the clean energy future.

According to Lovins, it could result in change that is “one of the most transformative that’s ever happened in global energy.” [3] When a lot of folks talk that way, it just sounds like hype.  Especially when China is the world’s largest coal generator, and electric output in China is expected to more than double by 2035.  But then again, 30 years ago who ever thought that electric utilities throughout the U.S. would be trying to convince consumers to buy less of their product?

Forecasted Electricity GenerationSource: U.S. Energy Information Administration International Energy Outlook 2011

[1] See for instance, the U.S. Energy Information Administrations Today in Energy report U.S. Energy Intensity Expected to Continue Its Steady Decline Through 2040

[3] From the Google Hangout talk Reinventing Fire China:

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