Forget what you know about Energy

Robbie Orvis works for a sustainability think tank that’s basically an office full of battle-hardened climate-change warriors.The San Francisco based  Energy Innovation  consults everyone from the central government of China to small-town city planners on how to most effectively “de-carbonize” their societies.  

For Robbie, our energy future depends on smart and flexible grids, performance-based incentives, and rethinking  what we know about energy.

If you like to win climate-change arguments, then Robbie’s insights should be core reading.  I spoke with him to get his take on the future of energy.  

This interview was edited for clarity

Robbie:

In our fight against climate change, the scale that we focus on is critical.

So many people ask me if we, as individuals, should focus our efforts on the household, the city,  the state, or the national level?  

That, really depends on the country that you’re working in.

In Indonesia or China (where Energy Innovation works), the federal government level is the most important because they are largely top-down command economies.

So much climate change legislation and policy change in the US happens at the state level.

States, especially in the US, have a lot of control over policy issues, renewable energy promotion, fuel economy standards, cap-and-trade programs, adoption of electric vehicles, etc. There are a lot of things that states can do to put pressure on energy companies to de-carbonize.

Many people are super focused on cities. But they have a lot less power to influence broad carbon policy because they are limited in the types of policy they can pass.

But they do regulate thousands of buildings and often large fleets of vehicles, so efficiency standards there can still make a significant impact.

Carrots are better than sticks

Rewarding sustainability through performance-based incentives is much more effective long-term and on a broader scale than is punishing carbon emissions through, for instance, a carbon tax.

Taxes may work in the short term, but they don’t necessitate infrastructural evolution [more efficient cars, factories, light bulbs, etc.] because suppliers can just pass on the cost of the tax to consumers.

But giving tax breaks for companies that actually make equipment upgrades that lower emissions – that generates real change.

New York state has used a “measured efficiency improvement” as an incentive to build or retrofit more energy efficient buildings.

A similar program in the UK called RIO makes utility company profits strongly tied to measurable metrics and performance goals.  

Something that the average person rarely knows – is the fact that Public Utility Commissions have immense power to decide on energy policy in each state or region. They are usually the gatekeepers when it comes to deciding on the energy profile for a state.  

Power to influence policy

I just have to say that I really love my job – especially when we hear or see direct evidence that what we are doing is actually being used to influence, strengthen, or pass climate policy.

I was very fired up when Hal Harvey, our CEO, was asked by China’s minister of energy about how China can change its policies to drive down emissions and spur change. That was a big deal.

We actually have a very effective Energy Policy Simulator on our website that two agencies in China are utilizing – but anyone can use it and just fiddle with it from the couch at home.

Forget what we know about energy

Strangely, the biggest hurdles that I face are just people’s misconceptions about energy.

The first one is the false idea that we absolutely need to have “baseload” power (coal or nuclear).  That’s an archaic, intransigent idea and a big limitation to moving to a new renewable-based paradigm.

The second hurdle is that, for economists, there is a tendency to want to promote carbon pricing as the silver bullet to fixing all of our problems.

But that’s dangerous because while that’s an efficient way to remedy externalities, there are a lot of market-based barriers to this approach working long term.

In our broad experience at Energy Innovation, we have found that performance incentives work much better in the long run to spur real and deep energy-sector change.

In the end, what we’re really pushing for, of course, is an energy future in the US and the world that looks significantly different than our energy profile today.

The predictable changes are that coal will of course shrink and renewables will expand significantly, as will electric transportation.

But the change that will really shift things is moving to smart, flexible, interactive grids.

Managing the huge fluctuation in energy demand throughout the day is extremely difficult, so when an energy company can give discounts to customers that voluntarily reduce energy use during peak demand – even on a moment-to-moment basis – that will allow for much greater predictability at energy plants.

And that will change everything.