Energy Waste

An understanding of the wastefulness inherent in our energy habits and energy infrastructure is a critical starting point for understanding the magnitude of the opportunity presented by clean energy. This insight is crucial for the long term planning of any organization with substantial energy intensive capital assets. These organizations wil prosper only if they have the foresight to incorporate energy into their long term strategic plans.

America wastes half of the energy it generates. 50%. Sound extraordinary? It's true, and it's the "dirty" little secret of our fossil fuel consumption habits.


How can it be that losses of 50% are possible? The answer is that our energy habits and energy infrastructure are holdovers from a different time - a time when energy was very cheap, and environment was not a concern.

For example, our power plants use decades old technology, and vast amounts of heat that they generate are lost to the atmosphere instead of used to provide heat for other buildings.

Additionally, we lack energy storage capabilities. Power plants produce energy constantly regardless of demand. For example, plants continue to produce power at night, despite that there is minimal demand. We lack the ability to cost-effectively store this excess energy, so it is either never captured, or it is lost as heat.

Inadequacies in our distribution infrastructure (the substations and power lines that criss-cross the nation) and our failure to fully utilize energy at the point of use (in buildings, industrial equipment, electric motors, automobiles, etc) substantially further exacerbate the problem.

How can it be that loses of 50% are acceptable? They are acceptable only because the price of energy is low enough to not incent consumers to care much.


Prices of fossil fuels continue to be low today because of subsidies and tax breaks that petroleum producers and distributors receive. And, by the way, even though people complain about special treatment for oil companies, they fail to realize the extent of their dependence on cheap fuel. For example, every time the price of gas goes up by a dime, people are up in arms. Oil company subsidies cannot be removed because people would revolt.

In short, our country is conditioned to waste excessive energy, and feels entitled to artificially low energy prices.

Clearly, this is unsustainable. And it is all about to change.

The price of energy is about to rise dramatically, which will reward those organizations that take action now, but potentially decmiate organizations that fail to recognize the coming reality of energy 'true cost pricing'.

Next: Pending Federal climate change and energy legislation, 'true cost pricing' of energy, why energy prices are set to rise dramatically, and how organizations can position themselves today to soften the blow of price increases tomorrow.