Profitably Getting Off Coal: Micropower

Previously I summarized how modern efficiency techniques can wring four times more work from each kilowatt-hour of electricity, at far lower cost and often with better service quality. But we can also produce electricity in new ways that don’t harm the climate. The market is quietly shifting to those climate-safe power solutions to cut its costs and financial risks.

Conventional power plants separate fuel energy into roughly one-third high-quality electricity and two-thirds low-quality heat. American power plants throw away as waste heat 20% more energy than Japan uses for everything. Yet other countries commonly capture and reuse it through “cogeneration,” also known as “combined-heat-and-power.” That’s far cheaper than, and about twice as efficient as, making electricity and heat separately. Yet obsolete laws and entrenched monopoly practices keep uncaptured a U.S. industrial cogeneration potential equal to the nation’s nuclear power production (19% of total electricity), inflating annual energy costs by $70 billion. Your state utility commission can fix this.

Despite similar resistance, with similar solutions, a parallel revolution is bringing renewable energy—wind, solar, geothermal, small hydro, waste and biomass generation—into the mainstream. Such equipment (excluding big hydroelectric dams, which are already overbuilt) got $56 billion worth of global investment in 2006. Even very large-scale use of the variable kinds (wind and solar) will need less back than we’ve already built for big thermal power plants.

The Economist magazine uses the term “micropower” for cogeneration plus renewables (other than big hydro). Industry and Government data reveal that micropower in 2005 produced 1/6 of the world’s total electricity and 1/3 of the world’s new electricity. In 13 industrial countries, micropower delivered from 1/6 to more than 1/2 of all electricity. This revolution already happened—sorry if you missed it!

Micropower already outproduces nuclear power worldwide, and is walloping it in the global marketplace. In 2005, micropower added 4 times the output and 11 times the capacity that nuclear power added. In 2006, nuclear capacity fell as retirements outpaced additions, while even the smallest and costliest renewable, photovoltaics (solar cells), installed 1.7 billion new watts. Micropower plus negawatts probably now provide the majority of the world’s new electrical services; central power stations provide less than half, because they cost too much.

Almost all micropower is financed by private risk capital, but no new nuclear power is—it’s bought only by central planners. Its collapse of an incurable attack of market forces is good for the Earth’s climate, because new nuclear plants are so costly that spending the same money instead on micropower and negawatts will save 2–10 times more CO₂, and sooner. Stay tuned for more solutions!

Amory B. Lovins, Chairman and Chief Scientist, Rocky Mountain Institute

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