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End-Use Inefficiency Shock

To put the potential of combined heat and power in perspective, it's important to remember that when we say the efficiency of the present electric utility system is 33 percent, that's just the efficiency with which it generates and delivers power to the consumers. Only one-third of the energy contained in a barrel of petroleum or oil-equivalent ends up as electric energy arriving at the meter. To calculate the overall efficiency of the actual energy service (lighting, heating, and so on), you need to multiply that 33 percent efficiency by the efficiency with which the consumer uses that delivered power, whether it's to run a motor or to turn on a light.

Everyone knows now that an incandescent light bulb (that familiar "bright idea" symbol of the past century) has very poor end-use efficiency in terms of lumens per watt, and that compact fluorescents are far better. But although fluorescent lighting gets about three times the efficiency of incandescent (about 15 percent versus 5 percent), when multiplied by the 33 percent of the power delivered to it (.33 x .15), the total efficiency of the compact fluorescent light is still just 5 percent.

Similarly, we might be encouraged by the advent of plug-in electric cars, but although the average mechanical efficiency of an electric motor is between 60 and 95 percent (depending on size, speed, and so on), the charge–discharge cycle for the battery itself loses about 20 percent each way (in and out). A car using plug-in electricity from a 33 percent–efficiency central power plant might have an overall efficiency of power to the wheel of 16–18 percent. That's more efficient than a conventional gasoline-powered vehicle operating in city traffic, but it still wastes the energy embodied in more than five of every six barrels of oil-equivalent.

Then consider the payload efficiency you get when you drive a car. Set aside the question of whether it makes sense, in a country where energy is no longer cheap, to move more than a ton of steel, glass, and rubber (plus fuel in the tank) to transport your 200 pounds, or whatever you and your briefcase or shopping bags weigh. If the efficiency of moving the car itself is 10 percent—typical in the United States—the payload efficiency of what's being transported (assuming it's one-tenth the weight of the car) is a tenth of that, or about 1 percent. If you carry a second person, or have a lot of luggage, the payload efficiency might be 2 or 3 percent. If the car is hybrid or electric, you might get up to 4 percent. For stationary uses, a comparable inefficiency prevails. Someday historians will shake their heads in wonder.

If you add up all the different kinds of energy use in the United States, the overall efficiency just for producing useful work is currently around 13 percent (and that's before taking payload inefficiency into account). It's as if a father goes out to buy seven ice cream cones for his kid's birthday party, and six of them fall on the ground as he's walking out of the store. The bad news is that a lot of ice cream is lost. The good news is that the dad's dexterity has lots of room for improvement.

When President George W. Bush and his would-be successor John McCain urged America to address its energy independence problem by drilling more holes in the ocean floor, they might not have been aware that they were recommending a course of action that would do nothing to improve the country's truly crippling energy inefficiency—nothing to relieve either near-term dependence on Middle Eastern oil or the longer-term problem of global warming. If the country were to adopt then–Vice President Dick Cheney's nightmarish scheme to build 1,300 new coal-fired central power plants, the effects would be even more devastating: The energy efficiency of the country would be barely on life support, and carbon dioxide emissions would rise to even more dangerous levels. Or if we followed the "clean-coal" route being promoted by the coal lobbyists and utilities, the carbon dioxide would continue to climb at approximately the same rate, but the cost of power would rise sharply—and the economy would be further crippled. ("Clean coal" might sound reasonable to people who don't get a kick out of oxymorons, but the process of converting the coal to gas—which gets rid of the fly ash and sulfur—makes the coal energy about twice as costly to deliver, and the process of capturing and storing the carbon dioxide produced by combustion doubles the cost again.)

Suppose that, instead of following the reflexive impulses of politicians pandering to an electorate fearing for its energy security, the Obama administration were to systematically put together a strategy combining just the two major opportunities outlined in this chapter: (1) Recycle high-temperature waste heat, steam, or flare gas in industrial plants, and (2) encourage the shift of mainstream electric-power production from centralized to decentralized heat-and-power production. How much would the country's need for fossil fuels be reduced, and how far would that take us toward full energy independence?

First look at recycling waste energy. We noted that the U.S. Steel plant in Gary, Indiana, produced about 100MW in 2004, and Mittal's Cokenergy plant produced 90MW. Approximately 1,000 other U.S. plants are already doing waste-energy recycling. Most of them are smaller than the Indiana giants, but together they were contributing 10,000MW of electric power per year to the national total, according to the latest available data. Yet according to a recent study for the U.S. Environmental Protection Agency, 19 different U.S. industries could have profitably generated more than 10 times that amount by recycling wasted heat. Even accepting a more conservative estimate by the Department of Energy, the profitable potential for energy recycling is six or seven times greater than the current level of recycling. Most of it would be clean electricity replacing power currently purchased from coal- or natural gas–burning utilities.

The approximate capacity of conventional (fossil fuel–burning) power plants in the United States in 2007 was 900,000MW, or 900 gigawatts (GW). The installed capacity of waste-energy stream recycling was 10GW. And the solar-photovoltaic (PV) capacity was 0.1GW. By 2009, PV had grown to nearly 0.2GW, and President Obama projected that the solar energy industry would double again in the following three years. As an industry grows larger, it's unrealistic to expect it to continue expanding at the same rate, but suppose the solar-PV industry continued doubling every three years. That would bring it to roughly 1GW by 2015—still just a fraction of 1 percent of U.S. electricity production. But in the meantime, if energy waste-stream recycling doubled at the same rate, it would reach 40GW—with more room to grow. If the full potential of energy recycling is exploited, we can generate up to 10 percent of U.S. electricity without generating carbon emissions or burning any additional fossil fuel. Granted that solar-PV is the golden future and cleaning up dirty fossil fuel is the prosaic present, a hard reality in the present business climate is investment cost. And the reality is that the waste-energy recycling option is much cheaper.

For wind power, the near-term prospects are stronger, but not yet strong enough. U.S. wind capacity reached 0.8GW in 2006, and wind is economically competitive on a per-kilowatt basis in some locations. But the actual output of wind facilities is intermittent, so the real output is less than that of a plant that is operating continuously. Even assuming a very optimistic growth trajectory for wind power, the recycling of waste streams from aging fossil coal– or natural gas–burning facilities will have greater potential for affordable carbon-free power, at least until 2013. Beyond that, the capacity for solar and wind power to continue growing geometrically becomes unrealistic.4 But even at the most rapid continued growth conceivable, it would be many years before solar-PV and wind power could replace more than half of the nation's fossil-fuel power. To keep the economy adequately functioning for that time and beyond while continuing to reduce carbon dioxide emissions, large investments in renewables must be joined by equally large (and initially more productive) investments in energy recycling.

Then consider the central power plants and the potential for ramping up U.S. power production by phasing out of "centralized" into decentralized CHP. Approximately 3,855 utility-owned or municipal electricity–only power plants currently exist in the United States. Studies by energy engineers show that the 33 percent efficiency of those plants plus their massive transmission and distribution infrastructure could be increased to around 60 percent efficiency if all new and replacement capacity were decentralized. That shift could take many years, but if the laws that prevent it were changed quickly, a substantial bump in electric power production—while achieving a net reduction in fossil-fuel use—could be achieved within a few years. If no new central plants are built and half of the old ones are phased out and replaced by CHP, half of the industry's 900GW capacity could shift from 33 to 60 percent efficiency—increasing total U.S. electric power by roughly one-third, while cutting emissions by one-third and using no additional fossil fuel.

That two-part strategy—recycling industrial waste energy and beginning to decentralize electric power generation—would constitute a huge stride toward energy independence and toward the parallel goal of sharply cutting carbon emissions. But it's not the whole story by a long shot; it's just the first chapter after the wake-up call.

In comparing the strategy we've just outlined with the option of drilling for more oil off the American coasts, we like to use an analogy. Suppose you have a farm in upstate New York where you keep seven wild mustangs in a corral. One day you discover that six of them have escaped. Do you immediately plan a costly new expedition to find replacements in wild-horse country 2,000 miles away, or do you try to retrieve the ones that escaped into neighboring fields and can't have gone far? Thinking of horses as units of potential work (horsepower-hours), and keeping in mind that six of every seven units of U.S. energy extracted from coal mines or oil wells escape before they can produce useful work or heat, doesn't the same question about retrieval versus replacement apply? It will be vastly cheaper to retrieve a barrel's worth of energy from a waste-energy stream that already exists in Allentown, Pennsylvania, and use it for electricity that's needed right there, than to retrieve that barrel's worth from a hole a mile deep under the Pacific Ocean off the coast of Santa Barbara and then refine it and ship it 3,000 miles.

To take this analogy one step further, we like to recall that before European explorers arrived in North America, no horses lived there. Horses originated in Central Asia and the Middle East. Later, those formerly Arabian imports became an indispensable part of the pioneer American culture and economy. Now as energy pioneers of the twenty-first century, we have an opportunity to do the same with horsepower. Our dependence on Saudi Arabia for the energy needed to run a modern economy can come to an end. We already have the horsepower in our own country. Like the farmers, mail carriers, and cowboys of an earlier time, we just need to learn how to harness it.

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