For many of us working or studying within the field of renewable energy, the recent boom in renewable energy interest among the general public and the financial sector did not come as a surprise. Scholars, engineers, inventors and environmentalists have for a long time seen and discussed the problems of current energy systems, and invested time, interest and money in alternatives and solutions. Our current energy systems are not sustainable and create high external costs. Reducing these external costs by replacing fossile energy sources with renewable energy is a logical step.
In the same manner, the next phase will come out of logic. Actually, it should be something that should have preceded the interest in renewable energy. The next boom will revolve around energy efficiency. This is not something entirely new; energy efficiency is an issue that has got a lot of attention during the last couple of years, with rising prices, climate change, energy dependence and other problems with the oil economy. Energy efficiency was a hot topic already during the oil crisis of the 70's. Whenever there are output reductions or price peaks, which may be the case with wars and conflicts, energy conservation and efficiency appear as necessary measures. What has not been frequently highlighted is the advantages of energy efficiency when compared to renewable energy. Don't get me wrong, they are two completely different concepts. Both are necessary for fighting climate change and other than on a national level, they mostly don't compete with each other. But when considering in which companies to invest your money, they often do compete. It is easy to understand the benefits of energy efficiency. If we need to reduce the energy generated from fossile sources with 1 TWh in a sustainable manner, we could go for installing more renewable energy capacity. Or, we could implement energy efficient technology. In the case of energy efficiency, we would not need to bother where to find more sources of energy. We would not even need to debate the issues of uncertain profitability and high investment costs of renewable energy production facilities, or deal with the issues with raw materia un-sustainability of ethanol, biogas generation versus incineration. Better than to find replacement sources of energy is to not need to use the energy in the first place. There is an inherent beauty in energy efficiency - earning more by wasting less. That is attractive for most of us conducting business. Thus, because of the logics of energy efficiency, it is a logical step that energy efficiency will be next highlighted cleantech sector. As in the case of renewable energy, this will not be a temporary trend. The problems connected to the oil economy are permanent, as are the problems with energy from other non-sustainable sources.
In a later post, I will highlight which sectors and companies will be the winners in this new wave of cleantech. There are a lot of companies that are rather invisible when thinking of cleantech, but that do work with energy efficiency.
PS. A quick note on energy efficiency vs. energy conservation. Although often used interchangably, they are not necessarily identical. Energy conservation means using less energy by doing less. That could involve sacrificing processes that we would have preferred to keep. Energy efficiency means using less energy by keep doing something, but with less energy input. Energy conservation is to turn off the light, energy efficiency is to change the light bulb to a energy saving one.