Suppose I paid you for every pound of pollution you generated and punished you for every pound you reduced. You would probably spend most of your time trying to figure out how to generate more pollution. And suppose that if you generated enough pollution, I had to pay you to build a new plant, no matter what the cost, and no matter how much cheaper it might be to not pollute in the first place.
Well, that’s pretty much how we have run the U.S. electric grid for nearly a century. The more electricity a utility sells, the more money it makes. If it’s able to boost electricity demand enough, the utility is allowed to build a new power plant with a guaranteed profit. The only way a typical utility can lose money is if demand drops. So the last thing most utilities want to do is seriously push strategies that save energy, strategies that do not pollute in the first place.
There are some things you wish you could have written, and the first paragraph is one of those. Romm nails it. Clearly, the most efficient MW of electricity is the one that was never used. But unless utilities are paid to conserve, not paid to produce, they will always build, build build.
Excellent summary of arguments he makes all the time over at the gristmill. Now to find out what BC does. Canada is one of the worst in terms of energy use per capita. Some of it can be linked to the cold climate, but Germany is plenty cold too, and uses a third less per person.
This article compares BC and California and finds BCHydro lacking in its incentives to save. The key is “decoupling”
Significantly, California adopted regulations so that utility company profits are not tied to how much electricity they sell. This is called “decoupling.”
BC’s per capita energy consumption is 0.26, well below the Canadian average and on the decline as Canada as a whole is getting worse. But more can be done.
The key value judgment to be made here is that reducing energy use benefits all of us. The system should be set up in such a way that it benefits the utility as well. This way, they’re on the same side.
Also, while a carbon tax is all well and good, it is not sufficient. Energy efficiency requires investment up front and people would rather pay 50 bucks a year in carbon tax than pay 300 bucks up front to insulate their homes better and save a 100 bucks a year in energy costs. Rebates only work if you have money up front. Giving people a $100 check is nice, but only if they spend it on improving energy efficiency. But, it’sjust money and we all know that money gets spent (beer, beer beer!) Subsidies work better as they reduce the cost of things. I would rather buy 10 compact fluorescent lamps for a buck each with the government chipping in the extra 10 bucks than get it back at the end of the year as a rebate, or pay 20c extra per incandescent lamp as a carbon tax.
All rambling aside, a really good article on the value of energy efficiency.