Monday, August 25, 2014

Energy Efficiency, Demand Destruction, American Utilities.

Energy efficiency vs. demand destruction: The big problem facing America’s utilities.: "... Demand destruction is different from energy efficiency. Efficiency is when you decide to use a little less of a resource than you did last year (turn out the lights, drive a more efficient car) or on a seasonal basis (turn down the heat during the winter). That can be a bummer for a provider. But in many instances, it is part of the business model... Demand destruction occurs when you eliminate or substantially reduce the need for the resource on a near-permanent basis. Somebody trading in a Chevrolet Malibu for a Nissan Leaf won’t be buying any gasoline for the next 10 years. Replacing a 30-year-old air conditioner with a more efficient new one will significantly reduce the power associated with cooling. Innovations in technology and business models can hasten the process of demand destruction—think of how the advent of iTunes cut into the sales of CDs... And when a company puts solar panels on the roof of a big-box retailer, as Ikea has done on 40 of its U.S. stores, or as Walmart has done (89 megawatts of capacity at 215 locations as of last fall), it is effectively destroying a decent chunk of demand over the 20-year life of the system. When a lot of people decide to go solar in the same city or area, it can add up...." (read more at link above)

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