Taking Stock
35 Years of Influence… and Counting
By Amory B. Lovins, cofounder, chief scientist, and chairman emeritus of Rocky Mountain Institute.
This year, as Rocky Mountain Institute turns 35 and I turn 70, what have we dared, done, won, lost, learned, and become? When RMI began in 1982, eight things were clear:
- Energy is a “master key” to tangled emergent crises in resources, population, environment, development, economy, and security.
- We could best create and spread breakthrough solutions in a small, agile, collaborative, nonprofit think-and-do tank with high talent, ambition, depth, quality, and repute; lacking a suitable one, we’d have to create it.
- Though the right rules are vital and we must help devise them, government should steer, not row: in market economies, business does the hard rowing. Business-led, market-driven change would outpace lagging policy as politics, especially federal, became more polarized, corrupt, gridlocked, and dominated by powerful incumbents.
- To engage across a swirl of colliding interests, we must stay impeccably apolitical, non- partisan, nonadversarial, and independent.
- To serve a diverse and perhaps fracturing society, we must deliver no single outcome, but a broad slate of transideologically appealing benefits for all, and must focus on outcomes, not motives.
- Dwight Eisenhower said if you can’t solve a problem, enlarge it: expand its perimeter to encompass everything its solution requires. So to solve seemingly intractable systemic problems, we must not just innovate but integrate, creating an actionable and compelling vision across boundaries.
- Practical transformation in some of the planet’s biggest, most complex, most rigid systems is a subtle, decades-long strategic game demanding relentless patience as well as continual tactical advances.
- To sustain ourselves and inspire others, staying intrepid despite skepticism and tenacious through adversity, we must live and strive in applied hope.
Those bets proved correct, served us well, and today confer unique advantage on RMI as we look to the future.
From the start, we envisioned a world thriving, verdant, and secure, for all, for ever. We still do. To build that world, the sharpest but most neglected tool was efficient and restorative use of resources. It still is. Now opportunities are getting bigger and cheaper, faster than they’re applied. Creating a clean, prosperous, and secure low-carbon future, though still a formidable challenge, is thus getting easier every day — and, we think, more convincing to those still steeped in fear and pickled in gloom.
With 35 years of foresight and insight, RMI has deeply influenced the vehicle, real estate, electricity, and many other industries, and laid many of the foundations for the new energy era now bubbling up. We’ve leveraged big changes in a global economy over 2 million times our budget, by putting the right ideas in the right heads at the right time, and by helping reframe problems, re-vision paths, bust barriers, re-mind designers, convene and collaborate, partner and pioneer, speed and scale. Much of this work has been recognized with awards, relationships, and reputation. Most entails close cooperation with industry partners. RMI did almost none of this transformation singlehandedly — many other important actors have helped at many critical stages — but our role in orchestrating and catalyzing major change remains unusual, if not unique.
Having reframed the energy problem around end- uses in 1976 (for results, see “Soft Energy Paths,” Solutions Journal, Summer 2016), I organized our analytic and practical work around the four energy-using sectors: mobility, buildings, industry, and electricity. All were linked to other issues and disciplines, so RMI’s first decade also made important contributions to water efficiency, regenerative agriculture and forestry, non- proliferation, security, and community economic development. Leaving those aside, I recount here some highlights of how our energy-centric efforts have already achieved more than I’d imagined.
MOBILITY
RMI laid the foundations for, and continues to drive, today’s emerging transformation in how our bodies and goods move around the world.
Automotive: Vehicle electrification has gone from unimaginable to superior and (starting in 2017–2018) affordable. This could be further sped by making autos not just modestly but severalfold lighter and lower-drag, a shift RMI has led since our 1991 invention of the Hypercar® concept. Needing two to three times less energy to move the auto can correspondingly reduce the number of costly batteries required, speeding deployment by a decade or two; make cheap batteries ubiquitous; and facilitate vehicle-to-grid links (another 1991 RMI invention) and smart charging, so electric vehicles can help the grid integrate variable solar and wind power. We open-sourced our industry-validated Hypercar R&D to maximize competition, then supported seven automakers’ transitions via technical and strategic engagement. Our interventions sped Japan’s hybrid-car development and helped trigger the global industry’s revolutions in lightweighting and electrification. (An early example, the 124-mpg carbon-fiber electric car I drive, is already profitable for BMW.) RMI spin-off companies developed, with industry partners, a 67–114-mpg uncompromised midsize SUV design in 2000 and a 100-mpg production-ready utility/delivery van in 2011. Another RMI spin-off developed, and sold into the supply chain, the leading process for making ultralight carbon- fiber structures at automotive cost and speed; making just U.S. autos that way could displace half OPEC’s oil for under $10 per saved barrel, or about a fifth of the mid-2017 world oil price. We helped change federal policies so lightweighting can save both lives and oil, and so government R&D can rapidly advance ultralighting and batteries. We suggested and tested novel federal, state, and local supporting policies now spreading around the world.
Freight and integrated mobility systems: We showed highly profitable paths to make heavy trucks two to four times more efficient, helped Walmart double its truck-fleet efficiency, spun off the North American trucking industry’s leading efficiency program, and identified a pathway for China to halve empty truck hauls. We helped lead the military revolution in mobility-platform efficiency and wrote the Pentagon’s roadmap to oil-free security. We helped the aviation industry begin its path off oil. We drove the shift toward efficient marine shipping via market transparency, and introduced radical efficiency into cruise, luxury, and naval vessels. We
“From the start, we envisioned a world thriving, verdant, and secure, for all, for ever. We still do.”
elucidated new electric, autonomous, and connected mobility business models now upending the auto and oil industries; sped electric-vehicle infrastructure deployment; and trialed integrated urban mobility systems. We helped the governments of China and India shape major accelerations in electric mobility and integrate information technology and urban design with mobility, just as we’re piloting in the United States. And we confirmed the practical potential to save $4 trillion by getting a far more mobile U.S. completely off oil by 2050.
BUILDINGS
Our new Innovation Center, in Basalt, Colorado — the most efficient commercial structure in the coldest climate zone in the U.S. — is just the latest step in more than a third of a century of built- environment leadership. RMI invented the green real estate development concept in 1991, showing how developers could heal natural and human
communities. We wrote its standard text and basic treatises, helped build its institutions and train its practitioners, discovered and proved its huge non-energy benefits, invented its highly profitable deep-retrofit and right-timing practices, enlisted governments in adopting it, and elucidated its barriers, business opportunities and models, and policy and strategic implications. Today’s deep retrofits, building-code reforms, and zero- or positive-net-energy new-builds widely apply our learnings and tools, gained from codesigning more than a thousand diverse superefficient buildings worldwide. Our signature way to cut construction cost — smaller or eliminated mechanicals, such as chillers and boilers, that pay (or more than pay) up front for the efficiency that makes them smaller or unnecessary — is spreading, and we’re helping build it into popular design software.
By around 2008, RMI’s widely sought-after design skills had helped create a third of the world’s LEED Platinum projects. But our iconic deep retrofits of the 21st century, like the Empire State Building and Byron Rogers Center, built on our earlier greening of the White House, the Pentagon, Deutsche Bank’s Greentowers, the Sydney Olympic Village, and other projects. Those, in turn, applied our 1986–1992 six-volume encyclopedia of electric efficiency — the basis of a leading spin-off firm — and our $18 million 1990–1997 “ACT2” integrated energy efficiency experiment with Pacific Gas & Electric Company. Our first headquarters building (1982–1984) helped inspire the European passive-house movement that’s now going global. Such thought leadership continues today in our efforts to take U.S. commercial and residential buildings’ efficiency potential to national scale, and to help China implement our collaborative reframing of its building strategy around passive and radically efficient design.
We developed and proved performance-based design fees, zero-energy campus retrofits, right- timing tools for portfolio retrofits, and innovative financing methods. We crafted tools for biomimetic and biophilic design, superefficient building portfolios for firms from Ford to Walmart, and fundamental redesigns for everything from affordable housing to zoos, from refugee camps to corporate campuses and medical facilities. In all, our design support, trainings, and insights helped inspire and evolve what is now a major industry beginning to capture U.S. buildings’ potential for $1.4 trillion in net-present-value energy savings with a 33 percent internal rate of return.
INDUSTRY
Industry uses over half the world’s energy, much of it wasted. Our design prowess can help fix that, and has already markedly raised many sectors’ efficiency bars. RMI has advised more than 85 Fortune 500 firms and more than 10 of the world’s top 50 brands — not just on technology and strategy but also on superefficient facilities and technical processes. Our hallmark integrative design techniques optimize whole systems for multiple benefits. This often makes very large energy savings cost less than small or no savings, turning diminishing returns into expanding returns. Across such diverse sectors as microchips, hydrocarbons, chemicals, mining, manufacturing, data centers, food and beverage, retail, and supermarkets, our $40-plus billion worth of collaborative industrial redesigns have typically found about 30 to 60 percent energy savings in retrofits with two- to three-year paybacks, and in new facilities, about 40 to 90-plus percent energy savings with generally lower capital cost.
Just optimizing friction by making the world’s pipes and ducts fat, short, and straight — rather than thin, long, and crooked — could save roughly half the world’s coal-fired electricity, with typical paybacks under one year in retrofits and less than zero in new-builds. Yet this isn’t in any textbook, business forecast, or official study, because it’s not a technology: it’s a design method. We have the opportunity to make such “integrative design” commonplace via a half-dozen scaling vectors from new design pedagogy to installer training and from software development to graphic “how-to” manuals for Chinese factory engineers. Now the durable relationships formed, reputation earned, and skills honed in our industrial work are enabling a new RMI effort to help the hydrocarbon industries profitably eliminate 10 percent of their methane emissions by 2030 — the fastest way to dial down the Earth’s thermostat.
ELECTRICITY
From scholarly debates to practical fieldwork, from helping utilities and regulators craft least-cost resource plans to enlisting the Department of Defense’s leadership in resilience, there are few important electric innovations today that don’t show RMI’s handiwork, and many of the industry’s most basic trends have depended on it. Our wide- ranging and rapidly evolving electricity practice focuses on collaborative industry reinvention, new business and regulatory models (notably New York State’s Reforming the Energy Vision proceeding and China’s grid reforms), corporate renewables purchasing, clean energy for low-income households, low-cost solar power for communities and mines, widening investor access, and the new economy of flexible loads, batteries, grid and load defection, distributed assets, mini- and microgrids, balancing costs, and green dispatch.
Besides moving customers toward saving three- fourths of U.S. electricity (now used one-fourth in industry, three-fourths in buildings), RMI is driving profound change in how electricity is made and delivered. RMI has laid most of the conceptual, analytic, and often technical foundations of modern least-cost electricity strategy, melding efficient and timely use with diverse, distributed, resilient, and renewable supply. Our work underpins the vast industry (about $12 billion a year in the U.S. alone) of selling saved electricity, or negawatts — a term we first popularized. It has influenced the
“RMI did almost none of this transformation singlehandedly — many other important actors have helped at many critical stages.”
language, business models, and offerings of firms whose global market for efficiency and renewables exceeds a half-trillion dollars a year. Our decades of work with more than 100 utilities and scores of regulators worldwide evolved a logic that’s transforming the industry, with electricity demand declining in rich and flattening in poor countries, and the majority of global new supply now renewable.
We first showed the enormity of the electric efficiency resource, urged that negawatts be bought whenever they’re cheaper than megawatts (nearly always) and that utilities be rewarded for best buys first (as 14 states do and eight are considering), asked that efficient and timely use of electricity be allowed to compete directly against its supply (as two-thirds of the U.S. now does), debunked equity and rebound myths, devised some 20 ways to make markets in saved electricity, predicted how renewables could outcompete thermal power plants, showed how to integrate variable renewables like wind and solar reliably with little or no bulk storage, organized industry efforts (underpinning the U.S. Department of Energy’s Sunshot program) to halve photovoltaics’ balance-of-system cost and cut solar power’s cost by two- to fourfold, showed how to correct grids’ frightening vulnerabilities, uncovered the hidden economic value of distributed generators, warned of the utility “death spiral,” predicted and explained the failure of California’s botched 2000–2001 electricity restructuring, analyzed why costly nuclear plants reduce and retard climate protection, showed how natural gas’s price volatility undercuts its apparent cheapness, and helped drive and explain the impressive — but widely misrepresented — power revolutions in Germany and Asia.
“So what were those 35 years preparing us for? To achieve exponentially more impact.”
SYNTHESES
Ever since my 1976 Foreign Affairs paper and 1977 book Soft Energy Paths controversially reframed the energy problem — with uniquely accurate foresight of year-2000 U.S. energy demand — RMI’s “grand syntheses” have defined and organized new categories of intellectual capital. These works organized contemporary thought about energy vulnerability and resilience (Brittle Power, 1982), profitable climate protection (Least-Cost Energy: Solving the CO2 Problem, 1982), profitable green business (Natural Capitalism, 1999), economics of scale (Small Is Profitable, 2002), getting profitably off oil (Winning the Oil Endgame, 2004) and off coal (Reinventing Fire, 2011), and profitably delivering seven times more Chinese GDP per unit of energy and 13 times more per unit of carbon (Reinventing Fire: China, 2016).
These and more than 1,000 topical publications by RMI’s roughly 170 staff support the institute’s global reach — now extending from helping China lead the world in deploying efficiency and renewables and helping India explore new mobility and electricity futures to helping Rwandans gain solar access and Caribbean island nations switch from diesel to renewable power.
WHAT’S NEXT?
So what were those 35 years preparing us for? To achieve exponentially more impact. To sustain our values, improve our quality and effectiveness, evolve our tactics, and keep our culture audacious and tenacious. Past global energy transformations have taken a half- century or more, but historic transformations and modern industrial dynamics now give us hope that this one is on track to go far faster.
China and India added 86 percent of the world’s new coal stations in the past decade, but have now halted hundreds of gigawatts ripe for cancellation before they become stranded assets. India’s energy minister predicts his country’s total capacity will be 60 to 65 percent renewable by 2022 because auctions made renewables cheaper than coal, and he engaged RMI to help launch India’s transformation of personal mobility. Renewables, their costs plummeting, are half or more of net electric capacity being added in America, China, India, and the world. In 2016 alone, costs fell 37 percent for Mexican solar power and 43 percent for European offshore wind power. The cheaper renewables get, the more we buy, the cheaper they get, and so on.
Extrapolating our U.S. roadmap — and its Reinventing Fire: China counterpart we organized to help China’s government reframe its energy strategy — to the rest of the world could about achieve the Paris Agreement’s 2C ̊ climate trajectory while delivering the same or better energy services roughly $18 trillion cheaper. Reinvesting in helping natural systems move carbon from air to soil could then about achieve the aspirational 1.5C ̊ goal and save trillions of dollars while boosting global development, prosperity, and security. These are worthy tasks for our next 35 years.
Despair (said René Dubos) is a sin. Ignorance is not bliss. But RMI brings good news rooted in advanced technology, integrative design, mindful markets, irrepressible innovation, and fearless entrepreneurship. So far, human skill and will have expanded to match the problems humans create. Each of us evolved from ancestors who overcame huge challenges. We must not betray their legacy but apply it.
My early mentor, the inventor Edwin Land, said, “Never undertake a project unless it is manifestly important and nearly impossible.” But Henry Ford reassured us that “Whatever is worthy and right is never impossible.” Ford added: “Whether you think you can, or whether you think you can’t, you’re right.” We can.
Rocky Mountain Institute has the ability and the duty to help all people, of all views, everywhere, to see what they can do, and to do it. I feel blessed by that privilege, by gifted colleagues, and by your companionship on the journey.
Amory B. Lovins is cofounder, chief scientist, and chairman emeritus of Rocky Mountain Institute.
WEB EXTRA
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