35 Years of Bold Steps in the Clean Energy Race: Part 3

An Interview with Amory Lovins and Jules Kortenhorst

As RMI celebrates our 35th anniversary as a nonprofit organization, we are in a very exciting, but also very critical, time in our race to a clean energy future. We recently held a web discussion, 35 Bold Ideas to Win the Clean Energy Race, with RMI CEO Jules Kortenhorst and Cofounder and Chief Scientist Amory Lovins, moderated by Kelly Vaughn.

This third and last blog post from the web discussion focuses on electric vehicles, cement, methane, and more. Questions and answers have been lightly edited for clarity.

Vaughn: In regards to electrification in transportation, what are some developments that we can look toward and what type of mileage can people expect over the next few years?

Lovins: Well, this is the year when you start to get roughly $35,000, 200-plus-mile-range electric cars from several vendors. And there’s a whole swarm coming after that: dozens and dozens of models in all shapes and sizes from practically every automaker over the next three years at very competitive prices. They’ll probably reach the same sticker price as today’s gasoline cars in the early 2020s. And of course, long before that, they’re cost-effective because they save you so much fuel. Electricity is so much more efficiently used. It ends up a lot cheaper per mile than gasoline. This is, of course, most important for fleet vehicles. So if you’re using sharing like ZipCar or Getaround (software for hiring your neighbor’s car when it’s parked), ride hailing like Lyft and Uber or, soon, autonomous cars, all of those drive fewer cars a lot more miles and therefore save so much energy cost that it more than covers any initial higher sticker price. So we’ll see this first in fleets. And if we focus support on fleets, we can get 10 times more electric miles than we would get if we just went for helping private vehicles go electric early.

Now, of course, electrification happens faster and cheaper if you take the obesity out of the car. We now know how to make cars severalfold lighter and more slippery. And in fact, RMI has a couple of spin-offs in this area, one of which sold a technology into the supply chain. You can buy it now and it lets you make two-by-two-meter carbon fiber parts in one minute. That’s the holy grail. I was just in Detroit a few days ago. There’s a lot of excitement in the industry about fit cars, which then need two-thirds fewer batteries. So they get cheaper a lot sooner and of course they charge faster. So as we gradually make cars fitter, batteries cheaper—down four- or fivefold the last five years, another 70 percent to come in the next few years—and the infrastructure better, I think the electric vehicle revolution is going so fast that even major oil companies are now acknowledging it as a major threat to their business.

Kortenhorst: And it’s also interesting to recognize that this is not just a phenomenon in the developed world. In fact, the largest electric car market is now in China. And some of the other lesser-known electric car companies are actually Chinese companies. So it’s not just Tesla. It’s not just the major OEMs from Detroit. But it is now a global move.

This is where the acceleration of the pace is a hopeful sign. So many of these transitions are S-curves, where initially the development is slow, but then at some point, you start to see a very rapid acceleration, in the very same way that none of us could have imagined 10 years ago that the smartphone would be pretty much standard around the United States. Initially it was slow and now everybody pretty much owns one. So that rapid increase of deployment is happening in electric vehicles, has definitely happened in LED lighting, is starting to happen in solar, and has already happened in wind. So as these curves grow from the slow-moving part to the fast-moving part, in some ways, all bets are off how the industrial landscape is changing.

And it’s not a stand-alone thing. All these things happen together. For example, when we think about electric vehicles, it’s important to also think about the role that electric vehicles have in the electricity system, because you can charge that car at night when you come home, but that time might not be the optimal time. The optimal time might be during the day at the office, because that happens to be the time when solar power is making the marginal cost of electricity very low. So thinking how we integrate electric vehicles into the electricity grid to address the stability issue is another way in which we see that the different trends in the industry are all coming together.

Lovins: And of course, as you have more electric cars, you get abundant cheap batteries, which means distributed solar everywhere. So we’ve been showing how these batteries, although they are often not the cheapest way to get the benefits, are already cost-effective. That is, their benefits exceed their costs installed in your house in much of the country. It’s a very exciting time.

I think what all of these convergent and mutually reinforcing trends show, as Johan Rockström recently remarked, is that there are two diverging views of the energy future: one built around new processes, new developments, new business models, new technology and design, which behave in the S-curve way that we’ve seen in hundreds of industries that can grow very fast, especially in combination; and then another view based on being held back by the inertia of the incumbents. And that way, I think, is looking more and more old and not the way it’s really developing. It’s not to say those industries aren’t powerful, or that they don’t have important capabilities, some of which society will need. But they need to adapt quickly and that is a huge cultural challenge. These are very large, complex organizations. So we’re very gratified that some of them that we work with are coming over to a different view and making that struggle themselves in how to change to advance the new energy system, and not just protect the old one.

Kortenhorst: Indeed, the accelerating pace of the transition in the electricity system and the ability that gives us to electrify much more of society is very exciting. But it also immediately highlights that we still have a challenge in some parts of the economy where electricity is not the whole answer or not most of the answer. For example, cement is currently made in a process that, by its nature, emits CO2. And that is a process that takes very high-intensity heat and therefore cannot easily be electrified. We’ll have to change the cement process, the physical process of making cement to a different process, whether that is based on a completely new technology or based on different fuels, in order to mitigate the emissions in that sector. And there are a few more sectors like that. Amory and I love to have a debate about the viability in the short term of electric or hydrogen-based planes or, alternatively, a transition in the aviation sector to biofuels. There are still a number of parts of our economy where the pathway to low carbon is not yet crystal clear and where more research work needs to be done, where more analysis needs to be done, where more experiments need to take place, and where we need to, in the end, accelerate the deployment of the solutions of the future.

Lovins: To take your cement example, some of those technologies already are entering the market and they need less heat at much lower temperatures. And also, of course, one of the exciting side effects of cheap renewable electricity, such as off-peak wind power, is you can make hydrogen out of it, which gives you as high a temperature as you want for industrial processes, and it’s easy to store.

Vaughn: I want to make sure we address an issue around timing. When we look at a lot of these innovative ideas and projects from Rocky Mountain Institute, in addition to some disruptive technologies that are entering the market, when can we expect to see some of those disruptive projects take hold?

Lovins: Those are all things that we don’t need to predict. Nobody does, because they’ll all play out in the market. And neither we nor any other analyst, or for that matter, bureaucrat, should pick winners. If we create competitive conditions, the best ones are going to win. They’ll be different in different places, in different niches. That’s good. And that will drive much faster innovation than any choices we can make.

Kortenhorst: But I will say that your question about timing is an important one, right? The urgency and importance of the climate change issue forces us to start thinking about the changes we can make that have real material impact in the very near future. And that is why I’m excited about our global methane program. Methane is a greenhouse gas, but it is different from CO2 in two ways. On the one hand, it increases warming much more significantly. But on the other hand, it has a much shorter time in the atmosphere than CO2, so it disappears more quickly. That means that if we can reduce methane emissions, we have more immediate impact.

So we are embarking on a program addressing methane emissions, particularly in the upstream oil and gas supply chain. And this program might be, in some ways, tricky and controversial because we have to interact with the oil and gas industry and they’re not always as open-minded to those interactions. But on the other hand, they have come to realize increasingly—particularly the European oil and gas companies—that any future role of gas in the energy system is critically dependent on addressing methane leakage. So working with the oil and gas industry to reduce methane leakage, to reduce flaring, where a lot of methane leaks, is a significant opportunity for us, and we’re ramping up that effort. We’re looking to make some significant investments. We’re looking for more support because this is one area where we can do something very quickly that can have a real material impact.

Lovins: It’s the fastest way to turn down the global thermostat.

Vaughn: Before we close, I want to leave an opportunity for any final thoughts.

Lovins: We are blessed with some unusually talented and dedicated colleagues. It’s such a joy to work with them and with all of you to see what we can do together. It’s already exceeded my fondest hopes and I can’t even keep up with how fast it’s starting to materialize.

Kortenhorst: Let me add to that. Thank you to you, Amory. Thirty-five years ago, you had this bold and audacious idea to start an institute here in the Aspen valley that would influence global energy use to create a clean, prosperous, and secure future. We’ve come a long way in 35 years. We’re going to go a lot further in the next 35. And for that, we’re also grateful for all the support that you all listening to this are giving us, because we couldn’t do it without you. Thank you all very much.

This is the third in our series exploring the important issues discussed in the webinar. Be sure to also read Part 1 and Part 2 of the discussion, or download the full transcript of the discussion.

Image courtesy of iStock.