Article | 1990

Four Revolutions in Electric Efficiency

By Amory Lovins

In this paper from 1990, Amory Lovins discuses four changes impacting electricity demand. He argues that demand for electricity is altered profoundly by new technologies for improved end-use efficiency, new ways to finance and deliver those technologies to customers, cultural change within utilities, and regulatory reforms to reward efficient behavior. The technological improvements can come in the form of lighting and commercial, residential, and industrial retrofits. The second revolution, financing and delivering technologies to customers, can be implemented with negawatts or electricity savings. The third revolution is a cultural change within utilities that would let them provide the best service to the customer by focusing on marginal (not sunk) costs. The fourth revolution, a change in regulatory philosophy and practice, would decouple utilities’ profits from their sales as well as allow utilities to keep some proceeds when they incentivize customers to save energy.