The Surprising Value of the Energy You Don’t Use
Whole-system design can improve energy efficiency by 5x and greatly lower costs, says Amory Lovins.
Going from gas pump to tire, less than a quarter of the energy in every gallon is converted into motion — most goes missing as heat, friction, and exhaust — and less than one percent ends up moving the driver. In your kitchen, only a third or so of that blue-flame heat penetrates the kettle — the remainder vents away. And in data centers humming to serve up videos and answer questions, just a third of the electricity is powering the calculations — another two thirds goes to heating their power supplies, spinning their fans, and chilling their waste heat. Counting all the losses end-to-end, only about 0.01 percent of the power-plant fuel ends up delivering customer value.
Energy waste is everywhere, largely invisible, and shockingly valuable. Taken together, these losses across the world’s energy supply systems add up to $4.5 trillion every year — or nearly 5 percent of global GDP. Converting delivered energy into useful services – such as hot showers and cold beer — wastes at least 80 percent of what’s left.
In many cases, affordable — indeed, often profitable — solutions are available to cut the waste, improve efficiency, and save money. That’s why prioritizing energy efficiency is an essential part of the solution to ease the transition to clean energy. Because renewables waste less energy generating and transmitting energy, wind and solar power can double or even triple the efficiency of electricity production. And pairing clean energy supplies with conventionally improved end-uses — such as variable-speed electric motors or electric heat pumps — can then double efficiency again.
But the biggest breakthrough, often overlooked, comes from rethinking how we design and operate buildings, vehicles, and factories — melding a series of design solutions to deliver compounding benefits. Few people have championed this whole-system approach more than RMI cofounder Amory Lovins, who recently explained at Stanford University’s Energy Seminar how the transition to clean energy can become far faster, cheaper, and easier by applying “integrative design.”
While most analyses focus on the technologies of energy supply and of isolated energy-using parts, Amory explains that rethinking how we design buildings, vehicles, and factories as whole systems can boost energy productivity by as much as fivefold, measured from delivered energy (such as electricity or gasoline) to final service (such as torque, flow, or mobility). Here are select excerpts of his talk, adapted for length. Scroll to the bottom to view the full presentation via video.
Integrative design applies standard engineering principles in unconventional ways — asking different questions, in a different order, to achieve dramatically better outcomes. Rather than optimizing each part of a system in isolation, integrative design analyzes how components interact, enabling designers to achieve multiple benefits from a single intervention.
Improving comfort and saving money in buildings
“Optimizing buildings, vehicles, and factories as whole systems, not as piles of isolated parts, could often make very big energy savings cost less than small or no savings, turning diminishing returns into increasing returns,” says Amory. Such enhanced efficiency magnifies returns before a single solar panel or wind turbine is added, yet it’s seldom taught, practiced, rewarded, or expected. “Renewables get all the headlines because they’re visible,” Amory explains. “But energy is invisible, and the energy you don’t use is almost unimaginable.”
“Renewables get all the headlines because they’re visible… But energy is invisible, and the energy you don’t use is almost unimaginable.”
For example, improving a building’s insulation and windows may eliminate the need for a heating and cooling system altogether, turning what seems like an extra up-front cost into long-term net savings.
In Amory’s own home in Snowmass, Colorado, where temperatures can drop below -5°F (-20°C) — he observed –47°F (–44°C) in the 1980s — and winter days can be continuously cloudy for as long as 39 days, passive solar design, superinsulation, and advanced windows cut energy use so effectively that he doesn’t need conventional heating at all. “Eliminating the heating system subtracted more capital cost than efficiency added,” says Amory. After also saving about 99% of water-heating energy, 90% of electricity, and half the water, “all the savings combined paid back in 10 months. Today, that would probably be less than zero.”
The same principle scales up to commercial buildings. For example, RMI’s retrofit design of the Empire State Building initially cut energy use by 38 percent, later by 51 percent, with a three-year payback, largely because smaller mechanical systems offset much of the cost of efficiency upgrades. From Stanford’s Carnegie building to RMI’s Innovation Center in Basalt, Colorado, and across numerous other projects worldwide, passive design combined with efficient existing technologies has consistently delivered deep energy savings and superior comfort, along with excellent economics — even with lower upfront costs, which further shorten payback periods.
Designing small changes with big impacts in industry
And these results aren’t limited to buildings. In industry, which uses half the world’s energy and electricity, rethinking design choices like pumps, fans, motors, and pipes could yield 40–90 percent savings, with lower capital costs. In his remarks to Stanford University’s Energy Seminar, Amory notes that most engineers focus on making these devices more efficient but forget to improve efficiency in how they’re connected — namely, pipes and ducts. He described how small design decisions, like using fatter, shorter, straighter pipes, can reduce friction losses so dramatically that pump sizes — and therefore energy use — drop by up to 90 percent. “It’s not a technology, it’s a design method,” says Amory. “And few people yet think of design as a path to speed and scale.”
Improving efficiency in cars, data centers, and more
This same logic applies to electric cars, cement, data centers, and aviation. For example, BMW started making its i3 electric vehicles with lightweight, durable carbon fiber. The costlier but lighter-weight material needed fewer batteries to move less weight, and recharged faster with less electricity and infrastructure. For BMW, just the avoided batteries and simplified auto assembly repaid the carbon extra upfront cost of using carbon, quadrupling efficiency, and leading the German automaker to profitably sell a quarter-million of the compact EVs in 2013–22. Applying this same logic to AI data centers, Amory argues that improvements to AI hardware, software, and system architecture could increase energy efficiency, greatly reducing power demand and capital cost. Better structural design could profitably save half the world’s cement and steel. And so on across all of industry.
Thinking in whole systems
In every sector and nearly every use, integrative design offers a powerful yet radically underused pathway to dramatically reduce energy, water, and material use across the entire economy, often at lower cost and faster payback. The reason it remains rare, Amory points out, is not a lack of technology but a failure of education and practice.
“Observing buildings, vehicles, factories in over 70 countries in 50 years, I see the same design errors repeated everywhere, because they’re widespread in our textbooks and our classrooms,” he says. “If the people who shape our built environment — engineers, architects, sheet-metal workers, pipefitters, mechanical contractors — were trained to think in whole systems, not just parts, we could unlock efficiency gains on a scale most still consider unimaginable.”
“If the people who shape our built environment… were trained to think in whole systems, not just parts, we could unlock efficiency gains on a scale most still consider unimaginable.”
It’s a problem we can solve today. And the solution starts with spreading integrative design literacy. As Amory puts it, we should aim to “make integrative design as common as grass… then the revolutions in renewables, electrification, decentralization, even digitization and democratization can get faster, cheaper, and easier.” Making that shift won’t just reduce emissions; it will reshape the very foundation of how we provide and use energy.
This article is based on a lecture Amory Lovins gave for Stanford’s Energy Seminar on June 2, 2025. You can visit the event webpage or watch the recording of his lecture here.
