A new report has identified that the USA could reduce its energy consumption by 23% by 2020 through energy efficiency.

The report has been prepared by McKinsey and Company, who are well known for their studies on the economics of cutting greenhouse gas emissions.

McKinsey however says that this sort of saving is not easily achieved. Three types of barriers to the uptake of energy efficiency are identified in their report – structural, behavioural and availability. They say that these barriers need to be overcome to realise the full potential of energy efficiency across the economy.

Structural barriers are those that prevent an end user of energy from saving energy. For example a tenant typically has no control over the type of heating and cooling system in the building.

Behavioural barriers are those where ignorance or unwillingness to act mean energy efficient solutions aren’t implemented. An example that we see quite often in commercial buildings is ignorance about the time the air conditioning starts in the morning. Often it will be starting two hours or more before the building is occupied in the morning – which is wasteful if it only takes half an hour to get the building to a comfortable temperature.

Availability barriers are those where the user wants to reduce energy, but can’t access the solution or technology, often for cash-flow or cost reasons. For example, a business with tight cash flow that knows its HVAC system is a clunker, but doesn’t have the cash for an upgrade.

The report proposes various solutions to these barriers, mostly showing what government could do. The prescriptions appear valid for any government, not just the US. If you are in government, or have some influence in government circles, this report is worthwhile looking at.

Click here for the report.

Whilst these sorts of reports can be useful, they come with the implicit message “Think climate change - think government.” Don’t fall into the trap of thinking that just because another report is recommending the government do more, that it’s the sole responsibility of government to cut greenhouse gas emissions. There is a lot you can do yourself, and with focus and creativity these barriers can be overcome. Your organisation could probably cost effectively achieve a 23% saving from energy efficiency within a couple of years if you make this a priority. And the greater the number of individuals and organisations who make this a priority, the greater the impact.

Go to the department of climate change’s website and you’ll see the slogan “think climate, think change”.

Here in Melbourne the department of climate change’s slogan could be rephrased as “Think climate - watch change”.

In the 1980s vehicle number plates here in Melbourne proudly bore the slogan “Victoria - the garden state”. Fast forward twenty years to 2009 and Melbourne is now the driest capital city in Australia. Six months ago we had our worst ever bush fires. The newspapers this week have been saying that fire danger is going to be even worse next summer. 

This is precisely what most governments have been doing for a long time now - thinking climate - watching change - and not doing enough. The Australian Government ratified the United Nations Framework Convention on Climate Change, along with most of the rest of the world, back in 1992 (yes, SEVENTEEN years ago!).  Back in 1992 this is what Australia and many other countries agreed to:

“Where there are threats of serious or irreversible damage,lack of full scientific certainty should not be used as a reason for postponing such measures [to anticipate, prevent or minimise the causes of climate change]”, UNFCCC, 1992

“Think climate, think change” is a start - yes we need to think about this issue - but we need to go beyond thinking to action - all of us, not just the government. I much prefer the message developed by Darebin City Council - “think climate, make change”. Now.

You can reduce your own carbon footprint significantly if you want to. You can encourage those you know to do the same. And if you are an entrepreneur - think up solutions that cut carbon emissions then make them a reality, like Shai Agassi at Better Place. “I’m an imagineer. I imagine the future and engineer towards it.”

Today I had the fortune to see Shai Agassi, founder of Better Place, talk about his vision for the electric car future. Shai calls himself an imaginer – “I imagine the future and engineer towards it”. His vision of an electric car future is elegant, simple, and achievable. Australia is a key part of his strategy to get the world to a tipping point which results in all cars becoming electric.

For electric cars to replace petrol cars they must be cheaper and more convenient. Yet the electric cars available now are more expensive and less convenient because of their short range and limited recharging options.

One of the keys to Shai’s vision is treating the battery – the single most expensive component in an electric vehicle – like gasoline. The battery becomes a consumable, not owned by the car owner. By taking out the battery its possible to make vehicles that are price competitive with gasoline vehicles.

A second key is the electricity grid, which is everywhere, and which he called “the longest extension lead in the world”. By extending the grid to having recharging points where cars are parked, vehicles can be charged whenever they are not in use. Better Place will be buying only wind or solar generated electricity for use in its vehicles.

A third key, for longer trips, is batteries that can be swapped over in a minute. The first prototype has just been built in Japan. So on a long trip (over 200kms) you pull into a battery station, change your battery, then keep going. It will take less time to change your battery than to fill your car for petrol. For a typical suburban vehicle typically there would be around 12 to 15 battery changes per year.

Paying per km you travel – for the electricity and battery amortisation – is still cheaper than the equivalent cost of petrol per km.

The result is:

• Cars that cost less to buy than fossil fuel powered vehicles; and
• Cars that cost less to run than fossil fuel powered vehicles.

Of course a large investment is needed to build the infrastructure – the recharging points and battery change stations. But if cars are cheaper, if they cost less to run, if petrol is only going to keep increasing in price, and if there is going to be continued regulation and incentive to reduce carbon emissions this is not a insurmountable hurdle.

Shai believes that the “tipping point” will be reached once three countries have proven the concept. Then the rest of the world is likely to follow – and follow quickly. The first country is Israel, which first supported the idea. Renault are investing one billion dollars in producing a electric vehicle, which will first be sold in Israel; they are aiming to sell 150,000 vehicles in the next few years. The second country is Denmark. And the third country is Australia, with Looksmart founder and former Victorian parliamentarian Evan Thornley heading up Better Place in Australia.  Australia was chosen for a couple of reasons. First its big, unlike Israel and Denmark, and thus provides a demonstration that the technology is suited to big and small countries. Secondly we have large sprawling cities, involving a long suburb to city commute, not dissimilar to many North American cities. A third reason would be that we have a relatively small population of cars, so the net capital cost is relatively low. Shai also said that Australia has lots of Lithium, iron and phosphate, the components used in electric vehicle batteries.

With a country full of electric cars, each with large storage capacity, the intermittent nature of electricity generation from wind and solar can be overcome. When the wind blows and the sun shines batteries in parked cars everywhere will be charged. When its calm and cloudy cars can then feedback into the network. And we move towards the smart grid or distributed network.

The choice of Evan Thornley as Australian CEO is interesting. Clearly Better Place will need tremendous IT and communication infrastructure to communicate with vehicles and the smart grid and monitor battery condition and charge levels. Its hard to go past one of the people who was involved in driving widescale uptake of the internet as a leader.

This future is not that far away. Various governments around the world are now offering subsidies to those who purchase electric vehicles. And in Beijing gasoline cars will be progressively banned from the streets. By 2014 no fossil fuel powered vehicles will be allowed in Beijing.

Shai believes that within 10 years we could have three to four million drivers using electric vehicles in Australia.

Shai Agassi spoke at the inaugural 2009 Alfred Deakin eco-innovation lecture. These lectures will feature optimistic innovation driving a more sustainable world. Shai’s positive vision is a great inspiration and a fantastic way of kicking off the lectures.