Parliamentary Commissioner for the Environment - Te Kaitiaki Taiao a Te Whare Pāremata

Blueprints for Sustainable Infrastructure Conference

New Zealand Society for Sustainability Engineering and Science
10 December, 2008

Chipping Away at Sustainability

Thank you for the privilege of opening this very important conference. A special welcome to those who have come from other countries – we look forward to learning from you.

Blueprints for sustainability. I am tempted to suggest you should have titled the conference Greenprints for Sustainability. And then of course, there are footprints – ecological footprints, carbon footprints. The title of my presentation can be taken many ways too - there are at least three meanings.

I could use it to talk about how our way of life is becoming less and less sustainable. But that would make us all miserable. On a happier note, “chipping away at sustainability” could mean that I am advocating an incremental approach to achieving that elusive goal of sustainability. But a third meaning is my topic today.

The chips are silicon chips and the title is a pun. Silicon chips have great potential to help us become more sustainable. I will talk mainly about energy since it has been a major area of my own work. The biggest threat to the sustainability of this planet is the sheer number of us. We are a species that has gotten out of control.

It is not actually us that is the problem.

The problem is what we consume – and where we dump the wastes from that consumption. An obvious example: The consumption of energy and the dumping of the accompanying carbon dioxide into the atmosphere. Not only is the size of our species increasing, but the average amount each of us consumes (and dumps) – the per capita consumption -- keeps increasing. And why shouldn’t people in developing countries have consumption aspirations like ours?

In “economic speak”, increasing consumption is called increasing demand. When there is a supply-demand imbalance, we can increase supply or we can reduce demand. The development of renewable green supply-side technologies is of course hugely important.

But the whole answer cannot lie on the supply-side. We must make major gains on the demand–side. At the very least, action on the demand-side buys us time while better supply-side technologies are developed. I happen to think it can do more than that.

Demand reduction has been the poor cousin for a long time.

I first started working on it thirty years ago at Lawrence Berkeley Laboratory in California with Art Rosenfeld and Alan Meier. Art had been on a Nobel prize-winning team that created one of the transuranic elements. One night during the oil price shocks of the seventies, Art drove up to the lab and seeing it blazing with lights, set to estimate the number of barrels of oil that were being wasted. That calculation was life-changing for him – he traded cutting edge nuclear physics for Thomas Edison - light bulb - physics.
This did not mean for Art that the intellectual challenges were trivial.

Nor are they now. Energy conservation - or end-use efficiency as we quickly came to call it – has challenges that tax many academic disciplines.

Over the past 30 years California has held electricity consumption per capita approximately constant. The state succeeded in decoupling electricity growth from economic growth for three decades. It is no accident – the state owes those researchers at Lawrence Berkeley Lab a great deal. And my old boss Art Rosenfeld is still at it – as an elderly California Energy Commissioner.

In the late seventies, Alan Meier and I worked together to produce the first supply curves of conserved energy – putting conservation – demand reduction – into the same economic frame as energy supply. A kilowatt-hour of electricity can be generated from a dirty coal-burning power plant at a certain cost. And a kilowatt-hour of electricity can be generated from a wind turbine – a green technology – at another cost.

It can also be generated by simply not being consumed; when technology and/or behaviour change enables a task to be performed with less energy.

In very many cases, the cost of generating a kWh by the last method – demand reduction - is the lowest.
One problem that demand reduction has in holding its own is that solar is sexy and conservation is not – it is downright stodgy stuff. I cannot deal with that little cultural problem today.

But back to my title – Chipping away at Sustainability. Silicon chips can deal with one problem – information. Two-way communication of information. And that is fundamental for good supply-demand interaction.

When I go to the shop to buy apples, I see the choices laid out in front of me.
I have full information – red or green, imported or local, expensive or cheap. Organic or ? I do not think the opposite is inorganic.

But when I buy electricity, my information is very poor. And therefore the market cannot function well.
My monthly bill – to use a term you will be familiar with from physics - is a “black box”. I do not know if it is lower this month because I bought a more efficient refrigerator. Or because the weather was warmer than usual. Or because the price has fallen – and pigs might fly.

Poor demand-side information also bedevils policy makers and investors.

The result is:
• High confidence in supply-side investments like new power plants.
• Low confidence in demand-side investments like energy efficiency programmes.

There are two basic requirements for significant demand reduction:
• A means of communicating timely information to many consumers.
• And that information being of a kind that will influence the decisions those consumers make.

It is high time I started talking more about chips.

Many of you will have twigged that I am heading toward smart meters and variable pricing. Smart meters that allow two-way interaction between electricity consumers and producers have the potential to create a step change in curbing the growth in the demand for electricity. A step downwards that is, but a step forward.

Smart meter pilots are being rolled out in this country by electricity retailers. There are obvious benefits to retailers – remote meter reading, for example – not having to tangle with Rottweilers. But there are environmental benefits as well. They can be delivered if the smart meters are really smart. And have the functionality that will enable peak power to be shaved or shifted.

In this country, our electricity peaks occur in winter around six o’clock in the evening. Much of our electricity is hydro, but at peak times, our thermal stations are running flat out.

I do not need to spell out to this audience that this means carbon dioxide emissions. In fact, the peakiest power requires truckloads of diesel from Marsden Point to the Whirinaki plant near Napier. Calculating the carbon footprint of those kilowatt-hours would be an interesting exercise.

The higher those peaks become, the greater the need to build more capacity – more power plants. And all new power plants have environmental impacts. It is perhaps ironic that the modern environmental movement in New Zealand began with widespread opposition to the raising of Lake Manapouri – needed for a renewable electricity project.

A major driver of peak power in New Zealand is residential consumption. So smart meters in homes are of particular interest. If they are to be environmentally smart, smart meters in homes need to have the functionality to support two things:

• In Home Displays
• Home Area Networks.

In Home Displays can communicate information about consumption and cost directly in real time to consumers. Home Area Networks can enable two way communication between smart meters and smart appliances.

How can appliances be smart?

We are all familiar here with ripple control on water heating – though the infrastructure supporting that system is in decline. But it is not just water heating that can be controlled remotely. In the United States, General Electric is now producing smart appliances.

For instance:

• Refrigerators in which automatic defrost can be turned off remotely at peak times.
• Dishwashers and washing machines where cycles can be slowed or delayed.

This communication capability can also enable time-of-use pricing tariffs. The results of a pilot in California are significant. A large number of homes with smart thermostats on various appliances - air conditioners, water heaters, and pool pumps - were exposed to a very different tariff in a controlled study.

Electricity used in the top 60 hours in the year – the peakiest peak – was five times as expensive. The average reduction in electricity use by the smartest group of homes during those 60 hours was 43%.
That is huge – and it shows the potential.

I am aware there are social issues here – and it will be important that if such tariffs are introduced, they are optional for residential customers. Significant reductions can be made even if only a minority of consumers sign up to time-of-use tariffs.

We have a new Government with an environmental policy that includes greater use of economic instruments to incentivise better environmental management.

Smart electricity meters provide the infrastructure to transmit pricing signals – including the price of carbon.
The physical instrument enables the operation of the economic instrument. But in this country, the rollout of smart meters is being led by retailers who may not be at all interested in the environmental benefits.
My question is simply this.

Will the roll-out of smart meters being led by retailers in New Zealand serve the public environmental interest as well as the interests of the retailers? How else can the Silicon Revolution help the environment by reducing consumption?

Transport is another area with a great deal of potential.

The transport of people is not an end in itself – apart from petrol head joy-riders. The fundamental service is access and communication, not mobility. I cannot wait for the technology that will enable cutting down airplane travel through beaming three dimensional holograms into a meeting, so there is a mix of real and virtual people around a table.

Silicon chips are playing a significant role in making public transport more attractive. On some roads in Auckland, the traffic lights know when a bus is approaching and obligingly turn green.

In Christchurch, a local firm designed the GPS software that gives real time information to travellers. If it takes you 7 minutes to walk to a bus stop, you can programme your cell phone to ring 7 and a half minutes before the bus actually arrives at that stop. Those endless minutes languishing at a bus stop are eliminated.

Plug-in hybrid vehicles that can put electricity back into the grid have the potential to help us optimise both our electricity and transport systems. Before too long, it may be possible to use batteries in vehicles to supplement our relatively small hydro storage.

And one day there will be big gains from road pricing that will optimise the use of our whole roading network – though Maurice Williamson and I will probably have to form a support group while we wait for that.

And beyond energy to other environmental concerns.

Remote measurement of water quality using satellites is something we should be doing now. And I must confess that I did fantasise about talking about the use of electronic devices to manage our fisheries better; it would have allowed me to call this address “Fish and Chips”.

So looking ahead to the next three days.

Two messages.

We need blueprints for sustainable infrastructure on the demand side as well as the supply side.
And keep chipping away at sustainability.

Big even strides toward that elusive goal are unlikely. Small concrete steps, persistence, and the occasional breakthrough are where it is at.

Thank you.

I declare this conference opened.