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Agitate against tech billionaires. Against oil companies toasting the planet for profit, and the politicians they’ve bought. Agitate against racism, fascism, and the new feudalism.
AGITATION NATION, the podcast featuring America's agitators, scientists, activists, and insurgent thinkers working for a better country. Hosted by David Fenton, from the Fenton Forecast newsletter.
Welcome to the Fenton Forecast. I'm your host, David Fenton. We're all about the future in our interview today with my guest, the physicist Amory Lovins, who is the cofounder of the Rocky Mountain Institute, which is the premier clean energy research and think tank in the country and around the world, frankly. Amory will give you a dose of optimism, except he doesn't call it optimism. He calls it applied hope, working for a better future rather than just being optimistic about it.
Speaker 1:Amory has been predicting a clean energy world since the nineteen seventies, and he's been right so often that we're gonna end up using renewable power. It's gonna be abundant and cheap. It'll be easy and cheap to store. And of course, that's exactly what's happening as solar and wind and battery prices keep reducing and keep reducing. So we're really in for a much better world.
Speaker 1:Of course, we're in a race to do this in time to save our climate, and Amory's optimistic about that. Also, in this interview, we also talk about Amory's views on nuclear energy. He's not a fan. He says it's very expensive, it takes very long to build, of course it is dangerous, it does make poison. And in his view, every dollar spent on nuclear power take is worse for the climate because it takes away from spending money on far cheaper renewables that are far faster to scale.
Speaker 1:He also he's so optimistic, he thinks his grandchildren will be flying the Pacific Ocean and coast to coast in solar powered airplanes, and he's about to take delivery of an entirely solar powered car. That's right. From the panels on the roof of the car. So over to my interview with my good friend, Amory Lovins, one of the great thinkers of our time. And of course, if you have any feedback, please send it to hellophentonforecast dot com.
Speaker 1:Hellophentonforecast dot com. Okay. Now to Amory Lovins, and you can learn more about his work at rmi.org. Rmi.org. Thank you very much.
Speaker 1:Welcome to the Fenton Forecast. We're talking about the future today with someone who's been predicting it for a long time, for fifty years, physicist Amory Lovins, who I'm happy to call a friend. Amory founded RMI, what used to be known as the Rocky Mountain Institute, in 1982. It's the leading research center for a clean energy future. And it has worked all over the world.
Speaker 1:Amory has published over 32 books, many, many hundreds of papers. He's a dropout from Harvard and Oxford. He is unconventional, although he's worked for the Pentagon and oil companies. So he's one of the more interesting characters that you could meet. And Amory, welcome to the Fenton Forecast.
Speaker 2:Thank you.
Speaker 1:So Amory, you've been a forecaster for a long time. In the 1970s, you published a very important article in Foreign Affairs Magazine that had a vision for a different energy path. You called it the soft path, which was renewables, solar, wind, efficiency versus the hard path, which was exclusive reliance on fossil fuels, nuclear, and other more, shall we say, dangerous and expensive technologies. And you were laughed at. Oh, that caused a lot of attention.
Speaker 1:And generally, many of your predictions have come true. We have a robust, renewable, clean energy industry. It's cheaper than ever. We have clean transportation burgeoning around the world. So, I wanted to ask you to start with, how is your vision going?
Speaker 1:Do you think we're doing?
Speaker 2:It's going quite well. The renewables part was delayed by basically intermittently hostile US policies for several decades And the efficiency part kept chugging along because it was obviously so profitable. It didn't have to get the cost down first to become profitable as renewables did.
Speaker 1:You mean to save energy? To save money.
Speaker 2:Yes. Now, that foreign affairs piece in 1976 was not actually a forecast. It laid out what could happen and why it would be a good idea. But it did suggest that over the next fifty years from say 1975, The US could use 72% less energy to make a dollar of GDP and the actual number turned out to be 65% so far. On the other hand, all the official forecasts said you couldn't save any appreciable amount of energy because after all we lived in a theoretically perfect market economy, so there can't be any waste.
Speaker 2:Boy, were they wrong. On the other hand, we've only scratched the surface of how much efficiency is available and worth buying. We could now save over twice as much as I thought then at a third the real cost and that efficiency resource keeps expanding as we find better ways to design, which means how do you choose, combine time and sequence technologies and they keep getting better too.
Speaker 1:So talk about design. You're teaching an integrative design course at Stanford University. And what are you teaching? What do you mean by integrative design and how does it run up against the conventional wisdom of today?
Speaker 2:Charles Wishart and I teach a course they call extreme energy efficiency. It's not actually extreme, of course, it's just no longer inadequate. But our students learn experientially how to quintuple global energy efficiency and that comes from, first of all, with beginner's mind, child mind, original mind. So, you let go of your assumptions and preconceptions and therefore become able to have new ideas. I used to work for Edward who said that people who seem to have had a new idea have often just stopped having an old idea.
Speaker 2:That of course is the hard part. Then
Speaker 1:Edward Land of Polaroid.
Speaker 2:Yes. Edward. And then we learned to design buildings, vehicles, factories, processes, equipment as a whole system for multiple benefits rather than a pile of isolated little parts for single benefits. In fact, you can see behind me where that comes from. My wife Judy and I live in
Speaker 1:a Meaning your house?
Speaker 2:Yes, in this passive solar banana farm which is also our office and home. And it's high in the Colorado Rockies near Aspen where temperatures used to go as low as minus 47 Fahrenheit, minus 44 Celsius and you could get frost any day of the year. But so far behind me, we have harvested 83 passive solar banana crops and there's not a heating system. That cost less to build because we saved more construction cost leaving out the heating system than we paid extra for the efficiency that got rid of the heating system. Super insulation, super windows, airtight construction with heat recovery ventilation and so on.
Speaker 2:And it turns out you can do the same trick in essentially any climate. In fact, one of the one of our early visitors after we moved in was an architect from Bangkok, Thailand who went back and did an analogous thing appropriately changing details in his hot wet climate instead of our cold dry climate and he saved 90% of his air conditioning. It's more comfortable and had normal construction cost. And this house also inspired the German passive house movement. There are now at least hundreds of thousands of examples across Europe and some in The US of houses that need no heat but have pretty much normal construction cost and same or better comfort.
Speaker 1:If I may, I want to explain to people who are watching this that what you're seeing behind Amory, the trees, that's not the outdoors, that's the indoors, that's the banana plants that grow inside his greenhouse, he gets two banana crops a year, I've eaten them, they're very good, and this is a house that he built in the nineteen eighties that uses no oil, coal or gas whatsoever, and it is entirely off grid
Speaker 2:and It's on grid in order to take coal off the grid.
Speaker 1:That's right. You feed energy to the grid from your house, excess energy. And this is high up in the Rockies, in a very cold area, and he's growing bananas without any fuel cost. There you go.
Speaker 2:The center of the house looks like this in a February snowstorm and these are some of the bananas.
Speaker 1:You go. Beautiful. Right. So, Amory proved, and this is over forty years ago, that you could do this, and of course it's incredibly economical because you have no electric bill, you have no oil burner bill, you have no gas bill. And so he was the pioneer of showing that this is possible.
Speaker 1:And let me tell you, if you go to his house, it's incredibly comfortable. There's a beautiful waterfall. It's really quite an accomplishment. Now, Amory, you also built an office building nearby for RMI, the Rocky Mountain Institute, Basalt. They did.
Speaker 1:Yeah. 5,500 feet or something like that, right?
Speaker 2:6,000 odd feet. We're at 7,100.
Speaker 1:Right. Tell us about the office building.
Speaker 2:Well, like this one, it's net positive energy thermally passive, that is it keeps itself hot or cold without needing equipment to do that, and all solar powered and delightful, beautiful.
Speaker 1:Lots of natural light.
Speaker 2:Yeah. And you can do this anywhere in the world but it's not just buildings that you can design as a whole system. And the whole system part here is that we're optimizing, say, the whole house rather than just the insulation or the windows as a component. Therefore, we use more expensive windows to make the house cheaper because we save more money when the more efficient windows are the last step you need to get rid of the heating system.
Speaker 1:We
Speaker 2:pay extra for the better windows. Now, out in the driveway I've got a car made by BMW. It's the old i3, they profitably sold a quarter million of them. It's an electric car but it has a structure made of carbon fiber rather than steel and that makes it about 300 kilograms lighter when you count all the weight you say by not having to haul around so much weight.
Speaker 1:Around 800 pounds.
Speaker 2:Yeah. And it actually doesn't cost extra to get quadrupled efficiency equivalent to 2.1 liters per 100 kilometers, 124 miles per US gallon. The reason it doesn't cost extra is that you need a lot fewer batteries, the costliest part of an electric car, to carry less weight around. Right. Two thirds of the energy it takes to move his car is caused by its weight.
Speaker 1:A gasoline car. Oh, I see. Yes. That's Any car.
Speaker 2:Yeah. And also, it's very much simpler to make that car. You don't need the body shop or paint shop, which are the hardest and costliest steps in auto making. You need a third the normal investment and water and half the normal energy, space and time. So when the automaking gets cheaper and you need fewer batteries, the car doesn't cost extra to make it out of this expensive carbon fiber material.
Speaker 1:Right. And you predicted this car. You helped design it basically. Didn't you call it the hypercar at one point?
Speaker 2:Yeah, in fact the license plate says hypercar. Yeah, that's a concept we came up with and had some spinoffs out of it, developed a way to make affordable carbon fiber structures for future models, sold that to a big German press maker. And the idea again is to make the car so efficient that it takes very little energy to move it. And I'm just updating my annual Stanford lecture on flight without fuel.
Speaker 1:Oh, right.
Speaker 2:And I think there's an important analogy here. There's a car I hope to have in my driveway late in the year from an American company called Aptera that is all electric, carries two people and you don't need to plug it in for ordinary driving, Power just by the solar cells on top.
Speaker 1:Wow. And you
Speaker 2:can do that because it is about three times as efficient as a Tesla. It has so little air drag for the whole vehicle. It's less than the air drag of the side mirrors on a standard pickup truck. And it's also made of carbon composite so it's light. Now imagine this approach for an airplane.
Speaker 2:We now know how to make planes several times more efficient in lift to drag ratio than the best ones now. We know how to make aeronautic structures like wings about sixty, six zero times lighter than metal ones making out of a molded plastic lattice plus a tough polymer membrane over it. We have good propulsors that are much more efficient than standard propellers using nature as a design model. They look weird and they work very well. And we have extraordinarily light motors and batteries now.
Speaker 2:So, if you put all that stuff together, I wouldn't be surprised if my grandsons were able to fly the Pacific in an all solar powered airplane.
Speaker 1:Wow, wouldn't that be great? And there are electric airplanes coming out soon that can do what about a thousand miles?
Speaker 2:Well, range varies with payload, but they tend to use batteries. I'm suggesting that you would have very few batteries in a solar system. If you could
Speaker 1:do direct power, right?
Speaker 2:Because you'd have very lightweight thin film photovoltaics, very efficient on both the top and the bottom so it gets reflected light off the earth. Then I think that that could be feasible as a long range plane just in the way that a Dabtera works fine for road trips and also gathers energy as it moves. Although if you want a really long road trip, then you would probably want to charge up the batteries first.
Speaker 1:And of course, you charge your electric cars the way I do from the sun. Correct. So that means we have no cost of fuel. We get to ride around for free.
Speaker 2:Yeah. Well, when you buy solar panels, you're basically buying at least a thirty year supply of electricity at a constant price.
Speaker 1:That's right.
Speaker 2:Yeah. So you shouldn't even worry about where you buy them from. You buy them, they're yours. You don't need to go back to the vendor to buy something else every year or every day because like a fuel because you just Right. No more gas pumps.
Speaker 2:Yeah. You don't need more of it and you have thirty years to figure out where you'll get the next set.
Speaker 1:And you know, I keep thinking that the solar industry should adopt as one of its marketing slogans the sun. It can never go up in price. It will always cost the same. You are shielded from your utility raising your bills. It's true, right?
Speaker 1:And you have a great corollary to that, which is as you kept predicting that the price of solar energy would fall, and it's fallen like what, 90% over the last twenty years or more.
Speaker 2:More than that, and batteries are down 96%. Right. Just just over 10.
Speaker 1:You're saying is something like, right? The thing about clean energy is the more you buy, the more you save. The more you order, the more you save. What is your little circle statement?
Speaker 2:Oh, it's actually Tom Friedman's. He says, When we buy more renewables, they get cheaper, so we buy more, so they get cheaper.
Speaker 1:Right, that's right. And that's what's happened. Do you think we're done with that cost curve or do you think solar is going to keep getting cheaper?
Speaker 2:No, no. Will keep getting cheaper, so will efficiency, so will wind power, and already solar and wind are the cheapest bulk electricity sources in the world and are over 90% of both US and world additions of generating capacity.
Speaker 1:Of new power, yes.
Speaker 2:Net of retirements. Right. So they've already swept the market. The revolution happened. Sorry if you missed it.
Speaker 1:So, Amory, as you know, there are people who are very sincerely and legitimately concerned about climate change who support nuclear power, and who also posit that while nuclear is the most expensive form of power now, that it also will go down in price. What do you think about that?
Speaker 2:Well, the only time it's shown a learning curve where it gets cheaper as you buy more is the first, I think, three reactors of many dozens bought in France and that was back in the nineteen seventies. Ever since then, the cost has gone up. Now, the current claim is that if we build novel kinds of reactors which were generally rejected decades ago for good reasons, or if we make them smaller and mass produce them in a factory and truck them to the site and plug them in, then they too can get cheaper. Well, nobody's done that. Small modular reactors are not a thing.
Speaker 2:They're a marketing slogan and there is actually no reason to believe they will be cheaper than today's big and grossly uneconomic reactors, which by the way make climate change worse.
Speaker 1:Tell me why.
Speaker 2:Well, because they cost more per kilowatt hour produced. That means they produce fewer kilowatt hours per dollar, therefore they displace less fossil fuel and save less carbon per dollar and also per year because they're slower to build. So, it's not worth paying extra for a non solution. In fact, the opposite of a solution. If you care about climate, need to pay attention to cost and speed and carbon, not only to carbon.
Speaker 1:Right. Because we have so little time to get ahead of the problem with saturating the atmosphere with carbon.
Speaker 2:Yeah, well we actually have the right amount of carbon but it's in the wrong place. It needs to be in the soil and the biosphere.
Speaker 1:That's right.
Speaker 2:But if you you know, we were sold, say, coal power by paying attention to cost but not carbon. Now we're being sold nuclear power by paying attention to carbon but not cost, but they both matter and speed matters too. So, buying the costliest, slowest solutions makes climate change and a lot of other problems worse.
Speaker 1:Yeah, because you could use that same money to scale many, many gigawatts of solar wind batteries and efficiency in much less time for much less cost.
Speaker 2:Exactly.
Speaker 1:And not a lot of people you know, there's a huge nuclear lobby and one of the things that drives me crazy is when people call nuclear clean energy. It is partly accurate to call it low carbon, it's not zero carbon, it takes a lot of power to mine and mill the uranium. But as you pointed out to me what's that?
Speaker 2:To enrich the uranium as
Speaker 1:That's right. As you pointed out to me, this is a bit of an Orwellian misnomer because there's no such thing as clean plutonium or strontium or cesium. These are dangerous poisons made by nuclear reactors, so to call it clean is news speak. Again, you can call it low carbon, and I hope people will use that. Again, I think it's a legitimate debate, but I think your analysis that this is worse for the climate is not heard enough, so I'm glad you're explaining it to people now.
Speaker 1:So tell us about efficiency. As you know, there are people that say that whenever you make the use of energy more efficient, people will use more of it. I've always had problems with that argument, although there are some cases where it's true. What do you think is the potential of energy savings or efficiency still?
Speaker 2:As we switch to mainly solar and wind but to renewables making electricity directly from natural energy flows, that doubles or triples the efficiency of using the input energy because you no longer have the huge losses in thermal power plants and in refineries and in other energy conversion and transport to get useful energy delivered to you so you can do something with it. Then there's another saving called end use efficiency that starts with energy delivered to you like electricity or gasoline and uses it to produce the services you want hot showers, cold beer, mobility, comfort, baked bread, smelted alumina, tons of steel, whatever. And efficiency gains still to be had there is generally accepted to be a factor two, but with integrated design it's actually a factor five across the global economy, all sectors and essentially all uses. And that's not the end of the matter. People sometimes say efficiency is the low hanging fruit, but actually it's already fallen off the tree.
Speaker 2:It's mushing up around our ankles and the tree keeps growing more faster than we can harvest it.
Speaker 1:You famously use a metaphor, an example of how you can find efficiency everywhere in crooked pipes versus straight pipes. You want to explain that?
Speaker 2:Oh, that's my favorite industrial example, although it also applies to buildings. So, half the world's electricity runs motors, half the motors run pumps and fans that move things like air and water through pipes and ducts. Well, if you make the pipes and ducts fat, short and straight instead of skinny, long and crooked, the friction goes down by 80 or 90% or more. In this house, it's 97% move our hot water around and therefore the energy needed for the pumps and fans goes down correspondingly, so does their size, so does the size of the motors that run them. Well, if everybody did this redesigning their pipes and ducts, it would save a fifth of the world's electricity and if they also improve the motor systems in 35 ways instead of the usual two while they're making the motors five or 10 times smaller, then they could save up to a third of the world's electricity.
Speaker 2:Funny thing though, none of this is in any standard engineering textbook or government study or industry forecast or climate model. Why not? Because it's not a technology. It's a design method. And those people don't yet think of design, how you put the pieces together as a path to speed and scale, but it's at least as important as technology and we need to pay a lot more attention to it.
Speaker 1:Yeah, it's how we think. You know, in the building that you built for RMI in Colorado
Speaker 2:Again, I didn't build it.
Speaker 1:I'm sorry. That you helped design and was built for Rocky Mountain Institute. One of my favorite stories about that building, and it's a beautiful building that you can see in basalt, is it has no heating and cooling system. There's no noise. There's no mechanical systems whatsoever.
Speaker 1:And it's incredibly comfortable. And apparently, if I have this right, the workers there got a little anxiety because it was so quiet. So you started piping in false HVAC fan sounds to make people happy.
Speaker 2:Not fan sounds exactly, I think it was probably an ocean or waterfall sound or something like that, but soothing. And in fact, we turned it off so we could do the recording, but behind me in this building is a waterfall that feeds through a couple of fish ponds and streams and stuff and pumps back up efficiently. And the day we were first building it, this Japanese guy mysteriously appeared and it turned out he had come to make sure that the waterfall would make a soothing alpha wave kind of sound instead of a medium wave frequency. So, he adjusted it till it did that and then went away. How he knew to show up that day, I have no idea.
Speaker 2:But he was a professional waterfall tutor. After a few thousand years, you get good at this level of aesthetic refinement.
Speaker 1:Beautiful. So, one of the reasons, Amory, that people are pushing nuclear power again, it touches on two, I think, very important points. One is that there's this myth out there that solar and wind, because they're variable, cannot be relied upon for so called firm power. So, how do you look at that?
Speaker 2:The idea that you need clean, firm power was a myth invented with that phrase some years ago specifically to promote nuclear power, although you could use it for non variable renewables like hydro and geothermal. But, it turns out not to be true for several reasons. First of all, solar and wind power, although they vary quite a lot, are very predictable in how they vary. In fact, in France in a stormy winter month, the curves of the forecast say wind power output a day ahead and the actual wind power output on the day are so identical you can hardly distinguish them. We can forecast wind and solar output more accurately than we can forecast demand.
Speaker 1:And what does that help with?
Speaker 2:Well, that means that you can choreograph solar and wind in different places and with different technological details so they're good in different conditions to produce highly reliable power and you can then coordinate them with other things you can control, other renewables that don't vary much or industrial cogeneration that you need to do to get industrial process heat.
Speaker 1:Or when to let the batteries rip Or and start supplying
Speaker 2:there are 10 ways to store or otherwise balance electric supply and demand across the grid on different time scales. Batteries are one of those and they become so radically cheap that now as say Bloomberg New Energy Finance has demonstrated from real market prices, the cheapest source of constant electricity if you want it is solar or wind plus batteries or any of the other backup methods that don't have to involve any fuel. The proof of the pudding is that in India right now three quarters of all the new firm capacity being installed on the grid is solar plus batteries.
Speaker 1:And in California, the grid has been relying more and more on solar and batteries and with the batteries supplying an incredibly increasing share of the power.
Speaker 2:Yeah, some evening peaks over 40% on occasion.
Speaker 1:That's right.
Speaker 2:So anyway, when you look at the whole electricity system, supply and demand, efficient and timely use included, then you find that it's quite straightforward to make it ultra reliable. Let me give you a couple of examples. Here's a really simple one. In Sparks, Nevada, in early twenty twenty five, a company called Redwood Energy put up an all solar microgrid, the biggest microgrid in North America at the time, to run modular data centers. And it's all solar, but it runs 20 fourseven, three sixty five.
Speaker 2:It is not backed up by the grid because it's cheaper and more reliable than grid power. And that's because it takes about eight hundred second life electric vehicle battery packs, puts them on, know, wraps them in a white tarp, puts them on cinder blocks on the desert floor, wires them together with magic electronics to turn them into one giant battery and it therefore runs all the time and the whole thing took four months to build. A data center takes eighteen to thirty months to build if you are short of
Speaker 1:And what's the power output of that?
Speaker 2:12 megawatts AC and order of magnitude bigger have already been designed and it can go essentially anywhere. Obviously land is cheap in Nevada, but if you're in a place with expensive land there are safe and cheap ways to stack up the batteries for a small footprint and get the same result.
Speaker 1:And then it's also true that the utility grid managers have ways of adjusting demand now, like hooking to people's nest thermostats and changing the temperature by one degree when there's a little less solar power.
Speaker 2:Or if turn off your refrigerator for fifteen minutes, you'd never know.
Speaker 1:That's right. And refrigerators which keep getting more and more efficient and I think really gives the lie to the notion that all efficiency gains result in more energy use. You're not going to run your refrigerator more than twenty four hours a day.
Speaker 2:Well, and you're not going to turn the thermostat down because the milk would freeze. It's true that you might drive your car a little more if it costs less in energy to drive it, but you really don't want to sit in your car more than an average of about an hour a day. You don't just drive around for fun.
Speaker 1:Yeah, sure.
Speaker 2:Well, some people do but there are limits. They have other things in their lives.
Speaker 1:Well, the cars are driving themselves more and more, so we'll see how that fares.
Speaker 2:Generally back to your point about so called rebound as efficiency make you usable. That's right. It's actually more complicated than it sounds because there's about five layers to it, but broadly speaking, it is a real effect that when you use less energy and pay less money for services, you may use somewhat more of them, but that's subject to saturations. You have to realize that that's what's happening. Know, if your refrigerator got more efficient, how would you know?
Speaker 2:You get one electric bill monthly in arrears. It doesn't have a line item for refrigerators. And basically, the rebound effects are very small. Many are unmeasurable, many have not been measured. The ones that haven't measured are typically in the few percent range except in a really pathological case where you're huddling in one room around an electric fire in your Glasgow tenement and then you probably will want to heat more than one room if you insulate the house so you can afford to keep the whole thing warm.
Speaker 2:But that's a fairly rare case.
Speaker 1:Yeah, sure, I get it. And you coined the term long ago, negawatt for the watch you don't need and that you save. And we need more of those.
Speaker 2:Yeah, a colleague of mine recognized that as a typo in a Colorado PUC document, so I liked it and spread it around. Now we have megawatts for the watts you save and flexi watts for the ones you use timely and both those resources are several fold bigger than had been thought or is still officially acknowledged. In fact, just flexi watts using electricity when it's cheap and abundant but in a way that's invisible to the customer that you're shifting when you use it, that can save 30 to 50 odd percent of the peak load.
Speaker 1:Yeah. Well, right now in Texas, I understand they're giving away free power from noon to three every day. They have so much solar power. It's now free. And they're trying to encourage people to charge their electric cars in Texas between noon and three when the energy is free.
Speaker 1:My mentor Abby Hoffman taught me that the most popular word in the English language is free.
Speaker 2:And in fact, Texas is a particularly interesting place. They're by far the national leader in deploying solar and wind power, not because they have a green or climate conscious state government, quite the conflict, but because they they are good at building things and making money. Yeah. This raises the more general point that I keep trying to impress on some of my colleagues in the environmental world. They're passionate about climate, that's fine.
Speaker 2:Other people may be passionate about national security or jobs or profits or competitive advantage or individual liberty or community choice or a lot of other things. Those are all perfectly legitimate reasons But we don't have to agree on the reasons. In other words, if we focus on outcomes not motives, we can often get very broad trans ideological agreement on what ought to be done and even do it together with with people we might not normally think of collaborating with without having to agree about which outcome is most important or which one we like better than others. Just forget about the reasons. Focus on the outcomes and we can get a lot more done faster with more people and not always be fighting over why.
Speaker 1:Yeah, so true. So, another reason people are pushing more nuclear power, more expensive, and I would say dangerous nuclear power, is because of the growth of AI data centers. And you recently published an article called Artificial Intelligence Meets National Stupidity.
Speaker 2:Natural stupidity.
Speaker 1:Natural stupidity. Thank you. That's right, it's a global phenomenon. So tell us, how do you respond to the idea that we're going to need all this, all of the above energy so that artificial intelligence can scale and solve all of our climate and other problems.
Speaker 2:This kind of reminds me of 1999 when the coal industry sponsored some dishonest articles about how we have to build more coal fired power plants to keep the lights on because the Internet's going to eat the grid otherwise. This is the same argument. For all we know, may be promoted by similar interests, that is people who have nuclear or gas energy that they have trouble selling in the market, so they need to create a panic to get taxpayers to be funded. And it does kind of smell like that increasingly, but there are several layers here we need to dissect. First of all, the whole case for artificial intelligence being an enormous growth in electricity demand is highly questionable starting with the whole business case of the AI enterprise.
Speaker 2:When you build an AI data center, you're betting against 10 things that are likely to happen and I can understand betting against one or two. That's taking business risks. That's what businesses do. Betting against all 10, though, really strains credulity and we have to cope with the increasing evidence that companies that adopt AI in general business use tend not to make more money at it. They really struggle to make a business case for buying it.
Speaker 2:Now, to be sure, there are specialized, more technical uses, everything from pattern recognition to weather forecasting, where AI can be powerful, effective, profitable, worthwhile. The trouble is they add up to maybe a tenth of the revenue that you would need to pay for building the data centers, especially when you then recognize that those depreciate in just a few years, not twenty or thirty years.
Speaker 1:Yeah, three years.
Speaker 2:Yeah, and so you need even more revenue. And the whole business is starting to have this gradual realization, especially some of the investors, that they may lose most or all of their money because there isn't enough revenue to support all those enormous investments. In fact, Bloomberg in the last week or two put out a paper showing that the majority of the data setters supposed to come online in The US in 2026 are not even under construction yet and the same going ahead for several years that what's actually happening on the ground is very much less than the enthusiastic projections, which indeed are dominated by Texas, which changed the rules recently, so anybody that says they're thinking of building a data center gets that counted in the projections. Well, that means a lot of it's vaporware.
Speaker 1:And there's a lot of local opposition including to Elon Musk using all of this polluting gas for his Grock data center.
Speaker 2:And there's water use, noise and a bunch of other local issues, But the other thing you need to worry about if you're building a power supply for somebody's proposed AI data center is not just are they going to actually build and run it, but will it thrive and will it keep paying your electric bill for twenty or thirty years so you can get your money back out of the power plant? One of the things you're betting against in the AI business is the efficiency gains which are running about fourfold per year.
Speaker 1:Right.
Speaker 2:How much AI service you get per kilowatt hour. That use when And I was designing data centers twenty years ago, we could save 95% of the energy at half the capital cost. That was mostly hardware improvements. Today the improvements are much more in software and system architecture. But, if the AI operator is getting the same AI out of a quarter as much electricity each year compared to the previous year, I better assume having built their power plant that they're going to quadruple their sales of AI products every year for decades to come or I won't get my money back.
Speaker 2:Right. That's a pretty hard assumption to justify when everybody else is rushing into the same dubious market.
Speaker 1:And there's another factor and I do want to move on in the ten minutes about that we have left to some other quick topics. So the indications are that the AIs are learning with more efficiency. They're going to need less compute for the same amount of learning. Like the human brain learns with far less training data and far less energy. And of course, the Chinese AI is already showing that you can have very amazing AI with far less processors and far less compute, means far less energy.
Speaker 1:And on this podcast, The Fenton Forecast, a future guest of ours will be the great AI scientist, who has been predicting for a long time that AI is going to need much less compute and energy to be successful. So stay tuned.
Speaker 2:Yeah, and by the way, a few months ago some Chinese researchers demonstrated an optical chip to replace electronic chips and it's about a thousand to 10,000,000 times more energy efficient. Fact, it's approaching the efficiency of the brain.
Speaker 1:Yeah, well I'm sure it'll never quite get to that miracle. So, speaking of China, Amory, you and RMI set up an office in China, how long ago was that?
Speaker 2:Oh, many years and of course it's all native Chinese staff it's
Speaker 1:Some decades, right?
Speaker 2:Oh, no, not that long, but it's been I think quite helpful to the Chinese government in forming its very strategically smart energy strategy of focusing on renewables and efficiency. So, China is now the world leader in many renewables and their supply chains.
Speaker 1:Well, that And electric cars.
Speaker 2:And electric cars, yep. And they're doing quite well with efficiency and basically they're turning into an electro state. China is electrifying its economy about nine times faster than the rest of the world while The US tries to turn itself into a petro state, a declining business, that's not very promising. I think on
Speaker 1:A corrupt polluting petro state.
Speaker 2:Well, whatever. They do sometimes go together. I think in China as in India where RMI is also very active, it's helpful that we can provide frank advice informed by work all around the world in how to meet whatever country it is goals for prosperity, security, the same things practically any country wants through a smarter energy policy and we give the same advice in this country and everywhere else we work. We just say, Here's what makes sense, makes money. Here's the evidence.
Speaker 2:Let's test it together, see what you think, talk about how it could apply to your conditions, and we think that this actually makes the whole world more prosperous and secure because And survivable. Yeah. So many of the world's problems and conflicts come from fuels unevenly distributed, polluting, unhealthful, insecure and whether you're in the military, in public health, an ordinary citizen, a farmer, a rancher, a forester, fisher, whatever it is you do, there are better ways to do it that use less energy, more brains, provide better service at lower cost, make more money at less risk and our job is to spread the good word and a little bit like that early activist, Saint Francis of Assisi, who said, Preach the gospel at all times. If necessary, use words. I tend to focus on not just thinking and writing, but doing and scaling.
Speaker 1:Right, so do tank.
Speaker 2:A think and do tank and a scale tank.
Speaker 1:And you published with RMI a book called Reinventing Fire. That was probably about what, fifteen years ago, maybe more?
Speaker 2:Let's see. That one was 2011, so fifteen years ago.
Speaker 1:And reinventing fire referred to getting energy without burning things. And from what I understand, this had a big effect in China on their decision to decouple from fossil fuels and to base the economy on burning fewer things.
Speaker 2:I am told it did and also that built on the influence of an earlier book that Hunter Lovins and Paul Hawken and I wrote called Natural Capitalism about how to practice capitalism, the productive use of and reinvestment in capital, but with all four kinds of capital, not just money and goods but people and nature. Well, that was published in Chinese by the number two ideologist of the party, not somebody I would ever expect to be working with. But, he and his boss, the top economist in China, gave it to the whole state council, the provincial governors, the paramount leaders and said you must read this and apparently a lot of them did and this helped kick off China's whole efficiency and renewables emphasis in I believe the eleventh five year plan and that did well for them, so they've kept on that track ever since.
Speaker 1:Now they own the industry of the future. Very briefly, Amory, what do you say to people who say, well, the Chinese are burning more coal, lots of coal, and building nuclear power plants. How do you respond to that?
Speaker 2:Well, they are building a lot of nuclear power plants. However, that effort driven by a very strong bureaucratic momentum as in other countries is dwarfed by the solar and wind power they're bringing online and it's their version of the world statistic which is that only 1% or less of the increased electricity in the world is coming from nuclear. It's a less than 1% distraction.
Speaker 1:And what about coal?
Speaker 2:They traditionally ran on coal. In 2025, China burned less coal to make electricity even as their economy grew. India did the same. First time it's happened simultaneously in over a half century.
Speaker 1:Wow.
Speaker 2:And what's happened in both places is that they're now adding solar, wind and a bit of other renewables faster than the demand for the services is growing and that tips fossil fuel, especially coal, into a steepening decline. That's happening now as a global trend, of course, in The United States as well. So, yeah, at the moment we're in a strange recidivist phase of trying to revive the more of a coal industry and boost gas and force people to buy them, But, that doesn't work very well because they're costlier and less secure than efficiency renewables. So, I think the big lesson of renewables having captured over 90% of the world market and efficiency accelerating is that markets beat politics.
Speaker 1:Yeah. Well, but politics can certainly affect markets, but in the end markets will win and of course in the end nature's going to win because people are going to have no choice but to wake up and recognize that if we keep thickening this blanket of pollution around the Earth, it's going to keep getting hotter, storms are going to get worse and your insurance and food bills are going to keep going up. So this is why you and I share optimism that we're going to solve this, that we still can solve this. And it's really important, especially for young people, know that while there's a big fight still ahead, this is solvable. Amory, we just have a couple of minutes left.
Speaker 1:What effect do you think that the Iran excursion, the Iran war, is going to have on the pace of clean energy and transportation?
Speaker 2:Well, of course, people with oil, gas and nuclear that they have trouble selling otherwise are saying, Oh, buy our stuff. It's more secure than their stuff. But that just renames the problem which is import dependence and insecurity along with higher cost and all the other issues. So, I think what is more likely to emerge as the main outcome is that countries will realize, Oh yes, security. That's a free byproduct of all these other benefits we get doing efficiency renewables to save money and improve health.
Speaker 2:Yes, we get security too. It's a trifecta. Why not go for that? And if we want to emphasize it more, we'll do even more of those things.
Speaker 1:I think it's true that something like 60% of the shipping traffic on the world's oceans is fossil fuels. Is that about right?
Speaker 2:I've seen a number like that, I'd have to check it, but it's a very very big number and there's a similar number for say, how much train traffic in many countries carries coal.
Speaker 1:Right, right. Not a good investment, folks. I wouldn't bet on more of that.
Speaker 2:And a lot of the rest, by the way, is carrying things like steel and cement. It takes a lot of energy and money to make those, but we could save half of them just by designing the structures more efficiently to give the same strength and stiffness and security with less material and smarter design.
Speaker 1:Yeah, so true. So, Amory, you're a very optimistic person by nature. Well, you keep saying that we can solve all this and things are going That's keep getting
Speaker 2:not mere glandular optimism. This is because I live in a spirit called Applied Hope. The optimist, like the pessimist, is really treating the future as fate, not choice. I'm trying to take responsibility for creating the world I want and each of us can do that. It is as as as a Welsh development economist said, to be truly radical is to make hope possible not to spare convincing.
Speaker 2:So, if you focus on building a world day by day, step by step, choice by choice that creates a world worth being hopeful about, you don't need to be optimistic, your applied hope will be realized and it's contagious.
Speaker 1:Yeah, I so agree. And those are great words to live by, applied hope. You know, especially these days when we have a lot of depressing things happening in the world, but they're temporary. They're not going to last. I'm quite sure of that.
Speaker 1:Amory, thank you so much for your dose of Applied Hope today on the Fenton Forecast. We really appreciate it. And to the audience, if you you wanna send any messages, I'll get them to Amory. Write to hellophentonforecast dot com. Hellofentonforecast dot com.
Speaker 1:Amory, always a pleasure, and I'm looking forward to eating the next crop of your bananas.
Speaker 2:Thank you.
Speaker 1:Thank you very much.