• English Site
• > World
• > Energy and Natural Resources

Saving the World, One Light Bulb at a Time

Why Conservation Is the World's Best Energy Source

By Alexander Jung

Part 5: The Growth Market for Green Energies

Such examples show the immense growth opportunities that greener technologies offer. The current global market volume for efficiency-related technology is estimated by the German Environment Ministry to total €400 billion and it is expected to grow to €1 trillion by 2030. And German companies are well positioned to get a big chunk of that business.

Generous subsidies from the last German government of Social Democrats and Greens have given German firms a good head start in developing renewable energy technologies such as hydro, photovoltaic and wind power. Both laws and subsidies for pilot programs have also helped German innovators become internationally known. Wind power is on the verge of “conquering the world market,” says Fritz Vahrenholt, head of Hamburg-based wind turbine builder Repower.

Prospects for exporting new high-tech innovations do indeed look promising. Around 19 percent of all environmentally friendly technologies currently come from Germany, Chancellor Merkel told the German parliament last November. “It could well become more,” she said encouragingly.

China is showing particular interest in “Made in Germany” eco-technology. The leadership in Beijing knows expensive resources need to be used more efficiently if the world’s largest country is to avoid an ecological disaster. According to the government’s rather ambitious planning, the Chinese are to become four percent more energy efficient each year. That will take more than just windmills and solar panels -- products from more traditional sectors like regulatory technologies, material science and power plant construction will be necessary as well. All are areas where Germany industry is well represented.

German engineers are developing turbines that are more efficient. They are inventing tires that have a lower resistance while rolling. And they are coming up with magical materials that offer better insulation.

Burkhard Schwenker, CEO of the Munich-based Roland Berger international business consultancy, believes the German environmental technology sector is already on its way to becoming a “leading industry” and local manufacturers are “fantastically” well positioned to compete globally. The consultant is forecasting growth of eight percent annually in the sector, eventually increasing the number of jobs in the sector from 170,000 today to around 700,000.

Extra costs that pay off

The technology is available, it’s just not being used often enough. Both industry and service providers are still far too ignorant about the cost of energy, even though they otherwise seem extremely keen to reduce waste and trim expenses.

Ernst Ulrich von Weizsäcker, co-founder of the Wuppertal Institute and current dean of the Donald Bren School of Environmental Science and Management at the University of California at Santa Barbara, finds it puzzling that more firms aren't trying to squeeze more efficiency from their energy usage. “I don’t know of any sector where it would be impossible to increase energy productivity fourfold,” he says.

If companies, for example, installed more electric motors with modern regulating technologies, the German economy could save as much energy as that produced by three or four large power plants. But normally they decide to purchase what they’re familiar with -- that is, the cheap models. They’ve apparently overlooked the fact that, over the long term, 90 percent of the outlays for operating a power unit are made up of electricity costs. In other words: The extra expenditures upfront more than pay for themselves in the long term.

And that’s the effect Freund Drehtechnik GmbH, a small western German company making rotating machinery components, is counting on. The firm recently invested €12,000 in a lighting system for its new assembly hall -- €4,000 more than traditional lighting would have cost. The company based in North Rhine-Westphalia installed energy-saving fluorescent lamps with special sensors that adjust automatically according to the ambient natural light. The extra costs will be amortized within three years.

But many businesses are adopting better energy efficiency at a molasses pace. For many executives it’s still easier to complain publicly about energy prices than it is to search internally for ways to use new conservation technologies. At least part of the corporate world, however, has begun thinking differently -- either for image reasons, out of conviction or simply to trim costs.

• The logistics company UPS is working on optimizing electronic navigation for its fleet of vehicles. The system is so advanced that it even suggests routes that avoid unnecessary left turns, which cost both time and fuel.

• US retail giant Wal-Mart, known for its stinginess when it comes to costs, is outfitting stores with modern lighting and solar panels. The company hopes to cut energy usage by almost a third.

• Germany’s national rail operator Deutsche Bahn is training its engineers to drive locomotives in a more efficient fashion. Some now even let their trains roll up to 70 kilometers on routes without a noteworthy reduction in speed.

Other companies are making use of the energy contractor model in order to become more efficient and save costs. At Microsoft’s headquarters in Germany near Munich, a contractor managed to squeeze out €100,000 in annual savings even though the building was only five years old. The service provider is a subsidiary of utility company Vattenfall, confirming that even the big energy companies are diving into the new business field.

Otherwise the industry that produces and sells energy is better known for wasting most of it. Utilities don’t get nearly enough out of power plants as technically would be possible. They still use old lignite-fired plants that only reach levels of energy conversion efficiency near 30 percent. Any other industry with similarly low productivity would quickly be put out of business.

In Germany the big firms -- RWE, E.on, EnBW and Vattenfall -- have carved up the territory. They set the industry’s agenda and they are betting on large power plants that require vast quantities of water for cooling and an expensive long-distance power grid requiring lots of maintenance.

Smaller plants that service end customers in urban centers are far more efficient. Such co-generation plants are usually fired by gas and are normally located close to the customers who use the power -- hospitals, schools or industrial facilities. They are also able to provide both electricity and warmth at the same time.