Gates was correct in stating that those two solutions won't be enough to meet the world's energy and climate challenges, but his comments baffled a lot of people. What if Gates had stepped into that lab at the Lakeside Prep School in 1968 and dismissed the new desktop computer as "cute"?
As it happens, efficiency is far more powerful than a lot of people think. And with dramatic changes in IT making the resource easier to reap, the potential is expanding in ways not possible even a few years ago. Here are seven charts to prove it -- along with two more that provide a reality check.
1. Energy efficiency has accounted for two-thirds of economic services since 1970.
According to a recent report from energy economist Skip Laitner, while demand for energy services has increased three-fold since the 1970, energy consumption has only grown 40 percent, and the energy intensity of the economy has fallen by half. That means efficiency has been responsible for roughly two-thirds of our economic services over the last four decades.
"The productivity of our economy may be more directly tied to greater levels of energy efficiency rather than continued mining and drilling for new energy resources," concluded Laitner in his report.
2. Efficiency in new buildings is canceling out the need for more power plants.
The U.S. is set to construct roughly 60 billion square feet of new buildings by 2030. But when Edward Mazria of Architecture 2030 looked at projections for electricity consumption in those buildings, he found something surprising: energy needs are actually falling. In theory, that means we won't need to develop new power plants to service those buildings.
"We have essentially created a moratorium on new power plants through efficiency gains in the built environment," concluded Mazria.
3. Energy efficiency may have accounted for 75 percent of U.S. CO2 reductions in 2012.
There is a lot of debate about how much the boom in natural gas has helped lower carbon dioxide emissions in America. Most people assume gas has played the dominant role. However, when Shakeb Afsah and Kendyl Salcito of CO2 Scorecard took a look at all the factors, they determined that three quarters of 2012 reductions came from economy-wide efficiencies, along with a mild winter.
"By far, demand reduction through energy efficiency and conservation measures in the transportation, residential and commercial sectors had the largest impact on CO2 savings -- nearly two times more than the effect of natural gas," concluded Afsah and Salcito.
4. Half of efficiency opportunities in commercial buildings are low- or no-touch.
When the virtual auditing company FirstFuel analyzed data within 60 million square feet of commercial buildings, it found that more than half of potential savings in those buildings could be realized through behavioral changes or small tweaks to equipment scheduling. That means traditional perceptions of efficiency -- namely, that it requires lots of upfront capital for retrofits -- may not be true in many buildings.
"While building retrofits remain the primary focus within commercial energy efficiency, our deep analysis of interval data reveals that a vast savings opportunity still remains largely untouched,” said FirstFuel CEO Swapnil Shah.
And speaking of Bill Gates, this is exactly what Microsoft found as well. By using simple analytics tools to monitor its sprawling campus outside Seattle, Microsoft is saving $1.5 million a year.
5. America may have reached peak car in 2005.
According to an analysis from Doug Short of Advisor Perspectives, vehicle miles driven in the U.S. have fallen by 8.75 percent since the summer of 2005 when adjusted for population growth. That equates to a 93-month drop that is showing no sign of slowing.
"The unique combination of conditions that fueled the driving boom -- from cheap gas prices to the rapid expansion of the workforce during the baby boom[er] generation -- no longer exists. Meanwhile, a new generation is demanding a new American dream [that is] less dependent on driving. The driving boom...is over," concluded a recent report from the Frontier Group.
6. Homeowners are starting to ditch their incandescent light bulbs.
According to a recent survey from the lighting company Sylvania, the highly inefficient, 100-year-old incandescent light bulb is finally starting to leave U.S. homes. Sylvania reported that 29 percent of homes had phased out incandescent bulbs altogether. And although consumers are still mostly adopting compact florescent lights, LEDs are now in 35 percent of homes, according to the survey.
7. Demand response reaches new highs for customer participation.
Although the summer of 2013 wasn't as hot as 2012's, demand response providers saw record levels of deployment this year. In July and September, EnerNOC and Comverge both saw record numbers of customers participate in the market. And in residential demand response -- a sector plagued by low customer participation -- Nest Labs reported that 89 percent of customers controlled their load through smart thermostats in Texas, dropping demand for air conditioning by 56 percent.
“This is incredible engagement, and this is only our first project,” said Nest's VP of Engineering Matt Rogers. “I’m incredibly surprised by how fast this is moving."
These trends show an extremely positive increase in efficiency throughout the U.S. But it's important not to read too much into them. America is still pretty wasteful -- and some worry that efficiency is not getting deployed fast enough. Here are a couple charts that provide a bit of a reality check.
8. Rates of converting energy into useful work are stagnating.
Following up on his analysis showing efficiency has been a more important economic driver than energy production, economist Skip Laitner looked at another important concept going forward: exergy.
We tend to think of energy in terms of commodities like electricity and fuels. But the transformation of those commodities into useful work is known as "exergy." The more work we can get out of a unit of energy (capturing waste heat, for example), the more exergy potential increases. However, Laitner showed that exergy efficiency has slowed -- dropping from 1.4 percent a year between 1950 and 1980 to 0.4 percent a year between 1981 and 2010. That means we're slowing the amount of useful work we can get out of each unit of energy.
“If we want to develop a resilient and more sustainable economy over the long term, then we must agree that energy efficiency -- more properly, exergy efficiency -- matters," concluded Laitner.
9. The U.S. economy is still only 39 percent efficient.
The Lawrence Livermore National Laboratory released a sobering chart over the summer that shows America "rejected" 61 percent of energy produced in 2012, mostly through waste heat. And because this doesn't account for the transfer into useful work, the LLNL figures are actually rosier than Laitner's referenced above.
These poor results come from revised estimates of how efficient (or inefficient) the transportation, heating and cooling sectors really are. According to one LLNL researcher, the lab lowered average efficiency estimates for automobiles and planes from 25 percent to 21 percent, and lowered household HVAC and lighting efficiency estimates from 80 percent to 65 percent.
This illustrates how difficult it is to parse through the true efficiency of the U.S. economy. While it's true that efficiency is gaining traction through more innovative deployment, the reality of the impact depends on how you approach the data.
Still, it would be hard to conclude that efficiency is "cute."