Honeywell Sidebar:
How to Solve the Energy Crisis
Honeywell Chairman and CEO David Cote outlines his seven solutions.
1. Governments and businesses must pursue both energy generation and conservation. “Today the generation crowd just says‚ ‘Drill, drill,’ and the efficiency crowd sees oil companies as the enemy,” Cote says. “They could fight to the death and neither would accomplish anything, or we can bring the camps together and have a chance.”
2. Business must create green products people actually want to use. Cote says fewer than a third of consumers do simple fixes such as installing compact fluorescent bulbs or caulking and weather-stripping. “Despite how they respond to [environmental] surveys, consumers generally won’t choose to be warmer in the summer and colder in the winter or to spend $20,000 on a car that doesn’t take off like the old one did,” he says. One example of a consumer-friendly energy saver that Honeywell markets is the turbocharger, a small jet engine that helps an automobile compress air for a better oil burn. With turbochargers, auto engines use 25 percent less gas or diesel, produce up to 40 percent fewer emissions and generate the same amount of power as traditional auto engines, according to Cote. He says they are used in half of the cars in Europe and almost none in the U.S., although that is starting to change.
3. Governments must provide incentives for corporations to adopt energy savers, at least until the economics catch up. Most contractors and building owners use a one-year ROI scale for upgrading facilities, Cote points out, meaning improvements must pay for themselves within 12 months. Most energy-saving projects, says Cote, involve a three-year payback cycle. Building owners are reluctant to add improvements such as upgraded HVAC systems that benefit the renter rather than the owner. Even accounting practices generally require companies to count energy-savings performance contracts as debt on their balance sheets.
4. Governments must use sticks as well as carrots. High energy prices and tax incentives for consumers who install energy-saving devices are big motivators, as are cap-and-trade systems, according to Cote. “Cap-and-trade regulation will create unbelievable demand,” he says, “and that will translate to job creation.”
5. Utilities need a new economic model that rewards consumers for using “negawatts,” or less energy. To implement this concept, however, the U.S. needs to embrace the smart grid. “Most utilities have no idea how much electricity their customers use during peak hours because they read the meters once a month,” says Roger Fradin, president and CEO of Honeywell’s Automation and Control Solutions division. “Via cellular telephone modems, the grid will send updates on electricity usage between consumers and utilities roughly every 15 minutes. You — or your programmable thermostat — will get a signal at your home or building or steel mill telling you how much electricity will cost, and you can then decide at what temperature to set your thermostat.”
6. Think alternatives. Beyond oil, Cote is a big proponent of developing natural gas, nuclear energy and green fuels in the U.S., in addition to alternative energies such as solar and wind, which he fears may have a long lead time before they become economically competitive. Honeywell is developing a plant-based replacement for diesel or jet fuel from plants such as camelina and algae that aren’t part of the food supply.
7. Don’t wait for perfect solutions. “A 20 percent reduction that actually happens is infinitely preferable to a 30 percent reduction that never gets there,” says Cote. “It’s important to just get started.” Cote points to Honeywell’s SmartPathTM Precision Landing System as an example of this type of partial solution, which could achieve a 10 percent to 15 percent fuel savings for each airplane that uses it.
