To win the cleantech race, America must prioritize energy efficiency

The nation that dominates clean technology will undoubtedly lead in the energy systems of the future. In this respect, America has been dealt a good hand. Thanks to generous investment and legislation, the U.S. has become one of the most competitive places for a clean technology company to do business.

The Inflation Reduction Act strengthened America’s position in the cleantech race. It is expected to facilitate an estimated $1.2 trillion in incentives by 2032. In addition to IRAs, the CHIPS and Science Act pumped an additional $54 billion into climate-related investments. The cleantech boom is allowing America to rebuild its domestic manufacturing base, creating millions of jobs and securing its own energy sources.

But the US is not the only competitor in the cleantech race. China has emerged as the new leader in renewable energy, accounting for almost 60 per cent of the world’s new renewable capacity due to be operational by 2028. China plans to triple its total renewable energy from 2022 to 2030. Beyond renewable energy, it is emerging as the dominant force in 37 of 44 key technologies across all categories tracked by the Australian Strategic Policy Institute.

The U.S. can still maintain its technological edge, but this industrial growth does not come without challenges. Our aging infrastructure is struggling to cope with this newfound demand for energy.

American industry should not simply wait for expensive and time-consuming grid upgrades to materialize. Instead, industry must leverage available technologies to reduce energy demand while generating the same value to the economy.

In short, regardless of who takes office in November, if the United States wants to maintain its leadership in clean technology, our industry must focus on energy efficiency.

America must reduce its energy needs while driving growth. That is the essence of energy efficiency—doing the same or more work with less energy.

Electrification itself is a form of energy efficiency, since electric technologies waste less energy than their fossil-fuel counterparts. And electrification is a huge opportunity for the U.S. By optimizing efficiency, demand flexibility (using the right kind of energy at the right time), and electrification in buildings themselves, it could save up to $107 billion in annual energy system costs, as well as a 91 percent reduction in carbon dioxide emissions from buildings by 2050.

In the industrial sector, many devices run unnecessarily all the time, including fans, pumps, motors and assembly lines. This is a simple problem to solve; with digital variable speed control technologies, we can ensure that industrial systems only run when they need to, saving both money and network load.

Next, we need to find ways to reuse energy. Recycling materials has become commonplace, but recycling energy remains a foreign concept. Reusing energy has a lot of untapped potential; industries, supermarkets, data centers, and wastewater treatment plants all produce large amounts of excess energy in the form of heat.

In fact, as much as 53 percent of global energy input will be wasted as excess heat by 2030. However, thanks to technologies such as heat exchangers and heat pumps, this heat can be reused in a variety of ways, reducing energy demand for heating.

Data centers, the “brains” of the US digital economy, are a good case study. With the rapid development of AI and the enormous computing power it requires, data centers are growing both in number and overall energy consumption.

Although innovations have made them much more energy efficient, U.S. data centers currently consume about 2 percent of the nation’s electricity, and that number is expected to grow. Much of that energy is used to cool machinery. But modern oil-free compressors can increase data center cooling efficiency by as much as 30 percent.

A huge, untapped source of energy can also be found in reusing this excess heat. Some estimates suggest that up to 97 percent of the electricity used by data centers could be used as heat. American data centers have yet to tap into this gold mine of clean energy.

With smart planning and investment, excess energy can be used to heat local homes and businesses. Turning to energy-efficient technologies like reusing excess heat represents a huge competitive opportunity for America. The cleantech race is not just about who can produce more energy, but about who can get the most out of the energy they do produce.

The U.S. can still maintain its technological supremacy. To do so, American industry must have a clear view of the challenges facing its cleantech boom.

Increasing energy supply cannot overshadow the need to reduce demand. To maintain the momentum of clean technology in America, demand for digital and industrial energy must decline while generating the same value for the economy.

By reducing our energy use and recycling the energy we already use, America can still emerge as the leader of the world’s newest technology race — and dominate the energy systems of the future.

Rick Sporrer is president of the North America region at manufacturing company Danfoss.

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