Energy Efficiency: Be or Be Perceived

After almost ten years at Intel, I have lost track of how many times I have heard the phrase “be and be perceived” in meetings and conference calls concerning our environmental and broader corporate social responsibility operations and reputation. For the most part, it has always seemed to me, Intel pays more attention to “being” a leader than “being perceived” as one. If you have to be imbalanced on this scale, that is the imbalance to strike from my perspective.

The “be/be perceived” balance began to change in the last two years, however, particularly as others in the industry were streadily gaining a “perception” advantage that was – in my opinion – disproportionate to reality. Marketing and PR plans were hatched to close the perception gap. We began to tell our story in ways and places we hadn’t before. At the same time, however, we redoubled our efforts on the “be” front to improve the energy efficiency of our own products. With the roll-out of the Intel Core michroarchitecture products in 2006, we marked our energy efficiency leadership and it continues with our recently launched “Penryn” products.

All of this is great. But the focus of all of these activities is on what I have called the “micro story” – the energy efficiency of individual Information and Communication Technology (ICT) devices. The story that has been overlooked is the “macro story” – the role of Intel’s technologies, and the complementary technologies of the entire Information and Telecommunications industry, in driving energy efficiency throughout the entire economy. But that story is beginning to be told.

Paul Otellini is a member of the Technology CEO Council (TCC). TCC helped support a report just issued by the American Council for an Energy-Efficient Economy (ACEEE), which provides the best analytical examination of what seems like an intuitive proposition – that ICT promotes energy efficiency and climate change improvements. obvious that concept may seem, opinion leaders and government officials have been focused heavily on the ‘micro,’ namely driving device efficiency improvements as hard as possible. Intel’s own leadership in this arena, and our longstanding support of programs such as Energy Star, demonstrate that we care about the micro as well. But what a single-minded focus on the micro obscures is that role that the proliferation of ever more efficient ICT devices can play in making every other aspect of society more energy efficient.

So what did ACEEE find when they looked at the ‘macro’ energy impacts of ICT:

• The blockbuster finding, based on some very fancy econometrics, was that for every additional 1 kilowatt hour of electricity demand created by new ICT devices, on average electricity demand decreased in the economy as a whole by 10 kilowatt hours. This is a real-life 10X impact.

• This 10X impact is the aggregate result of many different applications of microprocessors and other ICT in thousands of applications – including B-to-B and B-to-C e-commerce, other uses of the Internet, smarter industrial process controls, smarter and more energy efficient automobiles, just to name a few.

• Rolled up to the national level, the sum of these thousands of applications of ICT has been a dramatic improvement in the energy efficiency of the US economy. Yes, we still are inefficient compared to the Japanese or Europeans, but it takes less than half the energy to produce a dollar of GDP in the US as it did in 1970. This decline in the energy-intensiveness of the US economy has been particularly pronounced since 1996 when penetration rates for PCs and Internet usage grew significantly.

Beyond the raw energy numbers, what really matters to me and many others is what this progress translates into in terms of the big challenge of the day – slowing and reversing climate change. Increasing energy efficiency is the easiest and most powerful way to address the climate challenge. A recent analysis by McKinsey showed that many climate solutions actually save the economy money rather than costing money. Most of the free or profitable strategies involved energy efficiency.

Finally, as some one who travels to China and works on environmental policy issues there, I am particularly excited by the implications of the ACEEE findings for China and other rapidly developing economies. Temporarily cleaning the air for a few weeks of Olympic competition in one city is one thing. The only way China can continue to grow as it has without choking itself will be through the rapid uptake of ICT technologies throughout the Chinese society, ensuring that economic growth is as clean and ‘smart’ as possible. The positive climate change implications of that could truly be awesome.

For Intel to be a leader in bringing that change about, through our attention to both the ‘micro’ and the ‘macro’ would truly align the “be” and the “be perceived.”

One Response to Energy Efficiency: Be or Be Perceived

  1. Elia Rodriguez says:

    Interesting post! Agree we’d all been staring at the “micro” for so long that I – for one – had lost sight of the macro impact.
    I assume the ACEEE study took into account all the energy that is needed to power and cool data centers?