High gasoline prices have forced us to make painful adjustments, which may, unfortunately, be just the beginning. The world's dramatically growing energy demands are affecting all energy prices. Coal, Uranium and natural gas prices have all risen dramatically in the past few years and will continue to grow in the future as more and more of the world's population adopts our energy-wasting lifestyle. We are straining the limited resources of our planet.

Power rates are heavily regulated but will soon have to reach shocking levels unless we change our careless ways. Our wasteful energy habits were formed during the many decades before 1973, when oil was less than $3.50 per barrel. At those prices energy was essentially free so we learned to ignore waste. Only 15% of the power of the gasoline you burn in your car goes to move it down the road. The rest ends up as wasted heat, uselessly heating the air. Electric cars are about 75% efficient but they lost out to gas buggies back when gasoline was an insignificant cost.

In 1882, Edison's first electric power plant sold their spent steam for district heating. Efficiency of electric generation reached a peak in 1910 and has been falling ever since as regulated utilities stopped selling their waste heat. Nowadays the norm is to simply discard the extra heat. Thermal power utilities today only deliver 1/3 of the power in the fuel they burn to customers. The other 2/3 is simply discharged as waste heat! This 33%, efficiency level is the same as it was in 1957!

In the 1930s the government tried to encourage electrical generation by granting monopolies to power generators. The rate-setting formula they created actually penalizes efficient generation. If a utility buys less fuel because of better efficiency, their costs are less so rates must come down to cancel any benefit.

To make matters worse, the clean air act makes it dangerous for utilities to make efficiency improvements because it invites regulators to tighten emission controls as conditions for approval. Worse yet, the clean air act regulates the percent of pollutants (PPM) not the amount per kilowatt-hour (kWh) output. Currently, if you double efficiency the amount of pollutants you are allowed will be halved. Pollution standards should be changed to an output-based standard, such as grams per megawatt-hour (MWh) to stop these terrible unintended consequences. (For more how the power monopolies cling to their power, click on each of the bullet points on this page.)

Cooling towers simply discard the wasted heat of a power plant into the air. If a utility today sells steam as Edison did they are not allowed to keep any of the profits because the income reduces their operating expense base! Hot water or steam is a valuable commodity, which could be piped to homes for heating or sold to nearby drying plants, greenhouses, ethanol plants and fish farms. If the laws encouraged sale of excess heat, as they do in Europe, wasteful cooling towers and discharge outlets would be a thing of the past.

Iceland provides an excellent example of the benefits of efficient energy use. It approaches power generation as a complete ecosystem where available heat is used with about 90% overall efficiency. The hot water from its geothermal wells is first used to generate electrical power. If the waste heat were discarded, this would be less than 20% efficient. But the wastewater is instead piped to nearby factories and used for drying fruits and vegetables or to run absorption chillers in a refrigeration plant.

The hot water that exits those applications is still pretty hot so it is sold for district heating to greenhouses and apartment buildings. Next in line are the lower temperature applications like fish farming, snow melting and bathing.

By making use of all of the heat instead of discarding it as waste, the efficiency of the entire system can be 90% or more even though the power plant itself is only 20% efficient! This amazing improvement in efficiency requires nothing more than designing with an expanded awareness that considers synergies that will turn waste into profit. The model for this is all around us in nature where nothing goes to waste.

This new paradigm has been extensively developed as industrial ecology and is closely related to the concept of permaculture. It is a new way of thinking that opens awareness beyond design in isolation to consider the design as part of an interrelated ecosystem. As energy costs increase, we can use this new thinking to maintain a gentler form of our current lifestyle by simply taking advantage of the synergies we have ignored in the past. In Europe they have a $6 billion project called Lo-Bin ($3 billion already EU funded) to develop a 98% efficient geothermal power project based on these principles.

In cases where it isn't convenient to pipe hot water or steam to where it is needed, an ORC generator can convert waste heat to electricity. These generators are essentially air conditioners running in reverse: The heat boils a low boiling point liquid driving a turbine which turns a generator. With minor redesign, an air conditioner can be converted to a waste heat generator that will convert heat to electricity. Small ORC generators based on this principle are just beginning to be released to the market.

Solar thermal heating and hot water has become very popular in China where the cost of rooftop solar collectors has become very competitive. Fifty million rooftops already have solar thermal collectors and the numbers in China are growing by 26% per year. These collectors are mostly arrays of concentric glass tubes with an insulating vacuum between them. A hot water tank provides energy storage. These systems could easily be converted to also provide power generation by just adding a small ORC power generator. Mini-generators are not available yet but they could be very inexpensive high-volume products. Since home air conditioners sell for only US $0.10/watt, they could be a very economical way to generate power in the home from the excess heat when the water is already hot enough. Currently, this excess heat is simply wasted.

Combined Heat and Power (CHP) cogeneration can be done in the home with 85% efficiency. Honda has sold over 45,000 of its Freewatt micro-CHP home heater/generators in Japan. The generator uses a very quiet, natural gas powered, internal combustion engine that has the usual 20% efficiency. The unit is installed in place of your furnace and runs only when heat is needed. When it is running, it puts out 1200 watts of electrical power to run your meter backwards. The 80% "wasted heat" works just fine as a furnace to heat your home!

Most industrial plants that were designed in the days of almost free energy release most of their energy into the air as waste heat. ArcelorMittal has a steel mill in Indiana that they retrofitted to recycle wasted energy. They were able to recover about 250 MW of power, cutting the power consumption of the plant in half! This is like building a new 250-MW power plant that will never need any fuel. The cost of the construction required was less than half of what it would have cost to build a coal power plant. (Watch a video interview with Tom Casten, chairman of RED, the company the worked on this project.)

In the US we don't hear much about cogeneration or CHP but Denmark generates 55% of their electricity this way and Finland and Holland do about 40 percent. When wasted power is recovered we are saved the trouble, expense and pollution of building another power plant to generate that power. If our utilities laws can be changed so that efficiency becomes profitable, we could see a doubling of plant efficiency in just a decade. Since 69% of our greenhouse gas emissions are from heat and power, doubling efficiency could reduce our emissions by 34%. Instead of spending billions of dollars building new power plants, we should be using ecological thinking to put to use the millions of megawatts of heat we throw away every day.

Thomas R. Blakeslee is president of The Clearlight Foundation, a non-profit organization that invests in renewable energy and other socially useful companies and issues cash grants to individuals who are working effectively for change.