To win the clean tech race, America must prioritize energy efficiency

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

The Inflation Reduction Act has propelled America’s position in the clean tech race. The law is projected to facilitate an estimated $1.2 trillion in incentives by 2032. Beyond the IRA, the CHIPS and Science Act has infused an additional $54 billion in climate-related investments. The clean technology boom is allowing America to rebuild its domestic manufacturing base, creating millions of jobs and securing its own energy sources.

Yet the U.S. is not the only competitor in the clean tech race. China has become the new leader in renewable energy, accounting for nearly 60 percent of the new global renewable capacity expected to be operational by 2028. China plans to triple its 2022 renewable energy total by 2030. Beyond renewable power and is emerging as dominant in 37 out of 44 critical technologies across all categories tracked by the Australian Strategic Policy Institute.

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

American industry should not simply wait for costly and time-intensive grid updates to materialize. Instead, industry must use available technologies to reduce energy demand while still generating the same value for the economy.

In short, regardless of who takes office in November, if the U.S. wants to retain its dominance in clean tech, our industry must focus on energy efficiency.

America must reduce its energy demand while still fueling growth. This is the essence of energy efficiency — doing the same or more work with less energy.

Electrification is in itself a form of energy efficiency, because 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 (that is, using the right kind of energy at the right time) and electrification in buildings alone, it’s possible to save up to $107 billion in annual power system costs, alongside a 91 percent reduction in carbon emissions from buildings by 2050.

In the industrial sector, many appliances run needlessly all the time, including fans, pumps, motors and assembly lines. This is a simple problem to fix; through digital variable speed control technologies, we can make sure that industrial systems run only when they need to, saving both money and strain on the grid.

Then we must find ways to reuse energy. Recycling materials has become commonplace, but recycling energy remains a foreign concept. Energy reuse has a large, untapped potential; industries, supermarkets, data centers and wastewater facilities all produce large amounts of excess energy in the form of heat.

In fact, by 2030, up to 53 percent of global energy input will be wasted as excess heat. However, with technologies such as heat exchangers and heat pumps, this heat can be reused in multiple ways, lowering energy demand for heating.

Data centers, the “brains” of America’s digital economy, are a good case study. With the rapid growth of AI and the vast computational capacity it requires, data centers are growing in both number and overall energy consumption.

Although innovations have made them far more energy efficient, American data centers currently consume about 2 percent of the nation’s electrical energy, with this figure likely to increase. Much of this energy is used for cooling the machines. However, with modern oil-free compressors, it’s possible to enhance data center cooling efficiency by up to 30 percent.

A huge, untapped source of energy can also be found in repurposing this excess heat. Some estimates suggest that up to 97 percent of the electrical energy consumed by data centers could be harnessed in the form of heat. American data centers have not yet capitalized on this clean energy goldmine.

Through smart planning and investments, excess energy can be used to warm local homes and businesses. Turning to energy-efficient technologies such as excess-heat reuse, marks a huge competitive opportunity for America. The clean tech race is not just about who creates more energy, it is about who can get the most out of the energy they create.

The U.S. can still retain its technological supremacy. To do so, American industry must be clear-eyed about the challenges its clean tech boom faces.

Increasing energy supply must not overshadow the need to reduce demand. To keep up America’s clean-tech momentum, digital and industrial energy demand must drop while still producing the same value to the economy.

By reducing the energy we use and recycling the energy we’ve already used, America could still emerge as the leader of the world’s latest technology race — and dominate the energy systems of the future.

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