Leading the Energy Revolution: RMI

Roughly a decade ago, after being part of the team that built Sitel - one of the largest call center companies in the world - Jules Kortenhorst decided to take a sabbatical and spend some time considering what his next step should be. It was then that he transitioned to public service and he has been working to tackle climate change ever since. He began first in politics, running for the Dutch Parliament and then heading up the European Climate Foundation. He now finds himself at Rocky Mountain Institute (RMI), the Boulder- based “think-and-do” tank that finds solutions to the most pressing issues in the energy world. Mr. Kortenhorst has been leading RMI as CEO since 2013 as the organization works to swiftly scale its impact and accelerate the transition to efficiency and renewable energy.

Conscious Company Magazine sat down with Mr. Kortenhorst to discuss the remarkable work of RMI Co-founder and Chief Scientist, Amory Lovins, and the team at RMI, as well as his experience as a leader in the clean energy movement.

Reinventing Fire, written by Amory Lovins and the RMI Team, presents a multitude of solutions to the energy challenge. How have some of these solutions gained traction since the book was published?

Jules Kortenhorst: On the whole, the energy revolution is gaining traction. There is something magical about the moment when renewable technologies become less expensive than traditional, fossil-fueled sources, right? Solar power is suddenly making economic sense, and you can see this in the speed at which photovoltaics are rolling out. Solar PV costs are coming down dramatically, installed solar capacity is tracking with Reinventing Fire’s projections, and solar’s installed cost per watt is tracking with or just ahead of the US Department of Energy’s SunShot targets. Battery costs per kWh are similarly exceeding most industry analyst forecasts. We are across the tipping point with solar.

Energy efficiency is progressing in other sectors as well, such as with LED lighting and transportation. Five or ten years ago, LEDs were 17 times more expensive and therefore unaffordable. Now they’re still a little more expensive, but not by much, and if you know that your electricity costs drop by 20 percent as a result of using them and that they last 15 years instead of five months - boom - there you go.

Electric vehicles (EVs) are on the cusp of a revolution, which can be seen in innovative cars such as Tesla’s Model S, Nissan’s LEAF, BMW’s i3 and i8, and Chevrolet’s upcoming Bolt. Tesla, for example, will soon sell a car for $35,000 - and when electric vehicles become sexier, cheaper, faster, and better than the old thing, why not, right? There’s virtually no maintenance, very low fuel cost, they have the acceleration of a Porsche 911, a range of 300 miles, and the same price as a conventional option.

For the first time, EVs are bridging the divide between the electricity and transportation sectors. Lithium- ion battery developments and price declines driven by the automotive sector are crossing over into stationary residential applications; clean solar power is providing an alternative to fossil fuels for cars that once burned only gasoline or diesel; and vehicle-to- grid technologies are offering firming capacity for variable renewables and ancillary grid services such as frequency regulation. [Editor’s note: vehicle-to- grid technologies allow electricity to flow back and forth between an EV and the grid. With smart controls, these technologies can allow EV owners to sell electricity back to the grid when output from renewable energy technologies drops, such as when a cloud passes over a large solar facility or the wind stops blowing at a wind farm. Also, renewables sometime require additional generation resources in order to provide electricity at the proper frequency and voltage, and batteries, including EV batteries, can provide these ancillary services.]

In other areas, efficiency is not gaining traction fast enough due to misinformation about its benefits and because of transaction costs or perceived hassles. Regardless, integration of these solutions is what is exciting.

"Great insights are not good enough - they don’t achieve impact. It is great insights and ideas deployed at scale that have impact in the end."

Speaking of integration, the business case for many of the shifts proposed in Reinventing Fire seems clear and logical, especially for the private sector. What is preventing the adoption of these ideas more quickly? 

JK: As an organization, we have to increase our impact. We have, over the course of time, had many great insights, but great insights are not good enough - they don’t achieve impact. It is great insights and ideas deployed at scale that have impact in the end. I’m here to help the organization transition to an organization that is obsessed with scaling impact. If we don’t very quickly switch the ways in which we provide ourselves with energy, then it’s game over for our children and grandchildren (I’ve got four of them, and they’re a huge source of inspiration).

What’s challenging is the powers of old who are holding on for dear life to the financial interests of the past. If you are a coal business, oil or gas business, or in the old vehicle business, then you are worried about this transition. In the next ten years, we will see massive businesses being built, enormous fortunes being made, and big new companies emerging. At the same time, we will see old companies disappear, old ideas go away, big companies become small companies, and massive fortunes disappear. So naturally, there is pushback, particularly from a certain part of the political spectrum, because they are representative of those old interests. However, many of the energy incumbents have a different perspective and find it hard to understand that their world is dramatically changing. We are working with them to help them realize that they can thrive by accepting these changes and transforming their business models.

RMI makes a very clear case that improving energy efficiency will save money. In theory, efficient markets should adopt superior solutions. So, what’s impeding momentum?

JK: Efficient market theory has been debunked - markets are not efficient, and this is true in the case of the energy efficiency market. In other words, pure economics alone haven’t been enough to move large amounts of capital and see adoption at scale. A number of other market barriers still stand in the way. One reason is that there are enormous information gaps and a lot of misinformation about the benefits of energy efficiency. Most people fail to take into account the value of efficiency beyond the energy cost savings - the myriad of other quantifiable benefits such as risk reduction, better brand reputation, or improved employee health and productivity - that come with super- efficient buildings. 

To see the full interview with Jules purchase a print or digital copy of Issue 2 of Conscious Company Magazine online.  

This article appeared in Issue 2 | Spring 2015

To see more stories like this and features on innovative disruptors such as Chip Conley, Kimbal Musk, Plum Organics, Rocky Mountain Institute, and more - purchase Issue 2 online!

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