What is a Negawatt?
A negawatt is in essence a negative megawatt, in that it is a megawatt of power that was not required to be produced or expended. In other words, it is a unit of energy saved that would have otherwise not only been made but also used. Perhaps the simplest way to define it is that a negawatt is a measure of energy efficiency. When less power is consumed, the demand for energy decreases. If a penny saved is a penny earned, energy saved can be thought of in much the same way. Or, a megawatt saved is a negawatt earned. Instead of wasting energy, we can reduce its outlay as well as our own costs. While the cost of producing power may not be reduced, at least not by any great measure, we’ll spend less due to a decrease in volume. Energy efficiency also helps reduce pollution. More than one source indicates that the term negawatt was coined by Amory Lovins and may have been the product of a typographical error, which resulted in the word negawatt being printed instead of megawatt. Apparently,
\né-gə-wät\ n: A measure of the avoided use or the conservation of a unit of energy. Coined by author and scientist Amory Lovins, the term has been around for quite a long time. When energy efficiency measures are implemented in existing structures, energy consumption is reduced. This reduction can be measured in negawatts. Get it? negative watts. So why is it important, you ask? 1) Negawatts = cost savings. When your assets consume less energy, you pay for less energy. Depending on how your leases are structured, energy-use reductions can greatly improve your property’s net operating income and building value. Moreover, in any existing asset, there are always energy efficiency measures that can be implemented at near zero cost. The savings in energy costs represents cash flow to your bottom line. 2) Negawatts hedge energy price and investment risks. Energy prices can be volatile. When your assets require fewer units of energy to operate, you reduce your exposure to energy price risk.
Per the Motley Fool, The idea behind the negawatt is that the easiest, fastest, cheapest, and ultimately cleanest way to meet new power demands is to keep that demand from ever occurring in the first place. After all, the greenest and cheapest type of energy is that which never has to be produced. Correction: After Thursday’s 23% pop, anyone who would have acted on those articles would have doubled their money.
Negawatt power is a term coined and then promoted by Amory Lovins of the Rocky Mountain Institute. It means investing in energy efficiencies to reduce electrical consumption rather than investing in additional generation of electricity. Lovins theory was that we can actually support the growth of the electric supply by improving the efficiencies of homes, businesses, lifestyles, and electrical appliances rather then constructing a new power plant. We create an effective or “virtual’ power plant by saving energy rather than actually building more plants to supply additional electricity. Lovins called this reduction in electrical demand through energy efficiency, or through using electricity at non-peak times, a “negawatt”, a term he first saw as a typographical error for “megawatt.” Austin, Texas Austin followed this theory when faced with constructing another power plant. Now Austin is a leader in energy efficiency and solar energy. If it worked there, it can certainly work elsewhere,
