MacOS Sierra ALL features page

It does seem like you have a problem with your battery, although it's likely that it's only adding to the underlying issue which you've touched upon.

The concept behind Speedstep seems good, however, the way in which it works is quite bad — especially when it comes to kernel_task. I believe it's the reason you're seeing such a dramatic slowdown — because this "feature" is consuming the majority of your MacBook Pro CPU so it can apparently cool your system down and save energy.

Intel SpeedStep Technology allows the system to dynamically adjust processor voltage and core frequency, which can result in decreased average power consumption and decreased average heat production. (from Intel)

What this equates to is you end up losing a significant portion of the CPU while SpeedStep hijacks kernel_task and continually carries out low-overhead tasks until the CPU temperature drops. Your system essentially becomes bogged down so you can save energy regardless if you want to or not. I would imagine that most people expect to be able to use all of their CPU power when they want to — not when their system allows them.

Luckily this “feature” is built into a kext, in which each model identifier specifies how to control the temperature of the CPU. It's a simple fix, and most people that have similar issues to what you describe are quite happy once they realize this. I take no credit for this fix, for it's all thanks to Rhys Oxenhams who researched this and came up with a solution.

I understand that you're running into issues, so this is going to be more for others looking for info on this topic. Encrypting non-boot volumes should be a relatively easy process in OS X 10.8.x and later.

To encrypt a non-boot volume:

1. Right-click on the volume you want to encrypt

2. Select the Encrypt… command

3. When prompted, enter a password and (optionally) a password hint.

The drive will momentarily disappear from the desktop (to initialize the encryption) then re-appear.