Wednesday, August 01, 2007

Energy-generation: Costs and benefits.

Let me start by motivating the project a bit. Electricity demand isn't going down any time soon. Sure, there may be sensible ways to increase efficiency. After all, if current smart metering initiatives become widespread (for example), there'll be sound financial reasons to stop using so much friggin' power, or at least use it during off-peak times. Overall, long-term, wide-scale conservation is a pipe-dream, though. So, we need to be able to generate more power. However, many current technologies are, not to put too fine a point on it, filthy. (Coal and gas plants, I'm looking at you.) Others are (perhaps with justification, perhaps without) feared or of limited applicability. (Fission and hydro, to name two.) So, what do we do? The answer, of course, is that we need to build more generators, in a way that maximizes gains, while minimizing all the relevant costs.

The costs I see are three, and they're related to different stages in the power-generating process: namely, the input into the generator; the process of running the generator; and the output of the generator (excluding power, which is not a cost). The first I'm thus going to call "input costs". This includes things like fuel. Fuel costs, of course, don't apply to all technologies. For example, we don't have to pay anything for the sun, so solar technology has a zero fuel cost. Ditto for wind. However, coal, gas, oil, and nuclear plants (to name a few) all require extraction and refinement of some kind of fuel. Furthermore, extracting all these fuels itself exacts a cost, in terms of resources consumed, risks to miners, and so on. And there are also the construction costs: some plants are just really expensive to build. I suspect strongly that the cost of the average nuclear reactor is many times more than the cost of the average windmill, or even windfarm.

The second I'll call "operating costs". Every power plant or other power-generating structure in the real world is made out of real materials, which degrade with use and have to be maintained. And people have to be maintained to monitor and repair these structures. Into this category, then, go all the costs that are created simply by running the generating structure, whatever it may be. I'm honestly not sure what might go in here, generally speaking, so I imagine my ongoing investigations will be quite enlightening in this regard.

The third I'll call "output costs". The obvious candidate for this category is emissions. Oil, gas and coal plants all dump greenhouse gases of various kinds into the atmosphere, as well as other toxins. Nuclear plants create radioactive waste which somehow has to be contained and safely disposed. Windmills are alleged to create an "audio pollution" in terms of the sound produced by their rotation.

The benefits I see are two. The first is obvious; it's the direct benefit of building a power plant (or windfarm or whatever). That is, it's electricity. Every generating technology currently in existence produces different amounts of power at different rates. This is something that, clearly, has to be taken into account when we're evaluating what the best form of generating technology is. If good ol' petrochemical technology just creates a ton of energy, it may be that the benefits outweigh the costs. (That might suggest a flaw in my cost-benefit style of analysis; since I doubt that'll be the case, though, I think the methodology is going to work just fine.)

The second is perhaps not so obvious, but it deserves to be considered, and that's the indirect benefits of building a power plant or similar generating structure. The most prominent benefit included here would be job creation. Closing all the coal plants in the world would throw thousands of mining companies out of business, and tens of thousands of people out of work. It's just naive to ignore the fact that certain technologies will have positive labour impact that deserves to be counted in their favour.

With these five principles in hand, in my next post, I'll turn to the petrochemical technologies currently in existence: oil, gas and coal (including so-called "clean coal"). I'll look at how each works, then discuss the costs and benefits according to the format outlined above. And we'll ultimately see which technology would best serve our energy needs....

No comments: