About Energy

We can find information for delivered fuel cost from numerous sources, but
conversion costs vary widely based on application requirements.

The smaller/simpler the application, the less our fuel selection decisions are affected by conversion cost. For instance, conversion capital requirements and operating efficiencies for
personal home heating vs. central electric power generation are substantially different.
Given fuel prices and conversion unit efficiencies for home heating systems, we
can easily compare techonomic metrics based on the annual cost of heating a home.

These metrics cover the major financial elements of fuel and conversion, but
they do not consider environmental effects. In an unregulated system with no environmental
constraints, considering only the price of energy required for the desired
service finishes the evaluation. However, in most contexts, we must certainly consider
environmental factors. For a central power generation facility, environmental
and operational regulations are playing an increasingly prominent role in fuel selection.
Unknown costs of regulation (nuclear) and changing environmental requirements
(coal) have shifted fuel selection for new generating capacity in the U.S.
over the last two decades to different sources (natural gas).

The Three Mile Island accident (1979) and the Chernobyl accident (1986) halted orders for new construction of nuclear power plants in the U.S. A nuclear-powered electric generating facility
has not been built in the U.S. in the last 20 years. The economic uncertainty of
regulatory, safety, and licensing expenses has lead to the demise of the domestic,
commercial nuclear industry.

However, this has not been the case worldwide. France, for example, now
generates over 75% of its electricity from nuclear facilities with a standardized
design that reduces uncertainties. In 2000, there was as much electricity produced
from nuclear energy as was produced from all energy sources worldwide in 1961
(2438 billion kilowatt-hours.)

Similar environmental challenges, resulting in economic and regulatory uncertainty,
are also evident in the use of coal for electricity generation. Particulates,
sulfur dioxide, nitrous oxides, and greenhouse gasses are all contributors to air
pollution that are being regulated to protect the environment. The emission targets
are not stationary and are becoming increasingly tight as environmental effects
become better understood and environmental lobbies gain political power. Over the
past decade, the U.S. has shifted toward natural gas for electric generation because
it provides the least risk in the environmental/economic equation — even though it
is more suitable for many other, more demanding (mobile and chemical production)
applications.

Here is a clear example of the techonomic metric yielding an answer in a
nontraditional manner, by revealing the contributing areas that cannot be numerically
evaluated.

This is RISK. Whenever there is a strong contributing element to a
techonomic metric that cannot be reasonably estimated, the risk to making a
resource deployment is considerable.

If a government determines that it wants to
create an environment of uncertainty for use of a technology like nuclear power
generation, or any technology, then that industry will not advance in that country.
Likewise, if a government creates an environment that clarifies and supports the
application of a new technology — like France did for nuclear power generation —
then the industry will advance quickly. France now has 58 nuclear reactors, and they
provide about 77% of the country’s electricity. In 1973, France was relying on
traditional fossil fuels for over 80% of its electric energy needs.

The forces of economics ultimately enter the global marketplace, as indicated
by the words of the late Indian physicist Dr. Homi Bhabha, “No energy is more
expensive than no energy.”