Does It Matter that Something Can Be Cheap a Long Time from Now?

public health infrastructureI do connect this with the financial crisis. We seem to have become a world of people trying to cut corners and have it all now. The bankers sell hyped products for the fees and live high on the hog. Societies pump up debt to have it all now, and go on doing it until they reach a point of no return.

In Haiti, they paid a huge price for not having adequate building codes and building structures, all of which take money in advance.

In many developing countries, it is the absence of public health infrastructure like clean water and sewers, not to mention roads and dependable electricity.

I hear people say that doing things well is equivalent to being a fool. Their message is that it is better, smarter to do things poorly and get away with it. Maybe it was better when only a few people believed this, and society called them criminals.

I get on the horns of this dilemma when I respond to objections about PV costs. On one hand, I hear and sympathize with the rate payer objecting to the increase of their bills to pay for PV. Their utility puts in a big system and says the rate payers are going to have to pay more. Could anything be more simple? Their bill is going up. QED, PV is not economical. At least, that’s how we have been taught to think about it. (In fact, any new system will make their bill go up; but let’s ignore that nicety.)

But what about later, in this great foggy future we’ve conditioned ourselves to believe never comes? Then the PV system has been paid off and is operating for almost nothing. There is no fuel. The system is simple to operate, wears out very slowly, and may last a century – like the Hoover Dam. Then the rate payer’s payment drops precipitously to about a penny a kilowatt-hour. And that lasts for another twenty or forty or even a hundred years – no one knows how long, because no one has ever seen a well-made PV system wear out. In that sense, PV is already cheaper than coal over the life of both kinds of systems.

That’s the horns of my dilemma – how to respond to the question, “What is the economic value of PV versus conventional energy?” In one sense, it is more expensive; in the other, much less so (not even counting health effects or fuel price inflation).

Does it matter that something can be cheap a long time from now?

And it’s not even that long – only the length of the loan, maybe 20 years.

Ken Zweibel

1 Comments

u14
Sol Shapiro
March 10, 2010 12:31 pm

Ken,
I just learned where you are. A good spot.
Here’s a brief take on where I think we need to go for the future of U.S. electric generation:
I look, not to 10% or 20% but I feel we need to put ourselves on a path to 80% and more.
Capacity is then a major driver: solar clearly has the capacity; in its solar thermal mode, it has inherent storage and the capability to use gas back-up for cloudy days outlasting storage. Using pv – whose costs per kwh are near competitive with thermal, we really, really, need to address the issue of storage. And my take on this toaay is compressed air.
And so, I say, let’s give these technologies a chance to compete – to drive the cost down. I keep returning to a Sargent and Lundy report of 2003 that predicts, after a few thousad megawatts are deployed that solar thermal will meet 5 to 7 cents per kwh. We need to give this a chance.
I do see a second technology, still needed some development as having capacity and serve as baseload; that is “hot rocks” geothermal.
Together, these technologies in the Southwest with a national HVDC grid can be the backbone of our energy resource; supplemented by wind another technologies such as wave and tadal energy.
One more comment; I don’t really believe we will gete to electric transportation; I think a much more likely answer will be liquid fuel from artificial photosynthesis.