Brittle Power- PARTS 1-3 (+Notes) - Natural Capitalism Solutions

222National Energy Securityeffects may increase the costs of other parts of the energy system, or they mayincrease indirect costs or inefficiencies. The object, after all, is to deliver energy—or,more precisely, to enable particular services to be performed by usingenergy—rather than merely to install the capacity to put the energy into a distributionsystem. The goal should therefore be to build the energy systemwhich will perform the desired energy services at the lowest possible economiccost. If bigger technologies decrease construction costs by less thanthey increase other costs, then the technologies are too big.A full analysis of the appropriate scale to minimize total economic costs inparticular circumstances is inevitably rather complex. The key ingredients ofsuch an analysis are given in Appendix One. It deals with those factors whichtend either to increase or to decrease energy costs (especially electrical costs) asa function of scale, classified into ten major categories and based on the bestavailable data from actual experience in several countries. The analysis showsthat very large unit scale can typically reduce the direct construction costs (perunit of capacity) by tens of percent—at extreme sizes, even by sixty or seventypercent. But most of the diseconomies which inevitably accompany that increasein unit size are each of that magnitude. Appendix One identifies nearly fifty suchdiseconomies; for example, a requirement for custom building rather an opportunityfor mass production, more frequent and more awkward failures, generallylower technical efficiency, difficulty of integration to use waste streams efficiently,large costs and losses of distribution, large requirements for back-upcapacity, and higher financing costs and risks arising from longer constructiontimes. Almost any combination of a few of these documented effects could tilt the economic balancetoward small scale for all but the most highly concentrated applications.Thus there is a prima facie case that big energy technologies are not inherentlycheaper, and may well be costlier, than those scaled to match their end uses,most of which are in fact relatively small and dispersed. (The next two chaptersshow that the economic case in favor of smaller devices is even stronger thanthat.) Of course, there are still tasks for which big systems are appropriate andcost-effective. It would, for example, be almost as silly to run a big smelter withmany little wind machines as to heat many houses with one big reactor.Mismatching scale in either direction incurs unnecessary costs. What matters isnot some mythical “right scale in the abstract” but the right scale for the particulartask. 12 Even in our highly industrialized society, however, nearly all the energy-usingdevices are smaller—most of them are thousands or millions of timessmaller—than the billions-of-watts supply systems that have hitherto beenassumed to be economically essential. It appears that a more sophisticated andcomprehensive view of the economics of whole energy systems would lead to avery different balance of sizes between demand and supply.