The Cost

Whatever the uncertainties, a crude cost estimate must be made to emphasize the magnitude of the undertaking. The project will start with a first year cost of $100 million to $1 billion. Initial funds will be used for recruiting technical/ management staff and long range planning. Three action groups must be formed. One will plan the initial investigations of at least two different reactor types for preliminary testing and development. The second will evaluate Hawaiian-NOAA floating cities versus the aircraft carrier model for the floating platforms. This group will define critical test that will allow the selection of designs of the reactor and platform to be made in year three or four. The third Group will evaluate and select the site for two development facilities and issue requests for proposals and site designs.

The second year costs will be $3 billion to $6 billion. This will include site acquisition, evaluation of proposals, granting contracts, and construction of research and construction facilities. The research and construction facilities will serve as the foundation for the future production capacity for fusion reactors and floating platforms. We must maximize concurrent development, design and construction. The initial development of the Fusion-Hydrogen production equipment and production plants will require 5 to 10 years and cost about $200 billion. The construction sites and equipment will be designed for many years' use in construction of future reactors. The cost for the research and development of the Fusion-Hydrogen equipment and the investment in the reactor construction sites will be spread over all future reactors and ultimately recovered.

In the third and forth years the platform and reactor will be selected and design and construction of the commercial reactor-platform will begin. In the 10th year, the first reactor will be completed and sold to the utility company that will start the conversion to hydrogen. From then on, the endeavor should rapidly become self-supporting. Later, it will pay back the original investment as more and more reactors are built and sold. The implementation schedule shown in Figure 9.2 indicates that by the end of year fifteen, 50 reactors will have been built and sold. The 30,000-megawatt (Hydrogen) reactors should have a sale price in the range of $10 to $20 billion each (about the cost of an aircraft carrier). Thus, the gross sales for the project at the end of year 15 will be about $1.0 trillion.

Today we build electric power plants in a size rang of 500 to 4,000 megawatts capacity. These plants cost in the range of one to 2 million per megawatt. The lowest at-plant-cost for power from these plants is $0.02 to 0.05 per kilowatt-hour.

There are impressive advantages of scale in the construction of power plants. We can probably build a 30,000 Megawatt, 30 million kilowatt, (hydrogen) Fusion-Hydrogen facility for $20 billion; the cost will be $660 thousand per megawatt. Yearly operating costs will be in the range of $300 million. This will cover 1000 staff members, with appropriate overheads. There are 8760 hours per year. The operating cost will be $0.00114 per Kilowatt-hour (Kwh). Payments on 20-year bonds at 8% interest would be 2.037 billion per year or $0.00775 per kilowatt-hour. The total at plant cost of energy will be $0.0089 per Kwh. Before the consumer get the energy there will be added operating and capital costs for pipe lines, storage and fuel cells. Thus, this broad-brush estimate indicates that the costs of Fusion-Hydrogen energy will be comparable to current costs and has the potential to be less.

At this point, any effort to fine-tune an estimate would be a total waste of time. Technical project cost estimating has much in common with astrology. There are many elements to calculate, arrange, estimate, invent, anticipate, predict, foresee, prognosticate and evaluate. The estimation process is very impressive, but no matter how much work is expended, the result is usually no better than the original guess of the scientists and engineers that initially planned the task.

LINE THICKNESS SHOWS INTENSITY OF ACTIVITY

LINE THICKNESS SHOWS INTENSITY OF ACTIVITY

(X)IS THE AVERAGE NUMBER OF REACTORS DELIVERED DURING THE -FIVE YEAR PERIOD

ffl/mn

■ (Y) IS THE TOTAL NUMBER OF REACTORS DELIVERED

(X)IS THE AVERAGE NUMBER OF REACTORS DELIVERED DURING THE -FIVE YEAR PERIOD

ffl/mn

■ (Y) IS THE TOTAL NUMBER OF REACTORS DELIVERED

Figure 9.2 Schedule for Implementation of the Fusion Hydrogen Energy System

Even though the stakes are high and the profit potential enormous, it will be difficult for private industry to finance this development. No single company has the resources to invest $200 billion without return, for 8 to 10 years. A consortium might be able to perform the task.

A multi-national group of private companies will have difficulties reaching an agreement on the division of costs, work and future profits. It will probably be necessary for a government or a group of governments to bear the cost of developing the energy system.

In the United States, raising funds for the initial research and development can be accomplished by a direct carbon tax on current energy use. Logically, the tax should be applied only to energy sources that produce carbon dioxide. Looking back at The Table 2.1 "Energy Consumption by the United States", in 1999 the United States consumed fossil fuel energy equal to 86.05 x 1018 Joules. This is equal to 2.39 x 1013 kilowatt hours (Kwh) per year. A tax of $0,001 per Kwh would provide revenue of $24 billion per year.

For the homeowner or business purchasing electricity, the tax would escalate by a factor of about four because it takes four Kwh of fossil fuel energy to deliver one Kwh of electric power. For a home using 400 Kwh per month, the tax would be $0.40 per month or $4.80 per year. In Chapter 6, it was noted gasoline had an energy content of 12.8 Kwh/kilogram and an average automobile carried a charge of about 43 kilograms (approximately 15 U. S. gallons) equivalent to 550 Kwh. This would result in a tax of $0.55 per tank ($0,036 per gallon, $0.01 per liter). While significant, this cost increase is less than the escalation of gasoline prices that occurred between summer and winter. It is a much smaller cost than that survived in the seventies during the oil embargo shortages. One should note that the average Unites States gallon of gasoline carries a tax burden of $0.44 ($0,117 per liter). 252 The carbon tax is hardly noticeable in this tax environment.

From the energy cost estimated above of $0.0089 per Kwh, the cost of a nominal charge of automotive fuel, without tax, will be $4.45. If your car was powered by a fuel cell that is twice as efficient as an internal combustion engine, the cost for the same range is only $2.23. In the last year, the United States pump-price of gasoline has flapped around from $1.00 per gallon to $2.00 per gallon. Now, November 2001, the cost is about $1.30 per gallon including tax. Subtracting the $0.44 per gallon tax, the fuel cost is $0.86 per gallon. The cost of the 15-gallon standard tank would be $12.90.

The experience of the seventies shows that this level of cost increase can be tolerated without serious economic disruption. This tax will provide the funds for the development program in the initial years when there is no return from the sale of reactors. The Fusion-Hydrogen development effort will be started with a firm commitment to complete the reactor facilities. With this clear commitment, most of the ancillary equipment development (list show below) will be performed by commercial industries. No public funding will be required for this portion of the development effort.

It is necessary to raise money with taxes to get the program under way, but the issue of cost is, in many ways, irrelevant. Within the next 30 to 50 years fossil fuel depletion, environmental problems and world wide competition for shrinking reserves will leave us with two choices: a new energy system or collapse of civilization due to an energy shortage with potentially lethal competition and the extinction of many of the earth's species from environmental degradation. Out of consideration for the future of the world and our descendants, we ought to start building a new energy system soon; that is, when the final cost of the energy system will be the lowest. Whatever the method of funding, or the mix of energy sources used in the new systems, the costs of implementation of any one new energy system will be similar in cost to any other system and it will never be lower than it is today.

Apart from cost, there are two other major challenges. The first is the scientific and engineering effort to develop the technology. The second and more difficult challenge is the socio-political problem of motivating people to work hard to solve problems that today are only an irritation, but may become a planet-wide disaster later in their lives.

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