A4: Universal Energy Cost Estimate

Universal Energy is modular by design. Each of its technologies have the capability to connect to one another in any configuration desirable, thus any realistic cost estimate will be determinant on the ultimate nature of configuration. For sake of argument in providing a baseline figure, this model will make several assumptions about the scale and nature of implementation, cognizant of the implementation strategy for public resources and proposed legal and social mechanisms we reviewed earlier in the Appendix. Due to the nature of the assumptions required to make such an estimate, this model will be more generalized in approach as opposed to seeking exact estimates that could shift based on future circumstances, but we’ll try to be as reliable as possible based on the factual data at hand, and seek further to overestimate than come up short.

Further, as electricity generation in most contexts is denoted in kilowatt-hours, we will use the kilowatt / kilowatt-hour unit respectively for power and energy generating capacity in this estimate. Proceeding forward, this estimate is broken into two distinct areas: electricity generation and resource production, which we’ll cover in that order.

ELECTRICITY GENERATION

The United States currently consumes 4.17 trillion kilowatt-hours of electricity annually as of 2018 (4,171 terawatt-hours).[1] The initial goal of Universal Energy is to provide 300% of our national electricity consumption, which would be roughly 12.5 trillion kilowatt-hours (12,500 terawatt-hours).

If we were to leave our current capacity intact (and gradually phase out old power systems, starting with the oldest and dirtiest first), Universal Energy would initially need to generate 8.34 trillion kilowatt-hours of electricity. This figure can and should scale over time, but it functions as a sufficient target for now.

Further, this estimate will also include the necessary infrastructure to produce sufficient fuel, water and food to provide for our respective needs, as well as desalinate sufficient water to store sufficient energy in the National Aqueduct to comprise its battery and power-generating functions. These estimates will be assessed as a separate consideration on top of electricity generation within the resource production section.

Lastly, while this estimate will make assumptions about the nature of Universal Energy’s implementation, it’s important to note that we will be minimizing assumptions of future cost reductions as investment in Universal Energy’s technologies expands. This price estimate, consequently, will be based on the estimated price today in “overnight costs” – the cost of the construction if it were purchased and completed as a standalone unit. It will not assess cost reductions over time through improvements in manufacturing, lowered energy costs, subsidies or levelized costs – costs incurred and offset by revenue earned over the lifetime of an energy-generating asset.

This latter consideration is especially important, as levelized costs assume cost-mitigating factors such as energy sales in a commercial market, future subsidies, and, especially in the case of renewables, the application costs of continuous operation (of which renewables, especially solar, have less of than power sources that require fuel and active maintenance of moving parts). A $100,000 solar array, for instance, might cost $100,000 to buy and implement, but when considering the benefit of its generated energy that doesn’t need to be purchased, lack of maintenance, etc., the levelized cost of that array may be far less over its lifetime. It’s not so much of an accounting “trick” as it is a view of long-term accounting, but its functional result is to put cost figures in perspective, and, ultimately make them appear less than they would be if we were only considering the retail sales cost of the technology. This estimate will forgo levelized cost estimates and simply look to the “sticker price” of a technology as it exists today, and it will do so based on three reasons:

  1. The goal of Universal Energy is to make energy and resources as inexpensive as possible – its 2 cents per kilowatt-hour target is roughly 85% lower than the commercial price of energy today, so levelized costs as assessed today would not be viable with such a dramatic reduction in energy costs.
  2. Levelized cost estimates use myriad factors and assumptions ranging from the average commercial price of energy, subsidies and tax incentives, cost of labor, cost of materials and estimated operational lifetime – all of which vary wildly by region. Levelized costs, therefore, include several moving parts and are difficult and complex to assess on a nationwide scale. Further, they don’t incorporate the possibility of new technologies (the levelized cost of solar, for instance, doesn’t incorporate municipal integration. The levelized cost of nuclear, further, is based on light-water reactors, and doesn’t incorporate the emergence of new technologies such as thorium).
  3. Levelized costs, finally, are assessed to show how much a technology costs over time, which spreads the cost of energy over that time period. This estimate seeks to focus on what it would cost to implement Universal Energy today – “sticker shock” and all – because it is the investment in the technologies, themselves, and their accompanying infrastructure that solves resource scarcity and climate change. The focus isn’t on a capital investment that seeks a capital return (although it will ultimately do so), the focus, rather, is on a capital investment that seeks a social return – we get a future that’s not dominated by resource conflict, ecological collapse and all of the humanitarian and environmental crises they spawn. This factor, along with the others aforementioned, make levelized costs less appropriate for inclusion in this estimate.

With this clarified, we’ll proceed from here to review Universal Energy’s cost estimate in full. As the ultimate appropriateness of each of the energy-generating technologies will vary based on geographical region, proximity to coastlines, highways and cities, we will break this estimate down in terms of units of 100 billion kilowatt-hours generated per year, roughly 1/85th of Universal Energy’s foundational target.

We will refer to this 100 billion kilowatt-hour figure as an “Energy Unit,” which broken down on a daily basis, comprises 273.97 million kilowatt-hours generated per-day over a 365-day year.
With this established, we’ll start our analysis with renewables.

Integrated Renewables

The key strategy of renewables within Universal Energy is municipal integration, as it avoids the highly expensive requirement of large-scale land purchases, especially in urban environments (where land is most scarce and most expensive). Most renewable advocates ignore this cost factor when making estimates, which while normally disingenuous is less of a concern for our purposes here. That makes baseline renewable estimates valid for use in this context.

Solar Power: According to the National Renewable Energy Laboratory,[2] the benchmark cost of commercial solar implementation can be as low as $1.44 per watt for a fixed-tilt utility-scale system exceeding 2 megawatts in size (alternating current). Because we are seeking implementation in municipal infrastructure and not buying land, we will assume this figure for benchmark cost estimates. In doing so, we’ll also be referring to our prior assumptions on made on page 50:

  • An average of five peak sun hours per day in the U.S.
  • One square foot of solar generates 18.7 watts under peak sun. That’s 18.7 watt-hours per hour, 82.9 watt-hours per day, and 30 kilowatt-hours every year.
  • One square meter of solar generates 201.28 watts under peak sun. That’s 201.28 watt-hours per hour, 1,006.4 watt-hours per day, and 367.3 kilowatt-hours every year.
  • At $1.44 per watt, one square foot of solar panels would cost $26.93. One square meter would cost $289.84.

A 100 billion kilowatt-hours per year Energy Unit translates to 273.97 million kilowatt-hours per day, or 273.97 billion watt-hours. Divided by 82.9 watt-hours per square foot of solar panel surface, and that comes to 3.3 billion square feet of solar panels (118.5 square miles / 306.91 square km). At a cost of $26.93 per square foot, that translates to $88.87 billion.

Total cost: $88.87 billion per 100 billion kilowatt-hour Energy Unit.

Wind Power: The nominal, non-levelized cost of wind power in the United States is estimated to be between $750-$950 per kilowatt of power-generating capacity, with a non-levelized cost of 7 cents per kilowatt-hour generated.[3] This figure, ostensibly, excludes the cost of land purchase, wiring and grid connection, which would be significant externalities on top of equipment purchase. While this estimate places greater emphasis on the promise of solar power within renewables (due to myriad factors ranging from limited locational deployment, unique impact on migratory wildlife, potential fire risks and damage during storms), its promise is nonetheless substantial in certain instances – all the more so if looked to as a supplemental energy source that’s connected to the National Aqueduct or integrated within highway medians.

Assuming a figure reflecting the average cost of implementation (splitting the difference to arrive at $850 per kilowatt of power-generating capacity), we’ll make the following assumptions when coming to a cost basis for wind power.

  • Capacity factor is the actual output of a power source over a period of time as a proportion of the turbine’s maximum capacity. For example: if a 1-megawatt turbine generates power at an average of 0.3 megawatts, its capacity factor is 30%. According to the Energy Information Administration, the average capacity factor for wind is approximately 34.6% for 2018.[4]
  • To derive a 100 billion kilowatt-hour annual Energy Unit, we would need to generate 273.97 million kilowatt-hours per day.

Assuming the EIA’s average capacity factor of 34.6% for wind turbines, we would need a daily energy-generating capacity of 790 million kilowatt-hours. Broken down over a 24-hour day, that’s a power generating capacity of 32.91 million kilowatts per-hour.

At a cost of $850 per kilowatt generating capacity, that would cost $27.97 billion per 100 billion kilowatt-hour Energy Unit.

Liquid Fluoride Thorium Reactors

According to Robert Hargraves, author of Thorium, Energy Cheaper than Coal and a foremost expert on thorium energy, the cost of a 100-megawatt reactor is estimated to run $200 million.[5] This figure assesses end-unit manufacturing cost, pre-learning ratio (reductions in manufacturing costs every time the number of manufactured units doubles, due to process improvements, gleaned expertise, etc.). Naturally, this figure would differ in actual implementation as reactor cost would hinge on myriad factors: scalable generating capacity, non-included cost reductions in mass-manufacturing, regulatory requirements and ultimate funding sources, but it’s an empirical baseline figure to begin our cost assessment.

Although LFTRs are more efficient than traditional nuclear reactors, we won’t assess a higher operating capacity than the 92.5% of traditional nuclear power,[6] and include that figure for our estimations here. That would mean a 100-megawatt LFTR would generate 92,500 kilowatt-hours per hour (92.5 megawatt-hours). That translates to 2.22 million kilowatt-hours generated per day (810.3 million kilowatt-hours per year).

Sticking to our daily figure for sake of consistency, generating 273.97 million kilowatt hours per day would require 124 LFTRs. At a cost of $200 million per 100-megawatt reactor, that would come to a total of $24.68 billion per 100 billion kilowatt-hour Energy Unit.

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