Tuesday, April 10, 2007

Different Technologies Require Different Markets

I am a big believer in "Small is Beautiful."

Different technologies seem to require different market models. For example, Coal, Hydroelectric and Nuclear do best with the BIG MODEL. A big coal generator will produce less pollution for the same input of coal and output of electricity as a large number of small coal plants. When coal was used by small industry or for heating, it proved to be extremely dirty.

Solar and biodiesel seem to work better at a smaller scale. Biodiesel draws power from waste materials; so you need to have a large number of independent processing plants processing the fuel.

Solar energy reaches it zenith when it is incorporated in construction. Incorporating solar into construction involves all sorts of contracts with the property owners.

It is a strange difference. If you are going nuclear or with coal; you should be thinking in terms of large plants geared to maximize the energy produced for the environmental production. When thinking solar or biodiesel, I hope that people will be thinking of small concise applications of the technology.

Since coal, nuclear and hydroelectric require big operations, they really are in a situation that requires government oversight.

My fear is that when you take the big government/big industry view of developing bio technologies and solar, you will end up forcing the naiscent industries into the same big energy models.

This is what we are seeing with George Bush's big push on ethanol. He is forcing this biotechnology into big business/big government model that they Bush's know and love.

Solar, ethanol and biodiesel can all turn ugly if forced into the big model. The really scary thing about solar is that people will be tempted to cover large sections of the earth with solar panels. I could see the government covering (and consequently destroying) hundreds of square miles of BLM land with solar panels.


Scott Hinrichs said...

Very astute observations. It seems that we are trying to force alternative energy into the same large-scale distribution channels as as mainstream energy. You point out that this is a poor match. Failing to properly match harnessing and distribution methodologies with the source will render the source economically unviable.

Charles D said...

Excellent post. You're right that big government (particularly when the government is run by oilmen) will always favor big energy models like ethanol, hydrogen cars, etc.

If we had a more responsible government, we could work toward local generation of electric power through solar and wind, improve battery performance and ecology and move toward plug-in hybrid and pure electric vehicles.

To really push in those directions, we need government to take the lead. The corporations that dominate energy and transportation will never allow such small-model technologies to take root. Entrepreneurs will try but will not get the capitalization to be successful or will be bought out and destroyed by big energy.

Of course when you have 65 lobbyists for every Congressman, it's highly unlikely that sane energy legislation will ever get through.

y-intercept said...

The local political scene isn't that much better than the national scene. The American manufacturing industry was doing a fair amount with co-generation some 40-50 years ago. There were all sorts of private efforts to brew up biofuels. These efforts were pretty much shut down by NIMBY politics.

Would you want some brewing up biodiesel next to your house?

One of the reasons that I ran from the Democratic Party was that, 20 to 30 years ago, they were systematically protesting against and shutting down the small firms that we wish we had today.

What happens with the political action method employed by the Democrats is that the system of political attacks ends up driving out the good people, leaving thick skinned power brokers holding all of the cards.

I know that libertarians place too much faith in business. As long as our government is ruled by the politics of personal destruction, the market is pretty much what we've got. In the case of solar, the free market will work. They dynamics are simple: when the technology is ready to be rolled out big time, it will happen. Subsisizing and pushing the technology into the marketplace before it is ready will just create waste.