taken as a reasonable, unbiased estimate of the true incremental cost of 10 quads. These numbers have to be compared to current conjectures about the cost of solar power satellites. ECON, Inc., has been involved with three other corporations, Arthur D. Little, Grumman Aerospace Corporation, and Raytheon, in estimating the cost and performance of one particular solar power satellite of about 5 GW capacity (output on the ground). Based on such units, with a first unit cost estimated by ECON at about $15 billion (allowing for risk and uncertainty), the estimated cost of generating 10 quads of electric energy through such technology will be about $500 billion. This cost estimate allows for substantial cost uncertainties. Within these uncertainties we conclude that solar power satellite systems compare favorably with conventional power generating capacity on the ground. If operations costs are included in the evaluations — as they have to be — SPS may promise substantial savings if all the advantageous technical expectations of SPS operations prove correct. The ECON cost estimates assume a substantial decrease in space transportation costs; and these are clearly in hand with the successful completion of Space Shuttle systems technology and derivatives thereof. The estimates assume also a substantial decrease in the cost of solar cell production and assembly and deployment in space; but the cost estimates also allow for uncertainties. However, there do exist serious questions of environmental effects: radio frequency interference, possible ionosperic effects of such large energy transmission, and local microwave radiation zones, which cannot be estimated. Yet “conventional” additions to electric generating capacity (or replacement of that capacity) has at least equally serious environmental problems: for nuclear fission technology the problems are myriad and may seriously conflict with other national interests; fusion technology remains an economic promise of the future, with potentially serious contamination problems (tritium), and technically unresolved issues of being able to sustain a net energy output. For fossil plant systems, even existing uses of fossil energy seem to have a noticeable CO2 effect, with potentially dangerous climatic long-term implications. The message of Table 2 is rather simple and straightforward: If the industrialized nations are serious about bringing the developing countries to an economic standard close to their own, a supply of tremendous additional energy resources is necessary to fulfill their energy needs. Industrial societies are characterized by “roundabout” production processes, a term coined by the Austrian economist Boehm Bawerk. In short, roundabout production means that the productivity of individual labor can be increased many fold by the inclusion of real capital (machinery) which of necessity means extensive energy use. I am not trying to make a value judgment here of whether industrial societies are “better off’ than developing countries, nor whether developing countries necessarily have to commit all the past mistakes of industrial societies to date. However, if one is at all serious about real development of vast areas in the rest of the world — rather than pay lip service to that concept — it means making available energy resources, estimated in Table 2, equivalent to a total worked production of about 40 billion metric tons of coal equivalent per year. The “deficit” of energy use in developing countries is about 30 billion metric tons of coal equivalent a year, a number equal to more than four times the total world energy production of 1970. This points out a serious conflict between the goals of development espoused by both industrial as well as developing nations and the limitation of current energy resources. The truth of the matter is, particularly after the events of 1973, that industrial nations remain the major users of world energy resources, particularly fossil resources, while developing poor nations can afford less and less
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