Page 40 RAIN Spring 1986 varied. As you mentioned, we do indeed have Amory Lovins on one side who is saying you can probably close down 20-30 percent of today's existing power plants by using more efficient appliances and engines. And his case makes a great deal of sense. On the other side you have people who are claiming that the demand for electricity will return to the ages of the 1950s, and therefore we will need 400, maybe even 500 new power plants before the end of the century. They make their case by claiming that although the economy is becoming more efficient, it's becoming more electrified. And you can point to computers and robots and lasers and a variety of other things that somewhat buttress their case. And so where, perhaps in the middle, is the demand going to be? And if you're wrong, one way or the other, the costs are just tremendous. You're talking billions of dollars if you're a half of a percentage point off in either direction. So the issue is: How do you deal with the uncertainty? You certainly don't deal with it be building large power plants that take 12 years to build. You don't know whether or not you're going to need the power in 12 years. Where I think the answer lies is in having the ability to build smaller facilities, those being less than 50 or even 100 megawatts. These can be built in a year or two years, and can respond more accurately and quickly to what I think will be a fluctuating demand. One of the biggest reasons why you're not going to have centralized power plants is Wall Street, which is unwilling to take the risk of putting forth the money for centralized power plants that are going to take 12 years to build when we don't know if the power is going to be needed. Wall Street is extremely skeptical of utility companies at the moment because they got royally burned by watching cost estimates go through the roof for the last generation of nuclear power plants. We are not dealing with technologies so complex and capital intensive that only the oil companies and the large engineeringfirms can participate. The entrance fee into this marketplace is not so high that an entrepreneur can't hustle enough to enter and make a living doing this. RAIN: Is it ever going to be practical for the average homeowner to become a small power producer, or is it going to remain the province of corporations and joint ventures and to some extent, local governments? Munson: The honest answer is I don't know. It really depends upon technological advances. The technology that people are very excited about and which I think has the best potential is the small cogeneration system. The cogenerator is that machine which basically produces both heat and electricity by burning a single fuel. They are now used in applications as small as McDonald's Restaurants, Holiday Inns, and things of that sort And there are some prototypes that are being used for individual residences where you bum natural gas, peach pits, waste, whatever, and supply the heat and electricity required for your home. Indeed you can find numerous examples where they're saving a good deal of money for individual residences. The issue is whether they can make the machine maintenance-free enough so that it can be placed in somebody's basement and basically forgotten about for a year. There are many people who think that that will happen. The other very attractive technology is photovoltaic cells, which convert sunlight directly into electricity. The price of How do you deal with uncertainty? You certainly don't deal with it by building large power plants that take 12 years to build. those has dropped dramatically since the days they were first installed on satellites. They still need to drop to the point ^ where it would be beneficial for you to go to a store and buy, say, photovoltaic shingles to put on your roof. And those shingles would not only protect you from the rain but also supply the electricity for your home. Again, there are some examples where people are using photovoltaics in their own home. There aren't many, and if the technological advances do come that many people expect, in several years we may be looking at individualized, home-oriented power plants. For people talking about energy self-reliance, you're talking about the dream come tme. RAIN: Well, if it's uncertain whether homeowners will be power producers, you also suggest in the book that it's also a possiblity that the future of small-scale power producers may belong to ARCO and Bechtel and General Electric. Munson: There's a possibility of that. My guess is that it won't. That's primarily because we are not dealing with technologies so complex and capital intensive that only the oil companies and the large engineering firms can participate. In other words, the entrance fee to participate in this marketplace is not so high that an entrepreneur can't hustle enough to be able to enter and make a living doing this. I think we'll certainly have a number of entrepreneurs who will fail, and there will be fly-by-night operators, but 1 think what we'll be looking at is a real competitive marketplace. RAIN: What about the people that fail? Electricity production is not something we want to be iffy about. We want to make sure that when we need the electricity, whether it's in a home or in industry, that it's there. Is it a problem relying on unregulated companies that are small and therefore more risky and which could go bankrupt? Munson: I think that we'll actually find strength in diversity. Today we basically rely on a single monopoly that tends to have one or two centralized power plants. If one of those powerplants has a problem, for whatever reason—lightning, natural disaster, what have you—and it's down, we're facing a serious problem on a widespread basis throughout the utility
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