-28 would make. The purpose of this section is to provide a rough comparison of the capital costs of the Audubon Plan (including environmental safeguards) with other energy strategies. It is not intended to provide a complete (and necessarily complex) analysis of total energy costs such as has been provided in works by Roger Sant, Robert Williams, and the other authors mentioned in the Introduction. What about reliance on new supplies of domestic oil and gas that remain to be discovered? The primary and secondary recovery of oil and gas in the 48 contiguous states including the outer continental shelf peaked out in the early 1970s and is likely to continue to decline regardless of how many new wells are drilled. This is the conclusion of most petroleum geologists. Increased production from Alaska is projected to compensate only in part for the falloff in the other states. The so-called tertiary recovery is a complex undertaking with special problems unique to each site. Recovery is likely to be a slow process, with production levels limited in this century by the state of technology. straints may also limit tertiary recovery. In any case, with deregulation of domestic oil and gas prices, the world price of oil will set the level of domestic prices. The production of synthetic fuels may well ameliorate the world price of oil, but it is unlikely to bring it below the $50 per barrel (in 1980 dollars) projected in this study. What about nuclear and coal power? Environmental con Since most of the 40-quad difference between the Audubon Plan and the 1979 DOE projections consists of electrical generation, -29 it would be possible to forgo conservation and build, instead, 700 nuclear or coal-fired electricity-generating plants. At $1.5 billion per 1000-megawatt nuclear powerplant operating at 60 percent of capacity, the total bill could come to $1 trillion--$300 billion more than the capital investments needed for the efficiency improvements which would save the same 40 quads per year. Because the capital costs of modern coal-fired elec tricity-generating plants with state-of-the-art environmental controls are not much lower than the costs of nuclear plants, the capital needed to meet the 40-quad gap with coal would be almost as much as would be needed for nuclear power. Thus, even though reliance on nuclear and coal power would be cheaper than reliance on oil, it would require more capital than relying on energy-efficiency improvements. Although it is true that investments in energy conservation will require enormous capital, these examples show that the alternatives would Stated in another way, today's oppor be much less attractive. tunity to invest in more efficient use of energy is a highly attractive one for the free enterprise system. Such investments are now occurring at an accelerating rate. As a result, both Exxon and DOE recently reduced their projections of the demand for energy in the year 2000. Other studies project levels in 2000 well below the 80-quad target in the Audubon Plan. The economic facts and the accelerating movement toward the more efficient use of energy justify more emphasis by our leaders--even a crash program--on this most promising contribution to the resolution of our energy crisis. -30 Capital Costs of the Solar Equipment Needed in the Audubon Plan Solar energy is criticized more often than conservation in regard to capital requirements. But once again the cost of solar equipment must be compared with the alternatives. For example, one square foot of a solar collector providing hot water can save $2.30 worth of oil each year, with heating oil priced at $1.00 per gallon.* In seven years, the savings would pay back the initial investment for collectors costing $15 per square foot, which is about the price projected for system costs in 1985 by the Office of Technology Assessment.** Thus, even though it would cost $87 billion to install enough solar collectors (at $15/sq. ft.) to deliver one quad of hot water per year, it is a good investment compared to paying $1.00 per gallon for oil, or an equivalent price per Btu for gas. Table 5b shows the capital cost per quad of capacity (quads per year) for all of the Audubon Plan solar technologies. In almost all cases, the capital cost of the nuclear powerplants that would be required to provide the equivalent energy services *Assuming (1) a 30 percent efficiency for delivering the average 20 watts per square foot solar flux incident on the flat-plate collector, and (2) a 60 percent net efficiency for an oil burner and heat distribution system. Even today, at $25 per square foot and a corresponding payback period of 11 years, such collectors could be a desirable investment--especially since the price of heating oil is likely to rise, even when measured in constant dollars. **Application of Solar Technology to Today's Energy Needs, Office of Technology Assessment, Washington, D.C., June 1978. See Vol. II, p. 282, for details of typical systems costs. -32 Footnotes for Table 5B (a) (b) (c) (d) (e) (E) (g) (h) (i) Active and passive collectors. One-half the amount that would Annual Report to Congress 1979, DOE/EIA-0173 (79)/3, Volume 3, The figures in this report are given in 1975 dollars. 47 billion for utility wind turbines (Mod-2 turbines), 10 billion Gordon Thompson, "The Prospects for Wind and Wave Power in North America," Princeton Report to Solar Energy Research Institute, September, 1980 (draft), Tables 4, 5. The 1978 dollar figures in the report have been raised by 15 percent to convert to 1980 dollars. Energy yields have been reduced by factors of 0.9, 0.85, and 0.7, respectively, for small Darrieus turbines, large Darrieus turbines, and Mod-2 units, to account for availability lost due to maintenance. Estimated capital costs per quad for hydroelectric expansion projects range from $20 billion to $35 billion per quad depending on the project. Gordon Thompson, Hydroelectric Power in the U. S. A.: Evolving to Meet New Needs, Princeton Report to Solar Energy Research Institute, July, 1980, (Draft), Table 10. A mid-range value has been used here. Does not include 1.5 quads of alcohol or 2.1 quads of current yearly energy from forest products. Includes $18 billion for 0.5 quad of electricity-generating plants Base figures have been taken from Ref. (b) and increased by 30 percent to account for emission control equipment. $1.5 billion per 1000 megawatt (e) plant operating at 60 percent of capacity. This number does not include the cost of any design modifications that the Nuclear Regulatory Commission may require as a result of the Three Mile Island accident. Interest charges during construction are included. The $1.5 billion figure is the latest calculation of Charles Komanoff of Komanoff Energy Associates / private communication, January, 1980_/. Ref. (b) projects a slightly lower figure of $1.3 billion. We have used the Komanoff number since it (k) Cost per delivered quad of resistive heat. If heat pumps were used to provide heat, 40 percent less nuclear capacity would be required, but the capital cost of the heat pumps would have to be included ($60 billion per quad according to Ref. (b). (1) Average capital cost using nuclear power to provide all of the |