Last month I talked about half of the energy crisis: source and creation. This month I'd like to tackle transmission and use. We're clearly in need of some new approaches to this part of the energy equation if we're going to solve availability and cost issues.
It's ironic, but the cost of transmitting electricity is so high in some parts of the country that it actually makes sense to use relatively expensive, yet renewable, sources of energy such as wind, tides and the sun. Even if the initial tradeoff between the cost of transmitting electricity and using more expensive alternatives is a wash, such a move could result in considerable cost savings over the long run.
Long-line transmission loss may not be significant, but long-line maintenance is. As power transmission grids age, we should think about replacing them with a larger number of smaller, but more efficient, generating facilities.
If we need to generate and transmit more power to meet rising demand, it makes sense to charge companies that increase their energy use at a higher rater than those who don't. Another solution is to place a user tax on the immediate locality for the increased cost of power. High-demand users may think twice about staying in a location that has high energy prices.
At the same time, it's important to hold costs down for existing consumers. Since we have a rural system in place, the current average cost to farmers, for example, would decline. But if the land is sold to developers for a different purpose, an energy premium would kick in.
Businesses in energy-intensive sectors like technology are beginning to recognize the cost benefits of setting up shop in areas where there aren't so many high-end energy users. This realization is also producing a secondary benefit — spreading the job market to new geographic locations.
I also think consumers should be billed on a sliding scale that increases fees per kilowatt-hour as use increases. If you want five TVs, you'll have to pay more than the family that has only one. Perhaps this would encourage people to buy more energy-efficient items.
This opens up another thorny social issue. We can certainly increase our level of energy efficiency by putting a registration premium on any vehicle that is more than five years old, as well as a purchase premium on any light bulb that's not energy efficient. The money we save through these efforts could then be distributed to those people who buy products with the highest levels of energy efficiency.
The biggest problem with this approach, however, is that we end up penalizing those who have the least ability to pay. For example, older cars are the vehicles of choice for people who need transportation, yet can't afford the newer, more energy-efficient models. We don't need to place electronic goods out of their reach as well. In other words, if we try to regulate change, we're going to have to provide subsidies to those who — through no fault of their own — become victims of the rules.
The primary demand for energy-efficient products comes from a free and open market. Any move to further restrict free-market forces will hamper the kind of change that's needed to make progress in our efforts to use energy sources more responsibly.
Over time, the supply of more fuel-efficient vehicles will help improve the use of fuel per mile traveled. In fact, if we can increase the number of people who use public transit, as well as the volume of goods moved by rail, we may make significant progress in the direction of energy savings.
Any mechanism that requires regulation creates a bureaucracy that takes on a life of its own. Be careful what you ask for.