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080414: Energy Costs mean externalities matter
Ed’s Threads 080414
Musings by Ed Korczynski on April 14, 2008

Energy Costs mean externalities matter
What do the words “Energy” and “Costs” have to do with materials considerations in 2008? The most recent issue of the Materials Research Society (MRS) Bulletin has just been released and it’s a special issue devoted to exploring all aspects—including costs—of materials science and engineering for energy. Many fine companies like Applied Materials sponsored the issue being made free to the public at the MRS website, and at minimum all adults should read “The Economics of Energy Options” by Lester B. Lave of Carnegie-Mellon University.

Energy” is an amazing word. Normally defined as the “ability to do work,” we might define “work” as the “ability of use energy”…so the more you study it the more you find circular logic. To further confuse things, we talk about “potential” energy and “kinetic” energy and “random” energy and “surface” energy and “renewable” energy too. Because the term has vague and overlapping definitions, people tend to use the term as they see fit without considering how other people might be using the term.

“Costs” seems like a simple word until you consider “my” cost versus “our” cost…which is the simple way of framing the discussion of economic “externality” wherein I profit by making you pay for some of my cost. ROHS is an example of a topic that is clearly foolish or clearly wise depending upon where you draw the line for the limits of your system: if you only consider your system to be electronics design, manufacturing, distribution, and sales then eliminating lead from PCBs just adds cost and risk. If, however, you consider your system to be society as a whole and include electronics recycling, landfill maintenance, and human health care expenses then eliminating hazardous substances from electronics should reduce overall costs.

“Many of the energy decisions that U.S. residents currently make are conditioned by the subsidies that energy has enjoyed. Until the 1970s, there were few rules requiring companies to abate the air pollution emissions from burning fossil fuels. Fuel was sufficiently abundant that prices were extremely low. Coal and oil were extracted with little thought or care for environmental quality,” says Lave. “As a result, huge social costs were incurred through environmental degradation and the resulting ill health.” The U.S. Environmental Protection Agency (EPA), in a study titled “The Benefits and Costs of the Clean Air Act, 1970 to 1990,” estimated that abating air pollution had benefits of $22 trillion compared to abatement costs of $523 billion; thus, benefits were more than 40 times greater than costs.

“The costs of U.S. foreign and defense policies to secure large amounts of inexpensive petroleum have not been charged to the imported energy. Consumers made decisions on what car to buy, what size residence to buy, and what temperature to set the thermostat on the basis of artificially lowered prices. Subsidizing a product encourages its use. Thus, the energy policy of the United States has encouraged energy use beyond what it would have been if the price had reflected full social cost,” concluded Lave.

I was born in Detroit (“Motor City”) and still enjoy motor sports, and I’m more than willing to pay $5/gal for gasoline to fuel my fun machines. From first principles of power-to-weight, electric motors should out-torque and out-fun internal combustion engines, but historic batteries had limited life and range and so for 100 years we have been waiting for convenient electric cars to arrive

Philips in The Netherlands is leading research into new storage technologies for electricity, using 3D trenches in silicon to massively increase the surface area of solid-state rechargeable batteries. This technology derived from silicon IC STI etching could be used in small 3D integrated electronics systems, or potentially even in automobiles.

Lave’s article mentions the need for improved battery technology as part of our desired energy future. “A battery that could power a vehicle for 30–40 miles (48–64 km) and be recharged from an electricity outlet would save about two-thirds of gasoline use. Because only about 2% of electricity is generated from petroleum, if all automobiles and light trucks were plug-in hybrids, more than one-half of oil imports could be eliminated."

The whole debate over the “true” costs of energy centers on where we draw the line on our system, and this is clearly seen in the debate over “solar subsidies.” What is the grid cost of electricity where you live? How much is subsidized directly or indirectly by your government? Do you have to pay a huge upfront cost for your home or are major infrastructure investments absorbed by someone else and you just pay per month? All of these questions relate to the issue of government subsidies to encourage private investment in photovoltaic solar panels.

Meanwhile, Southern California Edison (SCE) announced that recent advances in solar technology combined with a new five-year mega-scale investments allows for costs to drop by one-half. “This project will turn two square miles of unused commercial rooftops into advanced solar generating stations,” said John E. Bryson, Edison International chairman and CEO. “We hope to have the first solar rooftops in service by August. The sunlight power will be available to meet our largest challenge – peak load demands on the hottest days.”

You can put it in my backyard.


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080414: Energy Costs mean externalities matter

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Ed's Threads is the weekly web-log of SST Sr. Technical Editor Ed Korczynski's musings on the topics of semiconductor manufacturing technology and business. Ed received a degree in materials science and engineering from MIT in 1984, and after process development and integration work in fabs, he held applications, marketing, and business development roles at OEMs. Ed won editorial awards from ASBPE, including interviews with Gordon Moore and Jim Morgan, and is not lacking for opinions.