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| Moderated by: Joe Kelley |
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| Wind | Rate Topic |
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| Posted: Sat Aug 26th, 2006 11:27 am |
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1st Post |
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Joe Kelley Administrator
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http://dsc.discovery.com/news/2006/08/25/windmill_tec.html?category=technology&guid=20060825163030&dcitc=w19-502-ak-0000 Reading through the article above may illuminate a few obvous problems. A. Southwest Windpower is planning to mass produce the Skystream and sell it for between $10,000 to $12,000 installed, about half the cost of similar size turbines, which are typically assembled by hand on a much smaller scale. If a product, any product, can be mass produced, then, the price can be reduced in proportion to something called economies of scale. In other words: If a farmer produces peanuts then the farmer has costs required to produce peanuts. Equipment, land, electricity, water, labor, time and energy are all required to make peanuts. If the farmer makes one peanut, then, the farmer must charge all costs for that one peanut. The farmer stays in business if he can sell the one peanut and cover all the costs of farming the one peanut. Suppose the costs of farming the one peanut is 10,000 to 12,000 dollars. What must be the price of the one peanut in order for the farmer to stay in business? Answer: At least 12,000 dollars. What is the price per peanut? 12,000 dollars per peanut. What is the price per peanut of the farmer can make 12,000 peanuts for the same costs? 1 dollar per peanut That is how economies of scale work. It is obvious that the cost of making one peanut is less than the cost of making 12,000 peanuts. It is as obvious that the cost of making 1 peanut is not the same as the cost of making 12,000 peanuts. Economies of scale work to reduce costs because one big cost is the cost of setting up or building a business. Another cost is maintaining a building and that cost also adds to the cost savings when running a business with economies of scale. From another angle: If a person starting a business knows exactly how many units (peanuts or wind generators) will sell, then, a person starting a business can gear up to make that many units as quickly and efficiently as possible. If the number of those units (peanuts or wind generators) is one, then, the quickest and most efficient possible method of making one unit will determine the cost of that one unit. Now - keep the business running for however long it takes to make 12,000 units. Work day and night constantly. Don't even stop to eat or pee. What if a person could make one unit for 12,000 dollars and what if a person could make 12,000 units in one hour? What happens to unit cost? The price per one unit if only one unit would sell is the entire cost of producing one unit. The price per one unit could be the same for all 12,000 units one hour later. If two people are in the same business trying to supply the same 12,000 units and both businesses make 12,000 units, then, what happens to the price? My comments intend to simplify economics. You may be confused. I am not. Don't blame me for your confusion. B. According to the developers, the system could save the average homeowner $500 to $800 per year on electricity. What is the cost benefit? 12,000 dollar for one unit and 500 dollars a year production from one unit. Divide 12,000 by 500 to arrive at Independence Day for that wind generator according to that article written by that individual person. 24 years Are you as confused as I am? C. Depending on the available wind, the turbine could provide 40 to 90 percent of an average home's energy needs. How much is your electric bill total for one year? My electric bill is at least 100 dollars per month or 1,200 dollars. If I times 1200 by .40 I get 40% of my energy needs for one year. 480 dollars is 40% of my energy needs. 500 dollars is the low end yearly output of the wind generator. When can I pay off the cost of the wind generator if my wind generator produces 480 dollars per year 12,000 dollars divided by 480 dollars equals 25 years. The pay-off independence day assumes no interest on the 12,000 dollar loan. D. Comparable technologies that generate electricity from the wind or even the sun cost between 15 to 35 cents per kilowatt hour, said Green. I pay .13 cents per kilowatthour the last time I checked. Here is the deal: If for any reason the power goes out at the collective energy farming business or Utility Company Corporation, then, I get no power. How much does power cost if no power is available? Ask one more question please: How much does money cost if no money is available? If you are still confused, then, I cannot find any reason for sympathy. I have no idea why this is confusing to anyone other than a possible manic belief in falsehood. That is a guess on my part; pure speculation since no words are currently flowing from the readers to me. I am ignorant as to why people are so confused about economics, money, and power. It is a simple matter of finding agreement. Edison tried many different elements before finding an element that agreed with the idea now known as a light bulb. Now everyone knows what a light bulb is even if the science of the light bulb is confusing. If the power goes out at your house and the power stays on at your neighbors house, then, who is more powerful - you or your neighbor? Will you go next door and steal your neighbor's power? http://www.informationclearinghouse.info/ How much will it cost to steal your neighbor's power?
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