Energy inefficiency

Apparently, the efficiency of power plants in the United States has remained the same for the past 50 years. That's right; in 1957, at a 33% efficiency rate, power plants got just as much energy for every pound of coal as they do today. Why this dearth of technological growth in such an important sector? One author makes a plausible case that it is the extensive regulations and perverse incentives created by government subsidies that have distorted the market, making efficiency unprofitable and competition miniscule.

According to the article, the market "is not stagnant because we've hit any fundamental limit. Indeed, studies by the US Department of Energy and Environmental Protection Agency have identified a whopping 200,000 MW of potential (that's 20% of the peak power demand of the US) for proven technologies that either recover waste energy from industrials and/or cogenerate heat and electricity from a single fuel source."

In other words, we have the technology to drastically increase the efficiency of energy production. In a free market, this efficiency would convert immediately to an increased profit and should therefore be adapted relatively quickly. One major reason that this has not happened is the fact that government regulation makes small start-up companies in the sector unviable – because capital investments are subsidized but energy must be passed on at no mark-up over operating costs. Moreover, mandates to adopt certain kinds of environmental standards have had the perverse effect of shutting out better, more efficient improvements.

Because of its size, importance, and environmental impact, the energy sector is often seen as a sector that requires government intervention. Yet that very government regulation has instead stifled progress to an almost shocking degree. Since the 1950's, we've invented personal computers, the internet, landed men on the moon and sent rovers to Mars. Is it a coincidence that despite all of that progress in unregulated fields, the most heavily regulated sector of the American economy has literally stagnated? I think not.

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written by Steve Giess, July 02, 2008

Unfortunately the Third Law of Thermodynamics - which determines the efficiency of coal fired power stations that use steam - has not altered since the 1950s. Combined power, I agree, is a different matter.

Magical thinking
written by Charles D Quarles, July 03, 2008

The Third Law of Thermodynamics allows one to calculate the theoretical maximum efficiency of any heat engine, be it coal fired steam, nuclear powered steam, internal combustion engines, external combustion engines, etc. Technology will only allow one to approach that theoretical maximum. Other laws of physics limit the maximum theoretical efficiency of any conversion of energy from one type to another, such as potential energy to kinetic energy.

The laws of chemistry come into play whenever one attempts to convert potential electrochemical energy to useful work. The laws of chemistry come into play whenever one attempts to use available materials in the construction of any work extracting machine or when one attempts to create novel materials to overcome the limits that inhere to other materials one finds in nature (and do not let anyone tell you otherwise, what we do is as natural as those things done by every other life form on this rock, some of whose individual actions is less than ours but when integrated over their greater biomass far exceeds ours).

I am going to make this my sig/tag line: "It never ceases to amaze me that people,especially leftist politicians, think that you can wave a magic wand and repeal the laws of physics, chemistry, and economics."