According to Lidow, there are six types of energy-related costs: generation costs, distribution and storage costs, conversion costs, usage costs, and cleanup costs. The last one is arguably the most important. The first five of these costs are period costs, meaning the generation costs and distribution and storage costs are quite clear. But what is obsolete, and therefore less clear, is the cost of cleaning up energy use. Think of global warming or cleaning up our rivers and lakes. Cleanup costs are deferred costs; we borrow them today so that future generations will pay them back. Therefore, as Lidow explains, cleanup costs are a key factor.
Most importantly, it's important to understand that 85% of the energy we use comes from burning fossil fuels. Now let's analyze how this energy is consumed. For example, our energy is consumed in the form of gasoline in cars and airplanes, but it's also consumed in the form of petroleum in plastics, coal, and lubricants—sometimes used for heating, sometimes for steel production, and sometimes for electricity—accounting for only 30% of our energy consumption.
Analyzing how our actions affect the environment and proposing ways to make them better is one option we might consider. “A very crucial thing is changing energy sources,” Lido said. “For example, you can switch from coal to natural gas. Natural gas emits fewer greenhouse gases per kilowatt-hour produced. We can also switch to nuclear or renewable energy. Each of these has a different equation for total cost.”
The disadvantages of renewable energy sources like solar and wind power are the high cost of storing energy when there is no sunlight. However, the disadvantages of nuclear power include the high cost of preventing terrorism and other natural disasters, as well as the high cost of cleaning up nuclear power plants. Therefore, each of these factors must be considered.
“If you look at the environmental impact, and if it makes economic sense, this is a journey we can take,” Lido said. “We can also change energy use. For example, we can use natural gas, coal, and oil, and the way they are used, and we could probably use them more efficiently if they were used in the form of electricity.”
Why is electricity inherently more efficient? Electricity is the journey of electrons, with virtually no mass. Therefore, transporting electricity is extremely cheap compared to transporting natural gas, coal, and oil. Thus, electricity is a better way to transform energy use into a more efficient method. Think of the comparison between electric cars and gasoline cars. In his presentation, Lido analyzed the equations governing it.
This equation encompasses production, distribution, storage, conversion, consumption, and recycling. Each stage of coal, natural gas, and all renewable energy sources consists of numerous components with varying costs. The most important thing to consider is storage. Storage is a crucial aspect of wind and solar energy because sunlight and wind are unavailable 24/7. As Lidow emphasizes, "Therefore, increasing storage is critical, as it is one of the major obstacles to the wider use of these energy sources."
Coal, natural gas, and oil are very easy and inexpensive to store at very high densities. Therefore, as battery prices decline, storage becomes more affordable, and the transition to renewable energy becomes simpler. However, as Lidow points out, recycling costs must be considered.
Clean coal does not exist, making coal cleanup extremely difficult. Natural gas and nuclear power face similar challenges; as Lido points out, their cleanup has never been thoroughly studied. Therefore, each of these equations must be examined. Considering the environmental impact, this widespread energy shift is crucial for large-scale reductions in global warming and pollution.
The industry best suited for the transition from natural gas/coal and oil to electricity is transportation, including electric vehicles.
“There are four factors driving this shift in energy use,” Lidow said. “Storage, batteries, electric vehicles, and electric aircraft.” “The efficiency with which we can convert electricity is a key factor, sometimes consuming half the energy. As we become smarter about energy consumption, the equation may become simpler. Of course, there’s also the cleanup and recycling of electricity, which depends not only on how it’s generated, whether from coal-fired power plants or solar panels, but also on the electricity itself, which has certain elements, such as recycling all our electrical equipment. How do we recycle it? Can we simply landfill them? Or can we find better ways to recycle and eliminate all the electronics we consider almost disposable from our environment?”
