The Inefficiency Paradox of Peak/Off-Peak Energy Economics

During the day when energy is expensive, the owner of a hydroelectric plant lets a lake of water flow through his dam to generate power to sell at premium prices.

During off-peak hours at night, he might purchase energy from a cheap source and use it to pump his lake back above the dam so that the next day, he can use it to generate energy at premium prices again.

This is an extremely inefficient process since more energy is required to pump the lake up than it produces when it flows done (yet this process is still profitable for the owner because of the great disparity in peak/off-peak energy prices).

Local Energy Solutions

Solar will be best almost everywhere but some places will need other sources. The best source of energy for a community is determined by their immediate environment:

• What sources of energy exist?
• What technologies exist to exploit those sources?
• What is required to sustain this exploitation?
• What effects does that exploitation have on the environment?

A diverse energy profile is necessitated not by a lack of faith in any one technology or an inherent need to ‘diversify’ but by the individuality of locality.

Internet vs. Solar Power

The internet cheapens land by decreasing the importance of location.

Yet solar increases the value of land by turning the surface area of the Earth into a source of energy.

China’s Stunted Growth

Looks like the world has been giving China a little too much credit when it comes to exports. Though the value of China’s exports has been rising against their GDP, China actually imports many of the components of their exports. China just adds the finishing touches. When the ratio of exports to GDP is recalculated to include only the value of exports that China itself adds, the ratio remains fairly stable over the last few years.

So what does this mean?

1. China is not as vulnerable to an American economic recession as we’d all like to think.

2. China’s production has shifted to exports of higher value (like electronics) in the last few years (though they still only add roughly the same value, the products themselves are worth more now).