Dr. Rossi has promised to sell 10kw e-cat boilers for home use for 5,000 euro by November, 2011. This number, which works out to 500 euro per kw has become used as “the cost of an e-cat”. Is this what the cost will be ten years down the road?
Oh my no!
We don’t seem to understand the incredible powers of mass production and the free enterprise system. (This, not the car, not “the assembly line”, was Henry Ford’s great invention imho.) Lets look at how these two work together to bring down the price of an e-cat.
First, an analysis of the current cost of an e-cat. The first e-cat boilers will be significantly more than an e-cat, they will include everything necessary to work as a home boiler. This means electronics, heat exchangers, a rather large lead and boron lined box, etc. Second, as far as I can tell these things will be hand assembled by Rossi himself. Even if they are not, they will be hand assembled as an automated process has surely not been developed yet. Third, the components are very pricey compared to what they will be. Rossi uses a very fine nickel powder. The manufacturing process for this is rather limited, so it is not very mass produced. As a result it is quite a lot more expensive than pure nickel. However, once e-cats are mass produced and there is a significant market for this fine nickel powder its cost will be marginally more than the cost of raw nickel. The same goes for the hydrogen. Hydrogen of normal purity apparently doesn’t produce a reaction, however highly purified hydrogen does. This purification process is surely currently expensive. How do I know this? Simple, it isn’t mass produced. Once big automated machines are producing huge volumes of the stuff it won’t be expensive any more.
Hold it, Bruce, who’s to stop the hydrogen purification company from charging a mint for the purified hydrogen even when they can make it for cheap? This, folks, (for those who don’t already understand this) is the joy of the free enterprise system. Lets say I am sitting around with a big lump of cash looking for a place to spend it. Someone shows me just how overpriced high-purity hydrogen for e-cats is. What will I do? I’ll get into that lucrative market. If I continue to maintain overprice, another player will get in. This will continue until all of us have more capacity than there is market for. We will then be given a choice — sell a little bit of hydrogen at a high price, or sell more at a slightly lower price. This will produce a pricing war amongst the suppliers who need to sell highly purified hydrogen to justify the millions that they spent building the hydrogen purification machine. That is the law of supply and demand. It is a “law” like the law of gravity. It works every time, even though most who don’t understand it can find all sorts of examples where it doesn’t seem to work. Truth is, with a bit of time it works every time. It doesn’t, however, work instantly.
So what will the true cost of an e-cat be? It’ll be just a bit more than the cost of the raw materials involved. Rossi says that there’s about 50cc of nickel in a 5kw reactor core. Nickel currently costs about $8 per pound. Nickel weighs about 8 grams per cc, so there’s about 400 grams of nickel in a 5kw core, or 80 grams of nickel per kw. That’s about 1/5 pound. So the nickel cost is less than $2 ($8 * 1/5 = $1.6).
Hydrogen is readily available in water. It merely takes energy to get it out. Energy will be generated with e-cats, so it is close enough to free. So the cost of hydrogen is nothing less than negligible.
The catalyst is still an unknown. Rossi says that it is a common and abundant material. For purposes of this estimation, lets say that it costs the same as the nickel.
So the “fuel” of the e-cat should eventually cost less than $5 per kw. This should, if Rossi’s estimates are accurate (I find him to be more than a bit of an exaggerator), mean that energy will cost about $0.0012 per kw/h ($5 per kw continuously for six months (4320 hours)).
What of the e-cat itself? It consists of:
- A metal container which is about the size of a man’s fist for 5 kw of output.
- A resistive heating element.
- A hydrogen input tube.
- An unknown “frequency” generator (Electromagnetic? Audio? Who knows.)
That’s about it. In mega-mass production, with the Chinese making the thing as fast as they can, how much will this cost, ten bucks? Close enough. So for an e-cat itself, we’ll spend about $2 per kw. Now output is less than $0.002 per kw/h. Cool, but factor in that the major use of energy is not thermal, we need rotary energy or electrical energy. That cannot be produced efficiently. If an e-cat can run at 300c, as Rossi claims, electricity generation will be about 30% efficient, so energy will be about $0.006 per kw/h (plus amortization on the cost of the generator + heat engine.) If the e-cat can only heat to 150c (slightly higher than what’s been demonstrated) then generation efficiency will drop to about 20%. Now energy will cost about $0.01 per kw/h (plus the amortization on the cost of the generator + a larger heat engine.)
That’s why I have been saying the ENERGY IS OBSOLETE. It’s practically free!
Now to answer the most obvious of questions:
1 – What about Rossi’s cut? Won’t we have to pay beaucoup bucks to Rossi for his patent rights? Well, not really, for the following reasons:
- At some point Rossi will make more money by taking less royalty than by taking more. Lets look at the extremes. If Rossi charges $.50 per kw/h, his product will be nothing more than a scientific novelty. Rossi will get maybe $1 million per year. If he charges $.05 per kw/h, and the non-Rossi costs are $0.05 per kw/h, the $0.10 per kw/h of heat will have some uses as a heating system, but it won’t put coal or oil out of business. Rossi will be earning probably $50 million per year. Not bad. If Rossi charges $0.01 per kw/h, and the cost of production is $0.02, he now can produce heat at $0.03 per kw/h. He will sweap the entire heating market, but he still won’t really challenge the electricity production or automotive markets. Rossi will be earning hundreds of millions per year in royalties. If Rossi simply charges as much as a royalty as is the production costs of the e-cat, the thing will output heat at $0.004 per kw/h. Electricity and rotary energy will be between $0.012 and $0.02 per kw/h. Current world energy consumption is about 150,000,000,000,000 kw/hours. Rossi’s take, about $300 billion per year. As you can see, the more Rossi charges, the less he makes. By charging very little, he will easily become the richest man ever.
- If Rossi over-charges on royalties seriously hampering the development of his technology countries that have little respect for patent law, such as China, and many African nations, will get an incredible economic boost. While this will challenge the first world, it will not particularly slow down the spread or low price tag on e-cat energy.
- Whether Rossi over-charges or not, there will be all manner of exploration into other ways of generating LENR. They will be found, and they will find ways of circumventing Rossi’s patents.
- Patents only have an 18 year lifespan. In the scheme of things, that’s not very much. In fact it’ll take all 18 of those years for the e-cat to become the dominant energy source. After that, Rossi’s royalties will only apply to any patentable improvements he makes on his technology. The royalty he gets from these will be limited to the amount of improvement they make on the “public domain” version (current version) of the e-cat.
2 – What about the price of Nickel? Won’t it go through the roof? Well, not yet. Lets say that tomorrow the world started using e-cats to produce 150,000,000,000,000 kw/hours of energy, enough to maintain our current lifestyle. Well, according to Rossi, 0.00005 pounds of nickel produces 1 kw/h. So the consumption rate of nickel will be about 350,000 tons per year. Current nickel consumption is 1,500,000 tons. So nickel consumption would jump by about 25%. This is hardly enough to freak out the price of nickel. Nickel is one of the most abundant metals. There are significant untapped reserves. We’ll be using A WHOLE LOT more energy before we suffer from significant nickel price increases. That said, by time we have our personal flying machines, by time we each have a greenhouse that grows all of the crops we need with artificial light, by time we have found every way of exploiting this cheap power, we’ll probably get there.
3 – How fast will the price drop? This is the million dollar question. The price will drop under the influence of market forces. I forecast that the per kw/h price will be 50% in two years. It’ll be 10% in 5. It’ll be 1% in 10. My forecast is that the price will bottom out in about 20 years when factors like nickel supply start to take effect. (Please note that weather forecasters aren’t perfect either.)
3 – Why is it worth knowing this? If we don’t have a clear grasp of the market forces, if we don’t have a sense of how the price of the e-cat will drop with time, we will be very poor at predicting the effect of the e-cat on the future. If our predictions are all wrong, our planning for the future will be just as wrong.
Have I got it right? Nope. Have I got it figured closer than you do? Well, that depends on whether you recognize the powers of mass production and the law of supply and demand. If you are sure that I’ve got it wrong, please show me so that my planning for the future can be improved.