The current energy production industry, characterized by fossil fuels and nuclear fission will soon be challenged by the E-Cat motor that will produce green, low cost energy. But how competitive this new source is and how will in affect the way we produce energy nowadays?
We can learn how innovation influences the established methods by looking at the process of replacing canals by railways in 183os England.
Since 1750s, British started building a complex canal system of 4000 miles on an area of 500 per 200 miles. All their activities were supervised by parliament and their tariffs were fixed by law. As a affordable, safe and easy means of transport, canals had both a legal and natural monopoly.
They influenced greatly the economy and especially the coal industry. Once the canals were built, the coal price dropped to 50% in towns and 20% at the canal pier, not farther than 5 miles from the town.
But in 1850s, the railroads started to be built, covering and extending the existing canal network. The railway companies started acquiring the canals in order to benefit from their monopoly position and their land. This brutal invasion of the railroads did not get the canals out of business, but caused them to adjust their tariffs by 90%. This way, it was easier for the railway companies to compete with the canals, even if extending the system involved investments in infrastructure.
As a parallel, introducing the E-Cat motor might not cause the common energy sources to go out of business immediately, but depending on its cost efficiency, the process of replacing them might be shorter or longer.
Let’s have a look at the potential competitors.
Nuclear energy is an industry that implies large expenses due to operations, ecological factors and radioactive waste disposal. Trying to adapt to the new price requirements will enforce this industry to drop its price. And a 50% fall would not be feasible, so the nuclear energy will become unprofitable.
Coal also requires operational and environmental regulations compliance expenses that are both fixed costs, very difficult to decrease. The coal industry will, most likely, lower its price and its market share.
As for petrol, it is the only real competition for the E-Cat motor. Considering the fact that over 80% of its price is pure profit for the oil companies, this industry will find it easy to adjust to the new price of the market. It will have to lower its tariff, but until the price reaches the extraction cost, it will still be a competitor for the E-Cat.
Concluding, depending on E-Cat’s cost efficiency, the common energy sources might be replaced by the cold fusion energy in as little as 2 years, considering that the minimum, extraction cost of oil is still higher than the cost of operating the E-Cat motor.
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