The Economics of Power Transmission

            When electrical energy is obtained from a fuel, it is possible to either transmit that energy electrically or to ship the fuel to a power plant located near the user of that electricity.  Because power losses occur when transmitting electricity over long distances, it has usually been more economical to transmit bulk fuel to the power plant than to transmit the equivalent energy electrically.  When the electricity is produced by hydro-electric dams or ocean currents, that electrical energy must be transmitted electrically through wires.

            The amount of electricity that can be transmitted by a power line is proportional to the product of the voltage and the current (amperes).  Because the energy loss in the transmission lines is proportional to the square of the current, if the voltage is increased, the current and the energy loss will be decreased for the same amount of power being transmitted.  The choice of transmission voltage is primarily economic, depending on the energy to be transmitted and the distances involved.  Presently the interstate grid system uses 500,000 volts and there are some systems that go as high as 765,000 volts that use large diameter aluminum conductors.  With very high voltages, it is possible to transmit electricity distances of more than 1,000 miles.  And the lower the costs of the electricity being generated by the Gulf Stream Turbines, the further the Gulf Stream Turbines’ power can be economically transmitted. 

The most economical transmission of electric power is obtained when the annual charges for the transmission lines (interest, depreciation, taxes, etc.) are equal to the annual cost of the energy lost in the transmission.  Though the cost of that electricity produced by the Gulf Stream Turbines will remain low the costs of that power that will be produced by burning oil and natural gas will increase greatly.  Therefore, even if a larger percentage of that power produced by the Gulf Stream were lost in transmission, the costs of that power delivered to the distant users can still be much less than that power produced by burning oil or natural gas in nearby plants.  Because the per kilowatt-hour costs for that power produced by the Gulf Stream Turbines will drop to virtually zero after the systems is amortized, it will become increasingly economical to transmit that power much greater distances, as the costs of operating the fossil-fuel plants increase.