Another price-related issue is pricing to create a market for SPS power. Since the availability of SPS electricity will be virtually uninterrupted, there will be incentives to marginal price output in order to assure a full market or load factor. The question of peak and off-peak pricing policy is also important to industrial location. To this point, we have stressed industrial energy requirements, but U.S. balance of payments problems are transportation (i.e., oil) related. Transportation demand is very uniform throughout the year (if not the day). Electric cars could store SPS energy in off-peak hours at low marginal cost and then operate on it during the day. It may also be possible to use SPS electricity to create hydrogen from water for hydrogen-powered vehicles. These alternatives have the desirability of leveling average daily transportation energy demand which can be further smoothed out by pricing to encourage storage. Hydrogen could also be generated and stored in tanks, like other liquid or gaseous fuels, when no other demand existed. The fuel could be sold out at a later date and could be priced to sell when tanks are full in a manner analogous to present-day oil storage. This form of storage could smooth out seasonal effects. The possibility also exists for storing fuel for space-powered vehicles. Another electrical-energy-related issue is the distribution of SPS electricity through the national power grid. Many different strategies could be employed to distribute the power. These include: competitive bids (thus eliminating the marginal cost-pricing possibility); first-come, first-serve, on the basis of regional economic development plans set forth by the federal government and many others. The distribution of SPS outputs is critical to the location of industry. As noted earlier, transportation costs and availability are considered by many theorists as the key factors influencing industrial location. Some industries that incur high transportation costs in moving their product may not be induced to relocate to a rectenna site regardless of the price of energy. Conventional (open hearth or basic oxygen furnace) steel production would fall Into this category and any bulky material industry is likely to be precluded from relocation to cheap energy. For example, while fuel and electrical costs are 50-55% of the total production costs for Portland cement, transportability of the product will be the prime determinant of manufacturers’ location.
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