Table 4.11 Capital Cost Ranges for Technical and Regulatory Uncertainty ($/kW) Possible future scenarios (described in Sec. 4.1) were defined by assuming certain values for key unknown parameters and by following an internally consistent computational pathway. Reasonable boundary assumptions were made concerning the key unknowns, which established the range of values within which most plausible futures will fall. The long-run costs of fuel (primary energy) are, in part, predicated on OPEC maintaining petroleum prices just below the long-run costs of producing substitutes from oil shale or coal. The cost of synthetic natural gas from coal was projected from a non-fuel cost of $3.17/10$ Btu plus 1.25 times the cost of coal per 10$ Btu (to allow for the 80% efficiency estimated for the gasification process) plus an assumed $0.97/10$ Btu for transmission and distribution. Similarly, the long-run cost of natural gas was determined to be equivalent to its alternative — high-Btu gas from coal. Finally, the long-run cost of electricity was based on non-fuel capital costs for the projected coal/nuclear ratios, assuming generation from oil and natural gas phased out and modest improvements in conversion efficiency between now and 2030. Fuel Price Paths. The long-run costs dictate the price of electricity, but the cost of other energy forms can differ when there are supply constraints. Oil prices are estimated to increase at a rate that maintains OPEC production more or less at constant levels, and, at a relatively inelastic demand, OPEC could seek increased prices because of constraints on coal and oil shale. However, if the price should reach $9.20 per 10$ Btu, it is estimated that large quantities of low-level solar thermal energy could become economically attractive,^ free of the environmental constraints affecting the development of other resources. Natural gas prices essentially follow the pattern of oil prices and are set so that remaining resources are produced before higher-co'st gas from coal or substitutes such as solar enter the market. In scenarios featuring low elasticities (energy-intensive GNP), the rate of price increases is high, and particularly so when supply constraints affect coal production. The price of coal is expected to increase from $1.15 to $1.38/10$ Btu between 1980 and 1985 because of impacts from the Surface Mine Control and Reclamation Act of 1977 and the possible continuation of decline in
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