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<div style="font-family:arial,helvetica;font-size:10pt;color:black">-----Original Message-----<br>
From: Rafal Smigrodzki <rafal.smigrodzki@gmail.com><tt><br>
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</xml><![endif]--><pre style="background:white"><tt><span style="color:black">On Sat, Dec 22, 2012 at 7:57 PM,<span style="mso-spacerun: yes"> </span><<a href="mailto:ablainey@aol.com">ablainey@aol.com</a>> wrote:</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">>> How is producing your own energy going to create debt?</span></tt></pre><pre style="background:white"><tt><span style="color:black">></span></tt></pre><pre style="background:white"><tt><span style="color:black">>### Producing your "own" energy in a social setting always requires</span></tt></pre><pre style="background:white"><tt><span style="color:black">>resources that have to be obtained from others - solar panels,</span></tt></pre><pre style="background:white"><tt><span style="color:black">>fertilizer for corn, land titles, mineral rights, uranium, whatever.</span></tt></pre><pre style="background:white"><tt><span style="color:black">>So before you produce energy you always have to incur a debt or a >loss</span></tt></pre><pre style="background:white"><tt><span style="color:black">>to your current asset balance sheet.</span></tt></pre><pre style="background:white"><tt><span style="color:black">></span></tt></pre><pre style="background:white"><tt><span style="color:black">>If you use more purchased resources on making this energy than it is</span></tt></pre><pre style="background:white"><tt><span style="color:black">>worth to others, you will not be able to pay off the debt incurred to</span></tt></pre><pre style="background:white"><tt><span style="color:black">>generate energy.</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><b><span style="color:black">Here I was talking in terms of National debt. Creation of energy currency does not create a national debt like printed money does. The current fiscal cliff is an artifact of todays debt based system and there is no real way to pay off the debt apart from sign over most private assets to the central bank.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Yes in an energy economy is perfectly possible to incur private debt. As said these can be paid back with future energy generation, or you could go out to work for more kWh. Not everyone will be generating although it would be an obvious source of income.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">But where today the risk of not being paid by the debtor lies in his ability to work profitably and decide to send the cheque. Instead the risk will only be that his generation equipment is destroyed before it repays you. A far lower risk and something that could easily be covered by insurance. Additionally if your debt is secured against his generation equipment rather than him personally (although he will have liability) if he dies, you still get paid.</span></b></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">>As Mirco pointed out, if others are more efficient in producing</span></tt></pre><pre style="background:white"><tt><span style="color:black">>energy (e.g. they are using a coal power plant while you are using</span></tt></pre><pre style="background:white"><tt><span style="color:black">>solar cells), the price of resources expressed in a standardized</span></tt></pre><pre style="background:white"><tt><span style="color:black">>deliverable of energy will be high.</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><b><span style="color:black">However the perception of the situation is different. The energy used to make a loaf of bread is constant if the method remains the same. It takes the same amount of light for grow wheat, same amount to mill flour, to bake the loaf. The currency unit is constant, the kWh. A loaf today has the same energy input as a loaf in 10 years time.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">The only way to increase profitability is to increase efficiency in the production process. So a loaf in 10 years time is identical but takes far less energy to produce.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Now think of that in terms of market competition. Today I could raise the price of a loaf to infinity. The only thing stopping me is my competition. However over time competitors do edge up their prices to increase profit. There is no theoretical limit to this apart from it becoming so expensive that people start to produce their own bread, grow their own wheat etc.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">As such the high limit is actually the energy cost for a consumer for producing a loaf. </span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Now compare to an energy economy where only efficiency can vary. The theoretical maximum profit can only be realised by attaining efficiency of 100%. </span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">You cannot go beyond 100% efficiency or your are entering the realms of overunity. So again it is the energy involved in the system that dictates the limit.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Both high and low limits or each system are static values and measured in units of energy. </span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Doesn’t it make more sense to opt for the system where efficiency is the most profitable and the price of an essential item is virtually static over time?</span></b></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">>For example, making a solar cell takes a lot of human effort and</span></tt></pre><pre style="background:white"><tt><span style="color:black">>various material and immaterial resources (research, capital costs,</span></tt></pre><pre style="background:white"><tt><span style="color:black">>electricity, chemicals, accounting, plant security, janitorial staff</span></tt></pre><pre style="background:white"><tt><span style="color:black">>etc, etc) per unit of energy generated from cells. But generating</span></tt></pre><pre style="background:white"><tt><span style="color:black">>energy from coal takes very little effort per unit of energy. A coal</span></tt></pre><pre style="background:white"><tt><span style="color:black">>plant will be able to pay a janitor many joules per hour. The solar</span></tt></pre><pre style="background:white"><tt><span style="color:black">>cell producer will have to match that salary - and this high salary</span></tt></pre><pre style="background:white"><tt><span style="color:black">>(as expressed in joules) will have to be included in the prices</span></tt></pre><pre style="background:white"><tt><span style="color:black">>charged to you for buying the solar cells. The price of solar cells >in</span></tt></pre><pre style="background:white"><tt><span style="color:black">>joules will be high in relationship to the number of joules you can</span></tt></pre><pre style="background:white"><tt><span style="color:black">>generate from them.</span></tt></pre><pre style="background:white"><tt><span style="color:black">></span></tt></pre><pre style="background:white"><tt><span style="color:black">>So as long as you buy more of other people's work effort per joule >of</span></tt></pre><pre style="background:white"><tt><span style="color:black">>"your" energy generated than this energy is worth to them, you will</span></tt></pre><pre style="background:white"><tt><span style="color:black">>have to go in debt to finance your enterprise.</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">-------------------------</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">>> You simply allocate the energy units to the creditor when you do generate</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> it. I could do that right now as the infrastructure already exists. I have a</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> grid tie solar setup, a feed in tarrif and a bank account. Currently the</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> meter reads in kWh, that is converted and I am paid for generation in £ and</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> then my creditors take payment in £. There is no real reason why the kWh</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> need to be converted during the process. They already have a guarenteed 25</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> year fixed monetary value per unit. I could in theory set up a loan today</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> using future energy generation as a guarantee. Then use that loan to put</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> more panels on the roof or improve the efficiency of the system. thus</span></tt></pre><pre style="background:white"><tt><span style="color:black">>> increasing my income.</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">>### Ah, now I understand where you are coming from - you stand to >gain</span></tt></pre><pre style="background:white"><tt><span style="color:black">>from forcing others to buy your electricity, at an inflated price >they</span></tt></pre><pre style="background:white"><tt><span style="color:black">>would never pay voluntarily.</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><span style="color:black">Rafal</span></tt></pre><pre style="background:white"><tt><span style="color:black"> </span></tt></pre><pre style="background:white"><tt><b><span style="color:black">Yes I do personally stand to gain but I am already gaining. The system is already there in all but name and my solar kWh is worth the same as any other kWh on the market.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Again you are perceiving the value in terms of todays money. The value of a kWh produced by low efficiency solar has exact equal value to a kWh produced by a coal fired station. </span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Who has paid the cost here? You seem to think the consumer will pay and that I am forcing them to by expensive energy.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">However It would actually be me paying with my inefficient setup. I have outlayed more on equipment and will take much longer to recoup that cost. So it is me that is driven to invest in more efficiency in order to improve my profit.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">However the long term view for the coal power station is not good. They also need to convert to some renewable source before the fossil fuel runs out. So even though their profits are greater today, they will still be chasing the same future technology as me. This is already the case in the energy industry where oil companies are now providing renewables.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">So both will be investing in the solar cell manufacturers and the Janitor there will be getting a good wage.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">It already happening. That janitor *is* being paid and the solar cell company is making a profit despite their product being far less efficient. Manly because people can’t put a coal power plant on their roof. So they must generally use renewables for micro generation.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black"> </span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black">Having a currency unit that doesn’t inflate due to its nature being a fixed immutable unit if energy means that the janitor can receive a minimum wage and won’t have his buying power eroded over time. In fact the opposite should be true over the long term. A loaf of bread will become cheaper in energy terms to produce and if the only way bread producers can outdo the competition is by lowering price. Then the janitor will get cheaper bread. As it should be in a developing world.</span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black"> </span></b></tt></pre><pre style="background:white"><tt><b><span style="color:black"> </span></b></tt></pre><br>
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