Exponential Growth == Good!

One of the pet things that excite me every day is the possibility of exponential growth from renewable power sources. This isn’t because I’m a hippy trying to save the planet, it’s because the more I do the numbers, the more it just makes good economic sense. (I’m simply a frustrated entrepreneur at heart one of my good friends told me. Lots of idea, not enough capital and time to implement them all.)

Specifically Wind/Solar/Geothermal Power sources. High upfront cost, yes, but low maintenance cost. You don’t need to buy wind to power a wind plant, you do need to pay for coal to power a coal plant. From the perspective of exponential growth, as long as I make more than it costs year to year, window/tidal/solar is an obvious long-term business plan.

Let me explain. Let’s go with wind power. The first one will cost and likely not make me much within the first year. Say 10 Mil for the first windmill.

Short of minimal maintenance we get most of the capital from selling to the grid. Back of envelope calculation, I’m guessing about 4-6 mil per year. So this means approximately every 2 years, we can double the number of windmills and pay interest/dividends on initial investment. So in 10 years, we could, in theory, have 2^5 = 32 windmills, and in 20 years, have over a thousand of them.

But where can we build this massive bounty of windmills successfully without large land costs, problems with low wind speeds, good location near the grid, or people complaining about their “views.”

I’ve thought hard about this, and realized that perhaps if we build up near Churchill, where no one lives, there’s tons of cheap land and if you look at the following map, lots of high wind locations.

Mean Annual Wind Velocity at 50M above ground.

Ok, that’s great.  How far are we from the main power grid, or at very least a powerline that feeds into the main powergrid up there. Well, let’s take a lot at the next map.

Generating Stations and Power Lines, Manitoba

Beautiful, what can you see there, in the vast empty spaces of the north of Manitoba… A beautiful 500kV powerline directly into the heart of where we want to build this exponentially growing wind farm.

So, we have cheap land, easy access to the largest power grid in northwestern America, and great wind resources… What is the last problem we need to resolve.

Well, as anyone who reads newspapers in Ontario is used to seeing around windmills, there’s the inevitable NIMBYism. (Not in my Backyard), by people who think these beautiful pieces of modern architecture will somehow destroy their great view of trees and rocks.

Well, let’s look at this map of population density in Canada.

Population Density in Canada from 2002

What do you notice around the Hudson Bay, particularly near where Churchill is.

There is almost no one living there. Ie. There is very little change for NIMBYism, and the few people who are there will likely be very happy to have the oil-sands level windfalls from jobs and capital due to the power production.

Note, this is all back of envelope, but doesn’t this sound like a great business plan to you? Up there with the original business of Hudson’s Bay when they built York Factory and started the creation of a business that has prospered and lasted for over 300 years.

Yes, because we are only starting with 1 windmill, it will take a while to get up to scale, but exponential growth is exponential growth. Given 10 iterations, we would be at 1024 windmills, 20 iterations, and we’d likely be generating enough power for the entire northeast corridor simply from wind… Then with that cheap energy, the real fun begins for Canada and Canadian manufacturing. 😉

Pretty exciting, eh?

KJR

ps. I would love to take this, put it into a business plan, get the capital and start building. However, I need an engineer to help me out with the technical parts. Perhaps if I could nail this down, the BDC or someone with some real capital would be interested in this long term plan.

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