
Now THAT’s stimulating!
keywords: batteries, nuclear energy, stimulus spending
Step 1: Borrow 1 trillion dollars
Scary. I was inspired to write this essay because I’m concerned liberal economists like Paul Krugman and Larry Summers will prevail in their effort to convince the President and Congress to increase stimulus spending by trillions of dollars. This plan is my answer to the question “if we’re going to spend like drunken sailors how can we do it in the best way?”
Step 2: Build 50 x 1 Gigawatt nuclear power plants
With $1T we can build 50 plants.
It costs China $1,600/killowatt to build a reactor. We’ll assume it’ll costs 25% more in the US, or about $2B for each. This estimate may be optimistic, because there are suggestions that the real cost is between $6 and $9B in the US. I’m hoping that if we build 50, we’ll leverage an economy of scale to get it down closer to the Chinese cost of $1.6B each.
The construction of each reactor creates 5,000 jobs. And each operating reactor supports 800 permanent jobs. That’s 250,000 temporary and 40,000 permanent jobs total.
These 50 reactors will inject 438,000 Gigawatt hours of power per year into the US electric grid. Current usage is 3,741,000 Gigawatt hours. We’ll have significant extra capacity. What to do with it? See below.

The AP100, the world’s most popular nuclear power plant design. Designed by Westinghouse and now being constructed in the US and China.
Step 3: Cost-neutral operation
Electric companies operate at about 10% net margin. I’ll assume we can get that to 50% or better because a large component of their cost is the investment in their generating facilities. The plan is to sell half of the electricity at market rates (about $0.10/kwh), and distribute the other half for free for targeted uses. More on that below.
This will provide about $22B/year to operate the 50 plants.
Step 4: Create a national standard and infrastructure for car battery exchange
This might seem like a non-sequitir because we were just talking about nuclear power. But bear with me…
Back to batteries: The problem with electric cars is that you can’t really drive anywhere with them. They can go maybe 100 miles before needing a recharge. Drivers of these cars are always concerned about how many miles they have left. And it takes overnight to complete a charge. Also electric cars are really expensive, fortunately there are companies willing to help people to get the car of their dreams by getting complete auto loans.
What if we had a national network of “filling stations” but instead of gas, they had batteries? It would work something like the way you trade out an empty tank to fuel your grill. They’d take out your discharged battery and replace it with one that is fully charged.
This will mean people won’t have to be nervous about running out of power while on a longer trip.
There are other implications as well: The long term costs and logistics of maintaining and replacing them when they get old will be transferred to these “gas” stations (just like the propane tank companies recharge and replace empty tanks). The big win for the car owner, is that as batteries become lighter and more efficient, these batteries will find their way into this new economy. Car owners won’t have to pay a hefty price to replace them in their car.
This new economy in batteries will drive innovation in power density and cost.
Step 4: Offer free electricity to electric car owners
This is the kicker. That’s right, make the cost of powering an electric car ZERO. The electricity will come from the spare capacity of our 50 nuclear power plants.
What will happen
The demand for electric cars will skyrocket. After all who wouldn’t want “free gas.” This demand will drive the quality of electric cars up, and the cost down. It will create hundreds of thousands of new jobs in manufacturing. The number of fossil fuel driven cars on the road will decrease and carbon emissions will drop.
If we have to spend a trillion dollars in stimulus, that’s how I’d do it.
Can it really work?
I think so, but it would require a political miracle to pull off. In the end even if we can’t make this work I hope this crazy idea might get some others thinking too. How would you spend a trillion dollars?
One last thought: What if we spent $10 trillion?
As long as we’re spending like a drunken sailor: What if we built 500 nuclear power plants instead of only 50? This might be going a bit too far, but here’s what could happen:
- 100% of our nation’s electricity would be supplied by nuclear power
- No coal, no foreign oil (for electricity anyways)
- Carbon emissions… zero
- We’d be able to power a significant portion of our transportation infrastructure with electricity and the rest with much less expensive oil (less expensive because of the lower demand)
Some references:
- The cost of electricity
- Electricity consumption by country
- List of nuclear reactors
- Cost of building a reactor
- The most popular nuclear plant design
Disclosure
Tucker Balch loves gas guzzling muscle cars.
James P.G. Sterbenz
June 5, 2012
How about serious high-speed rail infrastructure, at least where it would trump air? 500 km/h would beat air on the west coast, northeast corridor, and midwest (Omaha, Kansas City, St. Louis, Chicago, Milwaukee, Minneapolis.), and possibly southeast (Raleigh, Atlanta, Orlando, Miami)
Tucker Balch
June 5, 2012
Maybe, but I’m worried about spending that results in infrastructure we have to spend more money to support: Amtrak, more government workers, new entitlements. I’d like “investments” that return value or synergies with the economy.
Jack
June 6, 2012
Tucker–can’t tell if you’re being serious; however if you are, how does this boost revenue to pay off the borrowing?
The first step sounds suspiciously like Steve Martin’s old schtick: “You can be a millionaire and never pay taxes. Here’s how: First, get a million dollars. Then, when the tax collector comes to your door and asks why you didn’t pay taxes, just say, ‘I forgot’. “
Tucker Balch
June 6, 2012
This plan does not boost revenue other than by the taxes assessed on the people and businesses to benefit. An alternative plan is to skip the “free electricity” component, and instead charge for the electricity and use that to repay the debt. I’m honestly not sure which is the better alternative.
Mark
October 19, 2012
Your figure of 50 power plants is off by a factor of 10. 1 trillion / 2 billion = 500.