So first, I think a prize that could already be awarded is worthless. You disagree, and unfortunately neither of us has the billions to test this proposition.

I wish I could articulate this more effectively, but I’m more skeptical about the notion that simply waving money in front of companies (small or large) will make them commit significant resources (even above and beyond the value of the prize) to try and achieve the target. That’s why I think other technologies that are more mature, but still need significant increases in efficiency or output, may be more responsive to the motivation of prizes.

1) MASS OF FUEL FOR A 1000 MWe (megawatts electric) POWER PLANT. (Note: It would take about five hundred 1000 MWe power plants, running at 90 percent capacity, to produce the average amount of electricity used in the U.S. every year.)

a) Coal: Powder River Basin coal would require 13,000 tons per day. That’s essentially 130 train cars, each holding 100 tons of coal. Every day.

b) Nuclear fission: About 75 kg per day of uranium oxide fuel.

c) Deuterium-deuterium fusion: About 0.7 kg (1.6 pounds) of deuterium (available in approximately 20 cubic meters of sea water).

2) COST OF FUEL FOR A 1000 MWe POWER PLANT

a) Powder River Basin coal = Approximately $200,000/day.

b) Nuclear fission = Approximately $7,400/day.

c) Nuclear fusion = Approximately $4,000/day (present cost, but will probably drop significantly if an industry develops to supply deuterium from sea water).

3) LAND REQUIREMENTS FOR 1000 MWe POWER PLANT

a) Photovoltaic cells = Approximately 120 square kilometers (about 50 square miles).

b) Nuclear fission = Less than 1 square kilometer for the plant, 10 square kilometers including the mining and processing.

c) Nuclear fusion = Less than 1 square kilometer for the plant, no mine necessary.

Final note: The deuterium in 1 cubic kilometer of sea water is equal to the energy content of 300 billion tons of coal (the U.S. consumes about 1 billion tons of coal per year) or 1500 billion barrels of oil (more than all the conventional oil remaining underground that can be extracted at today’s prices). And there are 1.5 BILLION cubic kilometers of sea water.

That is always the case. The more potentially lucrative any potential endeavor is, the more people are interested.

“Your fusion example suggests to me that the technological gap is big enough…”

My fusion example should have suggested absolutely nothing about the technological gap, because I don’t know what the technology gap is. As I pointed out, some people claim to ALREADY have achieved more fusion energy out than energy put in.

http://www.lenr-canr.org/acrobat/SzpakSthermalbeh.pdf

Per my suggested prizes, these people would ALREADY be able to claim a $500 million prize (for excess energy).

The key thing would be that they would have to submit their apparatus to a U.S. federal government testing facility, and that testing facility would have to agree that exess energy (enthalpy) was indeed produced, before they would be able to collect the prize.

If they collected the first $500 million prize, I can virtually guarantee you that hundreds of other researchers would be scrambling to collect the remaining four $500 million prizes. And there would also be a scramble as they and hundreds (or thousands) of others tried to collect the five $1 billion prizes I suggested for generating 10 watts of excess fusion power for one week.

“With technological gaps that big, prizes are empty gestures. This tells me that fusion is the last of the alternative energy technologies that would respond to a prize.”

You don’t know anything about the “technology gap.” As I’ve pointed out (see link above), there are those who claim to have ALREADY generated excess energy.

And if the researchers above–Szpak, Mosier-Boss, Miles, and Fleischmann–collected $500 million, and you still claim that hundreds or thousands of others wouldn’t be jumping in to collect the other four $500 million prizes, or the five $1 billion prizes for generating 10 watts excess for one week…well, your claim simply doesn’t pass the straight face test.

No large company in the world (e.g. General Electric, American Electric Power) would pass up the chance at as much as $1.5 BILLION (if they collected prize categories) for a couple million in research expenditures.

Your arguments for prizes imply that there’s a group of researchers and/or entrepreneurs just itching to do something if only there was some extra financial incentive. Your fusion example suggests to me that the technological gap is big enough that any kind of prize structure is unlikely to spark new entrants into the field.

With technological gaps that big, prizes are empty gestures. This tells me that fusion is the last of the alternative energy technologies that would respond to a prize. Why would a prize sponsor be more interested in the biggest economic advantage if there were other improvements (other technologies) that could give significant advantages faster. Economically speaking, the discount of future rewards would make a smaller boost that happens sooner a better investment than a bigger investment that happens later.

As for boosting the prize pool as a percentage of total R&D funding, I think it should be framed differently. Some kind of assessment that would tell me which prizes are most likely to motivate action (which is not the same as which ones are most likely to pay out) would be a better rationale to boost the dollar amounts than some arbitrary quota.

If fusion can be developed commercially for a capital cost of $2000/kW or less, it will make cellulosic ethanol, photovoltaics, and fission obsolete. So it makes more sense to first offer prizes for fusion, and only if they can’t be collected would it be necessary to offer prizes for any other form of energy.

The solution to prizes for “far-off stuff” is to award smaller prizes for more-easily-achievable near-term goals. For example, I proposed offering 5 prizes of $1 billion each for people who can produce 10 watts of excess fusion power for one week. But as I mentioned, there could be a series of smaller prizes, increasing in size as the ratio of output power to input power approaches breakeven.

“I think prizes are fine, but they are a good complement to current research funding mechanisms, not as a substitute for any of them.”

Well, what would you guess is the current overall money split for federal research in traditional funding versus prizes? My guess is that it’s about 99 percent (or more) traditional funding, and 1 percent (or less) of technology prizes. So even switching to a 90/10 split of traditional research versus technology prizes would be a huge difference. I think such a split, or even 80/20, would be a huge improvement. I think this is particularly true in areas of energy and the environment. For example, here’s the National Renewable Energy Lab’s website for photovoltaics projects:

http://www.nrel.gov/pv/projects.html

My guess is that not a single one of them involves a technology prize.

My concern with the prizes for far-off stuff is I don’t think they provide sufficient incentive. You would disagree. What might persuade me is some suggestion that there are enough researchers/companies around doing complementary work that a million-dollar or more carrot would be sufficient incentive for them to make the adjustment to fusion work. By point of comparison, I think a similarly structured prize structure for solar (with different targets, obviously) stands a better chance of encouraging more activity because there are researches and companies doing work in the area, or close enough to it, that they would put in the effort.

You write, “If fusion gets to a point where it’s about making it produce more energy than it costs (or producing energy that is competitive with other sources of energy), than a prize would make sense.”

It’s interesting that you seem to also come from the exact opposite direction, in that you criticize prizes as being too focused only on things that make money.

But regardless, I agree that the *main* point of funding fusion technology prizes would be to (greatly) speed the day when fusion becomes competitive with other energy technologies.

But that doesn’t mean there couldn’t be prizes even though we’re a long way from breakeven. Let’s specifically take dense plasma focus fusion.

Here’s a paper that says that with a 67 Joule input, they get 36,000 neutrons per shot, and that the maximum neutron energy was about 2.7 million electon-volts (MeV). I’ll spare the math, but I calculate that to be energy-in-to-energy out of about 4.2 billion-to-1.

http://www.iop.org/EJ/abstract/0022-3727/41/20/205215

So, why not have a set of prizes that gives $1 million each to the first 5 parties who get within 1 million-to-1? And then another set of prizes that gives $50 million each to the first 5 parties that get within 1000-to-1? Then give set of prizes of $500 million each to the first 5 parties who get over breakeven?

The total expenditure if every single prize were awarded would be $5 million + $250 million + $2,500 million = $2.755 billion. And if every single prize were awarded, you’d have 5 parties who had achieved breakeven with a fusion device. And let’s suppose that the top prizes were never awarded. Well, there wouldn’t be any breakeven dense plasma focus machines, but the cost would “only” be $255 million. That’s trivial compared to, for example, ethanol subsidies of billions of dollars every year. And dense plasma focus fusion is potentially a good source of neutrons and X-rays, which can have significant benefits in other areas.

Hmmm…as the saying goes, “What we have here is a failure to communicate.”

I’m not suggesting anything nearly so drastic as that. I’m only making the point that engineering/scientific research–particularly related to energy, as I’m very familiar with that field–suffers from the tendency that all the effort is made to obtain the contract to look at the problem. Then the contractor finds out how the problem is more and more difficult, thus requiring more and more money.

Fusion is a very good example. The U.S. and other governments–on advice of the “fusion community”–has chosen the tokamak reactor as the way to go. But I think*** it was clear a long time ago that tokamaks will never become a signficant source of the world’s power. The plasma is simply too difficult to contain.

On the other hand, there are other methods of producing fusion–such as the Farnsworth fusor, dense plasma focus fusion, or even pyroelectric fusion–that have been shown without question to produce fusion reactions. But the problem with the Farnworth fusor, dense plasma focus fusion, and pyroelectric fusion is that they are all many orders of magnitude from generating “breakeven” levels of fusion energy. And by “many orders of magnitude” I mean like factors of a million of even a billion from breakeven. In other words, put in 200 watts, and get out 0.000002 watts of fusion power.

And then there is cold fusion, ala Pons-Fleischmann. Most scientists cold fusion ala Pons-Fleischmann say it doesn’t even exist. And a very small number of scientists insist that not only does it exist, but that it has ALREADY generated more energy out than energy put in.

http://www.lenr-canr.org/acrobat/StormsEhowtoprodu.pdf

Not even a tokamak reactor has ever generated more fusion energy than put in. (The ITER would be the first to do that. A decade from now. At a cost of $10 billion. If it gets built at all.)

So virtually all funding for fusion goes to tokamak reactor fusion, even though it almost certainly won’t generate a significant portion of the world’s energy for the next 5 decades, if ever.

So all I’m advocating is that prizes be set up, on which other forms of fusion could hope to collect. For example, I spitballed five $1 BILLION prizes for generating 10 watts of excess power for one week. That kind of money would certainly get attention!

And if one or all five of those fusion prizes were collected, it would probably be the best chunk of money the federal government has ever spent on energy research.

***P.S. If anyone thinks that tokamaks *will* generate a significant portion (say, greater than 10%) of the world’s energy in the next 50 years, I’d be happy to debate that matter on my blog or elsewhere.

I was suggesting that prizes could only be one really small part of the research policy portfolio, as it only makes sense to help bridge gaps between concept and marketable/profitable device or service. Sometimes the prize encourages the proof of concept, and the market incentives are there, and sometimes the prize encourages the improvement of the proven concept to the point where a market can form around it.

With this particular passage:

[“If fusion gets to a point where it’s about making it produce more energy than it costs (or producing energy that is competitive with other sources of energy), than a prize would make sense.”

No, you’ve got it 180 degrees backwards. If fusion gets to the point where people can see that it will produce energy competitive with other forms of energy, there will be no need for technology prizes. The market will take over.]

My wording was imprecise. I think a prize would only make sense if the challenge was to make fusion produce more energy than it consumes, or if the challenge was to make fusion costs competitive with other forms of energy. Even with a prize, it sounds like the state of the art in fusion is way too far away from either of these points to see a payoff for decades. Promise of a distant payoff seems like a lousy incentive.

Where malaria is concerned, I don’t think any private concern will get involved with it because it’s not worth their money. The market can’t pay enough, which leaves foundations to foot the bill. Then the cost becomes more than the prizes, it’s a guarantee of purchasing the winning product at significant volume (as NASA how fiscally prudent their competitions for space vehicles have been).

Unless the blood bags would have applications that health care systems can turn a profit on, what’s the motivation for companies to make the investment? Given that pharmaceutical companies are already set up to make long term investments in drug research, if they thought there was money in malaria, why haven’t they made the investment?

With the DARPA prizes, you have a more successful version of NASA’s attempts to have firms compete for the right to build something. Yet there is little private sector involvement in the DARPA prizes, so the market is pretty absent here, or at the very least heavily distorted.