There has been some discussion on a previous thread regarding the costs of electrical power based on numbers that Andrea Rossi has quoted (2000 Euros per kW). One of those who has participated in the discussion asked Rossi directly on his site today about the issue:
“You have quoted a capital cost of Euro 2000 / kW (electrical) installed generating capacity. Over, say, a five year payback and a 50% utilisation, this would give a finance cost of about 12 cents / kW-hr energy cost, which is not competitive with coal-fired generation at 6-8 cents / kW-hr. Do you expect the cost of your units to fall significantly as production ramps up?”
“The life expectance of the E-Cat is 20 years. In any case, surely the economy scale will lower the price also of an order of magnitude.”
Presumably Rossi cited the life expectancy of the E-Cat to show that maintenance costs would be low compared to traditional power plant equipment, although he doesn’t say that specifically. But his point about economies of scale is important to keep in mind. From all that has been revealed, the raw materials involved in creating the E-Cat and its fuel are common and inexpensive. Like any new technology, the first iterations are always the most expensive, and if this technology goes into mass production then we can expect the cost to go down significantly. If we take Rossi literally, then an order of magnitude would take his costs down to 200 Euros per KW — which would beat any other known electrical generation technology hands down.
How long it would take to reduce costs that far are unknown (if he could do it at all), but Rossi seems to be expecting his invention will cheap enough to be able to become the dominant means of electrical generation at some point in the future.