Any time you transform energy from one form to another, it is "lossy". Petrol engines lose about 75% of their energy (not counting all the energy it takes to extract it from the earth and get it into the car). By contrast, pumped-storage hydroelectricity results in only about 25% lost energy overall, making it incredibly efficient. 
Your claim that a 40% increase in power cost would "destroy the economy" represented an unsubstantiated opinion that flies in the face of empirical evidence. The economy, for instance, relies heavily on petrol and the real cost of a liter of petrol has doubled in the US over the past 20 years but the US GDP per capita has increased.
Meanwhile, the real cost of household electricity has been almost cut in half since 1960. It seems pretty unlikely that a less than 40% increase in electricity per watthour phased in over decades would "destroy the economy" when the real cost of electricity was nearly 100% more decades ago and the economy did just fine.
The economy adapts to fluctuations in the cost of goods and services.
"Energy storage - Packing some power". The Economist. 3 March 2011.