Propane vs Electric vs Oil vs... for heating home

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Propane vs Electric vs Oil vs... for heating home

Postby statsguy » Wed Jun 20, 2012 3:04 pm

I am considering several homes for purchase and they all have different heating systems

Heat Pump - electic
This is the system we are most familiar with.

Electric base board heaters
Most expensive I think

Propane/Bottled Gas
I figured this would be the most expensive but it appears to be reasonable actually.

Heating Oil
Similar to Propane

We plan to heat with a wood stove (pellets) as we have done this in the past.

Any suggestions on what to avoid or what to prefer?

Stats
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Fletch » Wed Jun 20, 2012 3:25 pm

In order to make a comparison of ongoing heating costs you would need the cost/therm for each "fuel" and the efficiency of the heating unit and how well the home is insulated (heat loss survey) in order to do the calculation. Costs vary widely across the country and vary with time. You also may choose to look at the typical life of each type system and how much it would cost to replace it. In my experience with four homes (natural gas and propane central heat, electric central air conditioner) natural gas is the cheapest; but my daughter lives in the Pacific northwest where electricity is only about 3 cents/kwh and it is the cheapest.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby dpc » Wed Jun 20, 2012 3:59 pm

This will depend a lot on the climate you are in and the relative cost of electricity. In terms of efficiency, the heat pump is probably most efficiency down to about 35 deg F or so. When the ambient temp drops too low, auxiliary resistance heaters kick in and these are not very efficient. If the house is in So Cal, this probably doesn't matter, but if it is northern Minn, it could be a factor. Of course, with a heat pump, you also get air conditioning as part of the package.

I'd stay way far away from heating oil, if possible, due to wide variability in cost, potential for leaks and soil contamination, and overall PITA.

Baseboard heaters are inefficient, but cheap and easy to maintain.

Propane is a reasonable option if natural gas is not available.

Most states have some type of energy or conservation resource available to consumers, or they force the investor-owned utilities to provide this service. You might want to check this out.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Wed Jun 20, 2012 4:46 pm

dpc wrote:I'd stay way far away from heating oil, if possible, due to wide variability in cost, potential for leaks and soil contamination, and overall PITA.
...
Propane is a reasonable option if natural gas is not available.

IMO, propane and oil are roughly equivalent as home heating fuels. They're usually priced about the same, largely because they're considered substitutes and because propane is a byproduct of refining oil. Natural gas is the clear winner right now for home heating, if it's available. Otherwise, oil or propane are about a wash. If one source has a much better supply chain in your region, I'd prefer that one. Otherwise, if both are widely available, I'd consider it a non-factor in terms of a purchase decision.

As far as hassle and safety, oil can leak and propane explodes. Both are bad. Fortunately neither is very likely as long as you do regular maintenance. Horror stories of soil contamination from oil leaks are mostly associated with buried oil tanks, which aren't used often anymore, at least for residences. If you are considering a home with a buried oil tank, this is a huge cause for concern and I wouldn't touch the deal without expert guidance. OTOH, if the oil tank is in the basement where it can be inspected annually, It's unlikely you'll have to deal with a serious leak. There are literally millions of these things in most everyone's basement here in the northeast (at least where natural gas isn't available). The industry seems to have a pretty good handle on the lifecycle of the tanks and the warning signs of possible trouble ahead.

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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Wed Jun 20, 2012 5:04 pm

statsguy wrote:I am considering several homes for purchase and they all have different heating systems

Heat Pump - electic
This is the system we are most familiar with.


Unless your electricity is wildly expensive (Connecticut, California). Coefficient of Performance on Air Source Heat Pumps (AHSP) runs to 3.0 and some can run higher than that. For every kwhr of electricity you spend you get 3 kwhr heat.

Now other poster is saying 35F less efficient, I have heard numbers down to 10F before the electric bar cuts in. So in very cold winter climates, not such a good idea.

Note this will also cover your summer AC needs (assuming you use forced air heating/ cooling).

It's a much bigger expense to get a 'geothermal' (Ground Source) Heat Pump. They can run COPs over 4.0 and they work in all temperatures. But you need either a vertical bore or a long trench. In rural Ontario (south of Lake Huron) a relative, sitting on a ridge with no cover, uses GSHP successfully in winter (down to -30F) and summer (up to 95F or 100F on a really bad day). Payback was about 7 years. Note there are (or were) in the US grants for these things.

They only work well in well insulated houses: the COP is driven by the gap between the incoming temperature (say about 50F) and the temperature it has to reach, the higher the lower the COP.

Electric base board heaters
Most expensive I think


Yes that's also how an electric hot water heater works, and the bar backup on an ASHP.

Average US electricity is c. 10.5 cents/kwhr. 3466 BTUs in 1 kwhr.

Propane/Bottled Gas
I figured this would be the most expensive but it appears to be reasonable actually.


Price tends to move around with the oil price, but per unit energy a discount.

Heating Oil
Similar to Propane


It's an uggh for so many reasons. Probably similar in expense (the US Energy Information Agency does publish stats on propane and heating oil prices if you search their website). Not as clean. In the NE USA there's a lot of it. Try to get a big enough tank to buy in the lows, typically in the summer (the dealers need to clear out the inventory rather than finance it) and of course the times when the snow is bad enough to stop deliveries.

We plan to heat with a wood stove (pellets) as we have done this in the past.

Any suggestions on what to avoid or what to prefer?

Stats


GSHP as above but ASHP is your most likely bet. Get an Energy Star one (max efficiency). Consumer Reports may have recommendations.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Wed Jun 20, 2012 5:06 pm

Fletch wrote:In order to make a comparison of ongoing heating costs you would need the cost/therm for each "fuel" and the efficiency of the heating unit and how well the home is insulated (heat loss survey) in order to do the calculation. Costs vary widely across the country and vary with time. You also may choose to look at the typical life of each type system and how much it would cost to replace it. In my experience with four homes (natural gas and propane central heat, electric central air conditioner) natural gas is the cheapest; but my daughter lives in the Pacific northwest where electricity is only about 3 cents/kwh and it is the cheapest.


If you have natural gas it is almost surely the cheapest. A modern furnace runs c. 90% efficiency so basically the price per kwhr is usually much cheaper than electricity even from an efficient heat pump (US electricity prices, consumer, average about 10.5 cents/ kwhr I believe, say in some of the Southern States 6-7 cents. I wasn't aware US retail electricity prices could still be as low as 3 c, even in the NW- -that is getting down to the Transmission & Distribution charge (ie the line cost)).
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Re: Propane vs Electric vs Oil vs... for heating home

Postby MathWizard » Wed Jun 20, 2012 7:14 pm

If you already have a heat source, and want to go with electric or heatpump+electric
investigate options for a dual fuel uninterruptible electric rates, where the
utility has the option of turning your electricity off if needed. They will only do this if
you have a secondary heat source that does not need electricity.

This can drop your cost of electric heat below propane, when it is usually the other way around.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Higman » Wed Jun 20, 2012 7:44 pm

In my area many of the new homes that use propane had underground tanks installed. This presents a problem when shopping for the best spot price. Only the company that “owns” the tank can deliver propane to it. This is for “safety” reasons. The tank owners’ propane prices tend to be higher.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Ilovevolleyball » Wed Jun 20, 2012 7:54 pm

Stats,

I really like my ductless heat pump daiken quatternity something or other. Heats and also works as AC. This is something to really consider... When it is hot you can only take off so many clothes.... When it is cold you can at least put on more layers.

Our situation. Small home 720 sq feet and mild winters mild summers. When had baseboard heating our electric bill was 90. Previous folks to own house had 180 bill now this is for just one month. After the heat pump worst bill was $55, we do have solar panels but in the winter they don't really produce that much so bill may have been $60. Now these numbers not taking into account that price for electricity has gone up and these numbers are over 3 separate years.

Another factor is that we added insulation in crawl space and attic and sealed up cracks...

Another thing for you to consider is cost to get service to your house. $10 a month just to have gas service, and while gas is more efficient, for our small house that $10 monthly would negate the savings. And add to that having to switch to a gas dryer and gas stove, gas water heater..... (*edit, not counting in cost to get gas to home, you may have to pay for that but, where I am the gas company will instal line to home if get so many gas appl, I think) if you are leaning towards gas than I would recommend you get all of these appl as well so as to save $ on monthly bill. Just electric my house and not counting solar 18KWH a day average first year, on 3rd year expect 12KWH a day... not counting solar. But, I am an energy conservation wacko.

Anyway, gas is so much more efficient checking out water heater yearly cost to run per year in gas and electric. gas 40 gal range $273 -314 elect 40 gal range $492-531 (and gas produces a lot more hotwater per hour electric much, much slower so probably not apples to apples, but you can look into that on your own looking at First Hour Rating or FHR.)

I believe something like 55% of elect power is generated using gas and lot of electricity is lost in transmition so .... check with your elect company. I am no expert but assume that price of elect may rise not so dissimalarly to that of gas.

If can go with heat pump I would for AC. If go gas, go all the way that is my advice. Check with your local gas company, electric company for incentives and information as well. See what incentives at state and fed level, not sure but worth looking into...

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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Wed Jun 20, 2012 8:23 pm

Higman wrote:In my area many of the new homes that use propane had underground tanks installed. This presents a problem when shopping for the best spot price. Only the company that “owns” the tank can deliver propane to it. This is for “safety” reasons. The tank owners’ propane prices tend to be higher.

I don't know about the specific deal with your underground tank, but I bet you are free to contract with someone else to install a tank. The tank probably cost several hundred or more to install, so the tank owner wants to make up that cost by charging you a higher rate for propane.

I only use propane for cooking and one year my propane company instituted a $75 annual service fee on my account. They said it was to cover their costs since I was only using 10-12 gallons a year and that wasn't enough to offset their cost of providing me a free tank.

I shopped around and instead paid another company $350 to install a 28 gal above ground tank. The old company came on the same day to remove their tank (no charge to me). Since I own the tank now, I pay a lower price per gallon and could shop around if I wanted. Also, I avoided that $75 a year service fee.

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Re: Propane vs Electric vs Oil vs... for heating home

Postby statsguy » Wed Jun 20, 2012 8:52 pm

Thanks for the info. We are looking at homes in Northern Virginia so the winter temps drop below 35F. The houses run from 2000 to 3000 square feet.

Also, I am more curious about what to expect for heating costs, rather than basing the choice of which house to buy on this. It sounds like all the heating sources are similar. We live in California now and have solar, our electric bill has been under $900/year (averaging less than $75/month) for a decade so I am a little out-of-date on how much to expect.

Thanks again. As I do more research will post back with new info

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Re: Propane vs Electric vs Oil vs... for heating home

Postby Ilovevolleyball » Wed Jun 20, 2012 10:16 pm

-4F My heatpump works to that temp. Coldest we had was 15F and we have baseboards if breaks or doesn't work.


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Re: Propane vs Electric vs Oil vs... for heating home

Postby rfburns » Wed Jun 20, 2012 11:12 pm

Propane. Then you could upgrade later with a heat pump and have a dual fuel heating system.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby MathWizard » Thu Jun 21, 2012 11:59 am

statsguy wrote:Thanks for the info. We are looking at homes in Northern Virginia so the winter temps drop below 35F. The houses run from 2000 to 3000 square feet.

Also, I am more curious about what to expect for heating costs, rather than basing the choice of which house to buy on this. It sounds like all the heating sources are similar. We live in California now and have solar, our electric bill has been under $900/year (averaging less than $75/month) for a decade so I am a little out-of-date on how much to expect.

Thanks again. As I do more research will post back with new info

Stats


At least for utility supplied houses (nat. gas, elec.) you can call and ask for a budget billing amount for
that address. This will give you an idea of the heating cost in that area.
Search a state's Universities extension website (preferably Virginia's) to compare various options.

E.g. http://extension.oregonstate.edu/catalo ... 1628-e.pdf
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Re: Propane vs Electric vs Oil vs... for heating home

Postby NHRATA01 » Thu Jun 21, 2012 12:09 pm

statsguy wrote:Thanks for the info. We are looking at homes in Northern Virginia so the winter temps drop below 35F. The houses run from 2000 to 3000 square feet.

Also, I am more curious about what to expect for heating costs, rather than basing the choice of which house to buy on this. It sounds like all the heating sources are similar. We live in California now and have solar, our electric bill has been under $900/year (averaging less than $75/month) for a decade so I am a little out-of-date on how much to expect.

Thanks again. As I do more research will post back with new info

Stats


Well, I'm a little further north than you, and on oil. The heating costs are ugly. This winter was mild, so not too bad. A typical winter, from december through march, I might average about 180 gallons consumed per month. 3300' house, tstat on 66 on the floor we're on, 60 on the one we're not, 58 in the basement. Boiler is only running 88% efficiency. The house does get a decent amount of passive solar heating from afternoon sun. At $3.50-$4 per gallon that can be $600-$700 per month for the coldest months. Maybe 10-15% of that is for the indirect fired water heater. Before I moved into the house, sometime in the winter of '08 prices broke past $4.50, and stories of $1k per month weren't unheard of. Really wish I had a nearby natgas main.

So yeah, avoid oil if possible would be the salient point here.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby NateW » Thu Jun 21, 2012 12:27 pm

My opinion is oil heat is going to be the most expensive, with perhaps electric resistance heating a little higher, if electric rates are high where you live. Although fuel oil is close in price to propane (in terms of heating value), oil burners require a yearly tune-up. So if you have oil heat, add about $100 per season for maintenance. Also, oil prices will continue to climb in relation to other fuels because the middle distillate fraction (of which heating oil is) is becoming scarcer due to the increasing use of diesel fuel (especially in developing countries). You can only get so much heating oil/diesel fuel from a barrel of oil.

For electric heat pumps, their use and operating costs depend on the winter temperatures where you live. Below freezing the advantage of a heat pump drops off and at some point, the heat pump can not extract additional heat from the outside air and will operate in purely resistance heating mode (the back-up electgric heating element comes on).

If you have natural gas, definetly go with it. It trumps all other heating sources in terms of price and convenience and is at a historic low in price due to recent substantial new finds.

"Thanks for the info. We are looking at homes in Northern Virginia so the winter temps drop below 35F. The houses run from 2000 to 3000 square feet."

I live in Northern Virginia too. Here, you see natuaral gas and oil furnaces and heat pumps used. I have never seen propane used to heat homes here, and I have lived here all of my life. Oil heat is usually found only in older neighborhoods (built before 1960), due to no natural gas network at the time of building. Natural gas tends to be used in neighborhoods built in the 1960 - 1975 range and electric only for the newer neighborhoods, although some do have natural gas service.

Also, for electric rates, Dominion Electric (your soon-to-be service provider) charges about 12 cents per KW-Hr.

For Natural gas, in the wintertime I pay about $150 a month for it and I have a 1600 square foot home.

--Nate
Last edited by NateW on Thu Jun 21, 2012 12:53 pm, edited 2 times in total.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Thu Jun 21, 2012 12:43 pm

statsguy wrote:Thanks for the info. We are looking at homes in Northern Virginia so the winter temps drop below 35F. The houses run from 2000 to 3000 square feet.

Also, I am more curious about what to expect for heating costs, rather than basing the choice of which house to buy on this. It sounds like all the heating sources are similar. We live in California now and have solar, our electric bill has been under $900/year (averaging less than $75/month) for a decade so I am a little out-of-date on how much to expect.

Thanks again. As I do more research will post back with new info

Stats


If you can get natural gas supply at a reasonable cost to install, then do it. Gas is c. $2.50 (I am struggling with units I think that is 1000 Cubic feet ie mmcf?) at the moment, commodity market price. It was over $8.00. Probably sustainble is around $4.50. Without looking into US retail prices retail cost is probably twice that (ie another $2.00 or so-- but if gas goes back to 4.00 say, the retail will go to 6.00 ie it won't double, it is a fixed 'slice' that the gas company takes for pipes, billing, retail margin etc). The discovery of shale gas has left the USA with a likely low gas price for the forseeable future (at least 5 years, probably 10+)-- gas is much cheaper per unit energy than electricity or oil (propane is priced of the oil price I believe).

With a 90% efficiency furnace you've basically locked in a low cost heating supply, and also the one that anyone who buys your home will expect.

(having said that, if you have neighbours with heat pumps, when they could have gas, it's worth asking ?why?).

Assuming no gas, or high installation cost, your next best bet is heat pump. With winter temperatures in Virginia, unless you are in the mountains, I don't think the HP will cause you too much grief (and, normally, it will also provide your AC)-- COPs of greater than 1 (baseboards have COPs of 1.0 ie 1kwhr of elec gives 1 kwhr of heat, ASHP run 3-4.0 when efficiently running). Again buy an efficient one (Energy Star) now and not worry about it. Modern ASHPs keep COPs above 1.0 down to teens F at least.

After that choice gets murkier but propane is cleaner than oil, the problem is ownership of the tank which you need to investigate.

BTW 88% efficiency on an oil furnace (other poster) is pretty good. I believe (not sure) that oil furnaces cannot 'modulate' (ie they cannot flex their heat output down) and so they run full out or not at all- that's fairly inefficient (gas furnaces modulate).

As Other Poster points out, oil is just a rough place to be on the supply chain, as refiners get clever in making more of higher value products (ie not heating oil) out of that barrel.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Thu Jun 21, 2012 4:58 pm

NateW wrote:My opinion is oil heat is going to be the most expensive, with perhaps electric resistance heating a little higher, if electric rates are high where you live.

Not surprisingly, as shown by this nifty online calculator, it does depend entirely on current prices and the winners and losers seem to flip back and forth. Seven or eight years ago, oil was much cheaper than natural gas per therm, now it's about double for oil.

Still, as expensive as oil is compared to nat gas, it's no where near as bad as electricity right now (unless you have a really low kwh rate). I just filled up my two oil tanks for $3.25 a gallon (btw - two tanks gets you summer pricing plus a volume discount). My oil burner is rated at 88% efficiency, which I think is typical for anything younger than 10-15 years old. I used the 12 cents per kwh cost for electricity in the calculator and came up with $2.66 per 100,000 btus for oil vs $3.52 per 100,000 btus for electric. (link)

However, if oil gets to $4.25 a gallon, it will be more expensive than electricity at 12 cents per kwh. Although here in New England, electricity runs around 15 cents per kwh, so that pushes the break-even oil price up to $5.40 per gallon. I certainly wouldn't bet against that, but there's still some breathing room.

Although fuel oil is close in price to propane (in terms of heating value), oil burners require a yearly tune-up. So if you have oil heat, add about $100 per season for maintenance.

Good point about the maintenance, although I think nat gas systems need a check every couple of years to inspect/clean/replace things like the igniter, water pressure/temp sensors, expansion tank pressure, and combustion chamber. So the savings is probably more like $50-75 a year rather than $100.

But the really big surprise for me was how much more expensive propane is compared to oil right now. Of course, this depends entirely on the efficiency of your equipment and local pricing. But man was I surprised by this. According to this mass.gov survey, the average cost of a gallon of propane is $3.25 in the Boston area right now. That compares to $3.60 for a gallon of oil (that's their data - I guess I got a really good price). So if we run the relative costs using 100% efficiency for propane and 88% efficiency for oil, we get $3.52 per 100k btus for propane vs $2.95 per 100k btus for oil. That puts propane at almost a 20% premium over oil. Perhaps the difference isn't as stark in other markets.

IMO, the lesson in this for the OP is that you can't just compare fuel types, you have to know the efficiency of the burner. A 30 year old 60% efficiency oil burner will definitely get killed by any fuel source and you'd probably do best to factor a replacement into the price of the property.

Also, oil prices will continue to climb in relation to other fuels because the middle distillate fraction (of which heating oil is) is becoming scarcer due to the increasing use of diesel fuel (especially in developing countries). You can only get so much heating oil/diesel fuel from a barrel of oil.

I can't decide whether I think this is true or not. If electricity production continues to move away from coal toward natural gas, we could easily triple or quadruple our demand for natural gas and eat up all that supply and more. Natural gas has also become the fuel of choice for many industrial processes and that's increasing demand too.

From a macro perspective though, it doesn't make sense to burn oil to heat our homes in the US. The incredible energy density of oil is tough to beat and so we should probably be using what we have left exclusively for transportation, where energy density matters the most. I read somewhere that it currently takes 400 lbs of batteries and super efficient dc motors to match the energy capacity of 8 lbs of gasoline burned in a relatively inefficient internal combustion engine.

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Re: Propane vs Electric vs Oil vs... for heating home

Postby MathWizard » Thu Jun 21, 2012 7:44 pm

Op,

The further north you live, the more important insulation is.

My house is well north of Virginia, but is super-insulated,
R48 in the attic R18 in the walls, and costs just over $1000/yr
for Nat gas heat + hot water.
Electricity is about the same, covering A/C , range, dryer,
fridge and freezer, lights/computers.


We arere pretty frugal with power,

Programmable thermostat is set at:
Winter: 68 when we are awake and home, 64 at night when we are away during the day, 60 on vacations.
Summer: 78 when we are at home, 82 till 1/2 hour before we come home,
we get $20/yr off on peak power program which cycles A/C via radio control, so it
shuts off 7.5 minutes of every 30. This lessens utilities peak load, as all A/C's are not on at the same time.

All lights are CFLs,
we unlug the coffeemaker after brewing and put coffee into an insulated carafe,
we turn off powerstrips to computers when not in use.

Furnace and A/C new in 99, and best efficiency I could get at the time.

I'd guess in Virginia, you should be able to do as well.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Van » Thu Jun 21, 2012 8:07 pm

FWIW. We just replaced a 19 year old HVAC system (propane furnace + air conditioner) with a "hybrid" system. Namely, a heat pump and a new propane furnace. We live in the NE (PA) where it gets very cold some winters. When the temp drops below 35 degrees, the usually more efficient heat pump will shut off in favor of the propane backup furnace. We are hoping this new system will work well!
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Fri Jun 22, 2012 4:01 am

magellan wrote:
Also, oil prices will continue to climb in relation to other fuels because the middle distillate fraction (of which heating oil is) is becoming scarcer due to the increasing use of diesel fuel (especially in developing countries). You can only get so much heating oil/diesel fuel from a barrel of oil.

I can't decide whether I think this is true or not. If electricity production continues to move away from coal toward natural gas, we could easily triple or quadruple our demand for natural gas and eat up all that supply and more. Natural gas has also become the fuel of choice for many industrial processes and that's increasing demand too.

From a macro perspective though, it doesn't make sense to burn oil to heat our homes in the US. The incredible energy density of oil is tough to beat and so we should probably be using what we have left exclusively for transportation, where energy density matters the most. I read somewhere that it currently takes 400 lbs of batteries and super efficient dc motors to match the energy capacity of 8 lbs of gasoline burned in a relatively inefficient internal combustion engine.

Jim


I agree with your point about oil as a transport fuel (only) given its energy density. You can make diesel oil (Natural Gas Liquids, Gas To Liquids) from NG but it's hugely expensive-- the Qataris I think have cancelled the third plant (the second is Exxon/ Shell? and costs c. $10bn for 100k bl/day).

Complicating factors. To consume oil, Americans are competing with the *world*-- Chinese consumers, Iraqi consumers etc. The only difference is to do with transport costs and oil pipelines (so there is an unusually large gap-- West Texas Intermediate is/ was c. $20/bl below Brent Crude because the pipelines don't run to the right places).

So the future price of oil is driven by rising demand across emerging markets. US and European and Japanese demand is close to static: rising prices have led to less driving and more fuel efficient cars, and regulation is accelerating that trend. But of course aviation fuel demand keeps growing (by international treaty, aviation fuel is not taxed). Shipping fuel. And China is now the world's largest car market.

Natural gas this is not at all true-- the US and Canada are essentially a cut off island. It will be several years before the USA can export natural gas (you have to reverse the LNG import terminals and that costs billions). Natural gas American consumers pay roughly 1/4 what Japanese consumers are paying.

LNG tends either to be traded on long term contracts (eg between the Australians and Korean and Japanese utilities) or, now, in a 'spot' market. The tankers go from Indonesia, Trinidad, Qatar and Australia (Western and Queensland) to the Japanese and the Koreans, and now the Chinese-- there are also terminals in Europe and the US (Lake Charles LA). But the US is not importing, and generally the Asians pay much higher prices-- so they get the deliveries.

LNG is about 8% of world gas consumption. Might double to 16%. Building a liquifaction 'train' and then a 'regasification' port at the other end is a multi billion dollar activit.

Yes the US will burn a lot more gas for electricity (very efficiently, I might add-- 55% conversion efficiency on a modern Combined Cycle Gas Turbine (CCGT) vs. 35% for a coal plant-- besides all the other air quality benefits). And there will be some movement of plastics and heat intensive industries *back* into the USA. Let's not overstate that latter, gas is still very cheap in the Gulf and other places-- it is a byproduct of their oil production (some places still 'flame' gas arising from oil production).

And there will even be some conversions to CNG powered vehicles, especially taxis, delivery vans etc. Pakistan leads the world in this (over 1m vehicles out of c. 3m worldwide I think).

But the 'shock' (supply side shock) of shale and tight gas, coal bed methane etc. is so large, that it has transformed the North American gas supply picture, and gas is being found in places like Pennsylvania right next to centres of demand.

So for the next 5 years the domestic price of gas in America is likely to stay low. After that, who knows? But steady improvements in things like heat pumps suggest that we will have a different set of priorities/ solutions by then.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby gd » Fri Jun 22, 2012 7:47 am

It's a buyer's market. Request that the Realtor provide copies (personal info removed, if desired) of the last year's heating bills for anything they want to receive a commission for selling you. It's not a perfect answer, since you must consider a mild winter and personal preference by inhabitants, but I'd guess it's better than any other information. It is unlikely these houses are equal in all other respects-- consider that renovating a heating system, immediately or in a few years, may not be all that expensive with respect to the entire house cost.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby tadamsmar » Fri Jun 22, 2012 8:17 am

Some utilities have electric TOU rates that can make all-electric attractive.

Sometimes you have to call the utility and ask about TOU rates. Seems they were a hot item a while back. Utilities still have them, but they don't advertise them for some reason. Must be due to some regulatory or other shift in the economics of utilities.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby c078342 » Fri Jun 22, 2012 8:31 am

Valuethinker: Electricity is NOT "wildly expensive" in Connecticut! I pay 7.5 cents per kwhr, which is significantly below the national average. Just to let your know.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Fri Jun 22, 2012 8:50 am

c078342 wrote:Valuethinker: Electricity is NOT "wildly expensive" in Connecticut! I pay 7.5 cents per kwhr, which is significantly below the national average. Just to let your know.

I suspect you're confusing the 'energy cost' or 'supplier cost' part of the rate with the overall rate. Here's an example Connecticut electricity bill that shows that the overall rate, once transmission and distribution are factored in, is about double the energy or supplier part of the rate. My guess is you're paying around 14-16 cents per kwh all in. To get the actual average rate, just divide the total bill by the number of kwhs used.

Jim
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Fri Jun 22, 2012 12:22 pm

magellan wrote:
c078342 wrote:Valuethinker: Electricity is NOT "wildly expensive" in Connecticut! I pay 7.5 cents per kwhr, which is significantly below the national average. Just to let your know.

I suspect you're confusing the 'energy cost' or 'supplier cost' part of the rate with the overall rate. Here's an example Connecticut electricity bill that shows that the overall rate, once transmission and distribution are factored in, is about double the energy or supplier part of the rate. My guess is you're paying around 14-16 cents per kwh all in. To get the actually all-in rate, just divide the number of kwhs used in a month by the total bill for that month.

Jim


Thanks guys, you both clearly know a lot more than I do about this!

I remember reading a list somewhere (EIA?) of average retail electricity rates. The top 2 were, I think, California (not all of CA either), and Connecticut-- higher than any other New England State. New York, and especialy NYC were also predictably quite high. So it stuck in my mind (perhaps incorrectly) that Connecticut was over 20 cents/ kwhr.

The only other place I know of in USA that is higher is Hawaii -- where people have quoted rates of 30-40 cents here.

That sounds incorrect but maybe not as incorrect as at first appears.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Fri Jun 22, 2012 12:32 pm

magellan wrote:Still, as expensive as oil is compared to nat gas, it's no where near as bad as electricity right now (unless you have a really low kwh rate). I just filled up my two oil tanks for $3.25 a gallon (btw - two tanks gets you summer pricing plus a volume discount). My oil burner is rated at 88% efficiency, which I think is typical for anything younger than 10-15 years old. I used the 12 cents per kwh cost for electricity in the calculator and came up with $2.66 per 100,000 btus for oil vs $3.52 per 100,000 btus for electric. (link)
Jim


88% efficiency.

I think modern oil burners run around 92%. So the gain is minimal. It's the old ones that ran 60-65% and at today's oil prices (and even gas prices) the extra pickup is worth having. Condensing furnaces (oil and gas) run in the low 90s *when* they are doing nice long runs (so they condense) *not* if they are on/off a lot. Also I believe (not sure) that whilst gas furnaces 'modulate' down output, oil ones cannot.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Fri Jun 22, 2012 1:33 pm

Valuethinker wrote:I remember reading a list somewhere (EIA?) of average retail electricity rates. The top 2 were, I think, California (not all of CA either), and Connecticut-- higher than any other New England State. New York, and especialy NYC were also predictably quite high. So it stuck in my mind (perhaps incorrectly) that Connecticut was over 20 cents/ kwhr.

The only other place I know of in USA that is higher is Hawaii -- where people have quoted rates of 30-40 cents here.

Here's a ranking of electricity rates by state that NPR did last October. Connecticut and New York were tied for second highest at 18.1 cents per kwh on average. Hawaii was at 33.2 cents.

But that data is a little stale already. Most of the country uses coal as the dominant energy source for electricity generation (50% of the mix on average) and coal prices have been relatively steady. But in New England, coal accounts for under 12% of generation. We have record allocations to both Nuclear and Natural Gas compared to the rest of the country, with each accounting for around 30% of generation. This almost completely explains the higher power cost in New England.

The good news is that rates are starting to respond to the huge drop in natural gas prices. It's a slow process because at the wholesale level, most power is procured through power purchase agreements between producers and wholesale consumers (eg utilities, power marketers) that run many months and even years. IMO, the impact of lower natural gas prices hasn't fully hit New England rates yet.

I think Connecticut's average rate dropped 2 cents per kwh just since last year and now they're ranked 5th instead of second. I'd expect that trend to continue if ng prices stay low.

Jim
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Re: Propane vs Electric vs Oil vs... for heating home

Postby pshonore » Fri Jun 22, 2012 1:37 pm

magellan wrote:
c078342 wrote:Valuethinker: Electricity is NOT "wildly expensive" in Connecticut! I pay 7.5 cents per kwhr, which is significantly below the national average. Just to let your know.

I suspect you're confusing the 'energy cost' or 'supplier cost' part of the rate with the overall rate. Here's an example Connecticut electricity bill that shows that the overall rate, once transmission and distribution are factored in, is about double the energy or supplier part of the rate. My guess is you're paying around 14-16 cents per kwh all in. To get the actually all-in rate, just divide the number of kwhs used in a month by the total bill for that month.

Jim

You are correct. I pay CL&P .0789 generation charge (thru Direct Energy ) and approx .07 per KW distribution charge with varies slightly because a portion is a fixed charge. Three years ago the generation rate was .1166 so that part has dropped by a third.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sat Jun 23, 2012 3:38 am

magellan wrote:
Valuethinker wrote:I remember reading a list somewhere (EIA?) of average retail electricity rates. The top 2 were, I think, California (not all of CA either), and Connecticut-- higher than any other New England State. New York, and especialy NYC were also predictably quite high. So it stuck in my mind (perhaps incorrectly) that Connecticut was over 20 cents/ kwhr.

The only other place I know of in USA that is higher is Hawaii -- where people have quoted rates of 30-40 cents here.

Here's a ranking of electricity rates by state that NPR did last October. Connecticut and New York were tied for second highest at 18.1 cents per kwh on average. Hawaii was at 33.2 cents.


FYI UK retail prices are about 13p/ kwhr ie c. 21 cents. Partly because electricity only pays 5% VAT (20% normal) UK has low electricity prices by European standards (but as with yours, driven by the gas price).

But that data is a little stale already. Most of the country uses coal as the dominant energy source for electricity generation (50% of the mix on average) and coal prices have been relatively steady. But in New England, coal accounts for under 12% of generation. We have record allocations to both Nuclear and Natural Gas compared to the rest of the country, with each accounting for around 30% of generation. This almost completely explains the higher power cost in New England.


It's bigger than that.? You have high line costs: labour costs, particularly blue collar unionized labour, are high in New England, *and* your penchant for ice storms etc. means the grids require a lot of work outdoors. New York City is NYC-- it's expensive to do anything in a densely populated urban area (traffic, deliveries, working space etc.).

On nuclear the plant is mostly written off in accounting terms, so high nuclear can mean *lower* electricity costs (depends on utility and what the regulator allows in terms of 'sunk' debt).

On coal yes old plants are very cheap (no capital cost-- fully depreciated). Gas plants are higher cost than those because they are new, but a new gas plant is a lot cheaper than a new coal plant to build (a gas plant is build a steel warehouse and load in the turbine, connect & test-- it's mostly prefab; coal is a much bigger construction project).

I think what happens is NE (like Ontario) tends to buy power at peak rates from the Midwest during peaks, and that's relatively expensive.

The good news is that rates are starting to respond to the huge drop in natural gas prices. It's a slow process because at the wholesale level, most power is procured through power purchase agreements between producers and wholesale consumers (eg utilities, power marketers) that run many months and even years. IMO, the impact of lower natural gas prices hasn't fully hit New England rates yet.

I think Connecticut's average rate dropped 2 cents per kwh just since last year and now they're ranked 5th instead of second. I'd expect that trend to continue if ng prices stay low.

Jim
[/quote]

It occurs to me that, at least historically, NE had high gas prices. The pipelines didn't stretch from the US gas producing territories and/ or the tolling charges on the pipeline. THat's why they import LNG at Boston and at Canaport in NB, however world LNG prices (that would presumably be Trinidadian LNG) are high post Fukushima (and into Europe, as prices from Gazprom in Russia are set relative to world oil prices, which are high).

So NE may pay generally higher natural gas prices than the rest of the USA?
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sat Jun 23, 2012 3:50 am

Re ASHP

http://en.wikipedia.org/wiki/Air_source ... cy_Ratings

The 'Efficiency' of air source heat pumps is measured by the Coefficient of performance (COP). A COP of 3 means the heat pump produces 3 units of heat energy for every 1 unit of electricity it consumes. Within temperature ranges of -3°C to 10°C, the COP for many machines is fairly stable at 3-3.5.

In mild weather, the COP of an air source heat pump can be up to 4. However, on a very cold winter day, it takes more work to move the same amount of heat indoors than on a mild day. The heat pump's performance is limited by the Carnot cycle and will approach 1.0 as the outdoor-to-indoor temperature difference increases, which for most air source heat pumps happens as outdoor temperatures approach −18 °C / 0 °F. Heat pump construction that enables carbon dioxide as a refrigerant may have a COP of greater than 2 even down to -20°C, pushing the break-even figure downward to -30 °C (-22 °F)


So it would appear that down to about 25F (-3C) the ASHP will run efficiently.

Was looking for a US source but google keeps throwing up UK data.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby interplanetjanet » Sat Jun 23, 2012 6:09 am

magellan wrote:The good news is that rates are starting to respond to the huge drop in natural gas prices. It's a slow process because at the wholesale level, most power is procured through power purchase agreements between producers and wholesale consumers (eg utilities, power marketers) that run many months and even years. IMO, the impact of lower natural gas prices hasn't fully hit New England rates yet.

Keep in mind that in many areas, power cost is only loosely coupled to the cost of generation. My utility, the largest electric provider in the USA by delivered power I believe, gets roughly 50% of its energy from natural gas (and is on the main western USA pipeline grid). I pay 36 cents per kw-hr marginal, and if electric rates fall because of lowered natural gas rates I will be beyond stunned. Current projections call for a rise above 40c per kw-hr (again). It was at 50 for a while, hopefully it won't get that bad again for a couple of years.

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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Sat Jun 23, 2012 9:36 am

Valuethinker wrote:On nuclear the plant is mostly written off in accounting terms, so high nuclear can mean *lower* electricity costs (depends on utility and what the regulator allows in terms of 'sunk' debt).

Yes this may be true in the best of cases. But IMO, nuclear has mostly been an economic disaster here in New England from ratepayers' perspective. As a case in point, take the Seabrook Station plant in New Hampshire. Construction of this plant bankrupt the NH utility that built it. Shareholders lost everything and bond holders recovered under 50%. As part of the bankruptcy settlement, ratepayers were saddled with a large part of the loss. The plant, which cost over $7b to build, was sold off at auction for less than $1b.

It's been 20 years since the plant started operating and ratepayers still pay a 1.3 cent surcharge on every kwh of electricity they consume to cover their share of the Seabrook debacle. Since nuclear is only 30% of the mix, that works out to a 4 cent per kwh surcharge on nuclear fueled generation. The loss that bond holders suffered would add another 10-15 cents per kwh on top of that. So had the original utility not gone bankrupt, energy from the plant would cost ratepayers 15-20 cents per kwh plus another 3-4 cents for operating costs. Even all these years later, that's over 3 times the retail market price.

Seabrook is an extreme example, but there's no doubt that nuclear is a very expensive power source. Also, it's very highly subsidized by the US government in the form of a blanket liability cap that the industry cajoled congress into passing. In the case of a large-scale disaster, US taxpayers are on the hook for any losses. Without this liability cap, nuclear power would have been completely shut out of the capital markets. Worldwide today, the only plants under construction are being built by authoritarian regimes or by monopolies that enjoy a government guarantee to recover their costs, regardless of the economics. Free capital markets have voted with their dollars and resoundingly said no-thanks to nuclear power, even with huge government subsidies.

Jim
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Sat Jun 23, 2012 9:46 am

interplanetjanet wrote:I pay 36 cents per kw-hr marginal, and if electric rates fall because of lowered natural gas rates I will be beyond stunned.

Wow. That's crazy high. Are you on an Island or a desert outpost or something? I don't think your situation is typical at all, considering you're paying three times the national average per kwh. Aside from Island power and remote outposts, I don't know of too many places where transmission/distribution costs get much over 10 cents per kwh.

Jim
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Sat Jun 23, 2012 9:58 am

Valuethinker wrote:So NE may pay generally higher natural gas prices than the rest of the USA?

Good catch. Pipeline capacity has been greatly expanded here recently, but not enough I guess.

Apparently, in the summer months, New England prices track the national average price and available pipeline capacity just about handles the load. However in the winter, pipelines are way oversubscribed and local natural gas prices run about 40% above the national average. Even at that huge premium over the national average price, natural gas still wins the day here over other home heating fuels by a large margin.

Interestingly, LNG terminals here are at record low utilization. As I think you mentioned above, LNG is priced on the world market and is uncompetitive against local shale gas. Apparently, that's partly true even during periods when peak-demand pipeline surcharges are added in. So apparently, LNG seems to have become something of a peaking resource to stabilize natural gas flows during pipeline crunch periods. That's similar to how jet fuel is used at the margins for power generation. I bet no one saw that coming 8-10 years ago (especially investors in those expensive LNG terminals).

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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sat Jun 23, 2012 12:43 pm

magellan wrote:
Valuethinker wrote:So NE may pay generally higher natural gas prices than the rest of the USA?

Good catch. Pipeline capacity has been greatly expanded here recently, but not enough I guess.

Apparently, in the summer months, New England prices track the national average price and available pipeline capacity just about handles the load. However in the winter, pipelines are way oversubscribed and local natural gas prices run about 40% above the national average. Even at that huge premium over the national average price, natural gas still wins the day here over other home heating fuels by a large margin.

Interestingly, LNG terminals here are at record low utilization. As I think you mentioned above, LNG is priced on the world market and is uncompetitive against local shale gas. Apparently, that's partly true even during periods when peak-demand pipeline surcharges are added in. So apparently, LNG seems to have become something of a peaking resource to stabilize natural gas flows during pipeline crunch periods. That's similar to how jet fuel is used at the margins for power generation. I bet no one saw that coming 8-10 years ago (especially investors in those expensive LNG terminals).

Jim


I don't think many foresaw what shale and tight gas would do to US gas supply. It's an open question to what extent that is sustainable, but even the sceptics have moved up the forecasts of US gas production (a lot). There's no reason to think the US price will be over say $5.00-6.00 in the next 5 years.

Yes re LNG as a 'top up'. US wholesale gas prices are something like $2.50 (my head spins on what units that is per mmcf?) and the the LNG price is over $10.00 (Atlantic and Pacific markets have different prices due to the significant shipping costs).

I think the bulk of utility peak power -- Open Cycle Gas Turbines-- will now also run on natural gas, which is way cheaper than jet fuel. Not at great efficiencies (35% say, vs. 55% for Combined Cycle, but you cannot use that as peak plant).
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sat Jun 23, 2012 12:47 pm

magellan wrote:
interplanetjanet wrote:I pay 36 cents per kw-hr marginal, and if electric rates fall because of lowered natural gas rates I will be beyond stunned.

Wow. That's crazy high. Are you on an Island or a desert outpost or something? I don't think your situation is typical at all, considering you're paying three times the national average per kwh. Aside from Island power and remote outposts, I don't know of too many places where transmission/distribution costs get much over 10 cents per kwh.

Jim


Jim

I believe Janet lives in inland California, and they have significant 'tiering' of prices.

Those numbers, btw, do not sound excessive by European standards, and, roughly speaking, California GDP per capita is 60% more than European.

California invented negawatt and other demand management systems (called the 'Art Rosenfeld effect' for the (Nobel?) prize winning physicist who, as California Energy Commissioner, persuaded governor Jerry Brown in the 1970s (now what ever happened to Jerry Brown? ;-)) that instead of authorizing new nuclear power plants, California could save energy eg utilities paid to save electricity consumption, rather than incentivized to increase it.

High prices are, I guess, part of that-- although there may be structural issues post deregulation as well (I am imagining, in summer, there are just not enough wires from other states to bring in the electricity CA needs in peak periods). And of course the coastal basins have significant air pollution restrictions, which restricts creation of new power plants in, say, LA.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sat Jun 23, 2012 12:55 pm

magellan wrote:Seabrook is an extreme example, but there's no doubt that nuclear is a very expensive power source. Also, it's very highly subsidized by the US government in the form of a blanket liability cap that the industry cajoled congress into passing. In the case of a large-scale disaster, US taxpayers are on the hook for any losses. Without this liability cap, nuclear power would have been completely shut out of the capital markets. Worldwide today, the only plants under construction are being built by authoritarian regimes or by monopolies that enjoy a government guarantee to recover their costs, regardless of the economics. Free capital markets have voted with their dollars and resoundingly said no-thanks to nuclear power, even with huge government subsidies.

Jim


We are in policy area (for external readers, Jim is referring to the Price Anderson Act, successively renewed by Congress, which caps the private liability for a nuclear accident at, from memory, $1bn).

Let's just say I generally agree with you re nuclear although the American cost experience with nuclear was more or less the worst of any country. Forbes called it the greatest American business disaster of the 20th century (in a cover article in about 1985). The economist of note on all this is a guy called Charles Komaneff.

Nuclear has its virtues, but we should always be sceptical of cost forecasts made in advance of new nukes. For example the 2003 MIT study estimated the Levelized Cost of Energy (a standard measure) as around 5-6 cents for 'new nukes' (from memory).

Estimates now, in light of the French experience (Areva) building reactors in Finland and Flamanville, are over 10 cents, perhaps 12 cents. Effectively a doubling in 9 years.

Although it's likely 2 new reactors will go ahead (Southern Company building one, also one in South Carolina) the US 'nuclear renaissance' has been stymied on cost issues. No utility is big enough to take the risk of a big cost overrun or market prices for electricity falling.

The UK prepares to embrace new nukes, but the number of players willing to build the 10 projected has dropped down to basically the French utility, EDF, and only if we agree to guarantee their electricity pool price (which we will do, by a complex form of market manipulation).

UK peak electricity demand is 55-60GW. As and if residential air conditioning comes in (almost unknown now) that's going to grow. 10 nukes would be about 13 GW of capacity.

http://www.iso-ne.com/nwsiss/grid_mkts/ ... index.html

tells me yours is about 24GW (18-24GW, summer peak).
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Re: Propane vs Electric vs Oil vs... for heating home

Postby FrugalInvestor » Sat Jun 23, 2012 1:13 pm

Valuethinker wrote:I wasn't aware US retail electricity prices could still be as low as 3 c, even in the NW- -that is getting down to the Transmission & Distribution charge (ie the line cost)).


In most areas of the PNW rates have been ratcheting up over the last few years due to the mandatory addition of green energy sources and other factors. Our base rate is now about 6 cents but with fixed daily charges and taxes the all-in cost is about 8 cents. Still low, but not what it used to be.

I just changed out my propane water heater for a more efficient electric one with an expected payback of 2-3 years.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby btenny » Sat Jun 23, 2012 1:24 pm

All in cost for electricity is just higher than you guys or NPR or others quote. At least from my experience in Phoenix. I pay around 15 cents per KW at around 4-900 KW per month depending on the season. That is the Phoenix costs for electricity that includes about 5 add on fees and taxes for things like jail tax, community college tax, etc.... So any savings we got back when we put in Palo Verde (giant 3 reactor nuc west of town that is now 20 years old) have been lost on other spending. Also any excess electricity that is not used for the grid at night from the nuclear plant is used to make ice that is then used to offset cooling costs downtown in the high rise buildings the next day. Thus the regular residential customer may not be getting real good rates that are quoted in many of these places.....

So I suspect that many of those electric cost forecasters are just wrong from various reasons...

Bill
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Re: Propane vs Electric vs Oil vs... for heating home

Postby magellan » Sat Jun 23, 2012 4:23 pm

Valuethinker wrote:I believe Janet lives in inland California, and they have significant 'tiering' of prices.

Ahhh. That explains it. Thanks! I did some googling and see CA ratepayers have been stuck with quite a relic of a system following the Enron price-fixing disaster.

Although I usually think of CA as forward-thinking with this type of thing, This system seems rather non-sensical by today's standards. It's based entirely on the amount of energy consumed and doesn't care when the power gets used. Generally during peak periods power costs 3 to 5 times more to generate and deliver than at non-peak periods.

I know there are pilot programs in the works to change this, but as I understand it, folks might be paying 40 cents a kwh to charge their EV from 1-7am, when the cost to generate and deliver that power is probably 5-10 cents. Meanwhile, other consumers are subsidized to the point of being able to max out their ac during peak periods as long as they keep their overall monthly consumption low. They may pay only 12 cents a kwh for power that costs 50-75 cents to generate and deliver.

I misunderstood Janet's original post and thought the high rates she was paying were tied to the economics of transmission and distribution in her area. Instead, it seems that she's caught in an income redistribution scheme that's masked as an electricity tiering structure.

Jim

PS - If CA invented demand management, kudos to them for that. That was a huge innovation. As I understand it, in much of the grid today, operators can curb peak demand by 10-20% if needed. I wish we could do more of it. There's no point in spending billions on new infrastructure that's only needed for a handful of hours each year. The ability to shed load in an orderly way allows the grid to safely operate with much higher average utilization, which saves us all big bucks.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sat Jun 23, 2012 6:28 pm

magellan wrote:
Valuethinker wrote:I believe Janet lives in inland California, and they have significant 'tiering' of prices.

Ahhh. That explains it. Thanks! I did some googling and see CA ratepayers have been stuck with quite a relic of a system following the Enron price-fixing disaster.

Although I usually think of CA as forward-thinking with this type of thing, This system seems rather non-sensical by today's standards. It's based entirely on the amount of energy consumed and doesn't care when the power gets used. Generally during peak periods power costs 3 to 5 times more to generate and deliver than at non-peak periods.


I had thought CA did use 'time of day' pricing aka 'smart metering'? I guess not, from what you say.

Electricity prices are extreme in their movements. A utility like Ontario or a Texas wind farm can receive a *negative* price from the grid early in the morning. Texas (ERCOT) is isolated from the rest of the US electricity grids, and so if the wind power is not needed, it is still shipped into the grid (there are subsidy distortions there as the subsidy is paid per kwhr generated). Ontario Power Generation is 60% nuclear and at times of the night, there is not enough demand-- and you cannot easily take a nuke offline nor off the grid.

EDIT: in short, the range is not 3-5 times, potentially, it's much bigger than that, because of the need for certain types of generation (nuclear and wind, primarily) to just deliver (similar issues with hydro power, but usually only in spring when the reservoirs cannot hold any more water).

I know there are pilot programs in the works to change this, but as I understand it, folks might be paying 40 cents a kwh to charge their EV from 1-7am, when the cost to generate and deliver that power is probably 5-10 cents. Meanwhile, other consumers are subsidized to the point of being able to max out their ac during peak periods as long as they keep their overall monthly consumption low. They may pay only 12 cents a kwh for power that costs 50-75 cents to generate and deliver.


Indeed. I don't know if even Open Cycle Gas Turbine power costs 50-75 cents/ kwhr (don't know, not doubting) and of course there is severe grid congestion at certain times of day.

Again, time of day pricing is being rolled out across North America. In Toronto for example your electricity price doubles at 7am, drops back again in the evening (I think it is peaked at 7-9.30am and 4-7pm).

I misunderstood Janet's original post and thought the high rates she was paying were tied to the economics of transmission and distribution in her area. Instead, it seems that she's caught in an income redistribution scheme that's masked as an electricity tiering structure.

Jim

PS - If CA invented demand management, kudos to them for that. That was a huge innovation.


Did they invent it? (as I claimed). They are certainly the first utilities (that I know of) that really drove it, especially the 'negawatt' programmes that pay utilities to save power. Deregulation killed a lot of those programmes in most states, but they are coming back.

As I understand it, in much of the grid today, operators can curb peak demand by 10-20% if needed.


They've always been able to do that with much industrial demand (the big customers get lower rates as a result), it's harder with commercial and residential. Ontario IESO is publishing estimates of about 10% savings on a 28 GW peak (Ontario has moved from a winter peak to a summer peak--it used to sell expensive power to New York in summer, and buy it cheaply in winter, but no longer).

The arrangement in Toronto is roughly that 30 minutes in 2 hours, they can shut off your big electricity items (chiefly the air con, and/or the water heating (water heaters have traditionally been owned by the utility anyways)).

I wish we could do more of it. There's no point in spending billions on new infrastructure that's only needed for a handful of hours each year. The ability to shed load in an orderly way allows the grid to safely operate with much higher average utilization, which saves us all big bucks.


Yes, and it also stops brownouts and blackouts. As the amount of renewables grows on the grid, and generally renewables are not 'despatchable' ie they cannot be predictably brought on line in advance of demand spikes, then demand side management becomes increasingly important.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby btenny » Sat Jun 23, 2012 7:32 pm

I don't know about Janet but Time of Day pricing in Phoenix is almost impossible to live with. I tried it for a while way back in 2003 I think. It was a mess. The big issue was you need to cool your house to say 60 degrees in the AM before 8 AM when the electricity cost is real low and then turn off all the power and let the house heat up all day until about 8-9PM before the really good low cost electric rates kick in again. That is sort of impossible in Phoenix as my house just gets too hot and you need to run the air conditioner some during the peak hours. Same for cooking and laundry, we used too much during peak hours. So you still end up buying ultra high cost electricity that offsets any savings you get from using a lot during off peak hours. So net net I did not save any money. In fact I spent more so I switched back to normal old fashioned standard level rates. We found the key to low electric bills in Arizona is to close up all the windows and drapes during the day and live like a mole during the summer and keep the AC set to say 80 degrees. Or the other solution is to leave town for most of the summer and set the AC to say 88 and close up your house entirely.....

Bill
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Re: Propane vs Electric vs Oil vs... for heating home

Postby interplanetjanet » Sat Jun 23, 2012 9:16 pm

magellan wrote:
Valuethinker wrote:I believe Janet lives in inland California, and they have significant 'tiering' of prices.

Ahhh. That explains it. Thanks! I did some googling and see CA ratepayers have been stuck with quite a relic of a system following the Enron price-fixing disaster.

Although I usually think of CA as forward-thinking with this type of thing, This system seems rather non-sensical by today's standards. It's based entirely on the amount of energy consumed and doesn't care when the power gets used. Generally during peak periods power costs 3 to 5 times more to generate and deliver than at non-peak periods.

I know there are pilot programs in the works to change this, but as I understand it, folks might be paying 40 cents a kwh to charge their EV from 1-7am, when the cost to generate and deliver that power is probably 5-10 cents. Meanwhile, other consumers are subsidized to the point of being able to max out their ac during peak periods as long as they keep their overall monthly consumption low. They may pay only 12 cents a kwh for power that costs 50-75 cents to generate and deliver.

My utility does offer a time of use plan, but it's mostly useful for those customers who either have PV solar or who have no summer cooling needs. A typical example is that if non-TOD (time of day) power costs 35c/kw-h in a tier, TOD power will cost as little as 31c/kw-h for "off peak", 38c/kw-h for "partial peak" and 49c/kw-h for "peak" time consumption. The savings are relatively small even assuming you can fit all of your power consumption into the off peak period, and it only takes a little peak power consumption to lose this savings entirely. Fortunately for those with PV solar, their bills get offset by that 49c/kw-h for power they generate over their consumption needs during peak sunlight times.

This is actually quite a lot better than it used to be. About 3-4 years ago the top non-TOD rate was about 50c/kw-h, off peak was about 42c/kw-h, and peak rates were over 80c/kw-h. I believe at one point the peak TOD rate was over $1/kw-h, but I'd have to dig through the tariffs to find out.

I misunderstood Janet's original post and thought the high rates she was paying were tied to the economics of transmission and distribution in her area. Instead, it seems that she's caught in an income redistribution scheme that's masked as an electricity tiering structure.

The net effect is, indeed, income redistribution from the (primarily rural) interior to the (primarily urban) coast, where most of the population resides. Further discussion on this would probably get political.

-janet
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Sun Jun 24, 2012 3:55 am

btenny wrote:I don't know about Janet but Time of Day pricing in Phoenix is almost impossible to live with. I tried it for a while way back in 2003 I think. It was a mess. The big issue was you need to cool your house to say 60 degrees in the AM before 8 AM when the electricity cost is real low and then turn off all the power and let the house heat up all day until about 8-9PM before the really good low cost electric rates kick in again. That is sort of impossible in Phoenix as my house just gets too hot and you need to run the air conditioner some during the peak hours. Same for cooking and laundry, we used too much during peak hours. So you still end up buying ultra high cost electricity that offsets any savings you get from using a lot during off peak hours. So net net I did not save any money. In fact I spent more so I switched back to normal old fashioned standard level rates. We found the key to low electric bills in Arizona is to close up all the windows and drapes during the day and live like a mole during the summer and keep the AC set to say 80 degrees. Or the other solution is to leave town for most of the summer and set the AC to say 88 and close up your house entirely.....

Bill


[EDITED following private comment]

Just a general plea not to ignore thermal mass in construction-- that's what they do in the Middle East.

On high heat reflective glass (commercial, but you can specify it in residential):

http://www.pilkington.com/north-america ... erview.htm

If one cannot do anything else, then shade, and painting the roof white (or silver) have a big impact (on the order of 10% of AC load).
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Re: Propane vs Electric vs Oil vs... for heating home

Postby btenny » Sun Jun 24, 2012 3:18 pm

Janet and others.

Are load leveling systems and electric peak demand smart meters available in your area? The idea is to turn off the AC unit for a few minutes if the electric water heater or dryer needs to run at the same time. Or vice versa as each home gets a load leveler system to keep the peak electric demand in check for a given home. The utilites in Arizona are experimenting with peak demand smart meters and home systems to see if this will help their summer load management and help customers get lower summer bills. The gotcha is the utilities want customers to buy and pay for installing these laod controllers. We were asked tp participate but since we are mostly gone each summer it was not a good investment for us.

Just some things to think about.
Bill
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Puakinekine » Sun Jun 24, 2012 3:24 pm

I've just only become aware of this thread, so am addressing a question from earlier. On the Big Island of Hawaii our rate on the June 19 bill was 43.3 cents per Kwh. The rate varies depending on oil costs, as 72% of our power is generated from oil, the remainder coming from hydro, geothermal, solar, wind, and biofuels. The rate has been as high or higher then 47 cents, but I don't often check on the rate, I just write out the check. Prices may be lower or higher on the Island of Oahu (City and County of Honolulu) where the vast majority of the states population lives. They are more dependent on oil then we are, but have better economies of scale, so I don't know.
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Mon Jun 25, 2012 4:48 am

btenny wrote:Janet and others.

Are load leveling systems and electric peak demand smart meters available in your area? The idea is to turn off the AC unit for a few minutes if the electric water heater or dryer needs to run at the same time. Or vice versa as each home gets a load leveler system to keep the peak electric demand in check for a given home. The utilites in Arizona are experimenting with peak demand smart meters and home systems to see if this will help their summer load management and help customers get lower summer bills. The gotcha is the utilities want customers to buy and pay for installing these laod controllers. We were asked tp participate but since we are mostly gone each summer it was not a good investment for us.

Just some things to think about.
Bill



The smart metering argument is a fraught one. Here (UK) smart meters are running c. £400 ($640). Who is going to pay for that? And installation.

In a regulated environment IF (big if) the regulatory agency allows it, the cost can be added to the rate.

In a deregulated environment, the energy supplier has to invest that up front with the customer, and hope the customer does not 'churn' before it has paid for it. That's the UK environment and yet the EU legislation mandates smart meters over the next 10 years-- universal. 0 to over 20 million meters in 10 years.

The rationale from the supply side is the volatility of the pool price. As Magellan points out, at peak hours on a peak day (normally summer, but in fact in the UK winter, still) the price of electricity can be 50 (or infinity) times the price at 4am-- say in US terms. A function of the nature of the supply-- nuclear and wind having no 'despatchability' (ie flexibility to demand) and the peak power is met either with expensive imports from long distance ('wheeling') or Open Cycle Gas Turbines (fiendishly expensive given low efficiencies), unless you have pumped storage hydro available.

Since the pool price 'spikes' at very short notice due to supply-demand issues, an ability to manage demand by the utility is economically very valuable-- actual peak demand can occur for periods of less than half an hour in a day.

Whether the consumer is truly as price elastic/ responsive to time shifts as has been suggested is also an issue. As a friend of mine (nuke engineer at Com Ed ie Chicago) said 'there's no price elasticity of demand on a Thursday in July when the temperature is 100 degrees'.

A Dutch study showed that some households with such meters had signficant falls in electricity consumption. Some did not. The difference? The ones that had a meter where the household could see it had a bigger sensitivity than the ones where the meter was inaccessible. The Devil is in the detail.

In Switzerland it is illegal to dry your clothes during peak electricity hours. Being Switzerland that law is probably obeyed ;-).
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Re: Propane vs Electric vs Oil vs... for heating home

Postby Valuethinker » Mon Jun 25, 2012 6:26 am

Puakinekine wrote:I've just only become aware of this thread, so am addressing a question from earlier. On the Big Island of Hawaii our rate on the June 19 bill was 43.3 cents per Kwh. The rate varies depending on oil costs, as 72% of our power is generated from oil, the remainder coming from hydro, geothermal, solar, wind, and biofuels. The rate has been as high or higher then 47 cents, but I don't often check on the rate, I just write out the check. Prices may be lower or higher on the Island of Oahu (City and County of Honolulu) where the vast majority of the states population lives. They are more dependent on oil then we are, but have better economies of scale, so I don't know.


I did some surfing around. One of the issues seems to be that there is no undersea cable-- the renewable energy sources in the island chain are not where the demand is (ie into Oahu, primarily). There is therefore a proposal to build that (at a $800m cost).

It was interesting reading the projections made 2006-08, as they assumed costs of solar panels going forward which have already been beaten on the downside-- the price of solar cells has fallen that much (but the installation and connection costs remain).

Islands in the world will be the first places to go all renewable (or near as practicable) simply out of the economics of importing oil for non-transport uses (ie lousy)*. At 43 cents/ kwhr you have hit the often-sought 'grid parity' (which does not mean for a host of practical reasons that you will all go out and install solar panels, of course) between renewable forms of energy and conventional electricity generation.

* I observed at Heraklion in Crete 4 x 200MW oil fired units, belching out smoke into a thermal inversion layer over the island. On a hot sunny day. That's just not rational nor necessary, long term, in an island characterized by sunshine 9 months of the year, and by fairly steady winds in the uplands (tending to have wind when the sun is not shining ie winter). Not that Greece can afford the imported oil in any case.
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