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The Cost of Energy
Sunday, May 8, 2005
2:15:00 PM EDT
The Cost of Energy
by Dave Cohen
Delivery of energy is a business. Like any business, it must pay its expenses and be profitable. That is the motivating force for the price consumers like ourselves must pay. Here in Danvers, I find that I am paying around 10.4¢ per Kilowatt-hour (Kw-hr) for electrical energy after I take the discount. Is that expensive? Let us do a short analysis to find out.
We know that the energy we get at our wall socket is roughly one third of the thermal energy required to produce electricity. Two thirds of the combustion energy at the power station is lost due to heat rejection and power line distribution losses. This means that the fuel burned at the power station must deliver 3 Kw-hr of thermal energy for every Kw-hr of electricity we consume. We also know that there are 3413 BTUs (British Thermal Units) in a Kw-hr. That says we are consuming just over 10,000 BTUs of thermal energy for every Kw-hr of electrical energy we obtain and use.
Electricity can be produced from many different sources. The most common source is from the combustion of coal. Over 50% of all the electrical energy produced in the US comes from coal, a nonrenewable fossil fuel. It can also be produced with natural gas or fuel oil as well as from non-fossil sources such as nuclear, hydroelectric, wind turbines, geothermal heat, or from solar energy collection systems.
Let us assume that our energy is sourced from burning fuel oil for the sake of cost comparison. A gallon of number 2 distillate (home heating oil or Diesel fuel) is presently sold at about $2.169 and delivers a net (or lower) heating value of 130,000 BTU. That is worth 13 delivered Kw-hr of electrical energy. $2.169/13 = 16.7¢ per Kw-hr.
We in Danvers are getting a bargain from the power company, at least for now; and we’re now being charged a significantly higher price for fuel oil than in previous years.
The lowest energy cost is from hydroelectric systems. In some regions, it is as cheap as 3¢ per Kw-hr. We have insufficient access to hydroelectric in New England to derive much benefit from it. The wind turbine project in Nantucket Sound is predicted to be able to produce power at 7¢ per Kw-hr. Let’s face it; we need it and should support it. Geothermal power (largely in California) is running at 4.5¢ - 7¢ per Kw-hr.
The cost of electrical energy varies significantly around the country. Consumers in New York City or Los Angeles may pay 2 to 3 times for the same energy consumption as consumers in Milwaukee.
What about solar power? The cost of energy derived from the sun is currently over 20¢ per kw-hr. Newer systems may eventually cut the cost in half. The problems with such systems are related to the fact that solar energy is periodic and inconsistent. Energy comes in when the sun is bright and can fall off to zero at night or during a storm. That means the energy obtained from the sun must be managed with a costly storage and redistribution control system.
Let us examine the idea of selling green hydrogen as a source of automotive energy. If we can obtain renewable electrical energy at 7¢ or less per kw-hr delivered, we could manufacture hydrogen by electrolysis of water with that energy. Hydrogen production requires a minimum of 61,000 BTU per pound of hydrogen to release it from water. That is equivalent to 17.9 kw-hr of electrical energy. At 7¢ per kw-hr that comes out to be $1.25 per pound net wholesale production cost. However, the electrolysis unit will not be 100% efficient. There will be some resistance heat loss. Assuming that 80% efficiency is possible, that boosts the production cost to $1.56 per pound. One pound of hydrogen returns the net combustion energy of about a half gallon of gasoline. So this then becomes the equivalent of $3.12 per gallon of gasoline. Add about $1.00 - $1.50 in distribution expenses, some production expenses, and taxes. We come out at less than $5.00* per equivalent gallon of gasoline. This compares with today’s $2.00 per gallon gas pump prices. But wait a minute, the “at the terminal energy efficiency” of a hydrogen powered fuel cell is more that twice that of the “shaft output efficiency” of an internal combustion engine. That means we can drive more than double the miles for a given fuel load. The fuel cost per mile may not actually change.
This is the future.
* $5.00 per equivalent gallon of gasoline is a cost also derived independently by GE Power Systems.
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2:15:00 PM EDT
The Cost of Energy
The Cost of Energy
by Dave Cohen
Delivery of energy is a business. Like any business, it must pay its expenses and be profitable. That is the motivating force for the price consumers like ourselves must pay. Here in Danvers, I find that I am paying around 10.4¢ per Kilowatt-hour (Kw-hr) for electrical energy after I take the discount. Is that expensive? Let us do a short analysis to find out.
We know that the energy we get at our wall socket is roughly one third of the thermal energy required to produce electricity. Two thirds of the combustion energy at the power station is lost due to heat rejection and power line distribution losses. This means that the fuel burned at the power station must deliver 3 Kw-hr of thermal energy for every Kw-hr of electricity we consume. We also know that there are 3413 BTUs (British Thermal Units) in a Kw-hr. That says we are consuming just over 10,000 BTUs of thermal energy for every Kw-hr of electrical energy we obtain and use.
Electricity can be produced from many different sources. The most common source is from the combustion of coal. Over 50% of all the electrical energy produced in the US comes from coal, a nonrenewable fossil fuel. It can also be produced with natural gas or fuel oil as well as from non-fossil sources such as nuclear, hydroelectric, wind turbines, geothermal heat, or from solar energy collection systems.
Let us assume that our energy is sourced from burning fuel oil for the sake of cost comparison. A gallon of number 2 distillate (home heating oil or Diesel fuel) is presently sold at about $2.169 and delivers a net (or lower) heating value of 130,000 BTU. That is worth 13 delivered Kw-hr of electrical energy. $2.169/13 = 16.7¢ per Kw-hr.
We in Danvers are getting a bargain from the power company, at least for now; and we’re now being charged a significantly higher price for fuel oil than in previous years.
The lowest energy cost is from hydroelectric systems. In some regions, it is as cheap as 3¢ per Kw-hr. We have insufficient access to hydroelectric in New England to derive much benefit from it. The wind turbine project in Nantucket Sound is predicted to be able to produce power at 7¢ per Kw-hr. Let’s face it; we need it and should support it. Geothermal power (largely in California) is running at 4.5¢ - 7¢ per Kw-hr.
The cost of electrical energy varies significantly around the country. Consumers in New York City or Los Angeles may pay 2 to 3 times for the same energy consumption as consumers in Milwaukee.
What about solar power? The cost of energy derived from the sun is currently over 20¢ per kw-hr. Newer systems may eventually cut the cost in half. The problems with such systems are related to the fact that solar energy is periodic and inconsistent. Energy comes in when the sun is bright and can fall off to zero at night or during a storm. That means the energy obtained from the sun must be managed with a costly storage and redistribution control system.
Let us examine the idea of selling green hydrogen as a source of automotive energy. If we can obtain renewable electrical energy at 7¢ or less per kw-hr delivered, we could manufacture hydrogen by electrolysis of water with that energy. Hydrogen production requires a minimum of 61,000 BTU per pound of hydrogen to release it from water. That is equivalent to 17.9 kw-hr of electrical energy. At 7¢ per kw-hr that comes out to be $1.25 per pound net wholesale production cost. However, the electrolysis unit will not be 100% efficient. There will be some resistance heat loss. Assuming that 80% efficiency is possible, that boosts the production cost to $1.56 per pound. One pound of hydrogen returns the net combustion energy of about a half gallon of gasoline. So this then becomes the equivalent of $3.12 per gallon of gasoline. Add about $1.00 - $1.50 in distribution expenses, some production expenses, and taxes. We come out at less than $5.00* per equivalent gallon of gasoline. This compares with today’s $2.00 per gallon gas pump prices. But wait a minute, the “at the terminal energy efficiency” of a hydrogen powered fuel cell is more that twice that of the “shaft output efficiency” of an internal combustion engine. That means we can drive more than double the miles for a given fuel load. The fuel cost per mile may not actually change.
This is the future.
* $5.00 per equivalent gallon of gasoline is a cost also derived independently by GE Power Systems.
Written by jdc2485 Blog about this entry |
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