Buildings
Published on May 23rd, 2016
by Guest Contributor
22
May 23rd, 2016 by Guest Contributor
By Indradeep Ghosh, PhD
Cupertino, CA
About 80% of the world’s greenhouse gas (GHG) emissions are a direct or indirect result of extraction and burning of fossil fuels – a process that needs to stop to put the brakes on global climate change. The concept of fuel switching is simply the process of replacing dirty, non-renewable fossil fuels with clean, renewable fuels. Since most of the renewable fuel growth is happening in the electricity generation sector, it is obvious that the future clean fuel of the earth will be mostly electricity. There are mainly 4 major sectors which will undergo fuel switching to electricity in the coming years – transportation, industrial processes, commercial buildings, and residences.
In the transportation sector, this will mainly manifest in the adoption of electric vehicles (EVs) powered by renewable electricity and a maybe a small percentage of fuel-cell-based heavy vehicles powered by renewable hydrogen. The superior economics and driving dynamics of EVs as opposed to gasoline cars have been discussed on this site in numerous articles. In places like California, where I live, even with higher-than-average electricity prices, EVs make solid economic sense currently to fuel and maintain over their gasoline-powered cousins. Moreover, most utilities in the USA offer low time-of-use (TOU) EV charging rates which the owners can use to fuel their vehicles cheaply during the middle of the night when electricity demand on the grid is low. Due to these facts, fuel switching to EVs is almost a no-brainer even under currently low gasoline prices.
Other than for transportation, fossil fuels are directly used by consumers for generating heat. This article takes a closer look at the economics and hurdles of fuel switching in heating applications in the residential sector.
As fossil fuel and electricity prices vary all over, the world the analysis here is done assuming California prices in the Bay Area. Similar analysis can be done at any place once the cost of the prevailing fossil fuel and its replacement electricity is known. In the residential sector, the dominant heating applications are water heating, space heating, cooking, and clothes drying. Currently, in the Bay Area, more than 90% of households use natural gas to perform these functions. Though there are electrical replacements readily available in the market for each of these applications, it is quite difficult to make the economics work under current fuel prices.
There are two major hurdles for switching out these appliances in the residential sector. First, the operating costs of these electric appliances are often higher than their corresponding natural gas counterparts. Second, there can be considerable initial costs to replace existing gas appliances with newer electric ones because of upgrades required to the electrical wiring infrastructure of the house.
To investigate the operating costs hurdle, I collected energy efficiency data from the federal Energy Star site. I assumed that the most energy efficient gas and electric appliance will be used in the house irrespective of initial costs. This means that, for water heating, the popular gas storage water heater of maximum efficiency will be switched with a current maximum efficiency electric heat pump water heater. For space heating, a current maximum efficiency gas furnace will be switched to a maximum efficiency air source heat pump. Note that ground source heat pumps are purposefully ignored here due to the huge initial investments needed in installing these systems in urban settings. Also the milder weather in the Bay Area reduces most of the efficiency advantages of a ground source heat pump. For cooking, a gas cooktop is switched to an efficient electric induction cooktop. And finally, for drying, an efficient gas dryer is switched with an efficient electric heat pump dryer.
Over here, it is important to understand the concept of Energy Factor while comparing energy efficiency. It is the amount of energy obtained for heating purposes as opposed to the amount of energy spent in the appliance. In the case of gas appliances, this usually equates to efficiency and a value between 0 and 1. However, in the case of heat pumps, as they do not produce any heat but just move heat from one place to another, the amount of heating energy obtained is almost always higher than the electrical energy spent in the system leading to energy factors greater than 1. The findings are shown in the table below.
In the table, the cost of natural gas is assumed to be $1.2 per therm, and since each therm is equivalent to 29.3 kWh, it yields a per kWh energy cost of about 4¢/kWh.
It is evident from the table that, even though electric appliances are much more efficient than their corresponding gas counterparts, achieving operational cost parity is still a big challenge in the Bay Area, where the cheapest electricity rates from PGE (Pacific Gas and Electric Company) run around 18¢/kWh for the flat-rate pricing. In fact, in the flat E1 rate offered by PGE, none of the electric appliances can compete in operating costs with their corresponding gas counterparts. However, PGE also offers some TOU rate schedules where rates can go as low at 11¢/kWh. If such rates are used, it is possible to make the economics work for space and water heating. Though it is conceivable to use TOU rates for water heating and store the heated water when electricity rates are low, it is quite difficult to do that for space heating. Also, the economics for switching cooking and drying are still quite bad, even though clothes drying can possibly take advantage of TOU rates.
One option for making the economics work is to pair the electric appliances with a net-metered solar system. Currently, in the Bay Area, solar PV systems can be installed for about $2/watt after federal tax credits, which translates to a levelized electricity cost of about 8¢/kWh. If this scheme is used, then electric water heating, space heating, and cooking immediately become economically viable in terms of operating costs. Even though drying is still costlier to run in electric mode, drying constitutes only a small percentage of the overall energy use if the other three applications are taken into account. So, the savings made by running the other appliances with electricity as well as the savings obtained by eliminating the gas meter connection fee make an all-electric home with solar completely financially viable in the Bay Area in terms of operating costs.
Other than the operating costs, there are the initial capital costs of switching these natural gas–based appliances to electricity, which can run into thousands of dollars. First of all, these high-efficiency electric appliances are similar in cost to top-of-the-line, high-end gas appliances. Even if the consumer elects to switch out the gas appliances at their end of life, there is an added burden of wiring infrastructure. Most of the older homes in the Bay Area are serviced by a 100 ampere main panel, which would be inadequate to service an all-electric home. The main electrical service panel needs to be switched to a 200 ampere panel at a minimum. (Note that this not an issue for the newer homes that come with a 200 ampere panel standard.) Also, multiple 240V lines need to be drawn from the panel to these appliances, further adding to the infrastructure costs.
The state and federal government can help in this process by providing energy-upgrade rebates to consumers who are willing to make the switch. PGE can provide special rate schedules to all-electric homes to make the switch viable even for people without rooftop solar. Also, a carbon tax on the price of natural gas, which is at historic lows, will help in making the economics work better for consumers. The California Energy Commission (CEC), which has historically advocated for efficient natural gas based appliances, is currently looking into the issue of electrification of residential appliances – mainly the use of heat pumps. These findings should be reflected in the new Title 24 building code recommendations which are due to come out in 2019. It is well known that California is serious about reducing GHG emissions and the governor has set an aggressive goal for the state to reduce its carbon footprint by 2030. Ways and means to accelerate fuel switching should be an essential part of the plan.
(From the editor) Another story by Indradeep Ghosh I highly recommend: What It Takes To Create An Off-Grid Household In The Bay Area (California) Using Rooftop Solar Battery Storage Only (Exclusive)
About the Author: Indradeep Ghosh is a clean energy and sustainability advocate residing in the Bay Area, California. His life’s ultimate goal is to rid the world of fossil fuels and ensure a sustainable future in an Earth rich in biodiversity. He is a strong believer in technological solutions and the innovative power of humans to solve complex problems. He publishes his findings and experiences from time to time in CleanTechnica.
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Tags: air source heat pumps, electric dryers, electric heating, electric stoves, electric stoves vs gas stoves, electric water heating, Energy Star, gas stoves, ground source heat pumps, heat pumps, space heaters, space heating, water heating
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Fossil fuels responsible for 80% of GHG emissions! The man much be mad.
Makes no sense at all because the GHG circulation in nature is factors higher..
I was talking about the excess here. The part which is in the natural carbon cycle is sustainable and should be maintained.
The very high marginal rates of PGE are due to a strange political decision made long ago to have a highly exaggerated incremental block pricing. It was started with good intentions during the rolling blackout era but now is on a path of its own pushed by a coalition of rooftop solar leasing companies and left wing politicians. It doesn’t reflect the true costs of the grid which are mostly fixed due to the distribution infrastructure being FAR more costly than the marginal local cost of electricity.
The effect of this is that California has no heat pumps despite it being an obvious choice given the climate and the serious infrastructure risks of gas pipelines in a seismicly active area.
The most important thing is we are starting to develop and refine the new technology. The transition will take a LONG time. NG gas in the lower48 is expected to run out in around 30 years. Right now NG is less then 2/mcf, and in 2005 it was above 13/mcf.
It is a 30 year plan, and we are easing into it.
I’ve found that gas dryers are kind of disappearing. Electric dryers are a much larger market, and as a result, the fancy, high-end dryers tend to come in electric only. Gas dryers cost more upfront but have *fewer* features.
Also, the amount of money spent running the dryer is really quite low.
So despite the fact that electric dryers cost more to operate, I think it will be quite possible to get people to switch. It’s already happening out of a form of inertia.
Any discussion of heating and cooling economics that focuses on a mild climate such as that in San Francisco is of minimal utility for the bulk of the rest of our country. Here in the Northeast, we not only have much more extreme weather, but we have a very high percentage of homes heated with oil or even electric resistance heating. In such an area and with those fuels, heat pumps are unquestionably the most economic HVAC solution — even geothermal heat pumps are easily justified. (Of course, no matter where you are, the environmental case for geothermal heat pumps is great. You must can’t get more efficient than “heat without fire.”)
Here in New York State, only 20% of our greenhouse gases come from electricity generation, 30% come from heating fuel, and 40% from transportation. New York is also the largest consumer of oil for heating in the country. Thus, emissions from electricity are much less important to New Yorkers than they are to folk in California…
The “Second Great Electrification” of our country will be driven by fuel switching, from fossil fuels to electricity, in the transportation and heating markets. We can’t meet our emissions reduction goals without ensuring that we broadly adopt these forms of “beneficial electrification.”
Air source heat pumps have improved dramatically in the last 20 years and people in the northeast are having excellent results from air source heat pumps. This is particularly true for going from oil/radiator to ductless. For some strange reason, the US made air-source heat pumps vent the air out the top – the place where snow falls. All of the Asian units have vertical intake and exit surfaces.
Northeast homeowners that I’ve talked with just love these ductless heat pumps with thei smaller costs and added AC in the summer.
Big houses can’t go ductless (you’d need dozens) but it’s great for apartments.
However, air-to-water split-system heat pumps finally exist, and for cold weather climates, too. I’m planning to get one as soon as I figure out how to locate it. This should allow hydronic-heating houses to use air-source heat pumps as well.
yes, lots of options. One reason ductless systems are popular in the northeast are the hot water radiator systems which lack ductwork. Hence, retrofits are possible and not every room needs one, but your point is well taken. Central hot water heating heat pumps, regardless of air source or geothermal outside retrofit right into existing hot water heating systems. Hydronic is making a comeback for new construction too because it’s simply more comfortable heat.
And we haven’t mentioned the huge benefits of deep-energy retrofits on homes in cold and very cold climates. That makes bills drop dramatically and gives more options for how to heat.
This article takes the relative efficiency and cost factors of fuel while looking at operating costs. Similar analysis can be done in the NE to figure out how much better air source or ground source heat pumps are over existing heating schemes. It does not matter what the total heating load for the season is from relative operating cost point of view. However, it will matter from the capital investment point of view as a high heating load leading to higher savings in operation costs will make the payback period of the initial investment shorter.
This is a very California-specific article. For three reasons:
(1) electricity prices are different in other locations
(2) natgas prices are different in other locations
(3) COP efficiencies depend on climate
True. Everybody has to make their own calculations but the method is the same. The Energy factor number published by EPA is an averaged COP for an average US climate and averaged over the year. However, in extreme climates these numbers will have to be modified.
Should we call it fuel switching, or electrification?
I think most of the time at least for heating and drying replacement happens when the old unit fails. Then it is a combination of what the repairmen recommend and minimizing the (unexpected) capital expense rather than longterm cost minization that determines the result.
From what I’ve heard, electric (resistance) dryers have been gaining market share. How available are heat pump dryers, and heat pump water heaters? And what about the purchase price premium, can it be overcome by longterm savings?
I have a portable induction cooker. We have a grand total on one pot that is suitable for it. Almost all the cookware for sale is nonmagnetic, so the issue of acquiring pots
that are suitable could be an issue.
You’re right about electric resistance dryers. I’ve been thinking about the reasons for this. Manufacturers don’t bother to make their nicest models in gas models any more.
I think part of it is that gas dryers are more complicated and have to meet a lot more legal standards, because they’re a “combustion appliance” — electric dryers aren’t. They also have more difficult installation for the same reason.
Gas dryers have always been a smaller market because a lot of places don’t *have* natgas. Being a smaller market, it’s not worth the manufacturers’ time to focus on them. Any new model is designed for the “mainstream” electric market, and if it’s a big hit, they *might* eventually make a gas variant. Which will cost more up front than the comparable electric dryer, which probably negates the savings on fuel cost.
The popularity as you said is highly dependent on the availability and cost of natural gas in a region. In the Bay area natural gas is relatively so cheap that all the big box retail stores like Home Depot and Lowes push gas dryers to the consumer. I sometimes just go window shopping to see what new efficient and smart appliances have come out and am dismayed to see that there are almost no electric dryers on the store floor. Even though the gas models cost a few hundred dollars more they make economic sense after 1 to 2 years of operation. All new house construction that I have seen here comes pre-plumbed with gas connection in the laundry area. This is sad but the reality here.
Even with today’s California grid, a gas dryer will be better for the environment than a resistance heater one.
Also I should note, any house I’ve ever lived in had 240volt outlet for the laundry room. Switching to a heat pump dryer should reduce the electrical needs, so that shouldn’t be a problem.
Electrification is something that we should expect to take decades, too early electrification -especially with resistance heaters probably isn’t a good thing.
In terms of kWh a resistance dryer is slightly more efficient than a gas dryer. So unless the grid electricity is completely emission free it will make things worse. However, a heat pump dryer is twice as efficient. So if the grid electricity has low carbon intensity as in Bay area then it might improve things. I have to do the exact calculations with PgE’s latest carbon intensity numbers to see if the balance is already tilted. If the house has rooftop solar then off course it is better. Also there are cities like Palo Alto now with 100% carbon neutral electricity. In such cases it will improve things.
Depends upon how you allocate the sources of the juice. Does the marginal KWhour run off the PV panels, or off the marginal supplier for the grid. At least short term I’d say the later, as the system operator has to find and bid for the extra KWhour. Maybe longer term the marginal increase in demand will lead to a marginal increase in new renewables gen.
True. If the marginal kWh comes from a peaker plant with 20% efficiency then it is bad for emissions. However, if it comes from a Combined Cycle Plant with 60% efficiency and is driving a heat pump dryer, then it might be better for emissions. TOU rates can steer people to do the drying during times of low carbon electricity. I do my drying during the day time on weekends and my solar panels directly juice the dryer. I have a large system though – 11.8 KW. The dryer peak draw is 5 KW,. During noon now the solar panels pump out 9.5 KW continuous. In winter it reduces to about 6.5 KW.
Picking the californa example, the marginal Kwh comes from gas combined cycle. Gas dryer is more environmentally friendly now and probably will be for a decade or so. Heat pump for central heat, however, is a good idea anywhere in the country, plus as TOU pricing emerges on electricity, can take advantage of ample renewable power at certain times of day.
Also, nearly everywhere, heating the building is a much bigger energy demand than the dryer.
I would also say “Electrification” rather than Fuel Switching.
This is why you should never believe anybody that uses primary energy consumption numbers when arguing against renewable energy. All the waste heat associated with combustion makes this figure way higher than what people actually need in terms of energy “services” like hot water, cold beer and turning the wheels of their car.