By Bob Flanary
A Condensed History of The Electric Grid
Some people consider the electricity grid to be horrible. Certainly no one wants a coal plant in their community. But the grid is changing-there are a lot of great things about the grid. The saying “Don’t throw the baby out with the bath water” applies. A little history will help put things in perspective.
On September 4, 1882 Thomas Edison fired up the Pearl Street Station in Manhattan. This was the first commercial power grid in the U.S. and served 82 customers. This grid was powered by coal. Exactly 26 days later, a second Edison grid became operational in Appleton Wisconsin. That generation system was a hydroelectric dam. Except for the first 25 days in the history of the grid, the grid has never been 100% coal.
The first coal plants were terribly inefficient. The early turbines had an efficiency of about 1.6%. In the 1910’s the efficiency was a whopping 15%. At that efficiency, generation of a kilowatt hour of electricity would release 6.68 pounds of CO2, in addition to a lot of other toxic garbage.
Fortunately, as mentioned earlier, except for the first 25 days of the grid, coal has NEVER been the only source of grid energy. Today the grid energy supply is diverse (think wind), with the share supplied by coal decreasing every year. Today, coal supplies only about 28% of the electricity we use. The trend from the very beginning has been for emissions of CO2 per kilowatt hour to drop as utility operators found ways to use less fuel and spend less money. Emissions on our grid, which is managed by PJM Interconnection
PJM Interconnection Territory
(Pennsylvania-New Jersey-Maryland), for the year 2018, were .924 pounds CO2 per KwH. That is quite different from the 6.68 pounds of CO2 per KwH of the 1910’s coal generators. In fact, today, about 39% of the electricity we use (PJM grid) comes from zero carbon emitting sources of generation. And things are getting better. Think of all the people putting solar panels on their homes and consider how wind power is now the least expensive generating option. This trend will continue. The following graph shows how emissions of CO2 per KwH have fallen since 2008 on the PJM grid.
The other trend has been that, in real dollar terms, the price of electricity per kilowatt hour has steadily decreased. The Energy Information Agency, EIA.gov, which is a division of the U.S. Department of Energy, expects little or no price change in electricity cost through 2050.
The bottom line is that the electric grid is getting cleaner every year, it became less expensive over time and is expected to remain at about the same price though 2050.
Natural gas, however, is a different story. Natural gas chemistry cannot change so natural gas cannot get cleaner. It will always emit 11.7 pounds of CO2 per Therm when burned. When burned, it releases about half the CO2 that coal does. Maybe that seems great, but remember, half of a really big number is a big number. Also, natural gas is a potent greenhouse gas that leaks in large amounts throughout its distribution system. According to the Energy Information Agency, natural gas prices are expected to increase by about 66% by 2050. Because natural gas is a horrible fuel, many of us hope that natural gas will be taxed as a carbon emitting fuel, making it even more expensive. Not only that, the infrastructure to bring natural gas to homes is in poor shape and is very expensive to repair. Ultimately the gas customers will need to pay for the repairs. Bottom line, natural gas will never be clean, and it is getting more expensive.
My Results and Myths About Electric Heating and Its Cost
As an Actuary, I’ve always have been very keen about saving money. It should be of no surprise, then, that I know how to get the best electricity rates. Since 2007, when it was first available, I have been on ComEd’s Hourly Pricing Program. On this pricing plan, I pay hourly wholesale rates. These rates are insanely low. Next, when you shut off your gas, ComEd gives you an electric space heat discount of $.01773 per kilowatt hour for all kilowatt hours used, be they used for heat or charging an electric car. The net result is that I only pay about $.065 to $.070 per kilowatt hour, including taxes. I didn’t know about the space heat discount initially. I learned about it a few months after the switch. Then, when I did sign-up for it there was an approval delay. For the first year, 2014, I did not get the discount. The top graph below shows my actual energy costs as recorded in Quicken while the second graph is what I would have paid had the electric space heat discount been applied from day one. Only year 2014 was affected by this.
My mixed fuel years total cost is in blue and my all electric years total cost in green. Looking at the graphs, did my expenses go up or down? Clearly, my expenses went down. Why?
Myth #1: Heating with Electricity Costs More than Heating with Natural Gas
Most of the dollar savings shown above are due to reduced gasoline expenses. However, for my house, heating with electricity costs less than heating with gas. To show this clearly, we will answer the question whether switching to gas heat would have saved me money last year. Here is a detailed analysis using data from the ComEd billing cycle of January 19, 2018 to January 18, 2019:
Accounting of Why All Electric Heating Saved Me Money 2018
This chart shows all the costs that would change had I to switched to natural gas heating last year. Start with my current total electricity cost for the period 1/19/2018 to 1/18/2019. Subtract items where costs go down, like the cost of the kilowatt hours needed to run the heat pump and the extra customer fee I pay for being all electric. Then add items where my costs go up, like the $.01773 per KwH discount I lose on non-heating electricity use. Finally, add the cost of running a gas furnace, which includes the customer fee, the fuel cost and the cost to run the furnace fan. As you can see, switching to gas heat would not have saved me money. Obviously, the converse is true:
I Saved $229.24 Heating with Electricity from 1/19/2018 to 1/18/2019!
Let that sink in for a moment: For five years in a row, for my 2600 sq. ft. home in Lake County, Illinois it has cost me less to heat my home with electricity than it would have had I heated with natural gas. Think of the solar panels I could buy with the savings! Think about how I could use that money to make my house more efficient. Like compound interest, the savings would grow.
Myth # 2: Heat Pumps Do Not Work at Temperatures Below 20 Degrees.
This graph of Chicago weather shows the average number of hours annually (vertical scale) within each temperature band (horizontal scale). We spend quite a bit of time below 20 degrees. If heat pumps could not work below 20 degrees, people trying to stay warm with a heat pump in the Chicago area would be in trouble.
This graph shows my heat pump’s heat output (thick green line) for a house with my heating capacity requirement (black line). Remember that my heat pump is an air source heat pump, not an expensive geothermal heat pump. Pretty sure the graph shows that my heat pump works down to at least minus ten. The Rockford graph shows it working down to minus 20. My heat pump provides 100% of my heating needs above 5 degrees. Pretty sure the myth has been busted.
Myth #2 Busted!
Graphs produced by Carrier.
Myth #3: Heating with Electricity Is Worse for The Environment
Earlier, I showed the PJM CO2 emission trend line for 2008 through 2018
Notice that since 2008 the graph is trending down. In fact, grid CO2 emissions per KwH are down 24.2% in the last ten years. This trend will continue in the future as coal plants continue to close, wind power is added to the grid, gas generation facilities improve in efficiency and other technological advances occur. So, even if electric heating were worse today, that disadvantage would be short lived. Let’s look at my annual CO2 emission trend. Here are my results since 2010:
It’s interesting that this graph is very similar to my total cost graph. I’m pretty sure the less money we spend, in general, the less environmental damage we do. Regardless, my emissions have declined every year since going all-electric, except for the slight uptick last year. As with the annual cost, most of the reduction is due to lower gasoline emissions. Let’s now look more specifically at my home heating results from last year.
From the earlier table we saw that my heat pump used about 9600 KwH to heat my home to about 70 degrees from January 19, 2018 through January 18, 2019. Using the PJM annual CO2 emission rate of .924 pounds of CO2 per KwH, CO2 emissions for heating my house was 8,870.4 pounds.
Heating CO2 Emissions in Pounds
Gas Heat: 9226.5
Electric Heat: 8870.4
Had I heated with natural gas, I would have used 757 therms of natural gas and about 400 KwH to run the furnace fan. Since burning a therm of natural gas releases 11.7 pounds of CO2, the CO2 from using gas heat would have been 9226.5 pounds.
For the period in question, January 19, 2018, through January 18, 2019, Myth #3 has been busted!
However, the results of this calculation vary significantly with the weather. On an average year my heating system will be better environmentally than a natural gas system. Keep in my, though, that the grid will get cleaner in the years to come. Eventually, regardless of weather changes year to year, my system will forever be better environmentally than a natural gas system.
Myth #4: My Heating System Cost More Than a Comparable Traditional System
My heat pump is an air source heat pump that operates similarly to a central air conditioning system, however, it also provides heat in the winter. It cost about $2000 more than a comparable air conditioning only unit. But I saved $2000 by buying an air handler instead of a furnace. Since the net cost of the two systems is the same, my system could not have cost more. (This information is from the original system quote and a recent discussion with an installer)
Myth #4 Busted.
What About the Other Electric Appliances?
The other components of my home that were once powered by natural gas are the ventless heat pump water heater, the ventless condenser clothes dryer, and the induction range. These appliances are all more efficient than their gas counterparts. They cost less to run and are better for the environment. And, they are just as convenient, if not more so, than their natural gas equivalents.
The Problem with Refrigerants
Some heat pumps contain refrigerants that are potent green house gases. My heat pump uses R-410a. This refrigerant is being phased out in Europe in favor of R-32. R-32, when leaked, has much less impact on the environment than R-410a. Honeywell Solstice (R-466a) has also been developed as a replacement to R-410a. There is continuing research on building better air conditioners and heat pumps. I encourage everyone to pressure their elected officials to accelerate the phaseout of refrigerants with a high GWP. There are some success stories of companies that have redesigned heat pumps to us use better refrigerants. Mercedes Benz, for example, is using CO2 as a refrigerant in the air conditioners of their cars. For all the success, though, we can do better. That said, there is no reason to preclude you from installing a heat pump for your HVAC system or a heat pump water heater. Why? The alternative, heating with natural gas, requires the use of natural gas, itself a potent greenhouse gas. Methane leaks from the gas industry dwarfs the problem with current refrigerants. We need to move away from using natural gas.
Reasons to go All-Electric (And Live Better Sustainably):
- Electric homes cost less to operate
- Electric homes cost less to build
- The money saved on going electric can be used to purchase solar panels, insulation or wind power
- Heating with electricity makes wind power more profitable since more heating is done at night
- Solar energy installers love all-electric homes because larger arrays are easily justified
- Because there are no open flames, all-electric homes have cleaner air
- Because all-electric homes have better humidity control there is less opportunity for mold growth-so, all-electric homes smell better
- Going all-electric will stimulate innovation in the associated electric appliances, leading to more efficient and reliable appliances in the future
- The increased winter demand on the grid will stimulate innovation on the grid infrastructure making the entire system more environmentally friendly
- The grid will be much more efficient in ten years-the appliances you buy today will be used on that grid meaning the electric appliances you buy today will become greener as they age
- Electric homes, unlike mixed fuel homes, have zero risk of carbon monoxide poisoning
- Electric homes will not blow up due to gas leaks
- Electric homes have less risk of kitchen fires and burn injuries because there are no flames
- Electric induction ranges do not add toxic air into your home as do gas ranges
- Induction ranges are way sexier than gas ranges
- Electric ventless dryers, do not have vents that clog up with lint, i.e., they don’t have that fire risk
- Electric dryers and water heaters do not have vents that insects and vermin can enter
- Electric dryers and water heaters do not have vents that draw in cold, dry air in the winter and warm, humid air in the summer
- Electric homes can be powered with zero emission sources of energy-natural gas homes cannot