July 09, 2008
Electric Price Growth Rate Rises In US

While electricity is much less sensitive than gasoline to rises in oil prices the inflationary environment for energy extends to electric power as well.

Prices.  Within the past few weeks, a number of utilities have requested permission from State regulators to raise electricity rates in response to rapidly increasing delivered fuel costs for power generation.  It is likely that most other utilities will soon need to pass through these increased costs to retail customers as well.  As a result, the forecast for growth in electricity prices is significantly higher than it was in last month’s OutlookAverage U.S. residential electricity prices are expected to increase by 5.2 percent in 2008 and by 9.8 percent in 2009 (U.S. Residential Electricity Prices).

In spite of this projected rise in prices for electricity we are in a long term trend of shifting more and more applications to run off of electric power. For example, in many parts of the United States electric power is now cheaper than heating oil for heating a house or other building. Also, the auto industry sees rechargeable electric cars as a way to escape from higher gasoline and diesel costs.

Wind turbines, concentrated solar power, and solar photovoltaics all place ceilings on electricity prices. So higher priced natural gas and coal can not cause even a doubling of US electric prices before massive substitution with wind and solar sources of electricity would take place.

Share |      Randall Parker, 2008 July 09 11:22 PM  Energy Electric Generators


Comments
JussiR said at July 10, 2008 5:20 AM:

Don't forget the dollar. The problem in your economy is that dollar is losing it's position as world currency and as a result they'r flooding back to your economy and this means inflation and increase in all prices. This is a big factor on oil prices and probably the biggest factor in electricity prices.

Nick G said at July 10, 2008 9:30 AM:

"we are in a long term trend of shifting more and more applications to run off of electric power."

Absolutely. It's THE trend.

" massive substitution with wind and solar sources of electricity"

It's interesting to note that at current prices PV is cost-effective on any form of transportation that's in use all day - RV's, trucking, bus, rail, water shipping. They're all going to hybrid-electric drive trains (or went long ago, in the case of rail), and PV can provide a surprisingly high % of their power (100%, in the case of container boats). As PV gets cheaper, and oil more expensive, more efficient forms of PV become economic - 10% efficient PV is the cheapest right now, but 40% efficient will get there, and that means a high % of industrial transportation energy from PV.

Randall Parker said at July 10, 2008 6:54 PM:

JussiR,

I agree about the declining dollar. The higher the price of oil the bigger the US trade deficit and therefore the weaker the dollar and the higher the price of oil. There's an element of a vicious cycle going on.

Nick G,

What's this talk about container boats being about to run off of solar power? You mean the big container ships that cross the oceans could get a substantial fraction of their power this way? What's your source for this?

Randall Parker said at July 10, 2008 7:10 PM:

Nick G,

Since PV on top of a train has weight do we really know that it will provide a net savings? Also, the trains would need cabling to bring the PV electricity up to an electric engine.

I suspect we will need lighter weight and higher efficiency PV before PV on trains and trucks makes sense. Also, whether PV will make sense for trucks could depend on how much of the time they operate in darkness and in lower light areas like Seattle versus Phoenix.

Nick G said at July 12, 2008 5:42 PM:

"You mean the big container ships that cross the oceans could get a substantial fraction of their power this way?"

The first question is: is it cost effective? Sure - it's just straightforward calculations: PV can generate power for the equivalent of diesel at $3/gallon (40KWH per gallon @40% efficiency = 16 KWH/gallon; $3/16KWH = bout $.20/KWH.

Let's take the Emma Mærsk. With length: 397 metres, and beam: 56 metres, it has a surface area of 22,400 sq m. At 20% efficiency we get about 4.5MW on the ship's deck at peak power. Now, as best I can tell it probably uses about 10MW at 12 knots (very roughly a minimum speed), 20MW at 15 knots, and 65MW (80% of engine rated power) at 25.5 knots (roughly a maximum). So, at minimum speed it could get about 45% of it's power for something close to 20% of the time, for a net of 9%. Now, if we want to increase that we'll need either higher efficiency PV, or more surface area from outriggers or something towed, either of which will increase costs.

On using wind propulsion to cut long-distance shipping costs by 10- 50%:

http://www.greencarcongress.com/2006/01/beluga_shipping.html
http://www.skysails.info/index.php?L=1

It's astonishing what can be done with modern materials, computer-aided design, and electronic control systems, to turn the old new again..

Nick G said at July 13, 2008 5:20 PM:

"Since PV on top of a train has weight do we really know that it will provide a net savings?"

I'm sure the weight of PV, especially thin-film PV built as an OEM installation, would be negligible.

"the trains would need cabling to bring the PV electricity up to an electric engine."

True, but I'm sure they have connections for signaling. Of course such a thing would take a bit of design work, given the varied nature of train payloads, and the way train-cars move around.

"I suspect we will need lighter weight and higher efficiency PV before PV on trains and trucks makes sense."

Again, I'm sure the weight of PV, especially thin-film PV built as an OEM installation, would be negligible in a 40 ton truck. Trucks would be much easier than trains, given that the roof is part of the truck: in trains, the containers tend to provide their own roofs.

"whether PV will make sense for trucks could depend on how much of the time they operate in darkness and in lower light areas like Seattle versus Phoenix."

Trucks are rarely undercover during the day, and they're in use more during the day than during the night. Of couse, the payback would be longer in Seattle.

Post a comment
Comments:
Name (not anon or anonymous):
Email Address:
URL:
Remember info?

                       
Go Read More Posts On FuturePundit
Site Traffic Info
The contents of this site are copyright ©