Two Consumer Units, one off peak only

[SUNRAY]

Whatever happens to the price of gas, I very much doubt that it will become as expense as, let alone more expensive than, electricity - not the least because rises in gas prices will inevitably be at least partially mirrored by rises in electricity prices.

I presume that looking at the gas/electricity price difference will become more difficult/complicated in the presence of heat pumps. Electricity will presumably continue to charged on the basis of the kWh actually supplied - but, unlike the present situation, with a heat pump that is a totally different matter from the kWh delivered to the house (which is what one would want to compare with gas kWh)??

Kind Regards, John

Yes all agreed, However in a rental property we have pre pay meters for gas and electricity. My tenant has informed me the current prices are now 13.2P & 17.4p. Last time I checked I believe the ratio was more like 1:3. It could simply be a catching up situation.

I'm playing devils advocate here but one way of reducing our gas usage to reduce our emissions would be to reduce the cost advantage to zero.

 

[EFLImpudence]

Often wonder why electricity is so much more expensive than gas.

Say electric is four times the price of gas.

So for a gas-fired power station, the gas must be a quarter of the electricity price - possibly less if they get it cheaper than a householder.

Why, then, does it cost three times as much to generate and distribute electricity than does gas?

 

[winston1]

There are losses in the 'heat engine' that converts gas to electricity.

 

[JohnW2]

Often wonder why electricity is so much more expensive than gas. Say electric is four times the price of gas. So for a gas-fired power station, the gas must be a quarter of the electricity price - possibly less if they get it cheaper than a householder. Why, then, does it cost three times as much to generate and distribute electricity than does gas?

I've often wondered the same. There are clearly major differences which inevitably make electricity more expensive than gas (to the end-user) but I don't know how far they goes to explaining the magnitude of the difference.

Gas is very simple. Once it has been 'obtained' (the cost of which is the same in either case), all that has to be done is to distribute it, through a distribution system which is basically just a simple network of pipes, which I imagine needs relatively little maintenance (and no real 'running costs', beyond the maintenance). Furthermore, in the absence of leaks, there are no losses (of "kWh") in the distribution network.

Electricity is far more complex and involves far more 'costly' elements. Firstly, there is cost of establishing and running the gas->electricity conversion process. The distribution network is much more complicated than gas, and therefore presumably involves much more capital outlay, running costs and maintenance costs (including, I imagine, far more 'replacement of elements of the network' {like transformers etc} than is the case with gas). Finally, there are lots of 'losses' (of "kWh") in the process, in contrast with the almost zero losses with gas. The gas-> electricity process is very far from 100% efficient and there are also substantial losses in the distribution network.

All of that means that gas-generated electricity has got to be more expensive (to the end-user) than gas but, as above, I don't know to what extent it explains the (apparently diminishing) price difference. The situation is becoming more dynamic, and, as we move forwards, with (presumably) a diminishing proportion of electricity being generated from gas, what happens to the price differential will presumably depend upon the cost of electricity generation in ways other than burning gas.

Kind Regards, John

 

[plugwash]

I also understand that the Electricity industry has essentially had to subsidize the transition to renewable electricity (either through explicit subsidies or through "must purchase" rules). I haven't heard of any similar requirements being placed on the gas industry.

 

[JohnW2]

I also understand that the Electricity industry has essentially had to subsidize the transition to renewable electricity (either through explicit subsidies or through "must purchase" rules). I haven't heard of any similar requirements being placed on the gas industry.

Possibly, but I think a pretty large electricity/gas price difference has existed for decades - since long before anyone knew what "renewable electricity" was/is!

Kind Regards, John

 

[EFLImpudence]

Is it, as Winston implied, that it takes twice as much gas to produce the 'equivalent power' of electricity - therefore the cost of the gas is more like half the price of electricity, which would be reasonable?

 

[JohnW2]

Is it, as Winston implied, that it takes twice as much gas to produce the 'equivalent power' of electricity - therefore the cost of the gas is more like half the price of electricity, which would be reasonable?

As I've said, I think that is only 'the first part' of the difference.

If one assumes that X kWh worth of gas can generate X/2 kWh of electricity then, as you say, that in itself would explain a 2:1 price difference. However, there will be appreciable losses in the distribution network, so that less than X/2 kWh will get to end-users, hence increasing the price difference to greater than 2:1.

Then one has to add in the fact that (quite apart from the efficiency of the conversion) turning the gas in electricity costs an appreciable amount (in terms of capital, running and maintenance/replacement costs) for which there is no real equivalent with gas, and then, further add in the "capital, running and maintenance/replacement costs" of the distribution network - which, as I have said, I imagine is very much more costly than maintaining the (essentially very simple) gas distribution network.

I don't have any facts or figures, but, starting with an assumed 2:1 price difference due to the inefficiency of gas->electricity conversion, I would think that those additional factors could easily increase the overall difference to 3:1 or greater, couldn't it?

Kind Regards, John

 

[winston1]

Back in 1960 at school in engineering science classes we were set a problem something like calculate the cost of boiling a pint of water using both gas and electricity, having been given the price of electricity in kW hrs and gas in therms. After several conversions of units the answer came out that gas was half the cost. The teacher said yes that would be right, gas is around half the cost of electricity. Always remembered that but over the last 60 years the difference has increased a lot.

Edited to correct double to half.

 

[JohnW2]

Back in 1960 at school in engineering science classes we were set a problem something like calculate the cost of boiling a pint of water using both gas and electricity, having been given the price of electricity in kW hrs and gas in therms. After several conversions of units the answer came out that gas was double the cost.

Fair enough, but you're presumably talking about coal gas ('town gas') which attracted considerable cost in relation to manufacture and storage - but I don't know how that compares with the cost of obtaining natural gas.

I don't think it was done back then (for fairly obvious reasons) but if electricity had been generated by burning coal gas, it would presumably have ended up considerably more expensive (per kWh supplied to end-users) than gas, as it is now. Back then, if electricity was generated by burning coal directly (rather than going via coal gas) that may go a fair way to explaining your observation.

 

[winston1]

Just noticed I got that wrong, gas was half the cost not double, now edited.

Indeed it was coal gas then. Natural gas conversion was done in the early 70's. Was overseas then (Australia) and I don't know if the price changed (dropped) at conversion.

 

[JohnW2]

Just noticed I got that wrong, gas was half the cost not double, now edited.

I must confess that, presumably because my brain 'knew what you meant', even before your edit I read you original as what you had intended, not what you had actually typed!

Indeed it was coal gas then. Natural gas conversion was done in the early 70's. Was overseas then (Australia) and I don't know if the price changed (dropped) at conversion.

I was around in the UK at the time, and remember the 'changeover' well, but I was at uni at the time, nit directly paying any energy bills, so couldn't tell you what, if anything, happened to the gas price. As I
implied, I would like to guess, since although all the costs of manufacturing and storing coal gas went away, the cost of extracting North Sea Gas must also have been far from inconsiderable.

For reasons I touched on in my previous post, I don't think one can sensibly/usefully make comparisons of the electricity/gas situation today with that in the days when 'the gas' was coal gas.

 

[aptsys]

Why, then, does it cost three times as much to generate and distribute electricity than does gas?

It doesn't. Electricity is primarily priced higher because of environmental levies. Essentially as a move to get people to use gas heating instead of electric fan heaters etc.

We'll likely see gas prices rise soon as a means to push the heat pump agenda.

 

[JohnW2]

... Why, then, does it cost three times as much to generate and distribute electricity than does gas?

It doesn't. Electricity is primarily priced higher because of environmental levies. Essentially as a move to get people to use gas heating instead of electric fan heaters etc.

Whilst that may be factor, the more concrete issues I've been mentioning are surely also very real.

It's easiest to thing just in terms of electricity generated from gas. If a source of gas (at whatever price) is available, all a gas supplier has to do is to distribute it, through a largely pre-existing 'simple' distribution network which is relatively 'cheap' (in comparison with electricity distribution) to maintain - with no losses of kWh (other than that due to leaks) between source and end-user.

With electricity, there are considerable losses in the gas-to-electricity conversion and some further inevitable losses in the distribution network - and that network is, I would think, much more expensive to establish and maintain than is the case with gas.

As I've said, I would have expected those considerations alone (quite apart from 'political' issues such as you mention) to be able to account for at least a 2:1-3:1 price difference (per kWh delivered to user) between electricity and gas

We'll likely see gas prices rise soon as a means to push the heat pump agenda.

Maybe. However, given that it is going to take decades to achieve widespread changing to eat pumps, and the fact that a high proportion of the population (including the poorest) are currently dependent upon gas, I would think that it would be very difficult (in both political and humanitarian terms) to try to introduce 'punitive' gas prices any time soon, wouldn't it?

Kind Regards, \john