Creative destruction - Electric heating?!

There is a lot of discussion about carbon reduction and global warming. Some people believe it - some don't.

The reality is that the debate is going on about how we produce electricity and heat - both at home and through national grids.

Other than global warming - there are factors to consider:

Capital cost (if any)
Running costs
Pollution
Access to the supply chain

In 2008 The Energy Savings Trust commissioned a report that investigated both the carbon emissions, costs and performance of over 50 different heating systems in a variety of settings. The carbon emissions will have stayed the same. For fuel these were:
                                                               kgCO2/kWh

Natural gas                                             0.191
LPG                                                       0.234
Oil                                                          0.264
Bio-kerosene                                          0.212
Wood (pellets, bulk supply)                    0.025
Electricity - standard tariff                       0.539
Electricity - 7-hour tariff (on-peak)         0.539
Electricity - 7-hour tariff (off-peak)         0.539
Electricity - sold to grid                          0.539
Community heating (from biomass boilers) 0.025

Clearly Electricity uses a lot of carbon for heating and hot water - it is not very good - in Sweden and Denmark it has been limited. Most "tests" e.g. SAP propose that electricity uses a lot of carbon.

From a cost perspective electric heating is quite cheap to install - and you can use off peak metering. However a quoted price per kWh is about 13p including off peak tariffs.

Compare this to Gas at 4p or wood pellets at 3.5p or oil at 4.5p - even with large rises in cost - electricity is about three or four times as expensive.

Why focus on Electricity?

In the UK the Green Investment bank commission has issued a report titled "Unlocking investment to secure Britain's low carbon future". In it they have proposed that we move to electricity as the primary form of heating in the UK. See the annex1 for graphs.

Even with reductions in CO2 emissions through increases in nuclear power and wind power generation - our CO2 emissions may be cut - which is a good thing - but they won't be cut by the ratio above ie electricity generation costs 0.539 kgCO2/kWh which is more than 20 times the emissions of biomass. Are they going to reduce carbon emissions by 20 times?

The UK consumer will be left with no option but to purchase significantly more expensive heat that generates more carbon emissions than alternatives.

If I was a venture capitalist - I would consider this to be a pretty poor pitch!

Whilst I can support better generation of electricity through off shore wind power - it does not transfer to heating. (If carbon reduction is the goal)

The average heating bill in the UK is said to be £800 for gas. Looking forward electric heating would be £3200. Over 15 years this would be £48000 rather than £12000 to run. Whilst gas prices may well rise - are there any guarantees that electricity will fall? Is this a winning strategy?

The present government wants to make market forces work - I am not sure that this demonstrates market forces - more bully boy tactics from large companies that are used to making lots of cash. (Have you met a RWE N-Power salesman (or woman)?! I can imagine that it is corporate culture - and rife throughout the organisation.

As a consumer there are choices for the government. If they vote for "electric heating" then some of our bills will rise by a factor of 3 or 4 in the coming years.

The Renewable Heat Incentive has been costed at £104 per person by 2020 - this is a fraction of the electricity cost of £3200. Is there really any alternative?

Unfortunately we have elected a government that believes in markets - even if they deliver a four fold price increase - rather than pay out a penny extra in tax. As a consumer I want the lowest cost alternative.