When did Electric Heat become cheaper than Natural Gas

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mshields

mshields

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Boston, MA
Recently, we've design two manufacturing facilities; one in PA, the other in OH, where we went with electric heat because it was so much cheaper than natural gas.

I'm trying to figure out when that happened? What caused it to happen? and what's chances that these conditions will hold steady over the long haul.

The OH facility is 96,000 square feet and they are putting in 4.5MW of electric heat. We're being told not to apply any diversity which I think is because the current exercise is to define a worst case cost. Even so, even if it were half that, it strikes me as insane

Thanks,

Mike
 
Perhaps cheeper to construct if location lacks natural gas infrastructure.

Perhaps more lucrative for property investors to design building future expansion for bitcoin mining.
 
ramsy said:
Perhaps cheeper to construct if location lacks natural gas infrastructure.

Perhaps more lucrative for property investors to design building future expansion for bitcoin mining.
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Boy that is a dirty word around here! They are putting the Bitcoin operations in lightly populated areas, but they are so noisy, they can be heard for miles. Right now there is no zoning requirements, but I imagine that is coming soon.
 
In October of 2021, nat gas was about $1.00 on the commodity market. I think it’s about $8.50 now and that’s down from the peak.
 
mshields said:
Recently, we've design two manufacturing facilities; one in PA, the other in OH, where we went with electric heat because it was so much cheaper than natural gas.

I'm trying to figure out when that happened? What caused it to happen? and what's chances that these conditions will hold steady over the long haul.

The OH facility is 96,000 square feet and they are putting in 4.5MW of electric heat. We're being told not to apply any diversity which I think is because the current exercise is to define a worst case cost. Even so, even if it were half that, it strikes me as insane

Thanks,

Mike
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I find it hard to believe that the operational costs for electric heat would be cheaper, especially since about 50% of our electricity is produced by gas fired units.
 
mshields said:
Recently, we've design two manufacturing facilities; one in PA, the other in OH, where we went with electric heat because it was so much cheaper than natural gas.

I'm trying to figure out when that happened? What caused it to happen? and what's chances that these conditions will hold steady over the long haul.
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That happened back in the 70's with the oil crisis then. Did a lot of electric conversions then. When oil finally stabilized and electric caught up that all changed to what most have been use to with gas heat being cheapest. Seeing it again, but don't know the enduring impact it will have. But with efficiency being improved in the last few years, electric conversions might stay steady.
 
hillbilly1 said:
Boy that is a dirty word around here! They are putting the Bitcoin operations in lightly populated areas, but they are so noisy, they can be heard for miles. Right now there is no zoning requirements, but I imagine that is coming soon.
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What makes them so noisy?
 
winnie said:
Electric resistance heat or electric powered heat pumps?

The COP of a heat pump makes a huge difference.

Jon
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In slab hydronic radiant heat with a water to water heat pump, radiant slab water loop to outside large underground water storage reservoir through the heat pump, could get the energy cost to a reasonable range. I would guess, it's a config I would consider trying, especially for a residence. Get the residence heat loss down to < 10 btus / sf and it's doable with a heat pump and probably, solar.

As a bonus I would try to get the system to do hydronic radiant cooling as well using all the same components.

But I'm sure they're not planning to spend for that kind of the installed cost. That number is too much. That means likely it's electric resistance elements in the ductwork compared to gas fired unit heaters doing the same thing (ducted air as the heat distribution method).

If it's resistance elements in the ductwork, they're going to have to throw a lot of kWh at it to do the work that gas would do. But the gas has a chance of being cheap again, just about the time they're done installing for it (or not).
 
We did some in slab electric heat for a company about 10-20 years ago. A couple (or even several) large warehouse/production areas. It was supposed to be cheaper, but I was always skeptical.

But they have added a lot of solar, so if they can power a large percentage from solar, that might tilt the scale some.
 
If the OP is referring to resistance heat, the KWH cost would have to be down in the couple cent range to compete with natural gas fired heat. Didn't do any math but resistance electric will only give you about 3400 BTU per KW.
 
mshields said:
Recently, we've design two manufacturing facilities; one in PA, the other in OH, where we went with electric heat because it was so much cheaper than natural gas.

I'm trying to figure out when that happened? What caused it to happen? and what's chances that these conditions will hold steady over the long haul.

The OH facility is 96,000 square feet and they are putting in 4.5MW of electric heat. We're being told not to apply any diversity which I think is because the current exercise is to define a worst case cost. Even so, even if it were half that, it strikes me as insane

Thanks,

Mike
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Are they purchasing some their energy from a wind or solar farm?
 
mshields said:
... electric heat ... was so much cheaper than natural gas.
.. what's chances that these conditions will hold steady over the long haul. ...
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Essentially zero. It will always be possible to generate electricity from natural gas with about 30% efficiency. In the long run, the cost of electricity (and electric resistance heat) will always be capped at about triple the cost of natural gas.

Other factors -- depleting natural-gas reservoirs and renewable electricity -- may drive the price ratio in the opposite direction.
 
wwhitney said:
Possibly true in some limited locations in the US, but the US grid as a whole was 22% coal powered in 2021. Also 61% fossil fuel powered.

Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA)

www.eia.gov www.eia.gov

Cheers, Wayne
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In our area a few municipal POCOs jointly own a fairly large coal plant. So in our case I think coal power is the majority for us. Of course they now want to close and tear down a perfectly good and modern plant some 15 years before it is even amortized and paid for. The height of fiscal irresponsibility.
 
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