5 ms·

I wonder if CA has noticed that electricity prices in the investor-owned-utility regions are so out of whack that a heat pump with a COP of 4 is no longer econo

by amluto 3y ago

I wonder if CA has noticed that electricity prices in the investor-owned-utility regions are so out of whack that a heat pump with a COP of 4 is no longer economical compared with a reasonably efficient gas-fired appliance. The solution isn’t more regulation or incentives, IMO. It’s to fix the utterly broken electricity market. (This is a great example, BTW, of how public-private partnerships can be dramatically worse than full public control. Palo Alto, Santa Clara, and Los Angeles are doing quite a bit better.)

Aloha 3y ago
Yeah, in a parallel comment I noted that in most of the country an 80% gas furnace is cheaper to operate.
- toomuchtodo 3y ago
  Even when you include the cost of carbon emissions in that fossil gas being burned?
  - riskable 3y ago
    The subsidies on the gas drilling, production, purification, transport, and infrastructure should also be accounted for.
    - Aloha 3y ago
      How do you calculate policies specifically for gas? There are tax advantages allocated to fossil fuel exploration, but not specifically for gas - and mostly just exploration.
  - cma 3y ago
    You would need a tax or heat pump allowment to adjust for that.
    - Aloha 3y ago
      Indeed, we could make electricity cheaper relative to gas to encourage HP usage, but the cost delta is high, you need electricity under 10c kWh to be competitive.
  - Filligree 3y ago
    Carbon emissions don’t cost anything to the person doing it.
    - Aloha 3y ago
      Even if you add a carbon tax a 200 dollars a ton, because of the relative inefficiency of generation and transmission, natural gas ends up being cheaper.
  - Aloha 3y ago
    Right now 50% of the power I can buy at any given time is generated by burning natural gas - this is true in 80% of the country. So it doesn't really matter - it might if we build some nuclear or whatever, but right now, it doesn't.
    - toomuchtodo 3y ago
      Right, you're not paying the true cost of that energy [1] [2]. I'm saying, what happens when you have to. That changes market signals, perhaps drastically, assuming the per ton cost of CO2 emitted (which is optimistically ~$50/ton but likely closer to $200/ton, assuming the only two ways to handle emitted carbon are to either not emit it or direct air capture and sequester underground ie Climeworks and company). When consumers must pay for the externalities of their fossil fuel consumption, it's no longer economically competitive. If you can't pass carbon taxes, have to outlaw new gas service like many jurisdictions are attempting to do. High level, looking at the cost of natural gas alone is insufficient for these discussions; you have to look at the entire supply chain and externalities to arrive at a true "apples to apples" comparison. (matters now, but won't as the blended cost of renewables and storage [firm generation] declines below the floor fossil gas needs to sell at to keep the infra running, and that infra already leaks like a sieve [3]) [1] https://energypost.eu/new-u-s-study-damage-per-ton-of-co2-costs-185-not-the-official-51/ https://energypost.eu/new-u-s-study-damage-per-ton-of-co2-co... [2] https://www.nature.com/articles/s41586-022-05224-9 https://www.nature.com/articles/s41586-022-05224-9 [3] https://www.edf.org/climate/methanemaps https://www.edf.org/climate/methanemaps
      - amluto 3y ago
        In a sensible world, i.e. not California IOU-land, you are of course correct. In California, for IOU customers, electric rates are pushing $600/MWh. You can figure out how exactly you want to apply the emission factors: https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references https://www.epa.gov/energy/greenhouse-gases-equivalencies-ca... But you will have a hard time making the math come out in favor of electricity. Unless you have a really nice heat pump, your electricity is 100% carbon-free, and you rule out gas-fired heat pumps [0] or cogen [1], you’re probably better off burning natural gas and using the money you save to offset your carbon usage in some more effective manner than throwing it at your local utility so they can burn it. Fundamentally, carbon pricing can work when CO2 emissions are expensive and the clean alternatives are reasonably priced. California has a major problem with the latter requirement. [0] They exist but seem very rare. [1] Reputable companies make these, but the devices are large and are not friendly for residential installations.
Slevin11 3y ago
Agreed. I live in the CA, and am a homeowner. I love the efficiency of heat pumps. I have a high personal incentive to install cool efficient tech. I have the 20k lying around to install a heat pump (or 5-7k for a mini split). Yet I will never install a heat pump, because PG&E is running a racket on electricity prices. In fact, I’m considering instead installing a new wood stove / masonry heater. CA needs to get its incentives aligned to meet any of these goals. You want people to electrify? Just make it cheaper to run in the long term, and everybody will just do it by default.
- downWidOutaFite 3y ago
  PG&E is charging you to pay for wildfire lawsuits and to bury power lines so that people can keep building cities in forests.
  - photonbeam 3y ago
    The state should pay for that out of general taxes rather that shifting the economic incentives of power use
    - amluto 3y ago
      IMO the state should have forced PG&E into liquidation, bought all the assets, and converted the whole mess to a public utility. It would surely take some time to learn how to operate PG&E’s disaster of a system, but it’s not as though PG&E can competently operate its own system right now.
      - s1artibartfast 3y ago
        I hated this idea at the time, but have come around to it. Im fairly libertarian, but understand that competition is difficult for the power distribution network. As much as I think the state is inefficient, a cost plus regulated monopoly is even worse. Municipal power companies in CA run $0.10-0.20 per kwh, while PG&E is $0.40-0.50 cents, and going up.
kerkeslager 3y ago
I agree with you that the electricity market in CA (and a lot of other places) is broken and should be fixed. But we also need to stop waiting for intractable economic problems to be solved to address climate change. In the long run, the economic and human cost of not addressing this will far outstrip short-term costs.
itsoktocry 3y ago
>are so out of whack that a heat pump with a COP of 4 is no longer economical compared with a reasonably efficient gas-fired appliance. Orthogonal, but I point this out all the time re: electric vehicles, when people claim "they are so cheap to operate!". Do you really think that will continue to be the case when they are 10%, 25%, 50% of the market? The government will squeeze every dollar "saved" out of you. If you're lucky it will be equivalent to what you used to spend on gasoline.

by amluto 3y ago

Aloha 3y ago

Yeah, in a parallel comment I noted that in most of the country an 80% gas furnace is cheaper to operate.

toomuchtodo 3y ago
Even when you include the cost of carbon emissions in that fossil gas being burned?
- riskable 3y ago
  The subsidies on the gas drilling, production, purification, transport, and infrastructure should also be accounted for.
  - Aloha 3y ago
    How do you calculate policies specifically for gas? There are tax advantages allocated to fossil fuel exploration, but not specifically for gas - and mostly just exploration.
- cma 3y ago
  You would need a tax or heat pump allowment to adjust for that.
  - Aloha 3y ago
    Indeed, we could make electricity cheaper relative to gas to encourage HP usage, but the cost delta is high, you need electricity under 10c kWh to be competitive.
- Filligree 3y ago
  Carbon emissions don’t cost anything to the person doing it.
  - Aloha 3y ago
    Even if you add a carbon tax a 200 dollars a ton, because of the relative inefficiency of generation and transmission, natural gas ends up being cheaper.
- Aloha 3y ago
  Right now 50% of the power I can buy at any given time is generated by burning natural gas - this is true in 80% of the country. So it doesn't really matter - it might if we build some nuclear or whatever, but right now, it doesn't.
  - toomuchtodo 3y ago
    Right, you're not paying the true cost of that energy [1] [2]. I'm saying, what happens when you have to. That changes market signals, perhaps drastically, assuming the per ton cost of CO2 emitted (which is optimistically ~$50/ton but likely closer to $200/ton, assuming the only two ways to handle emitted carbon are to either not emit it or direct air capture and sequester underground ie Climeworks and company). When consumers must pay for the externalities of their fossil fuel consumption, it's no longer economically competitive. If you can't pass carbon taxes, have to outlaw new gas service like many jurisdictions are attempting to do. High level, looking at the cost of natural gas alone is insufficient for these discussions; you have to look at the entire supply chain and externalities to arrive at a true "apples to apples" comparison. (matters now, but won't as the blended cost of renewables and storage [firm generation] declines below the floor fossil gas needs to sell at to keep the infra running, and that infra already leaks like a sieve [3]) [1] https://energypost.eu/new-u-s-study-damage-per-ton-of-co2-costs-185-not-the-official-51/ https://energypost.eu/new-u-s-study-damage-per-ton-of-co2-co... [2] https://www.nature.com/articles/s41586-022-05224-9 https://www.nature.com/articles/s41586-022-05224-9 [3] https://www.edf.org/climate/methanemaps https://www.edf.org/climate/methanemaps
    - amluto 3y ago
      In a sensible world, i.e. not California IOU-land, you are of course correct. In California, for IOU customers, electric rates are pushing $600/MWh. You can figure out how exactly you want to apply the emission factors: https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references https://www.epa.gov/energy/greenhouse-gases-equivalencies-ca... But you will have a hard time making the math come out in favor of electricity. Unless you have a really nice heat pump, your electricity is 100% carbon-free, and you rule out gas-fired heat pumps [0] or cogen [1], you’re probably better off burning natural gas and using the money you save to offset your carbon usage in some more effective manner than throwing it at your local utility so they can burn it. Fundamentally, carbon pricing can work when CO2 emissions are expensive and the clean alternatives are reasonably priced. California has a major problem with the latter requirement. [0] They exist but seem very rare. [1] Reputable companies make these, but the devices are large and are not friendly for residential installations.

Slevin11 3y ago

Agreed. I live in the CA, and am a homeowner. I love the efficiency of heat pumps. I have a high personal incentive to install cool efficient tech. I have the 20k lying around to install a heat pump (or 5-7k for a mini split). Yet I will never install a heat pump, because PG&E is running a racket on electricity prices. In fact, I’m considering instead installing a new wood stove / masonry heater. CA needs to get its incentives aligned to meet any of these goals. You want people to electrify? Just make it cheaper to run in the long term, and everybody will just do it by default.

downWidOutaFite 3y ago
PG&E is charging you to pay for wildfire lawsuits and to bury power lines so that people can keep building cities in forests.
- photonbeam 3y ago
  The state should pay for that out of general taxes rather that shifting the economic incentives of power use
  - amluto 3y ago
    IMO the state should have forced PG&E into liquidation, bought all the assets, and converted the whole mess to a public utility. It would surely take some time to learn how to operate PG&E’s disaster of a system, but it’s not as though PG&E can competently operate its own system right now.
    - s1artibartfast 3y ago
      I hated this idea at the time, but have come around to it. Im fairly libertarian, but understand that competition is difficult for the power distribution network. As much as I think the state is inefficient, a cost plus regulated monopoly is even worse. Municipal power companies in CA run $0.10-0.20 per kwh, while PG&E is $0.40-0.50 cents, and going up.

kerkeslager 3y ago

I agree with you that the electricity market in CA (and a lot of other places) is broken and should be fixed. But we also need to stop waiting for intractable economic problems to be solved to address climate change. In the long run, the economic and human cost of not addressing this will far outstrip short-term costs.

itsoktocry 3y ago

>are so out of whack that a heat pump with a COP of 4 is no longer economical compared with a reasonably efficient gas-fired appliance. Orthogonal, but I point this out all the time re: electric vehicles, when people claim "they are so cheap to operate!". Do you really think that will continue to be the case when they are 10%, 25%, 50% of the market? The government will squeeze every dollar "saved" out of you. If you're lucky it will be equivalent to what you used to spend on gasoline.