People often complain that “green” design costs more. Energy from renewable sources costs more, compact fluorescents (CFLs) cost more, “A” rated appliances cost more etc. The problem is that people compare one component against the next without joining all the dots. Whilst it may be true that certain capital costs are greater energy efficiency experts would encourage us to consider the whole system. Furthermore rather than considering the energy costs, as delivered by the energy supplier, they would have us consider the end-use cost of each service i.e. light rather than “lighting” (thus including day light), warmth rather than heating (thus including insulation), coolth (by which I mean fridges and freezers only i.e. not air conditioning (AC for short.) Curious about what costs a whole systems assessment of green vs. convention would reveal I decided to try and do some sums.
Green Energy Systems
Before I go any further, first of all let me define a “Green Energy System.” It is an energy efficient appliance i.e. a compact fluorescent (CFL) used in conjunction with renewable energy generation technologies from a specific source e.g. photovoltaic solar panels. The Energy Saving Trust (EST) report CE56 demonstrates the cost benefits of lighting CFLs compared to incandescent bulbs and notes that by installing CFLs you pay cost 78% less i.e. just 22% (one fifth) that of incandescent bulbs and that using a business-as-usual “Fossil Fuel System” (incandescent bulb plus fossil fuel generation mix) which costs £100.80. So how much does a “Green Energy System” cost?
Understandably addressing this question is not straightforward and requires a little restructuring of ones mental furniture, furthermore, given the available EST data it is actually easier in the first instance to try and determine the maximum permissible cost of renewable electricity when used in conjunction with energy efficiency. (Here “permissible” means no additional capital outlay beyond that incurred by a Fossil Fuel System whilst performing the same service i.e. the cost of the service i.e. lighting does not exceed £100.80) .
So how can we assess the permissible cost of energy in a Green Energy System?
Assuming that the capital cost of the Fossil Fuel System above is acceptable (which it must be, otherwise market theory says that the price shouldn’t be what it is) and that the cost savings that a CFL creates over its life (when used in a Fossil Fuel System) can be reallocated, i.e. to renewable electricity generation, the permissible cost /kWh of renewable energy can be determined by dividing the energy use of the CFL (kW.h) into the cost saving incurred by the CFL.
Permissible additional energy cost:
£78.14 / 240kWh = 0.325 £/kW.h used
Affordable energy cost = Permissible additional energy cost + existing energy cost:
0.325 £/kWh + 0.079 £/kWh = 0.404 £/kW.h or a rather staggering 40.4 p/kW.h-used !!!
The conclusion drawn from the calculation is that by installing CFLs a consumer can afford to pay up to five times more for electricity before the actual expenditure increases. So when you take this whole systems approach to energy you begin to wonder what all the fuss is about…..
For example Photovoltaics are generally held to be the most expensive energy source; thus a good example because any other renewable system is going to cheaper. In the book “Heat” (on pg. 128), Monbiot notes that in 2020 roof top solar electricity costs are expected to be 10-16 p/kWh (an average of 14p has been used in the graph below). At some 2.1 – 8.1 p/kWh more than fossil fuels conventional analysis would mean than people tend to conclude that it cost is uneconomic, but then you realise that when you use PVs as a part of a “Green Energy System” the energy price is just 25 - 40% that of the maximum permissible cost of renewable electricity. As a consequence even the most costly renewable energy sources, such PVs, can be considered to be more than just “economically viable,” rather they can actually be quite profitable as they leave you with more money in your pocket than the rather inefficient business-as-usual Fossil Fuel System solution
To undertake some cost benefit analysis you could say that based on solar electricity costs of 10-16 p/kW.h you actually save between 24.4 and 30.4 p/kW.h-used, that’s 5.8 to 9.6 p/kW.h-saved, or £58.56 to £72.96 per CFL installed. Assuming 10 lamps per house that’s a saving of £585.6 to £729.6 over the lamp life of the CFLs.
You will note that the energy costs that were considered above were the cost of solar PV in 2020. So what about current costs? Again Monbiot quotes some reputable third party sources costs ranging from 17-46 pence/kWh and “around 70 pence/kWh.” As this data suggests that there is a factor four range in the cost/kWh of solar PV it leads me think that this is still a very immature market. As PV technology still developing quite rapidly, and as normal market theory suggests that every doubling in production leads to a halving in cost, these figures should to be inevitably viewed with caution. As a consequence I would argue that today’s cost/kWh should be calculated on a case-by-case basis.
On pg.130, Monbiot notes that PVs have a life span of 25 to 30 years and have a payback of 25 to 35 years (he gives referenced sources for this data) and then goes on to note that you cannot make your money back. I can only presume that the references used calcs are based upon comparing one energy supply with another and not by applying a holistic approach to the assessment. If they had Monbiot would have found that the whole Green Energy System, using the 2020 estimate, can cost 60 - 75% less than a Fossil Fuel System. As a consequence the payback for PVs is reduced accordingly (i.e. using Monbiot’s data payback drops from 25 -35 years to 6.25 - 14 years) after which time the energy generated may be considered to be free (that’s what effectively payback means).
The graph above shows the whole life cost for a range of incandescent bulbs and CFLs with either conventional fossil fuel of renewable energy (PVs).
Beyond Green Energy Systems for Lighting
The above assessment of a Green Energy Systems was developed examining a lighting system but what about other systems: cooling systems (to reiterate I mean fridges and freezers only i.e. not AC!) or entertainment (television, computers etc.)
The lighting system reduced energy use by 80% but I can’t state that every system will achieve this level of efficiency. According to Swedish research dating from 2002, compared to the average set of household appliances in 1985 the energy use can be reduced by 54%; an improvement of 12% upon a study just seven years earlier. Given that 2009 is rapidly approaching would another 12% be possible? Another little recognised fact is that not only do energy efficient tumble-driers, refrigerators, freezers and lighting equipment, reduce carbon emissions, but they also help to prevent summer over heating.
Using Monbiots PV cost data, and a whole systems approach, when comparing a Green Energy System to a Fossil Fuel System I estimate that for PVs to become a cost effective energy source you need to ensure a minimum average energy performance improvement of 52% or more across all of the electrical goods and equipment. If you have any sense however you would adopt a least cost approach, wring out as much energy efficiency in everything that it purchased and thus minimise the whole system cost. With today’s technologies, and some careful shopping around, this should not be very hard at all. The AECB Gold standards are a fine example of this way of thinking where A++ rated appliances are required throughout.
(Using Monbiot’s data on pg. 111, a given that wind power is best generated remotely from the site and as a consequence would have to be bought from a utility, once again the break even occurs about the point at which a 50% improvement in energy efficiency is achieved).
Conclusion:
This is study utilises a least cost approach to renewable energy and climate change, in doing so it has demonstrated that by tackling energy systems in a holistic manner addressing climate change need not cost the consumer money, quite the opposite in fact. The most import fact to remember is to address the items with the lowest whole life cost before seeking to use renewable technologies.
NOTE: The above text is simply a means of demonstrating a systems based methodology that can be used when framing a debate about renewable energy. Whilst I have endeavoured to ensure that the calcs are correct I take no responsibility for how the above data is utilised. Please undertake your own calcs. when assessing Green Energy Systems.
Supporting Data:
CE56 by the Energy Saving Trust has an interesting study on the cost benefits of lighting. The paper notes:
100 W GLS
* Cost £0.50
* Lamp life (hours) 1,000
* Total lamp cost (over life of 1 CFL) £6.00
* Total electricity cost (over life of 1 CFL) £94.80
* Total costs £100.80
20 W CFL
* Cost £3.70
* Lamp life (hours) 12,000
* Total lamp cost (over life of 1 CFL) £3.70
* Total electricity cost (over life of 1 CFL) £18.96
* Total costs £22.66
Savings through the use of CFL instead of 100 W GLS £78.14
* The average period of use per year is 1,100 hours
* EST assume a cost of 7.9 p/kW.h for electricity
Cost/kWh saved
The traditional energy efficiency focuses upon saved energy i.e. the cost/kWh saved (or negawatts as some would say). Under this scenario the cost/kWh saved of a CFL can be calculated:
Value of saving: £78.14
KWh consumed by Incandescent: 1200
KWh consumed by CFL: 240
kWh saved: 1200 – 240 = 960 kWh
Therefore cost/kWh saved (including saved capital expenditure on lamps) =
(£3.70 – ((£94.80+£6.00) -£18.96))/960kW.h = £-0.081/kW.h
….. and this cost excludes any capital savings incurred due to reduced labour from maintenance.
Though interesting this cost benefit analysis is only useful when trying to describe how much money is being wasted/saved.
About the author:
Mark Siddall, principle at low energy architectural practice LEAP, is an architect and energy consultant specialising in low energy and PassivHaus design. He was project architect for the Racecourse Passivhaus scheme and has a keen interest building performance. In addition to architectural services his practice provides project enabling and education for clients, design teams and constructors.
LEAP website: www.leap4.it