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Fairbanks Residential Heating Fuel Cost Comparisons

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Fairbanks Residential Heating Fuel Cost Comparisons Tom Carlson Sierra Research, Inc. September 23, 2017
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Page 1: Fairbanks Residential Heating Fuel Cost Comparisons

Fairbanks Residential Heating Fuel Cost Comparisons

Tom Carlson Sierra Research, Inc.

September 23, 2017

Page 2: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Introduction – Space Heating Costs in Fairbanks are Significant and Varying

˃ Wintertime heating costs in Fairbanks are substantial compared to milder climates

˃ Space heating in the primary contributor to ambient PM2.5

˃ Historical fuel prices (especially heating oil) have varied significantly

˃ Given these variations, residents need access to current heating cost comparisons – not just fuel price comparisons

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$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50

2000 2002 2004 2006 2008 2010 2012 2014 2016

Pric

e ($

per

gal

lon)

Nov/Dec of Indicated Calendar Year

Historical Fairbanks Heating Oil Prices

Source: FNSB, Community Research Quarterly (assumed 25%/75% split in #1 and #2)

Page 3: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Which Cost More – Heating with Oil or Wood?

˃ Assuming you purchase wood (rather than cut your own) which is the cheaper fuel to heat with, heating oil or wood?

˃ Example #1: Central oil furnace vs. EPA-Certified non-catalytic stove (average 1,950 square foot home, winter 2016 prices)

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Page 4: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Which Cost More – Heating with Oil or Wood?

˃ Assuming you purchase wood (rather than cut your own) which is the cheaper fuel to heat with, heating oil or wood?

˃ Example #1: Central oil furnace vs. EPA-Certified non-catalytic stove (average 1,950 square foot home, winter 2016 prices)

˃ Answer -- Essentially the same:

Central oil furnace = $11.86 per winter day

Certified non-catalytic stove = $11.87 per winter day

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Page 5: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Which Cost More – Heating with Oil or Wood?

˃ Assuming you purchase wood (rather than cut your own) which is the cheaper fuel to heat with, heating oil or wood?

˃ Example #2: Central oil furnace vs. Uncertified wood stove

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Page 6: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Which Cost More – Heating with Oil or Wood?

˃ Assuming you purchase wood (rather than cut your own) which is the cheaper fuel to heat with, heating oil or wood?

˃ Example #2: Central oil furnace vs. Uncertified wood stove

˃ Answer:

Central oil furnace = $11.86 per winter day

Uncertified stove (avg. wood moisture) = $17.18 per winter day

Uncertified stove (dry wood) = $15.11 per winter day

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Page 7: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Space Heating Fuel Costs not Easily Comparable

˃ Reported units differ by fuel:

Wood - $ per cord

Oil - $ per gallon

Natural Gas - $ per ccf (100 cubic feet)

Coal - $ per ton

Electricity $ per kilowatt-hour

˃ Many on-line calculators do not reflect current Fairbanks prices, or the ability to evaluate future prices

˃ Other important factors include device efficiency and wood moisture

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Page 8: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Wood Heating Energy Affected by Moisture Content ˃ Wet wood has roughly half the heating energy of dry wood per

pound

8

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0% 20% 40% 60% 80% 100%

Reco

vera

ble

Heat

(BTU

/lb)

Wood Moisture (dry basis)

Recoverable Heat Energy vs. Wood Moisture

Dry,

seas

oned

Wet

, fr

eshl

ycut

Page 9: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Device Heating Efficiency Differences are Important

˃ The amount of energy from each fuel that supplies heat (heating efficiency) varies significantly by device, especially solid fuel devices

˃ This factor not always considered when comparing energy costs across fuels and devices

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0%10%20%30%40%50%60%70%80%90%

Space Heating Device Heating Efficiencies

Page 10: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Need to Compare Heating Fuel Cost by Heating Energy, Device and Wood Moisture

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Gross EnergyFuel Price Content (BTU) Units

Wood, 36% MC $266.99 17,913,034 /cordPellets $292.00 16,000,000 /tonCoal $120.00 15,200,000 /tonHeating Oil $2.39 135,000 /gallonNatural Gas $2.02 101,000 /ccfPropane $3.88 91,333 /gallonSource : Fairbanks Research Community Quarterly, 2016

$14.95

$11.21$12.68

$10.49 $9.95$11.86

$13.38

$0

$5

$10

$15

$20

$25

Fireplace, NoInsert

Woodstove -Non-EPACertified

Woodstove -EPA Cert.Catalytic

Pellet Stove(EPA

Certified)

HydronicHeater - EPA-

Certified

Coal Heater Central Oil(Wtd # 1 &

#2)

Natural Gas -Residential

Cost

($ p

er w

inte

r day

)Household Heating Cost per Winter Day

$115.35

Page 11: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

“Break-Even” Prices

˃ Wood prices historically more stable than oil

˃ Can calculate “break-even” price for oil (and other fuels) relative to more stable wood prices

˃ Example:

Average Wood Device costs $13.24 per winter day

Oil heating relative to the average wood device is cheaper up to $2.68 per gallon (the break-even price for oil)

˃ Break-even oil price will be higher for less efficient wood devices and lower for more efficient devices

˃ Can do more refined break-even estimate for any wood device

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Page 12: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Valuation of Pollutant Emissions

˃ It is also useful to compare pollutant emissions per heating dollar – informs residents seeking to reduce emissions in NA area

˃ Coal heaters and most wood device emit much more per heating dollar than heating oil or natural gas

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0.245

0.086

0.063

0.018

0.066

0.109

0.004 0.0010.00

0.05

0.10

0.15

0.20

0.25

0.30

Fireplace, NoInsert

Woodstove -Non-EPACertified

Woodstove -EPA Cert.Catalytic

Pellet Stove(EPA

Certified)

HydronicHeater - EPA-

Certified

Coal Heater Central Oil(Wtd # 1 &

#2)

Natural Gas -Residential

Emiss

ions

(lb

) per

Dol

lar

Space Heating Emissions (lb) per Heating Dollar

Page 13: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Solution: Borough-Based Cost Comparison Calculator

˃ Recommend development of on-line Fairbanks specific heating fuel cost calculator for use by residents in making informed heating fuel choices

˃ Functions/features could include:

Cost comparisons by fuel/device that account for efficiency and wood moisture ($ per heating BTU)

Cost/Emissions comparisons by fuel and device

Easily updated with current prices over time

Provides “break even” prices of solid vs. liquid/gaseous fuel

Optional monetization of “ease of use” issues (e.g., wood sweat equity)

˃ Goals: Easy-to-use, regularly updated, provide comparative true heating fuel costs (and pollutant impacts)

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Page 14: Fairbanks Residential Heating Fuel Cost Comparisons

sierra research

Questions?

[email protected]

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