Cheaper Oil for Fuel?

Ben84

dazbo wrote: »

Hi all i was so sick of being ripped off buy the oil companies that i switched off my aga in december and by mid jan the oil ran out so no boiler.
We also have a detached holiday cottage which is heated by electric only and our lecy bill for our house and the holiday cottage is £1200 approx per year.
When our oil ran out i got a couple of lecy heaters for our house and we got buy ok.
We are now considering going fully electric as anyone can produce electric (wind turbine in garden etc)
Oil is getting less and less, the price is getting HIGHER AND HIGHER and you cant make it or drill for it yourself In my opinion domestic Oil is old hat now.

lets stick together and switch to lecy this year then see what happens to heating oil prices

Let me know your thoughts

Ps does anyone want to buy an aga

Oil has reached about 6p per kWh in many areas, so depending on the type of boiler you're using, say 75% efficient, the actual cost of heat delivered to the house may be 8p per kWh or more. This is comparative or slightly more than the cost of electric in some cheap areas. I pay about 8p per kWh for electric.

If it works out about the same or less you may as well start heating with electric and enjoy the greater price certainty from fixed tariffs and the convenience of not having to order fuel. However, it's not always so easy. Unless your house is wired up for fixed installation electric heaters you will have to use the sockets, which although should be capable of running some electric heaters aren't often adequate to use many at the same time. You can easily overload circuits and you will already be using them for other appliances before you add electric heaters. Typical circuits are rated at 30 amp so you can't go over 7,200 watt load collectively (radial installations may only be 20 amp). My house has only one circuit for all the sockets, so a couple of 3 kW electric fires pretty much draw the maximum load for the entire house. Someone would just have to turn the kettle on or attempt to do some ironing while the TV and a couple of table lamps were on to blow the fuse.

G_M

And to add to Ben's points, and respond to

the wind turbine in garden etc

, that's all well and good a) once you've forked out for installation and b) if the wind's blowing!

If I was building a house, or doing a complete refurb, I'd consider solar panels, wind, heat exchange etc. But I've got a decent oil boiler that works, a fully plumbed-in ch system, and the pay-back period to rip that out and re-install is way beyond my life expectancy, and even if I'm lucky (life-wise), just too long to make economic sense.

home-heating-oil

I do not think anyone uses oil as a preference? It is there because of the lack of mains gas alternative. It is interesting to look at the cost electricity versus that of oil.

Does anyone have or know how to create an excel formula that would allow like for like comparison? I guess it would be something like converting pence per litre into a KW so we end up with pence per kw and then compare that to the electricity tariff? Sounds simple but I have no idea!

Be interesting to know.

The government should offer a 90% subsidy on proven alternatives like solar panels. The reason it is not popular is the long return on investment as pointed out by GM. But the cost remains high as the manufacturers do not have the demand to invest in tooling up to deliver millions of units. If the government provided a subsidy to a bring the return on investment down to 2-3 years the demand would increase, manufacturers could tool and the price would decrease significantly removing the need for a subsidy and the government would recoup their money thorugh taxation on profits.. Just a thought.

reeac

Just Google "calorific value oil" to get the facts. In round numbers 1 litre of oil yields 10kWh of energy so with, say, 85% efficient boiler you get 8.5 kWh of heat into the house. At 56p/litre for oil that's 56/8.5 or 6.6 pence per kWh for oil. We pay nearly twice that for electricity but even so I'm hoping that oil will fall back to nearer 40p/litre some day - it's probably speculators at work.

Ben84

home-heating-oil wrote: »

I do not think anyone uses oil as a preference? It is there because of the lack of mains gas alternative. It is interesting to look at the cost electricity versus that of oil.

Does anyone have or know how to create an excel formula that would allow like for like comparison? I guess it would be something like converting pence per litre into a KW so we end up with pence per kw and then compare that to the electricity tariff? Sounds simple but I have no idea!

Be interesting to know.

The first thing I do with any maths problem is write down everything I know and everything I want to know. After this it's a matter of finding a route from what you know to what you want to know.

Electric is easy, we already know that electric heaters are pretty much 100% efficient at turning electric from the meter in to heat. A kWh input is a kWh output as useful heat in to the house, so we just take the cost per kWh from the latest bill. To make a comparison with oil however we need to find the cost per kWh of heat delivered to the house when burning oil. We need to turn a unit we know the cost of (litres) in to kWh, then because boilers are not 100% efficient we need to account for energy losses from the boiler itself to find the cost per kWh of useful energy delivered to the house as hot water.

There are 10.27 kWh in each litre of heating oil, so take the cost of oil per litre and divide by 10.27 to find the cost per kWh (this is the cost of inputting a kWh in to your boiler).

However, unlike electric heaters, fuel burning appliances send some (potentially quite a lot) of energy up the chimney as hot gasses and a kWh in is not a full kWh out as useful heat. You need to find, or roughly estimate the efficiency of your boiler to find the number of kWh input relative to output. For example, if your boiler is 60% efficient, as a fraction of one that's 0.6, so for every 1.0 kWh of oil burnt 0.6 kWh is delivered to the house as heating energy.

To determine how many kWh of oil must be burnt to deliver a kWh to the house as heat, take the reciprocal, which is 1/0.6 = 1.67. So, to get a useful kWh of heat from your 60% efficient boiler you need to burn 1.67 kWh of oil.

As a guide, a 75% efficient boiler will burn 1.33 kWh for every 1.0 kWh output. An 85% efficient boiler will burnt 1.18 kWh for every 1.0 kWh output.

Final step to find a cost per kWh delivered to the house as useful heat, which allows direct comparison to electric costs, is simply multiply the cost for a kWh of oil (input to your boiler) that we found in the first step by the number of kWh that must be burnt to deliver one kWh of heating output to the house. This tells you the cost of a kWh of heat from the radiators in your house when burning oil in your boiler at the price oil costs you.

LittleVermin

Figures from Notts Energy Partnership - dated 26th May:

http://www.nottenergy.com/energy-costs-comparison3

You'll need to adjust for the efficiency of your system and local price of fuel.

But most of the maths has been done for you! So, Ben84, your route has been much shortened!

home-heating-oil

LittleVermin wrote: »

Figures from Notts Energy Partnership - dated 26th May:

http://www.nottenergy.com/energy-costs-comparison3

You'll need to adjust for the efficiency of your system and local price of fuel.

But most of the maths has been done for you! So, Ben84, your route has been much shortened!

Great link thank you.. So electricity is roughly twice the cost of heating oil at:

Electricity- 13.44 pence per kWh (100% efficiency)
Kerosene - 6.67 pence per kWh for (90% efficiency)
Gas oil at - 7.66 pence per kWh (90% efficiency)

Thanks "littleVermin", "Ben84" and "reeac"

A._Badger

Does anyone have a feel for the direction of heating oil prices over the next few months?

I'm still trying to get into the swing of using oil and though it seems intuitively right that it should come down in price when (if!) the weather improves, I'm not sure that's a reliable instinct.

Any opinions?

bernithebiker

A._Badger wrote: »

Does anyone have a feel for the direction of heating oil prices over the next few months?

I'm still trying to get into the swing of using oil and though it seems intuitively right that it should come down in price when (if!) the weather improves, I'm not sure that's a reliable instinct.

Any opinions?

I used to trade cargoes of the stuff, but it's a tough one to call, and lots of things can affect the price.

Once again, you can't think nationally, it's an international market and if say, the Chinese suddenly increase their consumption, then your price will go up too.

I too need to fill up a bit, but I feel the prices are a bit toppy at the moment - Brent has been in the 110 to 120 range for ages now and cannot seem to break any higher.

Given that summer is upon us (although this boosts diesel consumption), I would be inclined to wait a little as I feel there is more potential downside to up.

However, don't be greedy - if Brent does drop below 100$, that strikes me as a good time to buy.

If say, Iran does something silly or a big refinery blows up, then all bets are off!!

home-heating-oil

A._Badger wrote: »

Does anyone have a feel for the direction of heating oil prices over the next few months?

I'm still trying to get into the swing of using oil and though it seems intuitively right that it should come down in price when (if!) the weather improves, I'm not sure that's a reliable instinct.

Any opinions?

As per bernithebiker.. These are very uncertain time so it is impossible to have a sensible opinion. If it has not dipped back by end of August then chances are it is not going to. Back in December there was/is a sense that things could get worse:

http://www.liveoilprices.co.uk/oil/oil_prices/12/2010/wti-oil-price-trading-firm-at-91-150-by-summer-2011.html