Fuel Switching | Alabama Power

Fuel Switching: The Ultimate Flexibility

 

What's more cost-effective to operate: an electric or a gas boiler?

The answer? Both. That is, when you've got fuel switching capabilities. Building owners, operators and designers are choosing more and more to install an electric boiler to provide redundancy for an existing gas boiler and to manage the risk of gas curtailment or price volatility.

What does this mean to the owner or operator? To begin with, it helps to understand how utility rates work. Energy costs are seasonal: for gas use, peak season is winter. Electric use peaks in the summer.

A general strategy is to compare the cost of electricity and the cost of gas (remembering to use the gas boiler's efficiency!); the boiler can then be dispatched based on the breakeven point.

 

Gas vs. Electric Comparison Charts

The idea is to operate the electric boiler when gas prices are high (winter months), and then operate the gas boiler when electricity prices go above a predetermined setpoint. This strategy has several advantages:

  • Instead of purchasing firm gas, a customer can opt for a considerably cheaper curtailable rate
  • The customer has operating redundancy in the event of a boiler failure
  • Electric boilers can be cheaper to run than gas many hours of the year

 

Existing Construction:

An owner faced with an aging gas boiler has two main options:

  • Replace the boiler preemptively
  • Add a boiler to provide redundancy; the new, more efficient boiler will typically be operated, with the existing boiler remaining in place as a backup or to handle swing loads

Each of these has its considerations. Boilers are undeniably large pieces of equipment, and not all boiler rooms have space to accommodate an additional boiler. That could end up being a consideration of the fuel choice (see below), since gas boilers typically have a larger footprint than electric boilers.

On the other hand, if there is available room, typically the best option is to add a boiler. This minimizes downtime, while adding reduncancy and capacity.

 

New Construction:

New construction is a chance to provide the best possible design to a customer from the outset. In this case, the engineer can choose (assuming that boilers are required for the design):

  • One main boiler to carry peak load
  • Two or more smaller boilers to carry the majority of the load, with additional dispatch as required for peaks
  • Two slightly smaller boilers that should carry the load the vast majority (95%) of the time

Either of the last two will provide fuel switching opportunities and redundancy. They will also add somewhat to the cost.

 

Fuel Choices:

How should one decide whether to specify:

  • Gas
  • Electric
  • Both?

It comes down to cost analysis. If the customer is leaning towards having one boiler (redundancy not critical), then the analysis should involve 3-way cost analysis:

  • One gas boiler
  • One electric boiler
  • One gas and one electric boiler

Depending on the hours of use and utility costs, as well as the relative sizes of the boilers, any of these could be the right choice for the customer. For assistance with these calculations, click here.

Considerations
Gas Electric Gas + Electric
Footprint Large Small In between (smaller gas boiler, addition of electric boiler)
Maintenance Medium Low Requires staff who understands gas and electric boilers
Operating Cost Can be higher in winter than electric Can be higher in summer than gas Minimized
Capital Cost Similar to electric Similar to gas Can be higher if requires 2 boilers in lieu of one. If using existing boiler and adding, costs same

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