Multi-fuel Flexibility: Coping with Higher Energy Prices

Since we cannot predict prices of energy in the future, we need to prepare for fluctuations in prices of the various energy sources.

Frequently I am asked to identify the most economical energy source for heating water on a modern dairy farm today and in the future.

Today the options of energy sources for heating water include electricity, propane, natural gas, fuel oil, and coal. The only way to compare the prices of energy sources is on the basis of dollars per million BTUs. (For my friends in Russia, comparisons must be made on the basis of Rubles per Giga Joule). For example, consider that the cost of electricity is 10 cents per kWh and propane is $2.65 per gallon.  Which is cheaper, electricity or propane?

You can use an on-line Excel calculator to quickly and easily calculate the costs per million BTUs for various energy sources. The cost of the electricity at $0.10 per kWh is calculated to cost $29.31 per million BTUs and the propane at $2.65 per gallon is $34.04 per million BTUs. Clearly the electricity is cheaper. 

But what about the future?  What is going to be the cheapest energy source three years from now? Hey, with all the political gridlock in Washington these days, I could not even predict the cheapest energy source in three weeks! The prices of various energy sources today are influenced – to a large extent – by political decisions in this country and throughout the world.

Since we cannot predict prices of energy in the future, we need to prepare for fluctuations in prices of the various energy sources. Sometimes natural gas might be the cheapest source and other times perhaps electricity will be cheapest. The very best way to cope with the “roller coaster” energy prices of the future is to adopt multi-fuel flexibility. If you are buying a new water heating system today or in the future, insist on getting one that can use two or more different energy sources.  Perhaps you might buy a heater that can use either natural gas or fuel oil, with the capability of switching from one fuel to the other.  The switching can be done as easily as flipping a switch. Or maybe you will install a multi-fuel system that can heat water using electricity, propane, or fuel oil.

Establishing multi-fuel flexibility will cost you more today than installing a water heater that can use just one and only one energy source. In fact, the increase in cost for multi-fuel flexibility may be as high as 30% or even higher. But having the ability to cope with ever increasing prices of energy should make such an investment attractive.

Whichever type of water heater you select, keep in mind that you can usually scavenge some heat from around the farm to pre-heat the water and thus save energy. Heat energy that can usually be scavenged on many dairy farms include solar energy and energy recovered from plate coolers, refrigeration condensers, and vacuum pumps. 

Of course, there is always the opportunity to use energy in a more economically efficient manner in all phases of the dairy operation and in your home. If just one BTU is saved because of an economically efficient program put in place, then there will be benefits to the economy, to the environment, and to society in general. That’s a win-win-win situation!

- By Dr. Dennis Buffington, professor, Penn State Department of Agricultural and Biological Engineering. Email: dbuffington@psu.edu. Phone: 814-865-2971