Energy—Costs and Values Mike Schmidt Emerson Process Management T-I-E Workshop February 10, 2006.

Energy—Costs and ValuesEnergy—Costs and Values

Mike SchmidtMike SchmidtEmerson Process ManagementEmerson Process Management

T-I-E WorkshopT-I-E WorkshopFebruary 10, 2006February 10, 2006

Learning ObjectivesLearning Objectives

Understanding how we consume energy in Understanding how we consume energy in our daily livesour daily lives

Understanding the choices we can make Understanding the choices we can make to influence our energy consumptionto influence our energy consumption

DiscoveryDiscovery

What is the mix of teachers in the class?What is the mix of teachers in the class?High school, middle school, elementaryHigh school, middle school, elementaryUrban, suburban, exurban (small town or Urban, suburban, exurban (small town or

rural)rural)Public, privatePublic, private

What resources do you have available?What resources do you have available?Well-stocked, well-equipped labsWell-stocked, well-equipped labsAmple, or at least adequate, budgetAmple, or at least adequate, budgetCorporate or plant resources Corporate or plant resources

In what form does our energy come?In what form does our energy come?

ElectricityElectricityNatural gasNatural gasGasolineGasoline

Others?Others?

Energy saving tipsEnergy saving tips

Write down some ways that you’ve heard Write down some ways that you’ve heard suggested for a Midwestern family to save suggested for a Midwestern family to save on energy costson energy costs

How do we buy energy?How do we buy energy?

Electricity – by the kilowatt-hourElectricity – by the kilowatt-hourNatural gas – by the 100 cubic feetNatural gas – by the 100 cubic feetGasoline – by the gallonGasoline – by the gallon

All energy – by the $All energy – by the $

Develop a hypothesisDevelop a hypothesis

How does your family spend its energy How does your family spend its energy dollar?dollar?

How much does your family spend on How much does your family spend on energy?energy?

Test the hypothesisTest the hypothesis

Develop procedureDevelop procedureCollect dataCollect dataAnalyze data Analyze data

My household energy useMy household energy use

2005

18%

19%63%

Electricity

Natural Gas

Gasoline

10 year earlier10 year earlier

2005

18%

19%63%

Electricity

Natural Gas

Gasoline

Household energy use—over timeHousehold energy use—over time

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Gasoline

Natural Gas

Electricity

Draw conclusionsDraw conclusions

????????

Something really unusual happened in Something really unusual happened in 2001-2002.2001-2002.

Electricity and natural gas spending is Electricity and natural gas spending is fairly constant, but gasoline spending is fairly constant, but gasoline spending is climbing.climbing.

What next?What next?

Spending less means using lessSpending less means using less

Reduce the things we doReduce the things we doDo the things we do more efficientlyDo the things we do more efficiently

Where do we start?Where do we start?

Reduce costs for gasolineReduce costs for gasoline

Hypothesis:Hypothesis:My family can reduce costs with a hybrid.My family can reduce costs with a hybrid.

Data:Data:Current 2 vehicles are paid for.Current 2 vehicles are paid for.They get around ~21 mpg.They get around ~21 mpg.My family spent $4000 on gasoline in 2005.My family spent $4000 on gasoline in 2005.Gasoline prices are at $2.20/gal and going up.Gasoline prices are at $2.20/gal and going up.

AnalysisAnalysisMy family drives about 38,000 miles a year.My family drives about 38,000 miles a year.

Ford Escape HybridFord Escape Hybrid

Ford Escape Hybrid SUVMSRP: $27,51536 mpg city/31 mpg highway5 passengers

Ford Escape SUVMSRP: $19,99522 mpg city/26 mpg highway5 passengers

Ford Escape-comparisonFord Escape-comparison

$27,515 vs. $19,995 = $7520$27,515 vs. $19,995 = $7520

19,000 miles per year, $2.20/gallon19,000 miles per year, $2.20/gallon 33.5 mpg vs. 24 mpg 33.5 mpg vs. 24 mpg $1248/yr vs. $1742/yr = $494/yr savings$1248/yr vs. $1742/yr = $494/yr savings

15.2 years to pay back15.2 years to pay back 5 year pay back if gasoline is $6.69/gallon5 year pay back if gasoline is $6.69/gallon 5 year pay back if hybrid costs $5050 less5 year pay back if hybrid costs $5050 less

Honda Civic HybridHonda Civic Hybrid

Honda Civic Hybrid SedanMSRP: $21,85049 mpg city/51 mpg highway5 passengers

Honda Civic SedanMSRP: $14,56030 mpg city/40 mpg highway5 passengers

Honda Civic-comparisonHonda Civic-comparison

$21,850 vs. $14,560 = $7290$21,850 vs. $14,560 = $7290

19,000 miles per year, $2.20/gallon19,000 miles per year, $2.20/gallon 50 mpg vs. 35 mpg 50 mpg vs. 35 mpg $836/yr vs. $1194/yr = $358/yr savings$836/yr vs. $1194/yr = $358/yr savings


Toyota PriusToyota PriusToyota Prius SedanMSRP: $21,72560 mpg city/51 mpg highway5 passengers

Toyota Corolla CE SedanMSRP: $14,10530 mpg city/38 mpg highway5 passengers

Prius vs. Corolla CEPrius vs. Corolla CE

$21,725 vs. $14,105 = $7620$21,725 vs. $14,105 = $7620

19,000 miles per year, $2.20/gallon19,000 miles per year, $2.20/gallon 55.5 mpg vs. 34 mpg 55.5 mpg vs. 34 mpg $753/yr vs. $1229/yr = $476/yr savings$753/yr vs. $1229/yr = $476/yr savings


Can we draw conclusions?Can we draw conclusions?

For my family, the higher price for a hybrid For my family, the higher price for a hybrid is not worth the savings in fuelis not worth the savings in fuel

What conclusions can you suggest?What conclusions can you suggest?

Other comparisonsOther comparisons

Is comparing between hybrid and non-Is comparing between hybrid and non-hybrid models the best way to draw hybrid models the best way to draw conclusions?conclusions?

What if we don’t care if its hybrid, as long What if we don’t care if its hybrid, as long as it gets good gas mileage?as it gets good gas mileage?

Hyandai AccentHyandai Accent

Hyandai AccentMSRP: $12,45532 mpg city/35 mpg highway5 passengers

$1248 per year for gasoline

Volkswagen JettaVolkswagen Jetta

Volkswagen Jetta SedanMSRP: $17,90036 mpg city/41 mpg highway5 passengers

$1085 per year for gasoline

Pontiac VibePontiac Vibe

Pontiac Vibe HatchbackMSRP: $16,99030 mpg city/36 mpg highway5 passengers$1267 per year for gasoline

Comparing total costsComparing total costs

MSRP Annual Gas* 5-year cost

Hyandai Accent Sedan $12,455 $1,248 $18,695

Toyota Corolla CE Sedan $14,105 $1,229 $20,250

Honda Civic Sedan $14,560 $1,194 $20,530

Pontiac Vibe Hatchback $16,990 $1,267 $23,325

Volkswagen Jetta Sedan $17,900 $1,085 $23,325

Toyota Prius Sedan $21,725 $753 $25,490

Honda Civic Hybrid Sedan $21,850 $836 $26,030

Ford Escape SUV $19,995 $1,742 $28,705

Ford Escape Hybrid SUV $27,515 $1,248 $33,755

*Based on 19,000 miles per year and $2.20/gal

What if gas cost $6/gal?What if gas cost $6/gal?MSRP Annual Gas* 5-year cost




Toyota Prius Sedan $21,725 $2,054 $31,993


Honda Civic Hybrid Sedan $21,850 $2,280 $33,250


Ford Escape SUV $19,995 $4,751 $43,750



How high must gas prices go?How high must gas prices go?

MSRPAnnual Gas* 5-year cost


Toyota Prius Sedan $21,725 $2,820 $35,827



Honda Civic Hybrid Sedan $21,850 $3,131 $37,506




Ford Escape SUV $19,995 $6,525 $52,618


What about utilities?What about utilities?

Why do we use natural gas and Why do we use natural gas and electricity?electricity?

Form a hypothesisForm a hypothesis????????Test the hypothesisTest the hypothesis

Develop procedureDevelop procedureCollect dataCollect dataAnalyze dataAnalyze data

ProcedureProcedure

Collect utility billsCollect utility billsLook for patternsLook for patterns

Natural gas—a pattern?Natural gas—a pattern?

Natural Gas

$0

$50

$100

$150

$200

$250

$300

$350

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

There is a base level of useThere is a base level of use

Natural Gas

$0

$50

$100

$150

$200

$250

$300

$350

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

Steady use all year long for hot water,

$28/month

Natural gas—peaks in winter?Natural gas—peaks in winter?

Natural Gas

$0

$50

$100

$150

$200

$250

$300

$350

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

The peak use is for winter heating

Can we draw conclusions?Can we draw conclusions?

Total use from Jan-03 to Dec-05: $3,339Total use from Jan-03 to Dec-05: $3,339Base level of gas use, for heating waterBase level of gas use, for heating water

$28/month, $336/year$28/month, $336/year$1,008 from Jan-03 to Dec-05: 30%$1,008 from Jan-03 to Dec-05: 30%

Most gas is used in the winter for heatingMost gas is used in the winter for heatingHeating season from October to AprilHeating season from October to AprilPeak is in January or FebruaryPeak is in January or February$2,331 from Jan-03 to Dec-05: 70%$2,331 from Jan-03 to Dec-05: 70%

Any patterns in electricity use?Any patterns in electricity use?

Electricity

$0

$50

$100

$150

$200

$250

$300

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

Electricity also has a base levelElectricity also has a base level

Electricity

$0

$50

$100

$150

$200

$250

$300

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

Steady use all year long for lighting, cooking, etc.

$69/month

Electricity peaks in summerElectricity peaks in summer

Electricity

$0

$50

$100

$150

$200

$250

$300

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

The peak use is for summer air conditioning

More conclusions?More conclusions?

Total use from Jan-03 to Dec-05: $3,832Total use from Jan-03 to Dec-05: $3,832 Base level of electricity use, for lighting, cooking, Base level of electricity use, for lighting, cooking,

computing, etc., accounts for most usecomputing, etc., accounts for most use $69/month, $828/year$69/month, $828/year $2,484 from Jan-03 to Dec-05: 65%$2,484 from Jan-03 to Dec-05: 65%

About 1/3 of electricity use is for air conditioningAbout 1/3 of electricity use is for air conditioning Cooling season from May to SeptemberCooling season from May to September Peak is in July or AugustPeak is in July or August $1,348 from Jan-03 to Dec-05: 35%$1,348 from Jan-03 to Dec-05: 35%

Does combining reveal anything?Does combining reveal anything?

Natural Gas and Electricity

$0$50

$100$150$200$250$300$350$400$450

Jan-

03

Apr

-03

Jul-

03

Oct

-03

Jan-

04

Apr

-04

Jul-

04

Oct

-04

Jan-

05

Apr

-05

Jul-

05

Oct

-05

Combined base is $97/month

There is no gap between heating and cooling!!

Consider your energy saving tipsConsider your energy saving tips

If changing filters on your furnace every If changing filters on your furnace every month instead of every year improved month instead of every year improved efficiency by 5%, what is that worth?efficiency by 5%, what is that worth?

If keeping your tires properly inflated If keeping your tires properly inflated improves gas mileage 5%, what is that improves gas mileage 5%, what is that worth?worth?

If keeping your air conditioning unit If keeping your air conditioning unit shaded reduces electricity use by 10%, shaded reduces electricity use by 10%, what is that worth?what is that worth?

EvaluationEvaluation

What is the most useful thing you learned?What is the most useful thing you learned?What is the most surprising thing you What is the most surprising thing you

learned?learned?

ReflectionReflection

Does energy have a value other than the Does energy have a value other than the dollar value we give it? Should it?dollar value we give it? Should it?

What reasons might one form of energy cost What reasons might one form of energy cost more or less than the same amount of more or less than the same amount of energy in a different form?energy in a different form?

What will happen to the cost and value of What will happen to the cost and value of energy when people in developing countries energy when people in developing countries like China and India can finally afford like China and India can finally afford automobiles and air conditioning?automobiles and air conditioning?

ReferencesReferences

http://www.fueleconomy.govhttp://www.fueleconomy.gov, U.S.Dept. of , U.S.Dept. of Energy, Office of Energy Efficiency and Energy, Office of Energy Efficiency and Renewable Energy, U.S.Environmental Renewable Energy, U.S.Environmental Protection Agency.Protection Agency.

http://eia.doe.gov/http://eia.doe.gov/, Energy Information , Energy Information Administration.Administration.

http://www.eere.energy.gov/consumer/tips/http://www.eere.energy.gov/consumer/tips/, , Office of Energy Efficiency and Renewable Office of Energy Efficiency and Renewable Energy.Energy.

Energy—Costs and Values Mike Schmidt Emerson Process Management T-I-E Workshop February 10, 2006.

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Transcript of Energy—Costs and Values Mike Schmidt Emerson Process Management T-I-E Workshop February 10, 2006.