Cost-Effective Electric Boilers - Lattner Boiler Company

Cost-Effective
Electric Boilers
Electric boilers a prudent alternative to gas boilers
The United States has achieved a new level of
consciousness regarding the environmental
impact of the boilers we manufacture, specify,
purchase, install, and maintain. Emerging as a more
environmentally sound (zero emissions) and financially
prudent (26 percent more efficient) choice than gas
boilers is the electric boilers. This article discusses the
benefits and potential advantages of electric boilers as
well as the various arguments against
them.
Opposition to Electric Boilers
Arguments against electric boilers
typically are based on three widely
accepted beliefs:
• The electricity used to power electric boilers most
likely is generated by a process that creates as much
pollution as gas boilers, such as electricity that is generated
from coal.
• Electricity is expensive and likely to rise in price.
• Electricity can be unreliable, such as during power
outages and rolling brownouts.
These beliefs fail to account for economies of scale,
technology and regulation changes, rate discounts by
volume and time (demand-side management), and electrical
requirements of all boiler types (electric and gas).
Pollution. Shifting energy and pollution production
to generators allows energy-consuming societies to
benefit from economies of technological and capital
scale. Generators are capable of cost-effectively
implementing cleaner coal, natural-gas, nuclear, wind,
solar, and hydro technologies. For example, combinedheat-and-power
(CHP) technologies allow traditional
steam turbine generators to achieve system efficien-
Vice president of sales and marketing for Lattner Boiler Co., Sutherland D. Junge is a fifth-generation
boilermaker. He has a multidisciplinary bachelor’s degree in architecture and political science from the University
of California, Berkeley, and a master’s degree in business administration from the Tippie School of Management
at The University of Iowa.
2 January 2009 BSE
By SUTHERLAND D. JUNGE
Lattner Boiler Co.
Cedar Rapids, Iowa
cies of up to 80 percent. 1 CHP generators use waste
heat from the primary generating cycle to power heat-
recovery steam generators (HRSGs or boilers), which,
in turn, drive turbines and create secondary electricity
sources. Waste heat also can be used for thermal-energy
applications, such as hot water. Finally, waste heat
can be used for district heating. Although micro-CHP
technologies exist for smaller applications, large generators,
power plants, and utilities improve
CHP-system cost-effectiveness and
efficiency.
Generating and distributing electricity
at utilities, coal scrubbing, carbon
capture/sequestration, selective
catalytic reduction, and electrochemical reduction of
carbon may ultimately improve the environmental
performance of large-scale, even coal-burner, generators.
However, these technologies may never be costeffective
in micro or end-user scales. Generators also are
better positioned to comply with existing and imminent
pollution regulations. For example, pollution regulations
for small gas boilers, especially gas-fired high-
pressure steam boilers, require expensive and complicated
combustion-control technologies. 2 These control
technologies often add more than 20 percent to the cost
of a small gas boiler. 3
Control technologies can be difficult to operate and
maintain. As a result, end users frequently circumvent
pollution controls between inspections or when otherwise
possible. This problem is compounded by enforcement
complications. Regulatory agencies cannot enforce
pollution regulations that apply to every small-gas-boiler
owner. However, it is relatively easy to enforce compliance
at the generator scale, as there simply are fewer

generators.
A national carbon tax or carbon
cap-and-trade system could be
authorized in the near future.
Under a carbon-tax system, operators
of carbon emitters, including gas
boilers and electricity generators,
could face pollution taxes, depending
on the pollution-generation method.
Electric-boiler users would not face
additional taxes. Under a carbon capand-trade
system, generators would
be able to turn their high efficiencies
and low carbon-emission rates into
money by selling certified emissions
reductions or renewable-energy
certificates. Carbon credits already
are traded voluntarily in the United
States on public markets, such as the
Chicago Climate Exchange. 4 Carbon
credits are traded involuntarily—as
the direct result of regulation—in
other parts of the developed world
(Kyoto Protocol member countries),
particularly the European Union.
Expense. High-voltage technology
can help make highly efficient directcurrent
transmission cost effective.
Flexible alternating-current transmission
systems can help stabilize
voltage and allow grid operators to
add load to transmission lines safely.
5 Additionally, utilities and boiler
manufacturers are working together
to produce high-voltage (13.2-kv)
electrode boilers, which minimize
transmission losses and help maximize
boiler operating efficiency (up
to 99.5 percent). 3
Timing and volume
have an enormous and
often favorable effect
on the price
of electricity
per kilowatt-hour.
The amount of energy
and the time in which it
is consumed also are key
factors in determining
electricity’s cost. Consuming
electricity cost-effectively
primarily is a matter
of demand-side management.
Consuming electricity
during peak hours
increases costs; consuming
it during off-peak hours decreases
costs. In addition, the more electricity
consumed, the lower the cost per
kilowatt-hour. In certain instances, it
is possible to cost-effectively implement
fuel-switching systems to take
advantage of time-of-day discounts.
Timing and volume have an enormous
and often favorable effect on
the price of electricity per kilowatthour.
Reliability. No boiler, electric or
gas, will operate in a blackout or
rolling brownout. Electric boilers
obviously need electricity to generate
steam or hot water. Gas boilers
need electricity for control, pilot, and
valve operation.
Benefits
In addition to environmental
soundness, electric boilers offer other
benefits, including:
• Low cost. Low-emissions gas
Two 330-kw, 480-v low-pressure steam boilers heat a
Cedar Rapids, Iowa, private library and office building.
boilers cost approximately $1,732 per
boiler horsepower; electric boilers
cost $1,001 per boiler horsepower. 3
Electric boilers also are less expensive
to install because they do not require
stack or venting materials. Some
jurisdictions do not even require
electric-boiler rooms. Local authorities
should be contacted to verify
boiler-room requirements.
• Reliable construction. Because
of inherent construction differences,
electric boilers typically are not
subject to the same design-related
failures as gas boilers. Electric-boiler
vessels do not include firetubes,
watertubes, or complicated heat
exchangers. Electric boilers’ heating
elements make direct contact with
the water being heated. Therefore,
burned-out jackets, cracked tubes,
leaky tube sheets, improper combustion,
pilot disruption, and gas
seepage are not possible.
BSE January 2009 3

COST-EFFECTIVE ELECTRIC BOILERS
• Easy maintenance. Electric
boilers are easy to maintain for some
of the previously mentioned reasons.
Like all boilers, they require consistent
blowdown, proper water-quality
management, and appropriate
control maintenance. However, they
do not require fire-side cleaning,
tube replacement, or regular burner
tuning. At most, they require infrequent
element replacement or disengagement,
which can by performed
by most licensed electricians.
(Most new electric boilers last
longer than most new gas boilers
because of their construction and
ease of maintenance. It could be
argued that the slow replacement
rate of electric boilers also is good for
the environment.)
• Small footprint. Because electric
boilers do not require complicated
heat exchangers or tubes, their
footprints are comparatively small.
For example, a 1,000-kw high-pressure
cabinet-style electric steam boiler has
a footprint of approximately 40 sq
ft. Including element-removal space,
its footprint reaches approximately
67 sq ft. A gas-fired three-pass dryback
scotch-marine steam boiler
with the same British-thermal-unitper-hour
input (about 100 hp) has
a footprint of approximately 95 sq
ft. Including tube-removal space,
its footprint reaches approximately
141 sq ft. A difference of 74 sq ft will
have a notable impact on the cost of
constructing and/or leasing production
space, especially in commercial
applications.
• Smart metering. Electric boilers
can be equipped with smart meters.
Meters can track energy consumption,
voltage, current, etc. They
also can include alarm indicators,
Modbus/personal-computer links,
and Ethernet connectivity. Integrated
smart meters allow energy consumers
or utilities to monitor and control
electric boilers remotely.
• Precision controls. Almost all
electric boilers now include solidstate
programmable step control-
4 January 2009 BSE
lers, or sequencers. Step controllers
control the number and sequence of
electrical circuits (heating elements)
powered at a given time. In turn, a
pressure or temperature controller
informs a step controller how much
steam or heat is required. Depending
on the information supplied by the
temperature or pressure controller,
the step controller might provide
power to two of five total steps. If
the process needs more steam, such
as with a steam boiler, the step
controller might provide power to all
five of the steps. Ultimately, the step
controller will increase or decrease
the power as needed.
Although similar to a modulating
gas burner’s operation, step controllers
allow greater articulation and
precision. In addition, they do not
require annual tuning.
• Distributed-energy applications.
Electric boilers also can be used
reliably in distributed-energy applications,
such as wind turbines, photovoltaic
solar panels, and other means
of electricity generation. For example,
a system consisting of several
large wind turbines that power two
electric steam boilers significantly
decreases the amount of fuel transported
to a desalination facility in the
Ascension Islands.
Potential Advantages
There are several other, although
more nebulous, issues to consider
when evaluating electric boilers,
including sustainable competitive
advantage, marketability, and regulatory,
litigation, and valuation risks.
Sustainable competitive advantage.
Electric boilers create a sustainable
competitive advantage because
they are the most efficient boiler
choice available.
Marketability. Electric boilers
are easy to market in the current
“green” business climate. Popular
programs, such as the U.S. Green
Building Council’s (USGBC) Leadership
in Energy and Environmental
Design Green Building Rating System,
support the growth and marketability
of the electric-boiler market. 6 Energy
consortiums, green-technology
alliances, and environment forums
also are natural complements for
electric boilers.
Regulations. A s m e n t i o n e d
previously, electric boilers could help
mitigate regulatory, litigation, and
valuation risks. Regulatory risk is best
exemplified by increasingly stringent
pollution regulations. Most pollution
regulations probably will be tightened
(beyond current best-available
control-technology limits) before
present-day gas boilers become
inoperable. In fact, it is likely that
modern gas boilers will outlive any
“grandfather” period, too. The end
result will be wasted boiler life,
capital, and opportunity.
Litigation. According to a paper
published by the U.S. Environmental
Protection Agency: 7 “Ground-level
ozone (smog) is formed when NOx
and volatile organic compounds
(VOCs) react in the presence of
sunlight. Children, people with lung
diseases, such as asthma, and people
who work or exercise outside are
susceptible to adverse effects, such as
damage to lung tissue and reduction
in lung function.
“Ozone can be transported by
wind currents and cause health
impacts far from original sources.
Millions of Americans live in areas
that do not meet the health standards
for ozone. Other impacts from
ozone include damaged vegetation
and reduced crop yields.”
Because they produce zero emissions,
electric boilers likely mitigate
litigation risks.
Valuation. Low-efficiency buildings
demand risk premiums. Highefficiency
buildings command price
premiums. The more efficient the
building, the greater the premium.
“The benefits of building green
include cost savings from reduced
energy, water, and waste; lower
operations and maintenance costs;
and enhanced occupant productivity

and health,” according to a paper
published by the USGBC. 8 “Analysis
of these areas indicates that total
financial benefits of green buildings
are over 10 times the average initial
investment required to design and
construct a green building. Energy
savings alone exceed the average
increased cost associated with building
green. Additionally, the relatively
large impact of productivity and
health gains reflects the fact that the
direct and indirect cost of employees
is far larger than the cost of construction
or energy.”
It makes sense to invest a fractional
amount of additional capital at the
outset of a project to capture future
value (and, thus, present value). The
prospect of not doing so is valuation
risk. Furthermore, private and public
companies that do not build energy-efficient
low-emissions buildings
will be subject to higher costs in the
future, such as costs related to
regulations, litigation, energy
consumption, etc. Like any other
costs, these will be reflected in their
valuations.
Conclusion
Electric boilers are not appropriate
for every project. Perhaps counterintuitively,
electric boilers are not
appropriate in some partially deregulated
states, in which consumers have
a choice of electric-service provider,
and uncompetitive markets have created
fixed-retail, free-market-wholesale,
and inflated prices. Conversely,
some regulated and monopolistic
states are home to utilities that
encourage the use of electric boilers
by offering efficiency, fuel-switching,
and time-of-day pricing programs.
The bottom line is that engineers,
architects, contractors, and sales
professionals should consider electric
boilers as cost-effective alternatives
to gas boilers. The easiest way to do
this is to calculate the operating cost
per boiler horsepower per hour for
each boiler type.
To calculate an electric boiler’s
operating cost, determine a project’s
cost per kilowatt-hour and cost per
therm of natural gas. Multiplying cost
per kilowatt-hour by an electric boiler’s
estimated efficiency by 9.809 kw
per boiler horsepower equals cost per
boiler horsepower per hour:
cost × efficiency × 9.809
To calculate a gas boiler’s operating
cost, multiply 100,000 Btu per
therm of natural gas by a gas boiler’s
estimated efficiency. Divide the
result by 33,478 Btu. Finally, multiply
the inverse of the result by the cost
per therm of natural gas:
The total cost of owning
an electric boiler
often is lower
than the total cost
of owning a gas boiler.
cost ÷ ([100,000 × efficiency] ÷
33,478)
Examining the results of each
calculation gives an “apples-to-
apples” comparison of the boilers’
operating costs.
Typically, the cost-per-kilowatthour
threshold for cost-effectiveness
is around 7 cents. This usually is
possible for industrial electricity consumers.
In 2008, the U.S. Department
of Energy reported that the average
cost per kilowatt-hour for industrial
end-users in the United States was
6.36 cents. 9 This threshold actually
may be too low, considering the
low upfront cost of electric boilers
and the potentially higher costs of
enhanced environmental regulation,
litigation and valuation risks, etc.,
when gas boilers are utilized.
The total cost of owning an electric
COST-EFFECTIVE ELECTRIC BOILERS
boiler often is lower than the total
cost of owning a gas boiler. Perhaps
more importantly, electric boilers do
not harm the environment or our
health.
References
1) U.S. Environmental Protection
Agency. Combined heat and power
partnership. (n.d.). Retrieved from
www.epa.gov/chp/basic/efficiency
.html.
2) South Coast Air Quality Management
District. (1998, January).
Rule 1146.2: Emissions of oxides of
nitrogen from large water heaters
and small boilers and process heaters.
Retrieved from www.aqmd.gov/
rules/reg/reg11/r1146-2.pdf.
3) (D. Jackson, personal conversation,
n.d.)
4) Chicago Climate Exchange. CCX
offsets program. Retrieved from
www.chicagoclimatex.com/content
.jsf?id=23.
5) ABB Inc. Energy efficiency in the
power grid. (n.d.). Retrieved from
www.abb.com/cawp/seitp202/64cee3
203250d1b7c12572c8003b2b48.aspx.
6) U.S. Green Building Council.
Project certification. (n.d.). www
.usgbc.org/displaypage.aspx?cms
pageid=64.
7) U.S. Environmental Protection
Agency Office of Air Quality Planning
and Standards. (1998). NOx: How
nitrogen oxides affect the way we
live and breathe. Research Triangle
Park, NC: U.S. Environmental Protection
Agency.
8) Kats, G., Alevantis, L., Berman,
A., Mills, E., & Perlman, J. (2003).
The costs and financial benefits of
green buildings: A report to California’s
sustainable building task force.
Washington, D.C.: U.S. Green Building
Council.
9) Energy Information Administration.
(2008, November). Average
retail price of electricity to ultimate
customers: Total by end-use sector.
U.S. Department of Energy. Washington,
D.C.: Energy Information Administration.
BSE January 2009 5