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  # 2269624 4-Jul-2019 07:07
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Scott3:

 

For relevance to this thread 

 

 

You paid $187.46 for 822 units= $0.228 / kwh.

 

That's a hell of a lot more than the $0.144 /kwh you stated. 

 

 


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  # 2269629 4-Jul-2019 07:28
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Fred99:

 

Scott3:

 

For relevance to this thread 

 

 

You paid $187.46 for 822 units= $0.228 / kwh.

 

That's a hell of a lot more than the $0.144 /kwh you stated. 

 

 

 

 

It's pretty standard to quote the variable per unit cost and exclude fixed costs, as they are fixed (although of course lower usage might tip you onto low-user daily charges, so there is some relationship between usage and fixed costs).

 

Nonetheless, I'm very surprised how cheap Auckland line charges are


 
 
 
 


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  # 2270172 4-Jul-2019 23:08
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Fred99:

 

Scott3:

 

For relevance to this thread 

 

 

You paid $187.46 for 822 units= $0.228 / kwh.

 

That's a hell of a lot more than the $0.144 /kwh you stated. 

 

 

 

 

The $0.144/KWh was an error. The correct value is $0.1572/kWh. This is my marginal cost.

Assuming I'm not planing to disconnect from the power grid, or drop to a low user plan, the daily fee is going to stay regardless of my consumption. As such it should not be considered for such decisions, and there is little value into distributing it across the units of power I consumed in a given month.

Remote central north island is known for high lines prices, so OP's costs could be very different to mine.


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  # 2270214 5-Jul-2019 01:23
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RedMoose:

 

Hi

@Aredwood, thank you for your reply,  we are talking about a house that is in the middle of nowhere in the central north island.  And based on research we have done from what we have seen Diesel and LPG Diesel appears to be at least 3 cents per Kilowatt cheaper than LPG, natural gas is not available, and neither is a large power connection.  However, if there is some evidence to the contrary then we will happily look at alternatives.

 

 

 

We have considered heat pumps, however because of the layout of the house,  we would be look at needing at least 4 heat pumps (that were suitable for a cold climate). 

As alternative heat sources there is a log burning in the lounge of the main residence, heat panels will be installed in all bedrooms and hallways, plus a ventilation systems will be installed in both dwellings (a heat transfer will be installed in the unit with the fireplace as well).

 

 

Hi @RedMoose

 

What exactly is your situation? As you say it is residential, yet you also say that there are 2 unit titles? Will each house have a complete standalone system? Or are you intending to have some sort of common heating system. With the body corporate somehow metering heat to each property, or including the cost of heating in the body corp fees. I was actually guessing from your first post, that you were actually wanting a system for a hotel / apartment building / ski lodge etc.

 

How much does Diesel cost you? Including the cost of having it delivered to your house. As the cost of a full 45KG LPG bottle includes the cost of delivering it to your house. Admittedly, I have redone the cost comparison of LPG Vs diesel. And diesel was cheaper. But that was just based off the pump price of diesel at the local petrol station in Auckland. While I was using an LPG cost of $108 per bottle.

 

You also need to consider standby costs. As LPG hot water has 0 standby LPG usage. While a combi boiler (depending on its design). Either has a small internal tank, and therefore uses a heating element or starts the burners every now and then to keep that tank hot. And the other type uses a plate heat exchanger to heat the domestic hot water from the central heating water. If the central heating is off, and a hot water tap is turned on. The main burner has to be lit, water circulated between the burner and DHW plate heat exchangers, to then provide heat to the DHW. The hot water is slow to reach full temp, and flow changes cause the hot water temp to also change. While common NZ LPG water heaters are very quick to reach their set outlet temp from a cold start, and also have excellent temp regulation even under varying flow conditions. And importantly, local gasfitters will know how to install and repair them. Spare parts are more likely to be available locally, Or at least only have to come from Auckland instead of somewhere in Europe.

 

Diesel tanks are also a theft risk. As it is easy to siphon or pump the diesel out of a tank. And diesel can easily be sold on the black market and is almost impossible to trace. While with LPG, to steal it, you pretty much have to steal the whole cylinder. But the cylinders have serial numbers on them. And Elgas (in Auckland at least) offer larger cylinders that are bolted in place and filled by a tanker truck.

 

Guessing that you are in the TLC (The Lines Company) network area. So best option would probably be LPG hot water (although consider electric hot water on timer so it would only heat during off peak rates). Definitely LPG cooking (as if you have electric cooking you will be using peak rate power for cooking) And it also frees up lots of electrical capacity. Bedroom heating - definitely heatpumps. As smaller heatpumps have better COP, and you will be using off peak power mostly to run them. Lounge heating - Woodburner. Also consider heatpump or LPG heater.






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  # 2270293 5-Jul-2019 09:51
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nickb800:

 

Fred99:

 

Scott3:

 

For relevance to this thread 

 

 

You paid $187.46 for 822 units= $0.228 / kwh.

 

That's a hell of a lot more than the $0.144 /kwh you stated. 

 

 

 

 

It's pretty standard to quote the variable per unit cost and exclude fixed costs, as they are fixed (although of course lower usage might tip you onto low-user daily charges, so there is some relationship between usage and fixed costs).

 

Nonetheless, I'm very surprised how cheap Auckland line charges are

 

 

It's a mistake.

 

Dividing the full charge from your supplier by units used gives your actual cost, sure that's variable per month due to the fixed cost component.  

 

Unfortunately, plans like the OP is on with high daily fixed charge and low per unit cost don't give an incentive for electricity saving, effectively discounting heavy use.  Such plans should be regulated out of existence.


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  # 2270398 5-Jul-2019 11:42
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Fred99:

 

Unfortunately, plans like the OP is on with high daily fixed charge and low per unit cost don't give an incentive for electricity saving, effectively discounting heavy use.  Such plans should be regulated out of existence.

 

 

I completely disagree.

 

Line charges recovered through a low daily fee and high per-unit charges are an economic fantasy perpetuated to provide an artificial incentive to reduce energy use.
The fact is that the local lines company's costs for an individual connection are almost entirely fixed, with only a very tiny residual proportion variable. Within very large limits, it costs the lines company the same to provide your house with electricity whether you have one 8W LED bulb running or a full house load of washing, heating and cooking appliances. Once you have a grid connection of a particular capacity, the distribution infrastructure costs are fully incurred, and in a rational world would be recovered that way.

 

Plans with high daily fixed charge and low per unit cost are economically rational and correctly reflect the actual costs.


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  # 2270404 5-Jul-2019 12:26
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PolicyGuy:

 

Fred99:

 

Unfortunately, plans like the OP is on with high daily fixed charge and low per unit cost don't give an incentive for electricity saving, effectively discounting heavy use.  Such plans should be regulated out of existence.

 

 

I completely disagree.

 

Line charges recovered through a low daily fee and high per-unit charges are an economic fantasy perpetuated to provide an artificial incentive to reduce energy use.
The fact is that the local lines company's costs for an individual connection are almost entirely fixed, with only a very tiny residual proportion variable. Within very large limits, it costs the lines company the same to provide your house with electricity whether you have one 8W LED bulb running or a full house load of washing, heating and cooking appliances. Once you have a grid connection of a particular capacity, the distribution infrastructure costs are fully incurred, and in a rational world would be recovered that way.

 

Plans with high daily fixed charge and low per unit cost are economically rational and correctly reflect the actual costs.

 

 

Economically rational, socially acceptable, and environmentally sustainable aren't the same thing.

 

 


 
 
 
 


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  # 2270559 5-Jul-2019 14:15
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Fred99:

PolicyGuy:


Fred99:


Unfortunately, plans like the OP is on with high daily fixed charge and low per unit cost don't give an incentive for electricity saving, effectively discounting heavy use.  Such plans should be regulated out of existence.



I completely disagree.


Line charges recovered through a low daily fee and high per-unit charges are an economic fantasy perpetuated to provide an artificial incentive to reduce energy use.
The fact is that the local lines company's costs for an individual connection are almost entirely fixed, with only a very tiny residual proportion variable. Within very large limits, it costs the lines company the same to provide your house with electricity whether you have one 8W LED bulb running or a full house load of washing, heating and cooking appliances. Once you have a grid connection of a particular capacity, the distribution infrastructure costs are fully incurred, and in a rational world would be recovered that way.


Plans with high daily fixed charge and low per unit cost are economically rational and correctly reflect the actual costs.



Economically rational, socially acceptable, and environmentally sustainable aren't the same thing.


 



Except that high per unit costs mean that electricity is more expensive than LPG and other fossil fuels.

As a result, an easy way to reduce your energy costs is to switch from electric hot water to gas hot water. Lower end cost to the consumer, but way higher carbon emissions.

So in effect, you have a negative carbon tax (paying people to emit carbon).

There is definitely nothing environmentally sustainable about artificially high per unit costs.

And high unit costs also hurt low income people the most. As they are the least able to invest in better energy efficiency. Or switch to different energy sources.

So they are not rational from a social perspective either.

And they are actually indirectly racist. As high per unit costs (due to the Low User Regulations) hurt Maori and Pacific Islanders the most.





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  # 2270579 5-Jul-2019 15:17
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PolicyGuy:

 

Fred99:

 

Unfortunately, plans like the OP is on with high daily fixed charge and low per unit cost don't give an incentive for electricity saving, effectively discounting heavy use.  Such plans should be regulated out of existence.

 

 

I completely disagree.

 

Line charges recovered through a low daily fee and high per-unit charges are an economic fantasy perpetuated to provide an artificial incentive to reduce energy use.
The fact is that the local lines company's costs for an individual connection are almost entirely fixed, with only a very tiny residual proportion variable. Within very large limits, it costs the lines company the same to provide your house with electricity whether you have one 8W LED bulb running or a full house load of washing, heating and cooking appliances. Once you have a grid connection of a particular capacity, the distribution infrastructure costs are fully incurred, and in a rational world would be recovered that way.

 

Plans with high daily fixed charge and low per unit cost are economically rational and correctly reflect the actual costs.

 

 

I'm with Policy Guy on this one. Failing to allocate the fixed costs of a grid connection as they fall results in a substantial market distortion, leading to worse outcomes for our society a whole.

The current "low user" plan has been regulated into existence, and results in the users on that plan tier being subsidized by standard users. I am a strong supporter of eliminating such a policy.

I don't think OP has stated what power plan they are on. If they are in the "TLC" district a key cost driver is likely their max peak time consumption, which could encourage things like electric night store heaters.


Fred99:

 

Economically rational, socially acceptable, and environmentally sustainable aren't the same thing.

 



On all three fronts, I feel there is a clear case for allocating the fixed and variable costs as such, as opposed to lumping the fixed costs into the per unit cost.

Economically this is rational, because it means the price signals sent to the consumers accurately reflect the costs of operation.

If we did it the other way, with zero fixed costs, and a higher unit charge there would be the following market distortions;

 

  • Rarely occupied dwellings such as bachs would get a free ride, being subsidized by dwellings such as mine.
  • There would be no incentive to disconnect the likes of an abandoned house for the grid, meaning the cost of keeping that house connected is carried by others
  • There would be no incentive for commerical / industrial power users to structure their operations in a way that minimises their subscribed connection capacity. As such, the capacity of the lines / grid would need to be way more than it is now, increasing the cost to everybody.
  • Per unit cost of power increasing would send a false price signal, and encourage people to use less electricity, turning instead to LPG / Natural gas / diesel / coal / petrol / wood / solar. This results in less electricity being used as a country, so in turn less units to split the fixed costs over....
  • Higher marginal cost of electricity increases energy poverty related issued.

Also, we make most of our electricity here, where as oil derived products are typically imported which is bad for our balance of trade.

 

socially acceptable. Obviously this means different things to different people.

 

I find it perfectly socially acceptable to allocate fixed / variable costs appropriately, and to minimise market distortions by avoiding un-needed regulation. Also, given it's 2019, I feel any distorting regulations that lead to greater carbon emissions to be not socially acceptable.

There is significant support for eliminating "low user charges" regulations. These were originally put in place to act as a subsidy towards lower income households paid for by higher income households. Unfortunately it doesn't work that way as power consumption is a very poor proxy for wealth / income.

lower wealth / income households have on average more people per household, and are more likely to live in lower quality (often rented housing).

What ends up happening is that your lower income household of 8 people in an old drafty house in Otara, end up subsiding your wealthy empty nest couple living in an upmarket fully insulated and double glazed remuera apartment, and who spend three months a year overseas.

 

Type of hot water heating has a massive impact on total consumption Doesn't seem acceptable to me that a house with electric water heating should subsidize one with LPG water heating....

low wealth / income individuals have the least ability to reduce electricity consumption via things like solar PV, efficient housing (heating, insulation etc), gas water systems etc, as they often rent, and are also often capital constrained.

 

environmentally sustainable

 

In NZ our electricity is made with roughly 80% renewable. Other than the likes of direct solar thermal, direct geothermal, and waste heat, Environmentally electricity by far the best fuel we have at our disposal. We should be doing everything we can to move consumption to electricity from petrol / diesel / natural gas / LPG / coal for climate change reasons, and from wood fuel for local air quality reasons.

Artificially pushing marginal power costs, by including fixed costs in the per kWh rates, works exactly counter to this.

We need to push down marginal (per kWh power prices) to encourage the move away from fossil fuels and towards electricity 


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  # 2270590 5-Jul-2019 15:41
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Scott3:

 

The current "low user" plan has been regulated into existence, and results in the users on that plan tier being subsidized by standard users. I am a strong supporter of eliminating such a policy.

 

 

I'm not - the low user plan saves me so im happy with it :-)

 

However everything else is true

 

I live in a well insulated warm house, I am a moderately higher income earner compared to those in a low socio economic area or pensioners and I have two flatmates that are not on minimum wage either and we dont use a lot of power.   

 

So when Contact asked if I wanted to change to the low user plan, I ran the numbers and it saves me about $20-$30 per month except in June/July when its only about $5





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  # 2270764 5-Jul-2019 22:00
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raytaylor:

 

I'm not - the low user plan saves me so im happy with it :-)

 

However everything else is true

 

I live in a well insulated warm house, I am a moderately higher income earner compared to those in a low socio economic area or pensioners and I have two flatmates that are not on minimum wage either and we dont use a lot of power.   

 

So when Contact asked if I wanted to change to the low user plan, I ran the numbers and it saves me about $20-$30 per month except in June/July when its only about $5

 



It is completly rational for you to take the optimal plan for your usage.

My main concern is not that you get a small discount over standard users, but rather the potential that cira 30c/kWh rate has to incentive's you to move away from electricity. Getting gas hot water heating looks attractive at that electricity unit rate.




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  # 2270822 5-Jul-2019 22:52
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Aredwood:

 

RedMoose:

 

Hi

@Aredwood, thank you for your reply,  we are talking about a house that is in the middle of nowhere in the central north island.  And based on research we have done from what we have seen Diesel and LPG Diesel appears to be at least 3 cents per Kilowatt cheaper than LPG, natural gas is not available, and neither is a large power connection.  However, if there is some evidence to the contrary then we will happily look at alternatives.

 

 

 

We have considered heat pumps, however because of the layout of the house,  we would be look at needing at least 4 heat pumps (that were suitable for a cold climate). 

As alternative heat sources there is a log burning in the lounge of the main residence, heat panels will be installed in all bedrooms and hallways, plus a ventilation systems will be installed in both dwellings (a heat transfer will be installed in the unit with the fireplace as well).

 

 

Hi @RedMoose

 

What exactly is your situation? As you say it is residential, yet you also say that there are 2 unit titles? Will each house have a complete standalone system? Or are you intending to have some sort of common heating system. With the body corporate somehow metering heat to each property, or including the cost of heating in the body corp fees. I was actually guessing from your first post, that you were actually wanting a system for a hotel / apartment building / ski lodge etc.

 

How much does Diesel cost you? Including the cost of having it delivered to your house. As the cost of a full 45KG LPG bottle includes the cost of delivering it to your house. Admittedly, I have redone the cost comparison of LPG Vs diesel. And diesel was cheaper. But that was just based off the pump price of diesel at the local petrol station in Auckland. While I was using an LPG cost of $108 per bottle.

 

You also need to consider standby costs. As LPG hot water has 0 standby LPG usage. While a combi boiler (depending on its design). Either has a small internal tank, and therefore uses a heating element or starts the burners every now and then to keep that tank hot. And the other type uses a plate heat exchanger to heat the domestic hot water from the central heating water. If the central heating is off, and a hot water tap is turned on. The main burner has to be lit, water circulated between the burner and DHW plate heat exchangers, to then provide heat to the DHW. The hot water is slow to reach full temp, and flow changes cause the hot water temp to also change. While common NZ LPG water heaters are very quick to reach their set outlet temp from a cold start, and also have excellent temp regulation even under varying flow conditions. And importantly, local gasfitters will know how to install and repair them. Spare parts are more likely to be available locally, Or at least only have to come from Auckland instead of somewhere in Europe.

 

Diesel tanks are also a theft risk. As it is easy to siphon or pump the diesel out of a tank. And diesel can easily be sold on the black market and is almost impossible to trace. While with LPG, to steal it, you pretty much have to steal the whole cylinder. But the cylinders have serial numbers on them. And Elgas (in Auckland at least) offer larger cylinders that are bolted in place and filled by a tanker truck.

 

Guessing that you are in the TLC (The Lines Company) network area. So best option would probably be LPG hot water (although consider electric hot water on timer so it would only heat during off peak rates). Definitely LPG cooking (as if you have electric cooking you will be using peak rate power for cooking) And it also frees up lots of electrical capacity. Bedroom heating - definitely heatpumps. As smaller heatpumps have better COP, and you will be using off peak power mostly to run them. Lounge heating - Woodburner. Also consider heatpump or LPG heater.

 



Hi

Thank you for your comment, We are only talking 2 residential units in the PowerCo area.  As the house has multiple levels that are separate and a current ideal boiler and radiators already exist (hence looking at refurbishing this).  Currently there is not sufficient access for LPG bottle delivery,  however it could be possible to have and LPG tanker refill, however we are currently unsure how reliable this is in this area, where as diesel delivery is reliable. 

If we are unable to get 45kg or above LPG refilling on site then we would look at installing a LPG fitting for a 9 or 18kg LPG bottle, for a gas hob only. 

We are planning on one boiler that is metered per unit for energy used.  However i completely agree with the downsides of diesel heating hot water use in regards to heat exchangers the cylinders we are looking at, are designed to be used with a diesel boiler, where the boilers only need to be lit twice a day to warm the cylinder, and also if required there is an electric element in the cylinder as a alternative energy source.  

The radiators would be used in conjunction with an existing log burner (with heat transfer kit) and simple panel heaters (in all bedrooms and hallways).


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  # 2270828 5-Jul-2019 23:45
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How are you planning to do the heat metering?

 


Why I ask is that in apartment buildings with centralized Chilling / heating plants (i.e. metropolis Auckland), heat metering of these services is typically not done, with instead unlimited use being Included in body corp fees. I assume this is to do with the cost of installing sale grade heat metering.


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  # 2270868 6-Jul-2019 09:37
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Scott3:

 

We need to push down marginal (per kWh power prices) to encourage the move away from fossil fuels and towards electricity 

 

 

No we don't - at least not while demand can't be met by renewable production, if low marginal rates increase demand.


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  # 2270885 6-Jul-2019 10:14
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Those heat exchanger cylinders are almost certainly more expensive than normal electric cylinders. While having electric hot water might allow you to get access to cheaper power price plans, due to ripple control.

And since you want to use an old boiler- What is its energy efficiency? As it would probably only be 70% or so efficient. And what's its capacity? The extra hot water load might make it undersized. While it would probably be oversized when only heating hot water cylinders. Its overall cost of delivered heat may not be any cheaper than standard user rate electricity.

Also consider the rental property heating regulations. Do you know how many KW of heat the diesel system can deliver to the lounge? And is it enough to comply?

And as above. How do you plan to do heat metering?





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