Economics Of Solar Heating In Alberta

Abstract Natural gas prices in Alberta are anticipated, after having reached Btu equivalence with crude oil prices, to inflate at rates very close to overall inflation throughout Canada. Solar energy systems, air or liquid collector designs combined with short term storage have been evaluated economically against this projected price scenario for natural gas heating. These economic comparisons were made on a consistent present worth basis for several solar system designs against a conventional natural gas heating system. The results indicate a clear economic advantage continues for conventional natural gas heating over solar systems for such investment decisions to be taken within the short to medium future, (1975–1985). Future Alberta Natural Gas Prices In Alberta, space heating, domestic hot water heating and most other heating fuel requirements are currently met by using natural gas. In order to assess the feasibility of using a solar energy system for any of these applications over the next ten to fifteen years requires a reasonable forecast of provincial natural gas prices. Currently, the price of natural gas throughout Canada is established by agreements between producing provinces and the federal government. For Alberta gas production, the field gate or commodity price is established by the following principle:natural gas will be priced at energy equivalence with the current price of conventional crude oil at the Toronto city gate;the Alberta field gate price will be the price set by (1) minus the transportation charge of pipelining the gas between Toronto to Alberta. This relationship, making natural gas prices directly a function of the natural crude oil price is summarized in the following: Alberta natural gas price (NGP) = [2.34 cop-31.5]: ¢/GJ=([15.5 cop-33.2]: ¢/MMBtu) Where, cop is the crude oil price expressed in $/m2 ($/bbl). The trend for future crude oil prices in Canada is now clear. The price for domestic conventional production will increase at rates so as to approach the current price for imported crude oil. Up to and including 1980 this would mean a fate of increase of about 30 ¢/m 3 (2$/bbl) per year. Thereafter, crude oil prices over roughly the next ten years will increase at about the prevailing overall fate of inflation, likely five percent per year. The mid-year 1977 field gate price for natural gas was 88 ¢/GJ (93 ¢/MMBtu). The scenario described in the preceding paragraph for the future national crude oil price gives rise to an average annual price increase of 10.6 percent per year for the next 15 years. If the assumed 1980 price of crude oil was somewhat understated, a reasonable upper bound for future gas increases would still be represented by increases of 12 percent for the years between 1977 and 1990. Table 1 shows the annual price of natural gas as given by two forecasts, 10.6 and 12 percent per year. These rates of natural gas price increase will be utilized on our assessment of the economic feasibility of solar energy.