Tuesday, August 06, 2019

Does it make economic sense to ditch your gas stove and go for electric stove?


Recently, there has been a lot of buzz around the electric stoves since the availability of subsidized LPG has become questionable. Let us see if it makes economic sense to go for electric stoves at this present juncture given that electricity tariff has risen steadily over the past few years. 





1 kg of LPG has an energy value of 13.6 Kwh (Kilowatt hour). One Kwh is called one unit.
Hence, 14.2 kg of LPG (that is the amount of LPG in one cylinder) can give  193.12 Units.

1 Cylinder of LPG (subsidized) = Nu. 600 (approximate cost at this time.) If non-subsidized, it may cost around Nu. 900 or 1000 if we go by this Kuensel article which says the difference in cost between subsidized and non-subsidized is about Nu. 278 ( http://www.kuenselonline.com/govt-to-introduce-non-subsidised-lpg/ ).

Now, suppose, you use electricity instead of gas to get the same amount of energy as one cylinder of gas, how much would it cost? 
If you are one of those whose monthly bill is below Nu. 150 now, given that one cylinder of gas equals 193.12 units of electricity, the cost would be  Nu. 517.56 (Using rate for lower slab users @Nu. 2.68 per unit). 

For others, 193.12 units of electricity would cost Nu. 681.71 (Rate for higher slab users @Nu. 3.53per unit) . This is the tariff slab into which most of the people would fall under. 

See table 1 below for the power tariff. 

Conclusion:


1. As long as subsidized LPG is available, it does not make economic sense to go for electric stove.

2. The electric stoves are said to be around 74% efficient while gas stoves are only about 55% efficient. Efficiency is the percentage of actual energy that goes into final use after wastage through air, heating of the stove itself etc. This roughly 20% difference in efficiency would translate to a saving of about Nu. 120 per one cylinder-equivalent of energy. That means, it is a saving of about Nu. 120 per month, if you usually use one gas cylinder a month. If one cylinder lasts you two months, it is saving of about Nu. 60 per month. 

If you use induction stove (one on which only pots made of magnetic metals can be used), the efficiency is said to be around 85%. So, the savings in that case would be about Nu. 180 per cylinder-equivalent of energy usage. 

(Reference: https://www.1millionwomen.com.au/blog/which-type-stovetop-most-energy-efficient/ )

3. If the subsidized gas is stopped and the electricity tariff does not increase much, the electric stove would make some sense. However, even in this case, the advantage is not too huge given that you will have to invest around Nu. 10,000 to get a double oven. If you usually finish about one gas cylinder a month, the saving would be about Nu. 400 per month even when compared to non-subsidized LPG. Saving Nu. 400 each month, you will need 25 months to recoup your investment. By that time, your stove's useful lifespan may be over because most heating elements do not last too long under constant use.

However, if your savings per month comes to around Nu. 1000 a month with investment of Nu. 10,000 for the oven, it may make economic sense provided the useful life of the stove exceeds at least one year even under heavy duty.

4. Power tariff was last increased on 1st July 2018. I think that there are talks of another increase coming soon. In that case, there may not be much advantage to go for electric stove even if we have to buy non-subsidized gas unless your goal is to reduce the import of LPG by using our own electricity. 


Table 1: Revised Electricity Tariff (Source: BPC Website)
Tariff Structure
Unit
From 1st July 2018 
LV Block-I (Rural) 0 – 100 kWh
Nu./kWh
0
LV Block-I(Others) 0 – 100 kWh
Nu./kWh
1.28
LV Block-II (All) >100 – 300 kWh
Nu./kWh
2.68
LV Block-III (All) >300 kWh
Nu./kWh
3.53


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