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Electricity Facts
Fossil Fuel Economics
- The heat content of coal is approximately 30,000 btu/ton. So the fuel cost of electricity from an average coal plant with coal delivered to the plant at $110/ton is $30/mwh. Coupled with the high variable costs of $15/mwh, the variable cost of producing electricity from coal is approximately $45/mwh.
- The heat content of natural gas is 1,000 Btu/cu. With natural gas
now approximately at $13.00/MMtu ($13.00/MCu ft) and with a 10,000 heat rate, the marginal cost to fuel a simple cycle natural gas fired turbine is rising rapidly. Coupled with simple cycle variable costs of $10/mwh, the variable cost of producing electricity from natural gas is approximately $140/mwh.
- It is clear why electric utilities favor coal-fired electricity generation, despite its harmful impact on the environment—it is very cheap.
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