GAS COSTS AND GULF STREAM TURBINE PROFITS
The
Though environmentalists are urging the
increased use of renewable energy because of their legitimate and well-founded
concerns about global warming, there is a more urgent reason to move quickly
toward non-fossil fuel energy: the depletion of those gas reserves that can be
transported to US consumers by pipeline. This section explains why skyrocketing
gas prices are a certainty and why the EIA’s projections of gas prices are less
than worthless. It compares the
amortization costs for the power generated with the Gulf Stream Turbines to the
cost of just that gas consumed to generate an equal amount of power, using the
most efficient combined-cycle gas turbines.
It shows that, if large numbers of the Gulf Stream Turbines share
transmission cables and other facilities, they can produce electricity at lower
costs per kilowatt-hour than all
existing gas-fired power plants and all other power plants not yet built. Because these submersible plants will not corrode
and because of their mechanical simplicity, they can operate without servicing
for many years and periods of more than 20 years are possible. Produced in sufficient
numbers, the capitalization costs per kilowatt of generating capacity should be
between $800 and $1,600 – comparable to the costs of the wind turbines
and less than the costs of new coal-fired plants that consume fuel. Because of the Gulf Stream Turbine’s high
capacity factor, no fuel costs, and almost no maintenance costs, the costs of
that steady power that they can produce should be only about one-third that of
the unreliable power produced by the most efficient wind-powered turbines at
locations where there is good wind potential.
And, although the Gulf Stream Turbines can already produce electric
power much more cheaply than the gas-fired turbines, as the gas prices
increase, the Gulf Stream Turbine’s cost advantage will increase very
rapidly.
Inelastic Gas Demand Will Can Cause Huge Increases in Gas
Prices
Even
though U.S. natural gas production is peaking now and will be declining, a
decrease in the gas supply is not needed to cause skyrocketing gas prices –
all that is needed is that the firm demand for gas exceeds the producers’
ability to satisfy that demand. The
reason that a small shortage can cause huge price increases is that the firm
demand for natural gas is inelastic because
it remains relatively constant regardless of price. Elasticity of demand refers to the relationship
between a change in the price of a commodity and the change in the quantity of
that which can be sold. When a commodity
has an inelastic demand and the supply is more than sufficient to satisfy that
demand, prices will remain low, determined primarily by the costs of producing
additional quantities of that commodity.
Because the natural gas supply is determined by the total production
flowing from all the producing wells and because that flow rate is not effected
by short-term changes in demand, when there is more than enough gas to cover
the normal firm demand and fill storage requirements, the surplus must be
disposed of by selling it at prices below those of competing fuels to those
interruptible gas customers that can switch fuels. However, when there is not
enough gas to cover the firm demand and refill required storage, the gas
distributing companies, electric utilities, and industrial users will bid up
the gas prices to obtain that gas they will need. On
How high the gas prices will go during the near-term will depend on the weather, economic growth, and fears that the gas in storage will become depleted. A factor that will effect the speed of the price increases will be how rapidly those US manufacturers that must have cheap gas to remain competitive, will move their operations to other countries where cheap gas may still available. Though there will always be seasonal and short-term swings in gas prices, caused by changes in the fuel’s short-term availability and the weather-related demand, the gas shortage will worsen and the gas prices will increase to unbelievable levels during the next few years and beyond.
Spot-market and Wellhead Gas Prices
Whether
the Gulf Stream Turbines can produce electric power cheaper than the gas-fired
turbines depends on the Gulf Stream Turbines’ costs and the costs of that gas
used to produce the same power. As we
compare the costs of the electricity produced by the two systems, it would help
to understand the differences between the gas prices.
The Henry Hub spot and futures prices have become recognized as the source for “real-time” gas prices because they are the only spot prices that are reported on a daily basis by several natural gas industry news publications. The Henry Hub price is measured downstream of the wellhead, after the natural gas liquids have been removed and after transportation costs has been incurred. Because the Henry Hub NYMEX prices represents only those sales contracts for next day delivery, they can be extremely volatile when there are threatened shortages. Although only about 3 percent of the nation’s natural gas is sold through the Henry Hub pipeline terminal, their prices can portend the future for all gas prices. The Henry Hub spot price is quoted in dollars per million Btu. (Go to www.oilnergy.com or www.wtrg.com for updated prices for oil and natural gas prices.)
Because
the Gulf Stream Turbines would operate off the East Coast of South Florida, the
most important prices for making comparisons are those being paid by Florida Power & Light for that gas
that powers their combined-cycle turbine generators. FPL Energy Services buys their gas from the
spot market at the Henry Hub pipeline terminal in
Instead of
using the NYMEX spot prices, the EIA reports the average wellhead prices for
natural gas in its monthly and annual data publications and forecasts these
wellhead prices in both its Short-Term
Energy Outlook and the Annual Energy
Outlook. The wellhead prices are
reported after the final production and price data are received from the States
and the U.S. Minerals Management Service.
They include the value of natural gas liquids
and cover the wellhead prices of all gas sold under contracts of all
durations. They are stated in
dollars per thousand cubic feet. The
following graph shows the average wellhead prices between 1930 and 2004, with
my estimate for 2005 that is based on the spot market prices through August and
those anticipated through December.
Why
EIA Price Forecasts Are Less Than Worthless
The
EIA’s forecasts of the gas prices are worthless because they are all based on
the false assumption that there will be plenty of gas to cover the growing
demand through 2025. The EIA price
forecasts are wrong because they are based on ridiculously optimistic estimates
of future production costs and ignore the impact that an unsatisfied inelastic
demand can have on the prices.
The
following graph on the left was reproduced from the EIA’s Annual Energy Outlook 2002. The
graph shows three projections of the wellhead gas prices to 2020. In their reference case the gas price is
projected to reach approximately $3.25 by 2020, based on the value of the
dollar in 2000. Their “high growth”
price is projected to increase to approximately $3.63, and their “low growth”
price is projected to increase to approximately $2.93 in non-inflated dollars.
The
above graph (on the right) compares the EIA’s price forecasts to my earlier
price forecast (red ) that shows the effect that an unsatisfied inelastic
demand can have on the prices. The
average wellhead gas prices for 2004 exceeded $5.50 per Tcf. On
The following graph shows my earlier
estimates (made about 5 years ago) of the wholesale gas prices since 1980 and
projections to 2020. These prices are a
blend of prices for gas selling under long-term contracts, intermediate
contracts, short-term contracts, and on the spot market. Because the gas production from the older wells is
declining and many new gas wells are being drilled in an effort to maintain
production, the average wellhead prices will increase rapidly –
as the increasing volumes of the higher priced “new” gas replace the declining
volumes of the cheaper “old” gas that is sold under long-term contracts. Because the firm demand for natural gas is
inelastic, as the production declines, the only things that can slow the price
increases is a rapid increase in LNG imports, or a rapid decrease in the
demand. This reduced demand can come from
conversions to other fuels, conservation, curtailments of service because of
customers’ inability to pay, and from the losses of those industries that must
have low-cost gas to remain competitive.
The graph projects both high and low estimates, with the lower
estimates reflecting major losses of the gas-dependent industries and
conversions to coal. Though the graph
shows smooth price increases, they will be extremely volatile within each
year. The red dash near the top of the
following graph shows the highest spot gas price paid during 2000-2001 of $61.8 per
million Btu, equivalent to $60 per thousand cubic feet.
Decreasing Gas Volumes Can Increase Transportation Costs per Unit
Though decreases in demand can
reduce the upward pressures on the gas prices, it can also increase the
transportation costs for the remaining gas users. Though gas production appears similar to oil
production and natural gas competes with oil, the transportation costs for the
natural gas are much higher than are those for oil. After the investments in transmission, distribution
and storage facilities are made, the total costs of operating the pipeline
system are pretty much fixed. This is
because the variable costs for a pipeline’s operation and maintenance are
relatively low compared to the pipeline’s capital costs. Consequently, the use of a pipeline, or its load factor, will not greatly influence
the total costs of transportation, although the changes in the volumes being
transported can cause large changes in the transportation costs per unit. For example: If the volumes being transported
through a pipeline were to decline by 30 percent, the transportation costs per
unit for the remaining gas users would increase by approximately 43 percent.
Calculating Fuel Costs per
Kilowatt Hour For Existing Gas-Fired Plants
There is no
question as to whether natural gas prices will increase. The only question is how fast and how far –
and how will the increasing gas prices affect the costs of generating
electricity and the demand for power.
Because one Btu per hour equals .2931 watt-hour and one watt-hour equals
3.411804845 Btu, one million Btu equals 293.1 kilowatt-hours and one
kilowatt-hour equals 3411.804845 Btu.
That means that 293.1 kilowatts-hours of electricity would be produced
from each million Btu in a fuel, if the plant could operate at an efficiency of
100 percent. We can calculate the amount
of Btu required to produce a kilowatt-hour of electricity for any power plant
by multiplying the 293.1 kilowatt-hours by the operating efficiency of the plant. For example: If a gas-fired plant has an
operating efficiency were 60 percent, it could produce 175.86 kilowatt-hours
per million Btu (293.1 x .60 = 175.86).
The cost of fuel per kilowatt-hour generated is the price of the gas per million Btu, divided by the kilowatt-hours that that gas can generate. The formula for the cost per kilowatt-hour can be written as:
C = P/(293.1 x E) C=
fuel cost per kilowatt-hour in dollars
P= the gas price/MMBtu
E= the operating efficiency of the plant.
For a plant that operates at a 60 percent efficiency,
the electricity cost would increase $0.0056863 per kilowatt-hour for each
dollar the gas price increased per million Btu [$1.00/(293.1
x .60) = $0.0056863]. Efficiencies of the combined-cycle gas-fired plants approach 60%; the
efficiencies of the single-cycle turbines and boiler plants are roughly 30 to
33 percent. The following table gives
the fuel costs in cents per kilowatt-hour for electricity generated by
gas-fired power plants operating at the efficiencies shown at the top of the
six columns, when the gas prices per million Btu are as shown in the left
column.
Gulf Stream Turbines Have Low Capital Cost per
Kilowatt of Capacity
By
producing the Gulf Stream Turbines in large numbers and grouping many together
into “farms” where they can share the transmission cables and other facilities,
their total capitalization costs should be between $800 and $1,600 per kilowatt
of generating capacity – comparable to those of wind turbines. Because the Gulf Stream Turbines have much
higher capacity factors, however, their generating costs per kilowatt-hour of
power produced should be about one-third that of those wind turbines that are
placed at the better wind sites.
The following graph compares the
dollar costs per kilowatt of generating capacity for various types of
electricity producing systems. Except
for the cost of the Gulf Stream Turbine, all cost figures were reproduced from
an EIA graph. With the exceptions of the
gas-fired plants and the wind-powered turbines, all the power plants listed have
higher capital cost per kilowatt of generating capacity than the Gulf Stream
Turbines.
]
Except for the estimate for the Gulf Stream Turbine,
all data is from the EIA
The Costs per Kilowatt-hour For Gulf
Stream Turbines
Because the Gulf Stream Turbines
will consume no fuel, almost all of the costs for the electricity that they
will generate will be from the amortized costs of the system –
including the costs of the underwater transmission cables, anchor lines, and
the transmission and distribution facilities ashore. Those costs would be determined by the total
cost of the system, the time over which those costs are amortized, and the
interest rate being charged. Those cost
per kilowatt-hour would be the annual amortization cost, divided by the
kilowatt-hours generated in a year.
If the Gulf Steam Turbines are
grouped to spread the incremental costs of the transmission cables over many
units, the total installed costs for each two-turbine unit should be between $1
million and $1.5 million. The following
8 tables show the costs per kilowatt-hour for the electric power produced by
each Gulf Stream Turbine, equipped with two 50-foot turbines, having a total
rated capacity of 1.25 megawatts, amortized over 5, 7, and 12 years, at the
interest rates listed.
|
|
Cost per
Kw-hr based on 5-yr Loan, 80% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0262
|
$0.0327
|
$0.0392
|
$0.0458
|
|
|
|
6% |
$0.0268
|
$0.0335
|
$0.0402
|
$0.0469
|
|
|
|
7% |
$0.0274
|
$0.0343
|
$0.0412
|
$0.0480
|
|
|
|
8% |
$0.0281
|
$0.0351
|
$0.0421
|
$0.0492
|
|
|
|
9% |
$0.0288
|
$0.0360
|
$0.0431
|
$0.0503
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 5-yr Loan, 90% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0230
|
$0.0287
|
$0.0345
|
$0.0402
|
|
|
|
6% |
$0.0235
|
$0.0294
|
$0.0353
|
$0.0412
|
|
|
|
7% |
$0.0241
|
$0.0301
|
$0.0362
|
$0.0422
|
|
|
|
8% |
$0.0247
|
$0.0309
|
$0.0370
|
$0.0432
|
|
|
|
9% |
$0.0253
|
$0.0316
|
$0.0379
|
$0.0442
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 5-yr Loan, 100% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0207
|
$0.0258
|
$0.0310
|
$0.0362
|
|
|
|
6% |
$0.0212
|
$0.0265
|
$0.0318
|
$0.0371
|
|
|
|
7% |
$0.0217
|
$0.0271
|
$0.0325
|
$0.0380
|
|
|
|
8% |
$0.0222
|
$0.0278
|
$0.0333
|
$0.0389
|
|
|
|
9% |
$0.0227
|
$0.0284
|
$0.0341
|
$0.0398
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 7-yr Loan, 80% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0196
|
$0.0245
|
$0.0295
|
$0.0344
|
|
|
|
6% |
$0.0203
|
$0.0254
|
$0.0305
|
$0.0337
|
|
|
|
7% |
$0.0210
|
$0.0263
|
$0.0315
|
$0.0368
|
|
|
|
8% |
$0.0217
|
$0.0271
|
$0.0325
|
$0.0380
|
|
|
|
9% |
$0.0224
|
$0.0280
|
$0.0336
|
$0.0392
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 7-yr Loan, 90% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0172
|
$0.0215
|
$0.0258
|
$0.0301
|
|
|
|
6% |
$0.0178
|
$0.0222
|
$0.0267
|
$0.0311
|
|
|
|
7% |
$0.0184
|
$0.0230
|
$0.0276
|
$0.0322
|
|
|
|
8% |
$0.0190
|
$0.0237
|
$0.0285
|
$0.0332
|
|
|
|
9% |
$0.0196
|
$0.0245
|
$0.0294
|
$0.0343
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 7-yr Loan, 100% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0157
|
$0.0196
|
$0.0236
|
$0.0275
|
|
|
|
6% |
$0.0163
|
$0.0203
|
$0.0244
|
$0.0270
|
|
|
|
7% |
$0.0168
|
$0.0210
|
$0.0252
|
$0.0294
|
|
|
|
8% |
$0.0173
|
$0.0217
|
$0.0260
|
$0.0304
|
|
|
|
9% |
$0.0179
|
$0.0224
|
$0.0269
|
$0.0314
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 12-yr Loan, 80% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0130
|
$0.0163
|
$0.0195
|
$0.0228
|
|
|
|
6% |
$0.0137
|
$0.0171
|
$0.0206
|
$0.0240
|
|
|
|
7% |
$0.0145
|
$0.0018
|
$0.0217
|
$0.0253
|
|
|
|
8% |
$0.0152
|
$0.0190
|
$0.0228
|
$0.0266
|
|
|
|
9% |
$0.0160
|
$0.0200
|
$0.0240
|
$0.0279
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 12-yr Loan, 90% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0113
|
$0.0141
|
$0.0169
|
$0.0197
|
|
|
|
6% |
$0.0119
|
$0.0148
|
$0.0178
|
$0.0208
|
|
|
|
7% |
$0.0125
|
$0.0564
|
$0.0188
|
$0.0219
|
|
|
|
8% |
$0.0132
|
$0.0165
|
$0.0198
|
$0.0231
|
|
|
|
9% |
$0.0139
|
$0.0173
|
$0.0208
|
$0.0242
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 12-yr Loan, 100% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0101
|
$0.0127
|
$0.0152
|
$0.0177
|
|
|
|
6% |
$0.0107
|
$0.0134
|
$0.0160
|
$0.0187
|
|
|
|
7% |
$0.0113
|
$0.0508
|
$0.0169
|
$0.0197
|
|
|
|
8% |
$0.0119
|
$0.0148
|
$0.0178
|
$0.0207
|
|
|
|
9% |
$0.0125
|
$0.0156
|
$0.0187
|
$0.0218
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 20-yr Loan, 90% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0080
|
$0.0100
|
$0.0120
|
$0.0141
|
|
|
|
6% |
$0.0087
|
$0.0109
|
$0.0131
|
$0.0153
|
|
|
|
7% |
$0.0094
|
$0.0118
|
$0.0142
|
$0.0165
|
|
|
|
8% |
$0.0102
|
$0.0127
|
$0.0153
|
$0.0178
|
|
|
|
9% |
$0.0109
|
$0.0137
|
$0.0164
|
$0.0192
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 20-yr Loan, 95% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0076
|
$0.0095
|
$0.0114
|
$0.0133
|
|
|
|
6% |
$0.0083
|
$0.0103
|
$0.0124
|
$0.0145
|
|
|
|
7% |
$0.0089
|
$0.0112
|
$0.0134
|
$0.0156
|
|
|
|
8% |
$0.0096
|
$0.0121
|
$0.0145
|
$0.0169
|
|
|
|
9% |
$0.0104
|
$0.0130
|
$0.0156
|
$0.0182
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
Kw-hr based on 20-yr Loan, 100% Capacity Factor |
|||||
|
|
|
Capitalization Cost Per |
||||
|
|
|
$1,000,000
|
$1,250,000
|
$1,500,000
|
$1,750,000
|
|
|
|
5% |
$0.0072
|
$0.0090
|
$0.0108
|
$0.0126
|
|
|
|
6% |
$0.0078
|
$0.0098
|
$0.0118
|
$0.0137
|
|
|
|
7% |
$0.0085
|
$0.0106
|
$0.0127
|
$0.0149
|
|
|
|
8% |
$0.0092
|
$0.0115
|
$0.0137
|
$0.0160
|
|
|
|
9% |
$0.0099
|
$0.0123
|
$0.0148
|
$0.0172
|
|
Comparing Cost for Existing Gas Plants to New
Using
the preceding tables, it is possible to find the amortization costs per
kilowatt-hour for Gulf Stream Turbines with various capital costs and financing
arrangements. The following graph
compares the fuel costs per kilowatt-hour for three gas-fired power plants that
are burning gas having differing costs per million Btu, to those costs per kilowatt-hour
for that power produced by the Gulf Stream Turbines. The diagonal lines are the fuel costs for
gas-fired turbines that have operating efficiencies of 30, 50, and 60 percent. The horizontal lines near the bottom of the
graph are the amortization costs per kilowatt-hour for six Gulf Stream Turbines
having capital costs of $1.25 million ($1,000 per kilowatt of capacity), and
financed over 5, 7, and 12-year periods and operating
in a 5.5 mph current at capacity factors of 80% and 100%.
Schedule for the graph
A = Gas-fired single-cycle turbine plant or boiler plant operating at 30% efficiency
B = Gas-fired, combined-cycle power plant that operates at 50% efficiency
C = Gas-fired, combined-cycle power plant that operates at 60% efficiency
D = Gulf Stream Turbine financed over 5 years at 5%, operating at 80% capacity factor.
E = Gulf Stream Turbine financed over 5 years at 5%, operating at 100% capacity factor.
F = Gulf Stream Turbine financed over 7 years at 5%, operating at 80% capacity factor
G = Gulf Stream Turbine financed over 7 years at 5%, operating at 100% capacity factor.
H = Gulf Stream Turbine financed over 12 years at 5%, operating at 80% capacity factor
I = Gulf Stream
Turbine financed over 12 years at 5%, operating at 100% capacity factor
The
following graph shows an old estimate of how the natural gas prices were
expected to increase during the following 11 years.
The numbers on the left side of the graph shows the costs of the natural
gas. The numbers on the right side shows
the costs per kilowatt-hour for those gas-fired plants that can operate at an
efficiency of 60 percent, and for the Gulf Stream Turbines. The horizontal lines near the bottom
represent the amortized costs of a Gulf Stream Turbine, costing $1.25 million
and financed over 7 years at 5 percent, and operating at the capacity factors
shown. Because it will take at least two
years to get the first machines operational, the amortization period starts in
two years. After the seven-year
amortization period ends and the loan repaid, the costs of the electricity
produced by the non-fuel-consuming Gulf Stream Turbine would drop to virtually
zero. This graph was drawn in 2002 and
gas prices have thus far been tracking above what I predicted. Because of all the new gas-fired power plants
that consume gas during the summer, making it very difficult to fill storage, I
now believe that future prices will be much less volatile than those shown, but
will increase faster.
Return on Investments in
Because of the
deregulation of the power industry, the prices of electricity are now being
largely driven by the costs of that gas that is being consumed to produce
it. Under federal rules, a grid operator
calls on power companies to submit the price for electricity they can
supply. The operator than lists these
prices from cheapest to the most expensive.
Starting with the cheapest, the operator accepts offers until it has
enough power to cover the demand. The
last price accepted is what is then paid to all the suppliers, with certain
exceptions. As the gas prices increase,
the resulting higher electric prices will increase the profits for all those
companies that can generate their power from energy sources that are cheaper
than the gas.
The following table shows the annual returns on investments on a Gulf Stream Turbines, compared to the per million Btu fuel costs for natural gas to produce the same kilowatt-hours of electricity. These calculations are based on the Gulf Stream Turbine operating at an 85% capacity factor and the gas-fired plant operating at an efficiency of 60%. Capitalization costs per Gulf Stream Turbine are given at the top of the columns.
Annual Returns on Investment in
|
|
Gas cost |
$ 1,000,000 |
$
1,250,000 |
$
1,500,000 |
$ 1,750,000 |
$
2,000,000 |
|
|
$
5 |
26% |
21% |
18% |
15% |
13% |
|
|
$
10 |
53% |
42% |
35% |
30% |
26% |
|
|
$
15 |
79% |
64% |
53% |
45% |
40% |
|
|
$
20 |
106% |
85% |
71% |
61% |
53% |
|
|
$
25 |
132% |
106% |
88% |
76% |
66% |
|
|
$
30 |
159% |
127% |
106% |
91% |
79% |
|
|
$
35 |
185% |
148% |
124% |
106% |
93% |
|
|
$
40 |
212% |
169% |
141% |
121% |
106% |
|
|
$
45 |
238% |
191% |
159% |
136% |
119% |
|
|
$
50 |
265% |
212% |
177% |
151% |
132% |
|
|
$ 55 |
291% |
233% |
194% |
166% |
146% |
|
|
$
60 |
318% |
254% |
212% |
182% |
159% |
|
|
$
65 |
344% |
275% |
229% |
197% |
172% |
|
|
$
70 |
371% |
297% |
247% |
212% |
185% |
|
|
$
75 |
397% |
318% |
265% |
227% |
199% |
|
|
$
80 |
424% |
339% |
282% |
242% |
212% |
|
|
$
85 |
450% |
360% |
300% |
257% |
225% |
|
|
$
90 |
477% |
381% |
318% |
272% |
238% |
As the years pass and the shortages of both natural
gas and petroleum worsen and their prices skyrocket, the returns produced by
the investments in the Gulf Stream Turbines will continue to increase.
Mind Boggling Savings
from the
According to
If
one Gulf Stream Turbine submersible generating unit can produce 1.25 megawatts
in a 5.5 mph current, it would produce 9,861,750 kilowatt-hours of power per
year, assuming a 90% capacity factor.
Because one kilowatt-hour is equivalent to 3,412 Btu, that power would
be equivalent to 33.65 billion Btu.
Because there are 1,030 Btu in a cubic foot of natural gas and because
the best gas-fired plants operate at efficiencies of 60 percent, a single
An
aggressive approach would be to install enough
It was previously determined that a
Gulf Stream Turbine, operating at a 90 percent capacity fact, would produce the
same amount of electricity as would the gas-fired turbines consuming 54.56
million cubic feet of gas. If we
multiply that 54.66 million by the proposed 175,000 Gulf Stream Turbines, that
saving would be equivalent to 9,548 billion cubic feet of gas. That would be equal to exactly half of the
19,080 billion cubic feet of natural gas produced in the