Is electric heating more expensive than gas?

Q: I’m buying a flat which is fully electric-heated. Is this more expensive than gas? 

In principle, electricity is almost always more expensive to run than gas when using it for heating. This is especially true if the heating system used is for direct heating (like a bar heater) as opposed to a storage heater.

Electricity costs carry most of the environmental levies imposed by government and, as a result, are more expensive from that perspective. Secondly, electricity is a function of wholesale gas that has been burnt in a power station and used to generate electricity, which is then sent down the wires to a home. We typically work on an efficiency ratio for burning gas to turn it into electricity of about 50%. A home boiler by contrast will take gas and turn it into heat, with an efficiency of about 80%+ (some condensing boilers have an efficiency rating of 90%). So not only is electricity more expensive due to taxes and transportation costs; it is simply less efficient to begin with once you factor in the costs and amount of original fuel used to generate it in the first place.

Economy 7 tariffs were originally designed to support electric storage heating systems, as electricity is cheaper at night than during the day (and thus the costs are incurred at night, but the heat is released more evenly throughout the period required). The table below – from an OFGEM report – will help illustrate the difference in practical pounds sterling terms.



As you can see, a two bed flat using single panel heaters is more than double the price to run when compared to a gas boiler heated apartment. Even modern electric storage heater households are still some 30% more expensive. Gas prices right now are about 2.5p/kWh if you shop around and 3.9p/kWh if you don’t, which is a good reason for switching. But even at 3.9p/kWh, this is still vastly cheaper than the 10.5p/KWh for the best deal in the market for electricity, and the 12.62p/KWh for electricity from a non switcher. Whichever way you cut it, electricity heating is expensive!

Answer provided by Guy Thompson, MyUtilityGenius



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