What is Energy Worth?

I found this to be a fascinating calculation done by Richard T. Stuebi at the Cleantech Blog. We all ask about the price of electricity – investors ask if the energy produced by the latest and the greatest alternative energy technologies is cheaper than the market price of electricity or not….well read this:

Everyone pays attention to — and often whines about — the price or cost of energy. I would like to pose a different question: what is the value of energy? What is energy really worth?

It turns out to be a more interesting question than it might first appear. Let me present a few illustrative calculations.

A healthy adult can exert about 100 watts of effort for a reasonably sustained period. (Have you ever worked out strenuously on an exercycle with an output display? If so, have you ever pushed it to over 200 watts for very long?) Thus, over the course of a 10-hour day, a human might produce 1000 watt-hours — or 1 kilowatt-hour. From your local utility, you probably pay about a dime for a kilowatt-hour. On the other hand, if you were to pay that adult a (low) wage of $5/hour for that degree of effort, that kilowatt-hour would cost $50.

In other words, electricity is priced about 1/500 the equivalent value of human effort.

Oil is even more of a steal. There are 3412 Btu in a kilowatt-hour, meaning that an adult can produce about 3412 Btu of energy effort in a 1o-hour day — or 341 Btus per hour. In a barrel of oil, there are 6.2 million Btus — equivalent to over 18,000 man-hours, which would cost over $90,000 at a (low) wage of $5/hour.

At $60/barrel, oil is priced about 1/1500 the equivalent value of human effort.

And we complain that energy is expensive? Try replacing our taken-for-granted energy forms with the work of humans — and paying a wage for it! Content provided by and all rights reserved to CleantechBlog.com, the premier site for commentary on clean technologies, news, and issues relating to next generation energy and the environment.

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