Energy cannot have Cost, Price, or Bill; Fuel can

FUEL industry

The largest FUEL consuming sector in any economy consists is the FUEL industry itself. In the UK,  in 1974 the five FUEL related industries; coal mining, oil refining, & the production of coke, gas, & electric power generation consumed more than 30% of the total FUEL. i.e. , for every 100 units of FUEL or fuel input to the UK less than 70 units is delivered to a consumer for use.

Fuel Classification

FUELs classified according to the phase in which they are normally handled as shown in the table below.

Primary Fuelsraw fuels Fuel Product Development Stages
1. Upstream 2. Down stream 3. Distribution
Gaseous fuels: chemically the simplest Mining Exploration Production & Transport Gas Purification End user
Liquid fuels: contain more complex molecules Oil refinery
Solid fuels: complicated a molecular Prep & Handling

From the raw state (oil in the ground, coal in the ground etc.) FUELS are developed as an end product in three Stages.  Each stage having; technologies, machineries, plants, equipment, materials; processes, infrastructure (power generation, road hospital etc) & services, (transportation, from the industrial sector etc.); unique to that particular stage & all consuming FUEL.

FUEL analysis

Consider the manufacturing of any  commodity or product as a system; shown in the Figure below:


Goal: Apportion the total FUEL input in the form of primary fuels between commodities.

Convention of “FUEL cost conservation” for the system above states:

The sum of all the inputs(xi) times their respective FUEL costs (Fi) should equal the sum of all the outputs (yi) times their respective FUEL costs (Fi) 

Expressed mathematically as:

∑ xi Fi = ∑ yj Fj

inputs                                outputs

 FUEL efficiency

There are three reasons for examining the FUEL efficiency of the fuel industries in more detail:

  1. the fact that the fuel industries are themselves the largest consuming sector offers the chance of reducing the demand for primary FUEL ,supply without adversely affecting the rest of the industrial system;
  2. the FUEL wasted by industries constitutes a major hazard to local, & perhaps global climate. Whatever the limit on the ‘safe’ heat release into the atmosphere it is clearly desirable to minimise the ratio of the ‘heat wasted’ to Electrical Power delivered to consumers;
  3. It is essential to know the FUEL efficiency of individual fuel industries in order to evaluate the FUEL costs of manufactured products or processes. With this information it is possible to compare the total efficiency of two processes which consume, say, one ton of coal or 1000 kWh of electric power generated.

The fuel supply chain

The fuel supply chain can take a complex form of interconnected system with each industry supplying fuel to every other. For example, oil refineries supply fuel to Electric Power Generating stations which supply Electric Power to the oil refinery. An oil refinery may also provide the fuel used by the tankers which deliver crude oil to the refinery.

‘Indirect’ FUEL consumption

The fuel supply chain interactions require a careful method of analysis based on a systems approach. In addition to consuming fuel; the fuel industries also consume large quantities of materials & machines which require FUEL for their production. This ‘indirect’ FUEL consumption must be included in the analysis

Finally, most of the industries produce more than one product as output. It is therefore essential to have an acceptable convention for partitioning the total FUEL costs of the inputs between the different outputs.

Heat Content (calorific value)

In combustion (a process), fuel gives up its chemical energy by a chain of reactions that changes the chemical energy in fuel into thermal energy, measured by the Heat Content (calorific value) for the FUEL used; &  expressed in BTU/lb in Imperial Units; or kJ/kg in SI units.

The Heat Content (calorific value) is defined as:

The Heat Content (calorific value) of a fuel is the standard heat of reaction at constant pressure of the reaction in which the fuel burns completely with oxygen.

The Heat Content (calorific value) of the fuel is The maximum thermal energy which can be extracted

Some of the key features of the common FUELS.

Table of Fules

Evaluating the FUEL cost

In evaluating the FUEL cost of a commodity or product it is the total thermal energy (heat) available which is counted as part of the FUEL cost, not simply that part of the thermal energy (heat) which is utilised.

Not sufficient to consider simply the Heat Content (calorific value) of the FUELS used in a particular process. Account must also be taken of the FUEL expended in making the FUEL available for use. Example:

The mining & transport of coal involve the consumption of fuel, so the total FUEL cost associated with the consumption of a ton of coal is the sum of its Heat Content (calorific value) & the FUEL expended in producing the ton of coal. The sum is called the FUEL cost of coal.

 Any analysis has to evaluate the FUEL costs of fuels as delivered to industrial or domestic consumers

FUEL costs nuclear fuels:

There is no generally acknowledged Heat Content (calorific value) for a nuclear fuel, &  various authors count this input in different ways. The nuclear input is given an FUEL cost equal to the heat generated in the nuclear reactor. This is compatible with using the Heat Content (calorific value) of FUELS since, in principle; the heat from a nuclear reactor could be substituted for the heat obtained by burning coal.

FUEL costs for  hydro-electric power generation

the FUEL cost is taken as the Electric Power Generated  output since this is the heat equivalent.  In practice hydro-electric power generation installations are between 80% and 90% efficient at converting mechanical energy into electric-power. However when; adding  the FUEL costs for Engineering, Procurement, Construction, Commissioning; & hand over phases of a hydro-electric power generating unit project; the assessed efficiency of 80% and 90% drops considerably, for example taking into account the FUEL costs for materials like Cement, reinforced bars;  reinforced concrete, etc. etc. will put up the total FUEL costs. 



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