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Cooking and water heating with LPG or electricity - An economic assessment with policy issues

Abstract:

Latin American countries aiming to increase the efficiency in the use of their natural resources for electricity generation have established policies that change their energy matrix. Most Latin American counties have great potential for renewable energies, such as wind power, solar power, and hydroelectric power. For instance, Ecuador has had a huge investment in hydroelectric energy that are economically factual and eco-friendly. For this reason, the government implemented a programme targeting to improve migration from Liquid Petroleum Gas (LPG) to electricity for cooking and water heating because LPG has subsidy for residential customers, and it is not produced into the country. Therefore, this analysis considers electricity consumption habits, data of standard devices (useful life, installations costs, operation and maintenance costs, and energy efficiency), and incentives into electricity prices in order to evaluate the performance of LPG and electricity for cooking and water heating. The most appropriate choice referring to the economic benefit is to use electricity.