Comparative Costs of Leading British Steam Models in Relation to Water Power, 1800-70

The expiration of the Boulton and Watt patent in 1800 ushered a new age in British steam engine construction rendering this sector far more competitive. The objective of the paper is to calculate the annual operating costs of the various models which came to dominate this market during most of the 19th century. The analysis begins with sorting through a fair amount of data referring to the purchase prices of leading makers or models, i.e., B&W, FMW (Fenton, Murray & Wood), as well as the category of compound engines. Based on the calculated total capital costs (which also included labor cost of erection, cost of engine house, and other ancillary costs), I calculate the various components of the annual operating costs, i.e., interest, depreciation, repairs and maintenance cost, wages of the engineman, and fuel cost. The results show that the annual operating cost per hp was a bit lower for FMW compared to B&W, two firms which produced very similar engines, both standing at c. £24-25. Both engine makers, however, faced stiff competition when compound engines reached the peak of their performance thereby drastically reducing fuel consumption rates. By the 1840s, the respective annual operating cost per hp of the latter stood at a bit below £15. The above analysis, the first one in the literature producing such detailed reconstruction of the respective costs, shows that with compound engines the cost of steam further narrowed the gap compared to water power while the latter remained the cheapest form of energy throughout the 18th- and 19th centuries. However, the cost differential became so trivial with the appearance of compound engines hence explaining the overcoming of water power by steam in terms of hp diffusion beginning in the second third of the 19th century at a time the expansion of various sectors hinged on superseding the constraints imposed by the locational limitations of water resources.