Gasoline vs Electric Vehicle Future Fuel Costs
This was originally a comment on David Middleton’s post, https://wattsupwiththat.com/2019/10/31/the-oil-age-is-doing-just-fine-bloomberg-new-energy-finance-notwithstanding/
The original comment was from Detengineer, in reply to another comment from Mark, so the 2nd paragraph is directed at Mark, not David.
Detegineer goes into very good detailed calculations, on replacing ICE with EVs. Mod.
I think David is on solid ground regarding the future of the oil industry.
I read through your links and noted there were a lot of assertions, but very little in the way of data or logic to support the assertions. I agree with you that autonomous vehicles and transportation as a service (TAAS) will come to dominate the vehicle market. However, an autonomous vehicle can be powered by anything; batteries, an internal combustion engine, fuel cell, or even compressed air. Whether electric or internal combustion vehicles dominate the future market comes down to economics and project execution capabilities, and I believe we can make a fair estimate of this.
Assumptions:
1. There will be no Idiot Swan events. There will be no outright bans on drilling or frac’ing. Tax policy will not provide heavy subsidies for renewable power or batteries, nor will tax policy unduly burden oil and gas production.
2. The difference in purchase price for an EV and ICE vehicle will be almost immaterial to the economics of vehicle choice. This is based on the assumption that TAAS will push vehicle lifetime mileage closer to 1,000,000 miles, at which point the dominant economic driver will be fuel cost.
Vehicle Fuel Cost:
Based on today’s cost of gasoline and electricity (my latest bill) the cost of each at the wheel is:
• Gasoline: $0.3415/kWh ($2.50/gallon, 20% efficiency)
• Electricity: $0.2667/kWh ($0.16/kWh, 60% efficiency)
(efficiencies from your link https://www.forbes.com/sites/energyinnovation/2017/09/14/the-future-of-electric-vehicles-in-the-u-s-part-1-65-75-new-light-duty-vehicle-sales-by-2050/#76551c18e289)
This places gasoline at a 30% price disadvantage relative to electricity (not the more than 2:1 price disadvantage in your link https://www.globalxetfs.com/future-of-transportation-is-autonomous-electric)
So if fuel cost for an electric vehicle is lower and the initial purchase price differential is assumed to not be a factor and TAAS effectively eliminates the charging management and range issues that affect EV acceptance, then why do I believe the EV’s will not take over the world anytime soon?
Simple. I have reason to believe that the cost of electricity will rise both because of rising demand and the move to renewable power generation. I also have reason to believe that the availability of electricity will be a constraining factor; we just can’t build it fast enough.
The Future Cost of Electricity:
Moving to 100% renewable electricity power generation will considerably increase the cost of electricity.
The installed cost of solar PV, wind, and for comparison combined cycle natural gas turbines (CCGT) are:
• Solar: $3,000/kW (multiple sources)
• Wind: $1,400/kW (https://www.conserve-energy-future.com/windenergycost.php and
https://www.wind-energy-the-facts.org/index-43.html )
• CCGT: $965/kW (EIA)
Of course to get the costs on a consistent basis we should include the cost of fuel for the expected life of the shortest lived capital investment, estimated at 20 years.
• Natural Gas NPV: $3,108/kW ($4.00/MSCF 2019 pricing from EIA, 2.5% interest rate)
This yields an equivalent installed cost for a combined cycle natural gas turbine of $4,073/kW.
So it appears that renewables really are cheaper, quite a bit cheaper, than all the other power sources. Could the proponents of renewable power be right?
No. We all know that we have to look at what it costs to provide reliable 24/7/365 power, which is a vastly different proposition than installing ‘nameplate’ power. To supply reliable power requires the installation of additional solar PV or wind turbines to produce enough power above immediate consumption to meet 24/7 power demand and batteries and inverters to store the power until needed. So we need installed cost for inverters and batteries:
• Inverters: $392/kW (National Renewable Energy Laboratory: “2018 U.S. Utility-Scale
Photovoltaics-Plus-Energy Storage System Costs Benchmark”)
• Batteries: $73/kWh (Also from “The Future of Electric Vehicles”, 2030 estimated
cost)
Based on this the estimated installed cost to deliver 1 kW of power continuously is:
• Solar: $17,792/kW
• Wind: $11,246/kW
• CCGT: $ 4,244/kW
Assumptions:
• Solar: 8 hours minimum daylight in winter, no more than 1 day without sunlight, and 2 days to recharge after discharge.
• Wind: Average generation at 30% of nameplate, no more than 1 day without wind, and 2 days to recharge after discharge.
• CCGT: 85% mechanical availability.
Obviously how you play with the assumptions has a huge impact on cost. For solar I assumed a southwest desert climate with relatively long winter days and short periods without sunlight. Similarly for wind I assumed nearly continuous wind as one would expect in the mountain west.
What’s driving the cost is the need to install 5+ kW of nameplate capacity plus 40+ hours of batteries to support 1 kW of reliable 24/7/365 power. Costs escalate precipitously for conditions in the northeast (less sunlight, less wind). This is just a hugely inefficient use of capital (but an interesting spreadsheet exercise.)
Based on the installed cost we can estimate consumer power cost:
• Solar: $0.4059/kWh
• Wind: $0.2566/kWh
• CCGT: $0.0486/kWh
I’ve assumed a 5 year simple payout on capital invested. The fuel component of the power cost for the CCGT is the price of natural gas prorated for turbine efficiency of 60%.
When we including delivery charges we get a total cost of:
• Solar: $0.4959/kWh
• Wind: $0.3466/kWh
• CCGT: $0.1386/kWh
I chose a flat $0.09/kWh based on my power bill. This is likely underestimated in all cases as I would expect solar and wind to have higher delivery costs due to the geographically diffuse nature of the systems and the CCGT cost excludes natural gas delivery to the plant.
Vehicle Fuel Cost in a Renewable World:
The cost of power at the wheel again assuming 60% conversion efficiency in an EV.
• Solar: $0.8265/kWh
• Wind: $0.5777/kWh
• CCGT: $0.2310/kWh
• Gasoline: $0.3415/kWh
As we can see solar and wind are not at all competitive with gasoline, running respectively 242% and 169% relative to the price of gasoline. This is not going to incentivize anyone to buy electric cars; certainly not fleet owners. However we can see that natural gas retains a strong economic advantage over gasoline and assuming suitable supplies could support the conversion to electric cars.
The Future Cost of Gasoline:
Should electric vehicles start to reduce the demand for oil I would expect to see the price of gasoline drop, potentially quite a lot. On the low side the price of oil is limited by the cash flow requirements to keep production going. In refining margins would drop through cost cutting and the closure of high cost/bbl refineries and is limited by cash flow requirements. Speculating here but in dire circumstances gasoline prices could drop to between $1.00 and $1.50/gallon.
The one thing we can say with reasonable certainty is that the supply of oil will be adequate for the next several decades. Therefore the cost of gasoline is not likely to rise precipitously and drive the economics toward electric vehicles.
Converting Transportation to Electricity:
Thinking about it, in 2016 fossil fuels used for transportation represented 26.44 quads of energy (EIA). To put this in perspective fossil fuels represented 23.54 quads to electricity generation; transportation and electricity generation consume about the same amount of fossil fuels. The total fossil fuel contribution to electricity generation and transportation comes in at 49.98 quads. The cost to convert this infrastructure to renewables is below (in $Trillions):
What I never see mentioned is what it will cost to convert all the fossil fuels used in transportation to renewable electricity. Does nobody think about these things?
Transportation Electricity Total
• Solar $15.73 $14.00 $29.73
• Wind $9.94 $8.85 $18.79
These numbers exclude distribution costs and EV support infrastructure costs. If we call this an additional 25% to 50% above solar or wind installation costs then we are talking in round numbers $24 to $44 trillion. To put this in perspective the GDP of the US in 2018 was $20.5 trillion. To eliminate fossil fuels in transportation and electrical power generation by 2050 we need to invest $1 – 1.5 trillion every year, or 5-7.5% of the US’s GDP. (Note that this excludes nuclear and fossil fuels used by industry.)
Another way to look at this is we need to execute 1,000 – 1,500 separate billion dollar projects every year. My personal experience with multi-billion dollar projects is they take 8-10 years to execute and finding qualified people is like finding hen’s teeth. The management, engineering, and skilled trade resources are just not out there to execute in effect 10,000 separate billion dollar projects in parallel for 30 years. (Finding qualified people for a multi-billion project during the financial downturn in 2008-2010 was just about impossible.) Finally, if we were to try, the competition for resources would drive engineering and construction costs up tremendously.
Wrapping Up:
Oil will remain the primary transportation fuel for the next several decades. While a superficial look at today’s prices for electricity and gasoline seem to indicate a strong economic driver for converting automobiles from internal combustion to electric a deeper look at the probable future cost of electricity versus gasoline shows a strong economic advantage for gasoline over electricity derived from renewable sources. Electricity sourced from natural gas (combined cycle gas turbines) retains an economic advantage over gasoline and assuming suitable supplies exist could support the conversion to electric cars.
Regardless of economics, the large cost and skilled labor demands of converting the economy to renewables makes it highly unlikely that a significant portion of the fossil fuel supplied portion of the transportation market can be converted to renewables by 2050. Even if we limit the project scope to using natural gas derived electricity to support the conversion to battery powered cars limited management and technical resources will likely constrain the pace of the conversion.
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“To eliminate fossil fuels in transportation and electrical power generation by 2050 we need to invest $1 – 1.5 trillion every year,”
The colossal blunder in logic is threefold : 1) that automakes wil continue to build gas powerd vehciles beyond 2024 in any significant numbers. 2) that the increased need for non-fossil fueled generated electricity will result in higher electric prices – that depends upon a renewable generation future ( i believe the development of gen 4 nuclear SMR reactors will prevail – it should be noted that adoption of no carbon generation, resulting from the current light water nuclear and hydro of 30%, augmented by 70% Gen 4 nuclear would cost LESS than one trillion and will produce electrc prices cheaper than current prices )
3) that electric vehicles have advantages over gas powered cars in terms of maintenance costs and drivetrain
longetivity, which is far greater that gas powered cars
ColMosby,
1. You are putting the cart in front of the horse here. If electricity is not available no one is going to buy an EV at any price. Car manufacturers will respond to the market – eventually. But you bring up an interesting point – I wonder if the car companies are talking to the power companies? GM announced as part of the contract settlement with the UAW that they will convert an assembly plant to electric pickup truck production. Has anyone thought through where the electricity is coming from?
2. To be cost competitive with fossil fuels electricity costs have to come in about 4/5 times less than wind; call if $250 billion every year through 2050 to replace fossil fuels. This works out to running 2,500 separate billion dollar projects every year. My experience remains; the management, technical, and skilled trades staffing just doesn’t exist to support this level of work.
3. This is open to discussion.
If I live till 2024, I will still be driving my 1995 F150!
Half the population in the U.S. and 3/4 elsewhere doesn’t have a way to charge their cars at home. Providing charging spots at work would be very expensive and inelegant/awkward
Apart from what David Middleton pointed out, that we do not have adequate resources for the current battery type, the battery car may not be so bad for some purposes.
If we along the way transform the electricity production from fossil/nuclear/hydro to mainly nuclear generation IV and hydro where feasible, thereby avoiding greening the Earth too much with CO₂, the cheaper electricity improves the profitable productivity for both the developed and the developing world, and make it more tempting to run battery cars where practical.
It should be clear, even for an XR zombie, that the low energy density for batteries makes battery cars unpractical towards unusable in cold environments, long-haul, sparsely populated areas and high consumption vehicles (military 65ton tank, bulldozer, etc.).
My guess is, whether or not we felled all the Green’s windmill-trees and went for improving the traditional power generation, we may see a lot of city folks going for the battery car as a first or second car. But let is be a natural development, please.
Take for example forklifts. The larger outdoor ones are mostly still diesel, but virtually all indoor forklifts are today battery driven. Earlier the indoor lifts were often LPG (Liquid Petroleum Gas) driven, which was probably cheaper to run, but not very nice indoors. That development came all by itself, no subsidies, no decree from authorities and no political pressure. – Why the h..l can’t it be the same way with ICE vs EV?
actually in many cases the cng/lpg lifts went towards batteries for internal warehouse usage due to insurance costs (property and workers comp) as well as osha rules.
I’ve spent lot of time at a few workplaces working out the details on these.
so you’re no decree from authorities statement isn’t right.
course the charging stations themselves had a whole other set of rules/regs that (in paper form) outweighed the cng/lpg lift rules.
you’ve not lived until a toyota battery lift has battery go from 30% to 0 and die with 3800lbs up 20+ feet in the air…….
rope off the area run a portable charger down wait an hour hope the 10k$ load of ball joints doesn’t hit the floor
“… hope the 10k$ load of ball joints doesn’t hit the floor” – LOL, you are right, and I did see similar situation twice in the past.
I worked for a short while for a company making big trucks for lifting containers. These trucks had manual release valves for the same reason you described above, just in this case it may be engine failure instead of battery death.
iirc the toyota did have release however the load was just starting to cross over shelving so…..releasing would have dropped it AND broke shelf LOL
yeah a pain in butt.
fwiw I was trained to train others (certify them) for toyota, clark, mitsubishi,hyster forklifts.
majority of my training was clark (my most used training) and toyota lpg and electric.
really the clark courses were the best because, unlike others, while they did brand specific stuff (controls, daily checks, etc) they went above and beyond with generic lift safety stuff, positioning stuff, etc.
Looking at the map of solar potential on this page makes me feel that Solar is a pure myth.
https://www.eia.gov/todayinenergy/detail.php?id=24192
Other than the Southwest US the majority of the population centers of the US are in areas that receive only 70 percent of the theoretical solar potential. Then there is the fact that the North West and Central Midwest, Chicago to eastern PA, have less than 100 cloudless days. That means more batteries and 1,000 mile plus electrical transmission transportation.
After a burst in 2016, new solar installation in GA has fallen dramatically, and tickles the zero level, today.
The environmental impact is seldom addressed for areas like here. The vast number of installations have been centered around Atlanta in North GA. Atlanta is built in a (pine) forest. There are trees. Lots of trees. Enormous numbers of trees. Clearing the land for solar panels is bad enough, environmentally, but it is insufficent. You must also clear the trees for some distance around the panels so they don’t block the sunlight falling on the panels. You might have less NIMBY (not in my back yard) protests in this area, but you will get a strong NITWIHI (not in the woods I hunt in) pushback.
The guys in the woods are also more likely to have guns and annoying solar panels make great long distance targets
no more than 1 day without wind,
for wind I assumed nearly continuous wind as one would expect in the mountain west.
If you check here: https://transmission.bpa.gov/business/operations/wind/baltwg.aspx
… you can see the wind (and other sources) being balanced by the Bonneville Power Authority.
This is for a week, and updates every 5 minutes.
Last year (Nov. 25th) I posted on the topic “When the Wind Doesn’t Blow.”
https://wattsupwiththat.com/2018/11/25/when-the-wind-doesnt-blow/
[There was a minor glitch in one of the charts.]
I just checked now (11/10/2019 @ur momisugly 1:10 pm). This week has been a bust.
Re: “Idiot Swan Event”
Letting fascist socialists take control of your country seems to qualify. Water and electricity are intermittent and unreliable for the average Venezuelan, after 20 years of the Bolivarian Revolution and socialist ideals! The Chavez Venezuelan motto: “Motherland and Socialism”. It was changed from “Motherland, Socialism, or Death”, presumably because that was too prophetic! What follows is one citizens tale….
My Socialist Hell: Living in Post-Electricity Venezuela
http://www.breitbart.com/national-security/2019/11/10/venezuela-socialist-hell-electricity-water/
The problem with EVs is the practical use. This is why the left is in love with them, because switching to EVs requires an elimination of a lot of activity they disagree with, …. like pulling a boat, pulling a trailer with an ATV for hunting, large RVs traveling around the country. And this doesn’t even touch work applications, like the trucks used in plumbing, electricity, building, etc ….
All EVs are good for is toodle-ing around town, going to the opera, or some other urban pursuit. I know where I live, an EV is practically useless. Just about every house has an F150 or Silverado in the driveway.
The extremist element hates country folk.
https://www.breitbart.com/tech/2019/11/10/uc-berkeley-instructor-rural-americans-are-bad-people/
Comparing electrical and gasoline cars is difficult even if they were the similar in engineering sense and driven in a similar duty. An attempt for that comparison was written a few years ago and is available to read at:
https://www.masterresource.org/electric-vehicles/energy-usage-cost-gasoline-vs-electric/
or from this author.
Wow. I thought this one had gone into Word Press Purgatory. I posted this Friday night US Eastern Standard Time and didn’t see it on Saturday so assumed it was gone. If I’d thought it might get elevated I would have done a better job on the formatting. Thanks Mods.
What was not included in electricity costing was nuclear, which is the cheapest here in Ontario, Canada. Followed by hydo then natural gas, the renewables, wind, solar and biomass must be subsidized which are the only way they would exist here. They got rid of coal.
Diesel and gas are heavily taxed and electricity is quite cheap with much less tax. Therefore, EVs could be very economical. If they were to tax the electricity at the same rate as the fossil fuels it would be a different story.
Hmm no. We can’t say that with reasonable certainty. We have little idea of how oil price, demand, and supply are going to evolve.
The author suggests “..an autonomous vehicle can be powered by anything; batteries, an internal combustion engine, fuel cell, or even compressed air.” Compressed air is about the most inefficient means of energy storage imaginable. Great amounts of heat are generated and lost in the compression of air, representing lost energy, so compressed air is normally limited to uses where hydraulic fluids are undesiarable, or for powering tools and machines used in hazardous environments where sparks might ignite flammable vapors, or for inflating tires and so on.
In the long haul, all these gorgeous calculations and comparisons become mute when the user does NOT have a choice in deciding how to use their “personal’ vehicle.
It is becoming increasingly clear that current and future generations are being groomed to accept bureaucratic rules on how they own/use personal transport, because Climate Change.
The current poorly envisioned transition from fossil to green energy is going to be extremely painful, even if only partly implemented. And some of it will get done, if only for political reasons.
It stinks of socialism and can never work as advertised.
You do want to be re-elected, don’t you?
….become moot….
Amazing nonsense.
It’s like reading Popular Science again back in the early 1960s.
No more value or practicality now than then.
I get the impressions that most of these kinds of comments are from urbanites who already have dependable, if inconvenient mass transportation.
Only, most of America does not have major avenues with charge stations.
‘ell! There are many places in American that cars/trucks have trouble reaching and returning on a full tank of gas.
People on the coasts get sloppy when they think everyone can just run down to the local gas station.
Which, I assume is a subsidised price if any renewable electricity is involved.
Otherwise, that electricity price is based upon industrially maintained LPG, Coal, Nuclear or Hydro generated power.
Meanwhile the gasoline price is heavily taxed:
A) to support EV subsidies
B) to maintain and build roadways
C) A government cut.
Then there is the claims:
” • Gasoline: $0.3415/kWh ($2.50/gallon, 20% efficiency)
• Electricity: $0.2667/kWh ($0.16/kWh, 60% efficiency)”
20% efficiency? Blatant minimization or reality.
Ignoring that internal combustion engines run at at higher than 25% thermal efficiency, engines undergoing testing in vehicles right now are approaching 45% thermal efficiency.
Suddenly the predicted motor efficiencies of electric vehicles is not so impressive.
Especially since internal combustion engine are easy to scale up for heavy duty pickup trucks; while similarly advanced diesel engines serve heavy transport vehicles.
Then there are all the vehicles used where EVs are not even in dreamland; e.g. heavy toonage haulers used in mining, roadwork, tugboats, work boats, etc. etc. etc.
EVs at 60% thermal efficiency are tiny little critters that are capable of short hops in urban areas. When cold weather comes, they struggle to achieve any distances if the passengers want to be warm or kept cool in hot weather.
Unstated are the significant losses of energy when electricity is converted from AC to DC for charging the battery.
If renewables are in the picture, there is a significant loss of energy when the local DC current is converted to AC to be compatible with the grid.
Nor is there any solution in sight for fixing renewable energy’s unreliable inconsistent quality electricity.
But, their owners take great pride as the putt down the road by repeating to themselves, 60%. 60%. 60%.
What isn’t mentioned is that EVs motors are dependent upon circuit boards.
Circuit boards are plastic assemblies of hundreds to thousands of electronic components. One or two fail, and something major in the EV doesn’t work.
How? Solder joints and connections are very susceptible to cracking. Nor does solder age well.
It’s much too hard to find the misbehaving electronic component, so the entire circuit board must be replaced for significant sums.
That 1,000,000 mile vehicle mileage for EVs is impossible.
Internal Combustion machines nowadays easily reach 250,000 to 400,000 miles Rebuild the engine and they can go as far again. For a very significant discount price over the actual costs of EVs.
Right now, an extremely popular method of vehicle ownership is called leasing. Owners love leasing, usually because they can turn in their old leased vehicles and drive a new leased vehicle out the door.
Then there is the rest of the car exceptingthe engine.
Joints, suspension, bearings, even the wiring quickly show it’s age as the years pass by. The seat fabrics show wear, dry out and crack, the internal foams and springs break down; even the rails the seat moves on rust and stick. The switches and controls crack, break or just plain fail.
etc. etc.
Right now, I can load up my truck with camping gear and go camping, fishing, off roading, rock hunting, etc. I’ve crossed the country both ways twice camping and enjoying the outdoors.
I highly recommend the Pony Express Across Utah into Nevada. Denio and Virgin Valley in Northern Nevada are terrific places to visit. Those folks with small gas tanks might be lucky to find the Denio gas station open and with gasoline; otherwise it is wise to carry an emergency five or ten gallons.
My wife can fill the truck with her show gear and set up for any fiber festival she desires.
EVs that can replace these vehicles? Not on any practical time line during my life. That should reach at least 2030.
ATheoK,
Slow down one minute here. The point of my comment is that I agree with you 100%. You, like a great many commenters and posters have discussed at length all of the practical problems with EV’s, including range concerns. (I too have lived in the far west and am intimately familiar with range concerns.) The practical problems with EV’s were beyond the scope of this comment.
The point behind this comment was to do a dive into the economics and also to explore what it would take to convert the transportation sector to 100% renewables. To my knowledge no one has done this. This was done specifically to rebut claims that ‘fuel cost for EV’s is lower than ICE vehicles’ and that ‘EV’s will dominate sales in 10 years’.
At today’s prices it is objectively true that the fuel cost for an EV is lower than an ICE vehicle. The calculation is very simple. But it is not today’s prices that will drive the economics. Commenters in the popular press are blind to the fact that changing the source of electricity from fossil fuels and nuclear power to renewables will greatly increase the cost of electricity. This must be factored into the calculations, which are detailed lower in the comment. (BTW I also disagree with the efficiency numbers for ICE vehicles but used values from a link Mark Bahner supplied just to forestall any arguments on that point.)
One of the interesting things that came out of the calculations is that on a *nameplate* basis renewables are objectively cheaper than fossil fuels. So when Griff, et. al., bring this up they are not ‘wrong’. However 99+% of posters on WUWT understand there is a penalty for unreliability, but again I’ve never seen anyone attempt to calculate what the economic penalty for unreliability is (if someone out there has please accept my apologies). So I put together a calculation for what it would cost to supply reliable power (24/7/365) using published installed cost data for solar, wind, batteries, and inverters using assumptions that are very optimistic for renewables and what do you know, generating reliable power from renewables is damned expensive. We all already knew this based on what has happened to electricity costs in those places that have attempted to convert a large percentage of power generation to renewables; now we can at least put some fairly objective numbers out there.
The second part of the comment is an attempt to put some sort of timeline on how fast a conversion could occur if, by some miracle, the economics were to swing toward EV’s – or we were pushed that way by government fiat. I have nearly 20 years of large capital project experience working as an automation lead engineer. I am very familiar with the depth of the pool of available talent to execute these projects – it isn’t very deep (and I’ve retired myself out of that pool). So when we look at the size of the investment to meet an arbitrary 2050 deadline my gut feel says it just doesn’t add up. Politicians can ‘want to’ all they want, it ain’t gonna’ happen if the skilled people aren’t out there.
At a natural gas wellhead price of $4.00 per Mcf, a CNG station owner could buy natural gas on the market for approximately $0.94 per GGE. Add a $1.00 for the service, and at $1.94 compressed natural gas is cheaper than gasoline.
Why spend $millions for combined cycle gas plants to convert natural gas to electricity to squeeze into a series of conductors and transformers (that will cost additional $millions) to charge a battery (that won’t last the life of a vehicle) Just burn the NG in the vehicle. The vehicle is only 1/3 as efficient as the CCGT but the $trillions in avoided capital costs should make it a good deal.
“Just burn the NG in the vehicle. The vehicle is only 1/3 as efficient as the CCGT but the $trillions in avoided capital costs should make it a good deal.”
But the extra space required for a tank to hold compressed natural gas, and its extra cost, has to be factored in too.
So if fuel cost for an electric vehicle is lower and the initial purchase price differential is assumed to not be a factor and TAAS effectively eliminates the charging management and range issues that affect EV acceptance, then why do I believe the EV’s will not take over the world anytime soon?
Simple. I have reason to believe that the cost of electricity will rise both because of rising demand and the move to renewable power generation. I also have reason to believe that the availability of electricity will be a constraining factor; we just can’t build it fast enough.
How soon is “not … anytime soon”?
How fast is fast enough?
I definitely agree that a sufficiently strong push toward total solar- and wind- generated electricity will curb the growth of the EV share of the vehicle market. But right now the US has a lot of unused night-time capacity.
Mathew,
spare night time capacity is normal for a functioning grid. All that happens is the fuel load is reduced. It is not possible or desirable to run our grids without spare capacity.
Peaks and troughs in demand can be smoothed by pricing but it really is of no significance. Charging EVs at night will take up some of that demand but as I pointed out in another post, fossil fuel plants will increase output to meet that demand.
Iain Reid : Charging EVs at night will take up some of that demand but as I pointed out in another post, fossil fuel plants will increase output to meet that demand.
I agree with what you wrote. I am not much of a fan of solar farms and wind farms, and at today’s prices and technologies I prefer ICE vehicles (I own two recent VW Jettas, but I know people who own Teslas and I like them also, but not at today’s prices.) I anticipate that for a long time the demand for electricity for EVs will be met by increased consumption of fossil fuels.
But I also think that the market for EVs will grow as lifetime costs of EVs are reduced and well documented, starting especially with fleets of vehicles that have consistent routes, such as letter carriers and delivery vans. So my questions were about rates: How “soon” will EVs constitute 10% of the cars on the road? 20% ? Does it matter if it takes twice (or 4 times) as long as my Tesla-owning EV boosters predict?
I drive from San Diego to Denver a few times per year. It’s 17 hours of driving, plus an overnight at someplace like St George UT. With charging stations now I place I estimate that the drive in a Tesla would be 1 hour longer. That’s not much of an extra cost if the lifetime costs of the Tesla are driven down low enough. So I think that the rate of adoption of EVs will be determined primarily by the rate at which the manufacturing costs can be reduced, as subsidies are reduced and taxes are adjusted (so EVs share the costs of maintaining the roads). I am not predicting these rates, but watching them evolve.
A sufficiently strong push towards more solar- and wind-generated electricity will encourage the growth of the EV share of the vehicle market. (The U.S. grid is not going to be anywhere near “total” solar- and wind-generated electricity for 30+ years, so it’s silly to even speculate on “total” solar- and wind-generated electricity.)
EV batteries can instantaneously put electricity into the grid or take it from the grid. This allows massive oversupply to be absorbed and massive undersupply to be avoided. Further, EVs are already providing another service, so the capital cost of their batteries is already being partially covered by another function.
For example, take a Telsa battery pack…say it lasts 160,000 miles to get down to 80% of original capacity. The owner replaces it.*** That battery pack can then be combined with thousands or even millions of other used battery packs to provide grid storage.
***If the owner is a fleet owner, which will likely be the case with autonomous vehicles, it may very well make sense to run down much further than 80% of capacity. Still, eventually it will probably make sense to remove the battery pack from the car, and it still might make sense to combine it with other used battery packs to draw electricity from the grid in surplus periods, and discharge to the grid when electricity is needed. (The decision will be based in part on the economics of recycling the batteries.)
Mark,
Not today.
https://www.wired.com/story/no-you-cant-power-your-house-with-your-electric-car/
The article does mention that it could be done. It does not mention the changes that would have to be made to a vehicle to make this possible. This would include a link from the inverter that drives the car’s motor (bypassing the rectifier that charges the batteries) and some software changes to produce a single phase pure sinewave and match it to the detected sinewave of the power source. There would have to be software to decide when to charge the car and when to sell electricity to the utility. The software would require a link to the utility to communicate electricity prices in real time. There would be some set up required by the owner. None of this is technically infeasible but obviously this would add to the cost of the car.
Private owners may be very interested in powering their home from their car in the event of a power outage (I would), but I’m not sure they would be interested in selling power back to the utility. All it would take for me to kill this feature is discovering one morning that my batteries had 25% power and I was planning to take a long trip. I would turn this *feature* off immediately. Private owners may also not be thrilled by shortened battery life caused by more frequent discharge/recharge cycles. They may actually be able to make money on this, but the few dollars per monthly bill will be forgotten when the big bill to replace the battery comes around.
Fleet owners are a different story, and since we both think future car fleets will be large this requires deeper thought. Fleet owners will do anything to make money as long as it doesn’t compromise their primary mission, so can we make the economics and logistics work?
First up, fleet owners will likely have centralized charging stations. The rectifier to charge the car’s batteries will be built into the charging station, not the car, because it doesn’t make economic sense to put a rectifier in every car. Adding an inverter and controls to export power would not add much cost to the charging station. With this the fleet owner is set up to run a side hustle time shifting power from low cost periods to high cost periods.
The question is does time shifting work for a TAAS fleet owner? For solar power probably not; the fleet will presumably be busy during the day into the early evening when solar is available and need to be charged at night when solar isn’t available. (There is a huge assumption here that travel patterns do not change. I think they will change but how cannot be foreseen.) Wind power on the other hand is highly episodic but somewhat predictable; I would think there would be some opportunity here. Whether it’s big enough to justify the capital cost and fleet charging management efforts to capture it is unknown.
This contains two statements that must be checked:
1.) The automotive fleet can provide short term relief for utility mismatch.
2.) The automotive fleet can cover periods when renewables aren’t available.
Before we can answer either question we need to know the size of the available fleet in (for argument’s sake) 2050. In 2017 there were 234 million registered light vehicles in the US (https://en.wikipedia.org/wiki/Passenger_vehicles_in_the_United_States ). Assuming Transportation as a Service (TAAS) will achieve at least a 5:1 utilization increase the fleet size should decrease to 47 million vehicles. (We both agree that TAAS will reduce fleet size but you did not provide any numbers in your link. I believe a 90% reduction is achievable but chose 80% as a conservative number.)
Can the automotive fleet provide short term relief for utility mismatch?
Obviously not all the cars can be plugged in at one time, and only cars that are plugged in can provide instantaneous relief for utility mismatch. Assuming 10% of the cars are plugged in and that each car can charge/discharge at 50kW we have:
– 4.7 million cars
– 234 GW (million kW) charge/discharge rate
Working with your 2050 renewables projection of 42 Quads/Year, which yields an average power rate of 1,404 GW, the automotive fleet could handle an imbalance of about 17%.
So yes, the automotive fleet could provide short term relief for a fairly severe power imbalance.
Can the automotive fleet cover periods when renewables aren’t available?
I’ve been using 40 hours as the standard power outage period for solar and wind (2 nights and one day) in all of my calculations and will continue that here. At an average rate of 1,404 GW a 40 hour outage will require 56,167 GWh to cover it. Assuming each car can supply 50 kWh (50% discharge of a 100 kWh battery – slightly larger than a Tesla 3) the entire fleet can provide 2,338 GWh of power, or only 4%. (I would expect people to continue to need transportation during the outage, therefore the available power would likely be much less. This also assumes that the fleet is well charged – at least 75% – at the start of the outage. Depending on the start of the outage this could be much less. One should consider 4% to be a best case scenario and it should not be used for planning.)
So no, the automotive fleet cannot cover periods when renewables are not available.
Wrapping Up
This statement flagged this comment for further review for me.
My first thought was probably not, but having thought through this I think you are correct. We know that the unreliable nature of renewables significantly distort pricing and therefore should renewables become a significant share of the power generation market there will be a large secondary market for time shifting power. It looks like fleet owners will have the ability to enter this market at a fairly low capital cost. If they can fit this in with their other fleet management needs it could be a nice opportunistic side hustle (and if there is money to be made you can bet they will figure out the how).
However the vehicle fleet does not look like it can be tapped to back up renewables for extended weather related outages; it is not (contrary to much written opinion) adequate to solve what is a very big problem. (I needed the answer to this question before I complete the other economic analysis I promised you.)
Some EVs have both AC and DC plugs, and some DC connectors have two-way power transfer as part of the standard. Plugin hybrids’ generators could additionally power any household (or maybe a half dozen households) for as long as the gasoline lasts.
But usually it’s far cheaper to have a dedicated backup generator for emergencies with a standard transfer switch, and to have all the equipment above the high water / maximum tsunami level.
And for all the other stuff you mentioned, someone has already thought of it and worked it out, because stupidity is not as common a trait among engineers as mechanics believe.
Yes, my comment that “EV batteries can instantaneously put electricity into the grid or take it from the grid” was referring to when EVs will be owned by fleet owners providing transportation-as-a-service. It’s only when thousands or even millions of cars can be coordinated that it will make sense to carefully time removals of electricity from the grid and deliveries to the grid. No electric utility is going to be bothered with individual vehicle owners.
One significant thing I think you’re missing is this:
1) Right now, a Tesla drives about 160,000 miles before dropping down to 80 percent of original capacity (e.g, a 100 kWh pack goes to 80 kWh). Elon Musk says Tesla batteries will be able to do a million miles before too long. Let’s say they bring it up to 600,000 miles. And let’s say a typical vehicle goes 100,000 miles a year. So it lasts six years before dropping to 80 percent of original capacity.
2) Right now, the thought is that no one wants that battery pack. But when vehicle-to-grid becomes common, all those batteries still with 80 percent of original capacity will become a very valuable commodity to the fleet owners. The fleet owners will be able to use those batteries that have been removed from vehicles to charge their own fleet, or sell the batteries or grid services of those batteries to the utilities.
3) So there won’t just be the 47 million battery packs that you’re thinking about. Instead, there will be the 100+ million battery packs that have come out of old vehicles. They won’t be able to provide (or soak up) quite as many kWh per pack as they could when they were new, but the total transfers to and from the grid from those old batteries that have been removed from cars will probably substantially exceed transfers to and from the grid from the operating fleet of vehicle battery packs. Especially since, as you correctly point out, only a small fraction–you assume 10 percent–of the operating fleet would actually be involved in removing or putting electricity into the grid at any one time, since most of the fleet would be on the road most of the time.
Mark,
I agree that there could be a significant market for “lightly used” battery packs assuming fleet owners change them out at 80% (which they may not feel compelled to do). It would certainly make more sense than stashing them in Outer Mongolia. But two questions come to mind:
1.) Do battery packs continue to decline linearly, or do they fall off the table?
2.) Given that Li ion batteries are known to grow filaments during charge/discharge cycles when do they become a fire hazard?
I don’t know the answers to these questions, but I see both of them impacting the viability of this market.
According to the graphs and extrapolations at batteryuniversity.com, a battery in service reaching 80% capacity at 4000 cycles will continue to degrade linearly to hit 50% at about 13,000 cycles. Degradation seems to be more usage than age.
Some data at Electrek.com suggests that battery degradation in Model S batteries levels off after the first 5%, then then next 5% degradation takes much longer. Except for defects, none are going to go to 70% during the warranty – which is exactly what a warranty is for, compensation for defects.
But I don’t think anyone really knows how long today’s Li-Ion batteries will go, especially since the chemistry keeps changing. But I wouldn’t put a very old used EV pack in my house or even in a garage unless it had been recertified, and that plus a new enclosure might cost almost the same as a new battery pack.
If I put together a homebuilt one it would have to live in a buried concrete bunker. I don’t think they quite get like old, sweaty dynamite but I also don’t want to be the impetus for a new rule.
Sadly we are well down the road into Idiot Swan events in Australia. Good name for this behaviour BTW.
Electric cars are inferior to Internal Combustion Engine cars in every respect: Heavier, I mean a lot heavier, the battery in the Tesla Model S weighs 1,700 lbs, which also is very hard on the tires and suspensions. More expensive. Shorter range. Takes half a day to refuel unless you have a charging station that costs thousands of dollars. Fires that cannot be put out with water and burn for hours. If you run out of battery, the car becomes a brick, tow it and experience damage, cannot just walk to the gas station and buy a gas can and some gas.
Sure, none of this will change any time soon as battery technology has seen nothing new in quite a while.
Looking for an electric pick-up, or an electric 18-wheeler, anytime soon? Good luck. There are electric city delivery trucks, all the same problems, and worse.
Sooner or later the masses will realize that the weather seems the same to them, and nothing bad is actually happening. Lincoln said it best, “…You cannot fool all of the people all of the time!”
Yeah, it’s all impossible. Yet… we drive our Tesla every day, all the way into town and back.
Yes, can take up to 5 hours to charge, at my house. So… what?
It also takes a long while to water the grass, but if I put a sprinkler on the hose to automate the task I can do other stuff.
“Electric cars are inferior to Internal Combustion Engine cars in every respect:”
Electric vehicles have:
1) Fewer moving parts,
2) Do not pollute the air around the streets they are driving on,
3) Are quieter,
4) Are more energy-efficient,
5) Have a operating lower cost per mile driven, and
6) Perhaps most importantly, have batteries that can provide electric grid services, even when the the batteries are no longer even in the car.
Longer than that if you are looking at the whole transportation sector, not just personal automobiles. In that timeframe there is nothing likely to be available and practical to replace oil for:
1) heavy rail locomotives
2) ocean vessels
3) aircraft
4) long-haul trucks
In addition, EVs using current battery technology are not practical for extremely hot or cold climates.
So absent a very significant technological breakthrough, oil will remain the primary transportation fuel for well beyond the next several decades.
I’ll give you electric long haul aircraft as extremely unlikely, but battery powered boats that can cruise seven days would be 75 year old German technology. Weight is not as big an issue if it can be placed low enough.
Electric trains are hardly uncommon, where there is enough traffic to make it worthwhile.
Long haul electric trucking might never be practical, but it also might never compete with efficient higher speed rail.
And it’s all a moot point unless / until more carbon-free generation is built and brought online. No point charging a billion dollar electric cruise ship from a shore based diesel generator.
Can we all agree that renewable is not a thing (except for sun rays), and always write either
so called renewable
renewable, as described by statutes
renewable, according to the capricious definition
A fascinating read, but I would like to clarify one point in the assumptions put forward. That is this “8 hours minimum daylight in winter” – should that read “8 hours maximum daylight in winter”?
Here’s the price of gasoline before the taxman gets ahold of it:
New York Harbor Conventional Gasoline Regular Spot Price:1.787 USD/gal for Nov 04 2019.
My power bill here in the People’s Republic of California averaged out over the past year is $0.25 Kwh, which I’m enjoying because when the nearby Diablo Canyon nuclear plant shuts down and Governor Newsome’s wildfire “fee” kicks in it will get a lot worse. Very upsetting to read about the totally stupid idea of electrifying our transportation system. Isn’t the nearly as stupid idea of burning carbohydrates (food) for a hydrocarbon substitute bad enough? If we don’t want to burn gasoline in our vehicles let’s burn natural gas (compressed)…like a lot of city buses are already doing.
Costings are not rigorous here.
You need to look at in addition:
Lifetime and depreciation.
Fixed operating costs – maintenance and security
Capacity factor the plant can achieve (and is allowed to achieve).
Cost of capital and time that capital is deployed before operational profit is achieved.
Decommissioning costs.
Third party Insurance costs. (this has been used to effectively render new nuclear uneconomic)
If you do this the real underlying costs of renewable are revealed. In particular with wind three factors are used to massively distort costs.
(a) They are assumed to run at a much higher capacity factor than they achieve in practice.
(b) They are assumed to last longer and need less maintenance than they actually do.
(c) There is no built in cost of decommissioning as there is with nuclear.
And that is before the cost of co-operatuon with a reliable technology is introduced
As we now are beginning to realise, legislation can drive technology out of business and make uneconomic technology profitable.
Leo,
You are correct, the costs are not rigorous. This scoping study was assembled very quickly in an effort to get something out the door before comments closed. It was also biased toward renewables just to see if there was even a prayer.
I did address capacity factor, which just really kills the economics of renewables (and I used optimistic capacity factors!)
Transportation As A Service – shared transportation – depends on both population density and task (volume,/weight/freight). Mass transit makes more sense for cities – the bigger the better. But even the suburban commuter riding a train downtown does not wish to add more waits at the suburban end of the commute. Of course, if only we could be stripped of our individualism and independence – then we could all be herded to population centers and make do with Ikea delivered by Amazon Prime.
As I just asked Detengineer regarding the original comment (before I saw this repost):
Mark,
I’m going to try to respond to your comments above and below over the next couple of days. This is to let you know that I am working on them.
The short answer to your question is no. Autonomous vehicles and transportation as a service (TAAS) are going to completely remake the automotive industry. If Ford (or GM or FCA) even exist in 2050 they will exist in a form that is completely unrecognizable to us today. TAAS is going to completely change how you make money out of transportation and the companies will reorganize to match how the business functions. Expect a dizzying array of bankruptcies, spinoffs, mergers, and completely new players. This is going to be one ugly, bloody bit of business. F150 sales? Who knows.
That does not mean that BEV’s are going to dominate vehicle sales. Since vehicle purchase decisions will be dominated by the TAAS fleet owners I think it’s safe to say that cold blooded economic thinking will drive the BEV/ICE vehicle sales ratio.
So it really comes down to trying to guess what the relative fuel cost for electricity versus gasoline/diesel will be. If the future is 100% renewable electricity then the economics decidedly favor ICE vehicles. While I didn’t emphasize this in my post if the future of electricity generation is natural gas powered combined cycle gas turbines then the economics favor BEV’s. Oil will have a tough time competing. The Oil and Gas companies (David’s end of the business) won’t much care whether oil or natural gas dominate as it doesn’t much matter to them; it’s all poking holes and producing product. They get paid either way. Obviously it matters a whole lot to the refining and marketing companies (my former end of the business).
What this really means is that David’s central thesis is still true in either scenario: the Age of Oil (and Gas) is still alive and well and will remain so well into the future. Arguing about F150’s is a sideshow that neither proves nor disproves David’s central thesis.
With all that said, you are correct that I didn’t look at mixed cases (this was avoided in the interest of time). I will look at your proposed 2050 energy mix and see what the costs look like. I’m personally intrigued to see if renewables can be fit in in a way that is cost competitive. We’ll see what falls out.
Hi,
You write:
I suggest you take the 11-question quiz I prepared for David Middleton. (So far, he appears incapable of answering any of the questions.)
https://wattsupwiththat.com/2019/10/31/the-oil-age-is-doing-just-fine-bloomberg-new-energy-finance-notwithstanding/#comment-2844010
Note to David Middleton: If Detengineer or any other commenter on this blog answers all of the 11 questions, I will still give $100 to the charity of your choice, but only if you acknowledge the answers given by others as correct, or provide what you think are the correct answers for each answer by others that you think is not correct.
First of all…when speaking of the “future,” let’s stick to out to the year 2050. When you write, “If the future is 100% renewable electricity…” you’re inventing a scenario that no knowledgeable person would accept as plausible. No knowledgeable person thinks the U.S. will be using “100% renewable electricity” by the year 2050.
If you want your analysis to have any validity, rather than simply being a theoretical analysis of a hypothetical world that no one thinks will exist, you should use an electrical generation breakdown that you think is most likely by 2050 (in the absence of “idiot swan” events) (good phrase, by the way!).
Fortunately, we have some available assessments of what the electrical grid will look like in 2050. We have the EIA’s “Reference” case values…and we have my competing estimates:
https://markbahner.typepad.com/random_thoughts/2019/07/lets-see-who-knows-what-theyre-talking-about-part-deux.html
You should choose one or both of those, or something in between, and then make your estimate for what percentage of light duty vehicles sold circa the year 2050 will be gasoline or diesel versus either battery electric vehicles (BEV) or plug-in hybrid electric vehicles (PHEV).
First of all, I want to correct a mistake I made…I was so exasperated with David’s cluelessness, analytical incompetence, and disrespect (and even lack of civility) that I accidentally changed his claim about “F-series” sales to “F-150” sales. My apologies for that. I should have always used “F-series” not “F-150.”
But arguing about Ford F-series sales isn’t a “sideshow.” David Middleton claimed that:
As I pointed out previously, it only “looks like” that way to him because he’s a monumentally ignorant and analytically incompetent twit (on the issue of the likely future sales of EVs in the U.S.). So that’s not a “sideshow”. It’s at the crux of what sales of EVs will be like in 2050.
Hi,
This blog refers to an excellent paper with an even better graph:
https://blogs.imf.org/2017/07/31/chart-of-the-week-electric-takeover-in-transportation/
From the graph, in 2011, there were 792 gasoline automobiles per 1000 people in the U.S., and only 0.07 electric vehicles per 1000 people in the U.S. The question is, what will those numbers be in the year 2050.
I’ll put my predictions up on my blog eventually. But it might take weeks, as I’ve got other things to do.
Oh…I should have started my comments with: “Thanks! Much appreciated! Take your time…I know we all have other things to do.”
🙂
P.S. For example, I’ve been trying to explain to all the Elizabeth Warren fans on the “538” website just how insane the idea of using an “executive order” to ban all fracking in the U.S. is.
Mark,
Conclusions:
1. The future of the oil and gas industry appears to be just fine.
2. It is difficult to determine whether electric vehicles will dominate the personal transportation market by 2050. The future is very price and technology dependent. I believe that they will not but concede it is within the realm of possibility.
Caveats:
This is a scoping estimate written by a retired engineer from his home office. It is applicable to the upper Midwest of the United States.
Discussion:
It is assumed by a great many writers that battery powered electric vehicles (EV’s) are the future of personal transportation. One of the reasons cited for this is that EV’s have a lower power cost than gasoline powered cars (see for example the IMF report Riding-the-Energy-Transition-Oil-Beyond-2040). Indeed by my calculations in my little corner of the world this is currently true; at the wheel gasoline power costs 17% more than electricity.
Gasoline: $0.34/kWh
Electricity: $0.29/kWh
However what is true today may not be true tomorrow. To make an informed guess (and that is all this or anyone else’s prediction is) one must make a series of informed guesses about everything that may affect the relative cost of power at the wheel. This includes examining the efficiency of gasoline and electric vehicles and the probable future cost of gasoline and electricity.
Vehicle Efficiency:
The efficiencies used in the above calculations were:
Gasoline: 20%
Electric: 60%
These are based on values from the-future-of-electric-vehicles.
Tesla’s move from AC induction to reluctance motors (tesla-model-3-motor-in-depth) is expected to increase motor efficiency about 10%. Toyota’s Dynamic Force and Mazda’s Skyactive X engines are expected to have 40% and 56% thermal efficiencies respectively (mazdas-skyactiv-3-engine-could-be-as-clean-as-some-elec). Adjusting efficiencies appropriately (Electric: 70%; Gasoline – Toyota: 30%. Mazda: 40% to allow for transmission losses) yields these at the wheel power costs:
Gasoline – Toyota: $0.23/kWh
Gasoline – Mazda: $0.17/kWh
Electricity: $0.25/kWh
Toyota has a 9% cost advantage relative to electricity and Mazda has a 32% cost advantage. This shouldn’t be a surprise as any efficiency improvement to the relatively low efficiency of a gasoline engine will have a much bigger impact on cost than an improvement to the already fairly efficient electric car.
Taxes:
In my little corner of the United States gasoline taxes run $0.40/US gallon (the state is trying to more than double that). Electricity is taxed at 4% (based on my electric bills). It is a safe assumption that should EV’s become a significant part of the vehicle fleet the government will cast the eye of ‘revenue enhancement’ their way. It is impossible to guess how the government may enhance their revenues, but on the assumption that revenues will remain roughly equal (a bad assumption since there’s never been a government that didn’t want an even bigger slice of the pie) we can back calculate an equivalent tax rate on electricity. For me this is 19%. Rerunning the costs for gasoline and electric power at the wheel puts me near parity:
Gasoline: $0.34/kWh
Electricity: $0.32/kWh
Gasoline:
The IMF article cited above states quite reasonably that should EV’s (as they expect) come to dominate the personal transportation market then the price of oil will drop to $15/bbl. We’ve been here before; in 1999 oil prices did hover around $15/bbl for a brief period, so this seems to be a reasonable number to work with. I would also expect refining costs to drop by about 50% as the refining companies reduce capital budgets and staffing back to the levels I experienced in the ‘90’s. This will result in a roughly 50% drop in the price of gasoline:
Gasoline Today: $2.50/gal
Gasoline Future: $1.25/gal
Which results in an electric car’s power at the wheel to cost 72% more than gasoline:
Gasoline: $0.17/kWh
Electricity: $0.29/kWh
Electricity:
Mark Bahner criticized (reasonably) this post for assuming a 100% renewables world and suggested that I should use a projection of energy demand in 2050, preferably his (markbahner…eia-versus-mab).
I used the estimated U.S. energy consumption numbers from Lawrence Livermore National Laboratories as my starting point (us-energy-use 2018). This chart has both production and consumption numbers, which allowed me to calculate projected energy consumption for electricity and transportation in 2050 from Mark’s production numbers. It was assumed that base consumption of electricity and transportation consumption increased by the same amount as overall consumption (8%). The drop in petroleum consumption in transportation was replaced with electricity. Estimated electricity consumption in 2050 worked out to:
Solar: 22.5 Quads/Yr
Wind: 19.5 Quads/Yr
Nuclear: 3 Quads/Yr
Hydro: 2 Quads/Yr
Geothermal: 0.2 Quads/Yr
Natural Gas: 6.6 Quads/Yr
Coal: 2 Quads/Yr
Biomass: 0.5 Quads/Yr
TOTAL: 56.3 Quads/Yr
15 Quads/Yr. of electricity are used in transportation, representing ~50% of the total energy use in this sector. This looks like Mark assumes a nearly complete conversion to electric cars by 2050, which is consistent with his published comments.
Based on this electrical consumption mix the estimated consumer cost of electricity is:
Consumer Electricity Cost: $0.247 – 0.295/kWh
This is stated as a range because the published installed costs for solar PV ranged from $1,130/kW to $3,000/kW. Published installed costs for on-shore wind were reasonably consistent at ~$1,400/kW installed.
These higher consumer electricity costs result in an electric car’s power at the wheel to cost 21-44% more than gasoline:
Gasoline: $0.34/kWh
Electricity: $0.41 – 0.49/kWh
The break-even cost for gasoline in 2050 would be in the range of $3.00-3.50/gal.
Worst Case Scenario:
The probable direction of gasoline engine efficiency, the cost of gasoline, and the cost of electricity all point toward EV’s having higher energy costs at the wheel. While all three scenarios won’t happen (can’t happen) for giggles here is what the relative costs look like:
Gasoline: $0.10/kWh
Electricity: $0.35 – 0.42/kWh
This puts the at the wheel power cost of an EV at 250-300% above the at the wheel cost of an ICE vehicle.
The Real Cost of Renewables:
Power from renewables is only available when the wind blows or the sun shines. To provide reliable (24/7/365) power requires backup power, either from conventional power sources or batteries. This burdens renewable power because it considerably increases capital cost and fixed operating costs (I have ignored fixed operating costs in this analysis; including them would further burden the cost of renewables). The estimated cost of reliable power from renewables is (excluding distribution charges):
Solar PV w/ Battery: $ 0.214 – 0.406/kWh
Solar PV w/ CCGT: $0.072 – 0.114/kWh
Wind w/ Battery: $0.257/kWh
Wind w/ CCGT: $0.079/kWh
For comparison purposes the projected power cost for a Combined Cycle Gas Turbine assuming 85% mechanical availability and natural gas at 2019’s rough average cost of $4.00/MSCF
CCGT: $0.055/kWh
Renewables backed by CCGT are burdened by the capital cost of the turbine plus the cost of natural gas to supply power when the solar or wind equipment isn’t. To make solar or wind backed by CCGT cost competitive with standalone CCGT either the capital cost of solar/wind needs to drop to $500/kw (Solar)/$300/kW (Wind) or the cost of natural gas must increase to $11.50-$30.00/MSCF (Solar)/$18.00/MSCF (Wind).
Renewables backed by batteries are burdened by the cost of the batteries plus the capital cost of the additional renewable infrastructure to charge the batteries when the sun is shining or the wind is blowing. What surprised me is to achieve reliable power with renewables you have to install roughly 5 kW of power generation (wind or solar) to achieve 1 kW of reliable power using my optimistic weather availability estimates. If the weather gets worse the cost to provide reliable power skyrockets. These costs were also based on the projected cost of batteries in 2050, which is 1/3 the cost of batteries today. To make solar or wind backed by batteries cost competitive with standalone CCGT either the overall cost of solar or wind plus batteries must drop by 75-85% (this puts the cost of batteries at $22/kWh) or the cost of natural gas must increase to $30-$65/MSCF.
Assumptions:
1. It is assumed there will be no Idiot Swan events. Obviously tax policy and government mandates can change the course of events, and as one commenter noted the probability of an Idiot Swan event is uncomfortably high. But it’s beyond the ability of this engineer to predict what will happen in politics.
2. It is assumed that Fleet owners will dominate vehicle purchases and that vehicles in service will operate 100,000 to 150,000 miles/year and will have service lives between 500,000 and 1,000,000 miles. This extended service life will render any initial purchase price differences irrelevant to the economics. This also assumes that maintenance cost differences can be safely ignored.
3. Costs are calculated assuming power generation and consumption remain constant. There is no estimate of additional costs to cover peak demand. This obviously understates the actual costs, both capital requirements and the estimated cost of electricity to the consumer.
4. Blended 2050 power costs assume all natural gas is used for CCGT’s in backup service to renewables. This was arbitrarily assigned to solar PV as this provides the lowest overall cost. The capital cost for the CCGT’s was omitted from the analysis because this is assumed to be a sunk cost. Published levelized cost of energy numbers were used for the remaining power sources (EIA 2020 projected found at wikipedia {yeah – I know}). The split between solar and wind is from markbahner random_thoughts.
Timid Guesses about the Future:
Assuming economics will be the dominant determinant of the future of both power production and vehicle selection then the future trend will be along a path near the economic optimum.
In power production this means that the installation of renewables will continue as long as subsidies hold out, however backup will be from conventional sources, mostly natural gas. Once the market penetration of renewables gets large enough subsidies will be removed (they become unsupportable) and the addition of renewables will be limited by economics. Given the large changes in solar/wind installation costs or natural gas prices required to effect a swing in the economics it’s safe to say that the future of natural gas looks fairly assured (and thus the future of the Oil and Gas industry).
The future of EV’s versus ICE vehicles is a little harder to predict. The expected cost of CCGT natural gas supplied electricity is about $0.15/kWh, which provides a 25% cost advantage over gasoline at the wheel. To be competitive gasoline must sell at $1.90/gal. However if taxes are equalized gasoline is competitive at $2.35/gal. Change gasoline engine efficiency and gasoline becomes competitive at $2.50-3.20/gal.
This sensitivity analysis tells me that the future split between EV’s and ICE vehicles is very price dependent. EV’s could have significant market penetration if future electricity generation comes from natural gas. If this occurs then once EV’s achieve significant market penetration then the price of natural gas and crude oil will become yoked (as it was before frac’ing). Local tax policy could have a very large impact on the local EV/ICE mix. Because renewables strongly negatively impact the cost of electricity then if renewables become a significant part of the power mix it is unlikely EV’s will achieve significant market penetration unless there is a significant (and unexpected) decline in oil production. Based on the probability of continued increases in ICE efficiency and the ability of the oil industry to match price to electricity over the long term my guess is EV’s are unlikely to achieve 50% market penetration by 2050 (but I’m putting exactly $0 on this).
Crap. It looks like copying this into Word Press broke all my links!
Oil will remain the big boy in the berm for decades to come. No doubt about that. I think that more than EV’s, Natural Gas vehicles will make a bigger dent in the future. Simply because LNG vehicles don’t have many of the issues that one has with EV’s. First of all range. Those are no overnight scenarios. It will take time, but it will happen.