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Alt Text

Luxury Automakers Pivot To EVs

As the race for electric…

Electric Vehicles: The High Cost Of Going Green

EV

It has become raison d’être that electric vehicles (EV) will keep increasing in use without considering serious factors that could hamper their growth. The British electrical grid example and the growth of EVs should bring pause to consumers, investors and governments promoting their unconstrained usage.

According to the British National Grid, “the growing use of electric vehicles could increase electricity peak demand by 3.5 gigawatts (GW) by 2030.” This will occur since sales of EVs are expected to be more than 90 percent of all British car purchases by 2050, highlighted in its Future Energy Scenarios Report. In July, the British government mandated that all new petrol and diesel cars would be banned by “2040 to reduce air pollution and assist cutting carbon emissions by 80 percent by 2050 from 1990 levels.” Moreover, the National Grid stated:

“Peak electricity demand could even rise by as much as 8 GW by 2030 without ‘smart charging’ during off-peak hours and 18 GW by 2050 as the pace picks up to decarbonize.”

Where all interested parties should be concerned is the cost to achieve the above mandates. Britain will need billions of pounds of new investments into new power plants (either renewable or fossil fuels), transmission lines, smart grid network technology and EV charging points and stations throughout the country. Otherwise, Britain could potentially suffer power shortages when EVs overtake fossil-fueled vehicles.

Britain has the technology to support millions of EVs over the next two to three decades, but drivers will have to recharge their vehicles overnight or face billions in costs. This is when spare capacity on the grid is abundant, which is typical for most developed nations pursuing EV policies.

The grid operator still faces local network issues, as consumption of electricity to accompany EVs is expected to rise 15 percent in overall demand and 40 percent during peak times. Johannes Wetzel, energy markets analyst at Wood Mackenzie, surmises the dilemma for the British and all EV investors, consumers, governments and taxpayers:

It will be a challenge and a lot of investment is required – in generation capacity, strengthening the distribution grid and charging infrastructure.”

EV sales are expected to reach 20 million in Britain by 2040, whereas today they have roughly 90,000 on the road. But Britain already faces a power supply crunch, because older nuclear reactors and coal-fired power plants will be phased off the grid by 2025. No one at the National Grid, Parliament or the Prime Minister’s office has stated how this power will be replaced to support a huge surge in electricity demand caused by widespread EV adoption. Related: “Super Critical” Coal Shortage Sends India Scrambling For NatGas

The British could attempt to build natural gas plants, which are cheaper, faster to build and allow grid flexibility, but that isn’t being pursued since they produce carbon emissions. Renewable energy has problems when it comes to EVs because of supply and demand problems. Solar panels, for example, produce energy during the day, but not at night when the British would need to recharge their EVs to avoid large infrastructure costs. Though estimates can vary from government figures of EV adoption, analysts surveyed by Reuters said, “anything up to an extra 50 terawatt hours (TWh) would be needed for them (EVs) by 2040.”

Off-peak grid incentives could be the solution by encouraging charging only at night, when demand is currently only about a third of during peak periods. The transition to EVs would then pose no significant stress to the national grid. But the British government would need to make sure off-peak grid demand is properly incentivized and enforced.

This can be achieved, as Britain is making significant progress in energy efficiency. The overall peak power demand fell around 14 percent between 2005 and 2016—a time when the economy experienced significant growth. This bodes well for British EV expansion without significant costs associated with that growth. This could also mean there is slack in the National Grid’s transmission and distribution system that could take additional stress during peak power demand.

The National Grid, which also operates the British transmission system said:

The rise in peak demand can be kept up to 5 GW if there is smart charging and time-of-use electricity tariffs.”

The National Grid will need off-peak EV charging essential to keep costs down and stress on the grid to minimum levels. What happens, though, for the British economy and investors if peak demand isn’t enforced? The Scottish and Southern Electricity Network tested this theory and found “uncontrolled EV charging would double the usual domestic load to 2 kilowatts (kW) when using a 3.5 kW charger.”

To meet these demands, Britain opened the largest gas plant in two decades at 884 MW. The plant came online in Manchester last year, but the costs were over 700 million pounds. Unfortunately, two additional natural gas plants near Manchester have stalled because the developer has been unable to raise the dual project’s 800 million pounds required for them to be built. However, the risk of more fossil fuel being used to meet additional EV needs could mean that Britain emits more greenhouse gases with widespread EV adoption than conventional vehicles.

Nuclear is also an option to meet growing energy needs, but Britain has struggled to build nuclear plants due to the prohibitive costs associated with construction. EDF’s 3.2 GW Hinkley Point C nuclear plant won’t open until 2025 at the earliest, as the costs fall on the private sector. To address these concerns, British energy regulator Ofgem has been tapped to ensure multiple power sources, infrastructure to support EVs and more interconnectors dispersed throughout the country.

The final reality of mass EV adoption deals with jobs and profits. In early September, China also pledged to outlaw the combustion engine, though the government didn’t say when. Daimler, the builder of Mercedes, gave details about their EV program that should give investors, policymakers and advocates of mass zero-emission motoring reason to plan ahead. Daimler warned that:

Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs.” Related: Russia’s Arctic Oil Is Off Limits For Private Drillers

Daimler boss Dieter Zetsche also recently told reporters, “In-house production is almost irrelevant to the consumer.” If German jobs are threatened then British and Chinese jobs could also be eliminated. The factors of job elimination, infrastructure upgrades and the tens of billions it will take to have EVs overtake the combustible engine should give investors and elected officials grave concern.

Private energy investors, in particular, should understand the costs and tradeoffs before investing in the British EV market or other developed nations going down this path.

By Todd Royal for Oilprice.com

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  • Brandon on September 14 2017 said:
    Everyone is scared to tell the sad truth about electric vehicles: they pollute MORE than thermal engines. Yes, MORE and not LESS. And the more the EVs, the higher the damage to the environment we cause. Reason is simple: in the best of the cases, 20% of electricity they are powered with is still coming from COAL - that's definitely more environmentally obnoxious than refined oil products. Rest is from gas and nuclear fission, while only less than 25% from renewables. A cost-effective mass increase in electricity output can only be obtained - with present technologies - through an increase of COAL and NUCLEAR FISSION. An increase in gas is more environmentally sustainable but extremely more expensive. And I'm not even considering the environmental impact of battery disposal, the cost of nickel etc. Wake up from dreamland and political slogans.
  • JAY on September 14 2017 said:
    increases needed pollution to generate electricty more than gas engine only displaces area of pollution with solar flares and electric vehicles ...
  • Marcus Rönningås on September 15 2017 said:
    "Peak electricity demand could even rise by as much as 8 GW by 2030 without ‘smart charging’ during off-peak hours and 18 GW by 2050 as the pace picks up to decarbonize" ??

    I load my Ioniq during night time, just like everyone else. Hardly not peak.

    Furthermore I purchase COO's for wind, so no CO2 footprint at all.

    Then we also have decreased the cost by swithcing one of the cars to the Ioniq, although I lease it for 3 years.

    And the list goes on and on and on.. If you for some eason oppose EV's, well - don't by one.
  • Al on September 15 2017 said:
    The answer is rather simple - hydrogen fuel cell vehicles. They are here and it is time.

    I concur that the life cycle of a battery vehicle is a major source of pollution. Battery vehicles should be banned.
  • Bill Popp on September 18 2017 said:
    Use carbon dioxide, not "carbon", in these discussions and the issue may take on a whole different level of awareness. Then we might ask how much of this otherwise beneficial carbon dioxide gas in the atmosphere is actually due to man before we massively disrupt our economies?
  • Claudio Cadalço on October 11 2017 said:
    Electric cars are the future, the combustion engines only exists because the rockfellers, rothschilds, made it happen for their great fortune, that all... electric vehicles were invented first, and were in the right path, those oligarcs just dementeled that industry so they could profit more... that is the only reason we have wars all around the globe... why usa, uk, germany, france are in the middle east????? for fun??? why they support isis terrorists?? simple answer, because they still have cars to sell, and more oil are still needed...

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