Connecting plug-in vehicles to green electricity through consumer demand

Presented: December 10, 2013

Dr. Jonn Axsen, Simon Fraser University

Funded by: BMW of North America, LLCNatural Resources Canada

Social Sciences and Humanities Research Council of CanadaEnergy and Materials

Research Group

EMRG

53 kWh24 kWh16 kWh

HUGE VARIETY AMONG PLUG-IN VEHICLES (PEV)

4 kWh

~117 km electric range

Nissan Leaf

~56 km ~500 km gasoline

~300km electric range

Tesla Roadster

Toyota Prius PHV

Chevy Volt

20 km ~800 km gasoline

Plug-inHybrid(PHEV)

PureElectric(EV)

Comparing Battery Sizes:

3

0

50

100

150

200

250

300

350

400

450

0 200 400 600 800 1000

Electricity Carbon Intensity (gCO2/kWh)

DrivingCarbonIntensity

(gCO2/

mile)

EV

PHEV-40

PHEV-20

PEV emissions greatly depend on the source of electricity

U.S. Average

CoalNatural Gas

Source: Axsen et al. (2011), Energy Policy

Regular vehicles

Hybrid

CanadaToday

Questions I will explore today:

1. Do PEV buyers want “green electricity”?2. Will PEV buyers give charging control to their electric

utility?3. What are consumer motives?

Study 1: Green electricity with your PEV?

(US car buyers, n=1502)

Research Method

20-minute web-based survey US new vehicle buyers, n = 1502 3 segments: buyers of conventional, hybrids and PEVs

Survey layout:1. Game 1: PEV design2. Game 2: Green-electricity design3. Game 3: “Combined” design (PEV and Green-E)4. Motivation assessment

Game 1: PEV design gamesRespondents first select their next anticipated vehicle by type (CV or HEV) and body size (compact, sedan, mid-sized or full SUV/truck).

Incremental price, compared to base vehicle.

HEV: $780 to $1740

PHEV: $2090 to $7540

EVs: $2940 to $25,380

Example Screenshot from Survey

CV HEV PHEV EV

-10%

0%

10%

20%

30%

40%

50%

60%

Game 1: Vehicle DesignsHybrid and PHEVs are most popular.

Hybrid (HEV)

Conventionalvehicle

Plug-inhybrid

Electricvehicle40 miles

20 miles10 miles

200 miles150

125100 miles

% ofSample

segment

Selected vehicle design

Game 2: Green Electricity design games

1) No green program: or current “green” program if already enrolled. 2) Monthly Green Program: ¢1.5 to 3/kWh 3) 2-Year Green Lease: ¢1.5 to 3 /kWh 4) Install residential solar: $20 to $102/month

Example Screenshot from Survey

Game 2: Green Electricity DesignsLots of interest in monthly programs and home solar

% ofSample

Segment

Electricity program selected

None Current Program

Monthly Green

Program

2-year Green Lease

Install rooftop solar

0%

10%

20%

30%

40%

50%

900 kWh

20%

180 kWh

540 kWh

100% of home usage

60%

20%

60%100%

Game 3: Combining vehicle and electricity options

Example Screenshot from Survey

Game 3: Combining vehicle and electricity games

Hybrid buyers

Complements: The combination increases PEV demand by 23%

Game 1: PEV Game 3: Mixed0%

20%

40%

60%

80%

100%

EV

PHEV

HEV

CV

Study 2: Acceptance of utility controlled charging

(Canada car buyers, n=1754)

14

Pairing renewables & PEVs

Many sources of renewables are intermittent so the timing of electricity supply may not match the timing of electricity demand.

12am 12pm 11pm

Green Electricity Supply

PEVElectricity Demand (load)

15

Pairing renewables & PEVs

Many sources of renewables are intermittent so the timing of electricity supply may not match the timing of electricity demand.

12am 12pm 11pm

Green Electricity Supply

PEVElectricity Demand (load)

16

Utility controlled charging (UCC)—Any situation where the electric utility controls Plug-in Electric Vehicle (PEV) charging in order to better utilize intermittent renewable electricity sources.

17

The SampleTotal completes: 1754

The overall sample is generally representative of new car buyers:

Older, higher income, more highly educated, and more likely to own their own home

18

Who are the “early mainstream?”

Conventional Hybrid PHEV EV0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Perc

enta

ge o

f Sam

ple

32km

64km Electric Range

16km

240km Electric range

200km 160km 120km

80km

36% of total sample (n=530)

n=1469

36% = potential “early mainstream”

PEV buyers

Further analysis uses only these respondents

19

Making Tradeoffs – Stated Preferences

Status Quo

UCC alternative 1

UCC alternative 2

20

Latent-class discrete choice model:3 different consumer perspectives

Class #1: Pro-Green (21% of sample)– Generally supports utility-controlled charging– Positive value for renewables– Strong pro-environmental values/attitudes– Younger, more educated

Class #2: Pro-Savings (41% of sample)– Also supports utility-controlled charging– Highly sensitive to savings on electrical bill– Strong pro-environmental values/attitudes

Class #3: Anti-controlled charging (38% of sample)– Negative perception of UCC– Older, less educated

Pro-Green (21%)

Pro-Savings (41%)

Anti-UCC (38%)

All (100%)

Pro-Green (21%)

Pro-Savings (41%)

Anti-UCC (38%)

All (100%)

Pro-Green (21%)

Pro-Savings (41%)

Anti-UCC (38%)

All (100%)

Pro-Green (21%)

Pro-Savings (41%)

Anti-UCC (38%)

All (100%)

0% 20% 40% 60% 80% 100%21

Baseline(No renewables,no savings)

20% bill savings

100% renewable

20% savings+

100% renewable

% of PEV market accepting UCC

Comparing charging programs based on bill savings vs. renewable uptake

22

Summary points

Lack of awareness: most consumers do not presently think about the source of electricity for PEVs.

Green electricity can boost demand for PEVs: …when green-electricity option is presented.

“Utility controlled charging” acceptable to half of potential PEV buyers: support varies by green vs. financial motivation (which links to consumer values and lifestyle)

Variety of consumer motives: environmental values, financial savings, new technology, trust and privacy

Appendices

24

Guaranteed minimum charge (GMC)

20km

200km – 100% or Full Charge

180 km Guaranteed Minimum Charge

The absolute minimal level of charge that you would wake up to on any given morning.

This area may have charge but it may not. This will depend on the utility.

The larger the consumer allows this area to be the more useful their vehicle can be to the

utility.

180km – 90% Charge 20km – 10% of Charge

Preferences for electricity source when charging PEVs

Solar

Wind

Geothermal

Run-of-river

Large Hydro

Natural Gas

Biomass

Nuclear

Coal

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

Percentage of Samplen=530 25

How do you feel about using the following energy sources to produce electricity for electric vehicles?

26

-40% -20% 0% 20% 40% 60% 80%Percentage of Sample

How do they feel about UCC?

Will take control away from me in a way that I would not like

Is an invasion of my privacy

Neg

ative

Sta

tem

ent

Will help the environment

Should be supported by the government

Should be required for all PEV owners

Posi

tive

Stat

emen

t

n=530

To what extent do you agree with the following statements about Utility Controlled Charging? Utility controlled charging…

Binary logistic regression helped to explain respondent interest in “combined” product.

Controlling for numerous variables, Respondents were more likely to combine a PEV and Green-electricity design in Game 3 if they…

…are under 60 years of age.**…live in a detached home.*…recently bought an HEV or PEV.**…engaged in technology-oriented lifestyle.**…had stronger pro-environmental attitude (NEP scale).**

* Significant at 95% confidence level (p < 0.05)** Significant at 99% confidence level (p < 0.01)

Method Overview: The web-based survey instrument required 20-25 minutes to complete. The flow of survey questions was customized based on respondent characteristics, including up to three design games: (the survey also included many demographic and attitudinal questions not depicted here.)

Has residential solar panels?

Segment: CVB, HEVB, PEVB? Segment: CVB, HEVB, PEVB?

YesNo

Select “base” vehicle for design games Select “base” vehicle for design games

Potential to upgrade to:HEV, PHEV or EV

CV as basePotential to upgrade to:PHEV or EV

HEV as base

Assess potential to install home solar

Can have solar No solar potentialPotential upgrades to:Green program/lease or solar

Potential upgrades to:Green program/lease

Options to combine vehicle and electricity program: Vehicles: (CV), HEV, PHEV or EV Electricity: current, green program, lease, (solar)

Potential to upgrade to:HEV, PHEV or EV

CV as basePotential to upgrade to:PHEV or EV

HEV as base

End of survey

Game 1

Game 2

Game 3

Game 1: PEV Design GamesIncremental prices for upgrades are based on technical literature.

Higher Price Game* Lower Price Game* Compact Sedan Mid-SUV Full-SUV Compact Sedan Mid-SUV Full-SUVHEV $1,080 $1,290 $1,480 $1,740 HEV $780 $850 $920 $1,000 PHEV-10 $2,710 $3,530 $4,120 $5,050 PHEV-10 $2,090 $2,600 $2,950 $3,510 PHEV-20 $3,160 $4,060 $4,830 $5,880 PHEV-20 $2,320 $2,860 $3,300 $3,920 PHEV-40 $4,070 $5,110 $6,240 $7,540 PHEV-40 $2,770 $3,380 $4,000 $4,760 EV-75 $5,940 $6,920 $8,970 $10,550 EV-75 $2,940 $3,140 $4,010 $4,500 EV-100 $7,570 $8,790 $11,490 $13,510 EV-100 $3,760 $4,080 $5,270 $5,980 EV-125 $9,200 $10,670 $14,010 $16,480 EV-125 $4,570 $5,020 $6,530 $7,460 EV-150 $10,820 $12,540 $16,530 $19,450 EV-150 $5,380 $5,960 $7,790 $8,950 EV-200 $14,070 $16,290 $21,570 $25,380 EV-200 $7,010 $7,830 $10,310 $11,910

• All prices were framed as increments added to the “base” vehicle price (CV or HEV)• Incremental prices based on simple electric-drive price model:

– $/kWh was higher for batteries with higher power-energy ratio (W/Wh)– Incremental price includes battery, changes to engine, motor, charger, exhaust and wiring

• Two price scenarios: “Higher” and “lower” battery prices– “Higher” battery prices are double those in “lower” scenario

• Base and incremental prices differ by “base” model: compact, sedan, mid-sized SUV/truck or full-sized SUV/truck

– Incremental prices higher for larger, heavier vehicles

*Price increases relative to the selected “base” vehicle. If respondent selects an HEV as the “base” vehicle, thenincremental prices are as shown, but less the HEV incremental price.

Game 2: Green Electricity Design Games• Each respondent’s assumed monthly household kWh demand was based on their U.S.

State of residence and housing type (detached, attached, apartment or mobile home)• Green electricity program and lease prices were based on two rates:

– Higher price scenario: $0.03 per kWh covered by plan (20 to 100% of monthly kWh)– Lower price scenario: $0.015 per kWh

• Residential solar only offered to respondents with solar potential (rooftop access, and likely would have authority or permission to install)

• Solar installation prices based on:– System size (180, 360, 540, 720 or 900 kWh per month)– Following economies of scale, $/watt was lower for larger systems (as detailed by IBNL, 2011)– Two price scenarios: Higher ($5.1 to $3.6/W) and lower ($3.6 to $2.5/W)—gov’t incentives included– Monthly finance rate based on 5%, 20-year rate

1. Monthly Program 2. Two-Year Lease 3. Install Home SolarSource options Solar, wind, tidal, geothermal,

biomass, small hydro, or determined by electric utility

Lease solar panels or wind turbine (somewhere else)

Solar panels installed at home

Higher price scenario Levels: 20%, 40%, 60%, 80% or 100% of household electricity usePrice = $0.03/kWh

Same as Monthly (#1) 180 kWh: $29/month ($5.1/W)360 kWh: $58/month ($5.1/W)540 kWh: $68/month ($4.0/W)720 kWh: $86/month ($3.8/W)900 kWh: $102/month ($3.6/W)

Lower price scenario Levels: 20%, 40%, 60%, 80% or 100% of household electricity usePrice = $0.015/kWh

Same as Monthly (#1) 180 kWh: $20/month ($3.6/W)360 kWh: $40/month ($3.6/W)540 kWh: $48/month ($2.8/W)720 kWh: $60/month ($2.7/W)900 kWh: $71/month ($2.5/W)

Savings on electric bill None None Savings = (% solar) x Household bill

Summary of ResultsResults from Game 1 (PEV designs):

– Conventional vehicle buyers most frequently design HEVs (49%) or PHEVs (23-24%).– Hybrid buyers gravitate to HEVs (40-47%) or PHEVs (35 to 38%).– Pure EVs designed by 3-7% of conventional buyers, 7-12% of hybrid buyers.– Plug-in buyers gravitate to PEV designs (28% PHEV, 57% EV).– Respondents that already have “green electricity” are more likely to design PEV.

Results from Game 2 (Green Electricity designs):– Among conventional vehicle buyers, most design some form of green electricity: home solar (23-27%),

a green electricity program (18-22%) or lease (6-9%). – 32-42% of conventional vehicle buyers prefer no green program.– Most hybrid and plug-in buyers either already own a home solar system (32-37%) or design one (18-

35%)

Results from Game 3 (Combined games):– 31% of conventional buyers combined a PEV with a Green-E program, as did 53% of hybrid buyers, and

86% of plug-in buyers.– Adding Green-E options increased overall demand for PEV designs among conventional buyers (23%),

hybrid buyers (20%), and PEV buyers (5%). (While the percent increase is low for PEV buyers, it is from a very high base of over 80 percent.)

Consumer Motivations:– We observe a wide variety of motives across and within respondent segments, including environment,

cost, oil politics, renewable support and control of energy.– Conventional and hybrid buyers are more likely to be motived by cost savings.– PEV buyers more strongly motivated by technical interest and as well as environment.