The Emerging Era of Electric Vehicles: Demands, Generation, the Economy

and HealthPeter Gunther, Senior Research Fellow

Connecticut Center for Economic AnalysisREMI, Amherst ,MA, April 27 2010

National Impacts of All Light Vehicles Going Electric

• Vehicle manufacturers launching mass-assembled plug-in vehicles– GM Volt in Nov. 2010, Ford Transit light truck and

Nissan in 2011, and Ford’s Focus & Telsa in 2012.• U.S. light vehicles consume:– 16.8% of U.S. energy– 24.2% of U.S. fossil fuels.

• Pace of adoption will quicken relative to previous paper, pressuring electric generating and distribution systems.

National Environmental Perspective• 69.3% of U.S.

electricity is generated by fossil fuels.

• Capacity strained• Mix Undermines

the environmental advantages of substituting electricity for gasoline.

• Green Alternatives?

Plug-ins: Recent Improvements• Volt 220 recharge time reduced to 3.5 hours.• Use of lithium-ion batteries by all suppliers.• Volt 4 seats, Nissan’s version has a 5 seats.• En board GE timers that allow utilities to

flatten loads.• Ford Plug-ins get 100 miles per charge.• Transit first plug-in truck.• All CT residences metered peak and off-peak.• Greater certainty – GM gov’t. debt repaid etc.

Matching Plug-in Demands with Green Electricity Supplies

• Householders assumed to directly or indirectly pay the marginal costs of clean electricity, even though off-peak costs and rates are lower.

• Bio materials for electricity generation assumed to be wood chips or industrial wastes.

• Solar capital costs now 20% lower than two years ago but annual operations double to $111/MW of capacity.

• Transmission losses and charges increase from 10% to 15% for solar and 20% to 25% for biofuel generation.

CT Modeling DifferentiationsSlow Adoption

• At annual rates plug-ins gain 3% of CT new light vehicle sales in 2010 growing annually 1.25% of the previous year’s rate until the market is saturated

• After 2010 exceeds previous growth set at 2% with 10% annual increases

Rapid Adoption

• Same as slow growth except annual growth is 1.35%.

• After 2010, exceeds previous growth set at 2% in 2009 with 15% annual increases

Plug-ins attrition rates at 1.75% over the first 20 years and then in a straight line to zero over the next 20 years

Shocks to REMI• Electricity demand growth for plug-ins.• Gasoline demand shrinks due to plug-ins.• Net household savings in fuel spent on household

expenditures.• Capital and operating costs including operating

materials for incremental solar and biomass electricity generating systems.

• Assumes all CT incremental demand for electricity is supplied in-state and metal fabrication of solar panels occurs in state.

Modeled Exterior to REMI

• Reduced emissions of CO2eq as GHGs

Initial CT REMI Scenarios1. All fossil burning light vehicles replaced by plug-

ins wholly fueled by solar generation (DOE ranks CT as the 10th most suitable state for solar).

2. All fossil burning light vehicles replace by plug-ins wholly fueled by bio-generation using wood chips and sawdust.

3. A combination of the two:– Solar more scalable and needed at peak in early years

and bio-generation more effective in longer-term.

With Slow and Rapid scenarios for each, 6 cases in all

REMI Impacts Covered Here• CTRGDP• Jobs• Metal Fabrication Jobs• Jobs in Natural Resources Except Mining• Personal Income• Personal Taxes• Population• Labor Force• Labor Force Productivity• Others

CTRGD Impacts: 2010-2040 (Millions 2000 $)

Slow Adoption Rapid Adoption

CT Job Impacts: 2010-2040

Slow Adoption Rapid Adoption

CT Industry Job Impacts: 2010-2040

Metal Fabrication Natural Resources Except Mining

CT Personal Income Impacts: 2010-2040 (Millions Nominal $)

Slow Adoption Rapid Adoption

CT Personal Tax Impacts: 2010-2040 (Millions Nominal $)

Slow Adoption Rapid Adoption

CT Population Impacts: 2010-2040

Slow Adoption Rapid Adoption

CT Labor Force Impacts: 2010-2040Slow Adoption Rapid Adoption

Additional Modeling Considerations

• Elasticities and off-peak pricing of electricity facilitate off-peak fueling of plug-ins where current surplus nuclear generating capacity that could reduce needs to build incremental capacity.

• Greater use of biofuels to replace diesel in all vehicles, especially in heavier trucks.

• Evidence of the energy-food pricing nexus.• Health benefits of reduced emissions (GHGs and

PMs).

Other Peak Pricing Consumer Reactions

• At 11.34 cents/kWh for off-peak and peak at 22.56 cents/kWh compared to the current flat rate of 20.57/kWh, demand would shift to off-peak so as to eliminate the need for 1-2.7 bio-generating plants of the 75 required out to 2050, reducing impacts by 3-4 percent.

Energy/Food Pricing Nexus:Recent U.S. Experience 2005M1-2010M2

Annual Rates of Growth of Biofuel ProductionTime2009

Bioethanol259 M Bar.

Biodiesel12.8 M Bar.

Combined

2005-2006 25.1 175.9 28.5

2006-2007 33.5 95.6 36.5

2007-2008 42.7 58.4 43.8

2008-2009 15.6 -30.4 12.0

Energy/Food Pricing Nexus:Recent U.S. Experience 2005M1-2010M2

Energy/Food Pricing Nexus:Catch 22

• The problem with biodiesel is that it clouds and gels at different temperatures depending on the feedstock used.

• Biodiesel using Bernard Tao’s methods have remained gel free at -60⁰ F, but are reliant on using virgin soybeans as the feedstock.

• Right back into the Energy/Food Nexus.• If energy feedstock is also a human food,

pricing impacts must be considered.

CT CO2eq Reductions (1,000’s tonnes)

• Full conversion of CT’s light vehicle fleet to clean electricity would save nearly 16 million tonnes of GHG emissions in 2050

• Solar would eliminate virtually all the GHGs

• Fragmentary evidence from wood chip generators is about 40% of GHG is saved relative to fossil fuel generation by other than natural gas.

CT Health Impacts

• CT health impacts are difficult to assess:– Externalities are spread on airborne plumes;– Adverse impacts on the ozone layer are global;– Small particulate matter (PM) appears to be about 1000

times more harmful than GHGs• If solar supplied at peak reduces coal fired generation,

then PM would be reduced.• If biodiesel were similarly substituted for fossil-based

diesel and adjacent states attained the GHG savings with the average accompaniment of PM, in 2050 roughly 845 premature deaths would be avoided in CT.

Non-Fatal Health Impacts

• Avoidance of that level of premature deaths would normally be accompanied by:– 2,990 hospital stays– 39,440 emergency day visits;– 2,026,230 asthma attacks; and,– 10,479,200 person-days restricted by illness.

Potential Direct Health Impacts• Since gasoline fuels yield less PM than diesel and

relatively few light vehicles burn diesel, as a speculative experiment the following shocks have been added to the Slow Solar Adoption scenario:– population increases by avoiding dying at 85 persons per

year, or 59 additional employees annually 1 of whom dies in each successive year;

– 299 hospital admissions– 3,944 emergency day visits avoided annually;– 202,823 asthma attacks avoided annually; and– 1,047,920 person-days restricted by illness avoided; – Sickness days avoided equate to 4,213 additional annual

jobs.

Slow Adoption of Solar Employment Impacts with and without Accounting for Environmental Health Benefits

Slow Adoption of Solar CTRGDP Impacts with and without Accounting for Environmental

Health Benefits ( Millions Fixed 2000 $)

Slow Adoption of Solar Personal Income Impacts with and without Accounting for Environmental Health Benefits

( Millions Nominal $)

Slow Adoption of Solar Labor Productivity Impacts with and without Accounting for Environmental Health Benefits

( Millions Fixed $)

Slow Adoption of Solar Jobs in Health and Social Work Impacts with and without Accounting for Environmental Health

Benefits