In our last article we discussed the changing world of technology, the introduction of EV’s into the marketplace, along with bio-fuels and how solar stacked up against bio-fuels from an economical standpoint. Through this series I’d like to discuss the grid (from a 30,000 ft level) and challenge the idea that the grid can be upgraded in time (without renewable energy & BESS) to support the electrical appetite that EV’s are going to bring to our economy.
When looking at this, I have to ask myself what is the argument that there is a clear and present indicator that points to the current grid not having the infrastructure in place to support future customer demands. After all, we have highly educated and experienced industry leaders, think tanks, and institutions that watch load growth and forecast future demand - Don't we?
Fossil Fuel Delivery Infrastructure and the Power Grid Infrastructure
From the first-time electricity and fossil fuels were used on a commercial scale, there existed the immediate requirements to build the infrastructures in order to transport the respective energy. Since each unit of power (the fossil fuel Btu and the electrical kW) had their own unique places in the market, each had their own delivery infrastructure created.
The fossil fuel delivery infrastructure was developed by building roads for trucks, pipelines, trains, super tankers, etc. On this particular infrastructure, if you needed more fossil fuel due to economic growth in a certain area - you just added more trucks, trains, and super tankers to the equation. Pipelines resembled the electrical grid in that they were built for a certain capacity and were somewhat limited to a known throughput.
The electrical grid concept hasn’t changed a whole lot over the years. Pretty much, it consists of poles, wires, and transformers. I don’t want to oversimplify our grid – it’s very complex with all of the advances in relay protection, equipment, and HV switching throughout the substations of the USA. However, it is very restrictive just like a pipeline when it comes to expansion. Unlike the fossil fuel infrastructure, you don’t just put more amps on the line to get more power to an area of economic growth. You build new infrastructure.
Btu’s becoming kW’s
Currently, around 70% of all crude oil (whether pumped domestically or imported) is used for the transportation sector in the USA. So, what does it mean when industry leaders are looking into the future and saying that by 2040 a significant portion of the transportation sector could be powered by electricity?
A simple deduction would be that a sizable portion of all fossil fuel energy that was previously used to power vehicles will now be in the form of a kW and dispatched via the electrical grid. With revolution of the battery technology and its effect on the EV’s range ability, are we now beginning to see what could be a significant shift in how we are consuming energy in the transportation sector of our economy?
Wait a minute, does that mean that as much as 70% of the fossil fuel energy that was transported via the trucks, trains, super tankers, and pipelines now need to find its way down the electrical transmission and distribution lines? How much energy are we talking? A lot – a whole lot. And, we are not even discussing the introductions of new technologies to the Smart Homes and commercial buildings that will also increase the demand for electricity.
Electricity Generation and the Grid
If you speak to most utilities and power producers, you’ll find that the majority of them agree that we have plenty of generation capacity in the USA. Ironically, that is the argument that is used against renewable energy. “We have plenty of generation – we just need a better infrastructure to get it where it needs to go”. I’ve been on the receiving end of that argument too many times.
Another argument is that as a whole we’ve had a decrease over the past ten years of demand for electricity. That is due in a large part by the introduction of LED lighting and highly efficient appliances and electronics. Trust me - moving a car down the road will not be done with the same energy as a light emitting diode (LED). So how much electricity does an electric car use?
The power used by these EV’s during charging is staggering. I bought a Chevy Bolt. My wife loves it and I hear her bragging to her friends that she has not had to pump gas for over a year (big issue for the ladies if any of you men are listening). Being somewhat technical I threw an amp meter on the charge cord. It took 40 amps at 240V for 8 hours to charge it. That’s like walking into your home and turning on all the burners and oven on your electric range and letting it run for 8 hrs.
Let’s add two cars to that equation (the normal household). All of the sudden, that 200-amp panel on the side of my house starts to look a little inadequate. “Honey, will you go to the garage and unplug one of the cars so that I can use the range to cook?” What about a business that runs a fleet of vehicles housed at a central location? Are you starting to see how fast the introduction of EV’s could change our day-to-day living?
How fast is the EV change going to happen?
Any time I start looking at niche or emerging markets I try to see where the ‘Big Boys’ are putting their money. That’s a pretty good indicator. Most investors hold their cards pretty close to their chest for a competitive advantage, so it’s difficult to see where they are headed. However, one big indicator that an emerging market is at hand is when the news flash comes out stating that one of them has moved a significant portion of their portfolio into this or that sector. It immediately states they don’t just have a feeling that a market is moving in a particular direction – they believe it enough to pony up the cash and put some dollars at risk.
Overall it is estimated that globally car manufacturers are planning to invest around $225 Billion by 2023 in the EV market. Sounds like we have some believers. That’s a value of 2/3 of the entire market cap of the top 5 car manufacturers. Doesn’t that say that the enough players in the EV market think that EV’s are about to make a serious impact on the car market? Doesn’t it also say that these manufacturers believe this is a consumer driven market? What is that going to do to our current transmission and distribution electrical grid? How much growth are we talking here?
There are many studies that drill down into the specifics of any rabbit trail a person would want to chase when discussing the grid and its capability. Again, the articles here are articles that stay at the 30,000 ft level to encourage further research. We’ve asked a lot of questions in this article – intentionally. We will continue to publish articles such as this just to spur thought and discussion.
In our next article we will discuss How Electric Vehicles Will Affect the Power Grid and How to Tackle Those Effects?