The Role of Electricity as a Transportation Fuel

Panel 1 - Electricity Sector Issues - 2:00-3:00pm

• Dr. Constantine Samaras
• Ken Huber
• Dr. Mark Duvall

Panel 2 - Vehical Integration & Manufacturing Issues - 3:00-4:00pm

• Dr. Willet Kempton
• Mark Wagner
• Keith Cole
• Patrick Davis

With more than 30 models of electric passenger vehicles slated to enter the market in the next two years, questions about how a transition to electric “fuel” would be managed and the full costs and benefits of such a transition need to be addressed. Some studies indicate electricity could displace a large amount of U.S. oil consumption without adding electric generation capacity. Given the current U.S. electricity profile, using electric fuel also generates significantly fewer greenhouse gases per mile than gasoline with potential for greater improvement as more electricity is produced from renewable sources. Moreover, while significant grid management issues would need to be addressed, electric vehicles could have substantial economic value for reducing peak loads for electric utilities, managing excess off-peak capacity, and enabling greater use of renewable energy.

On March 15, 2010, the Environmental and Energy Study Institute (EESI) held a briefing to examine the economic, energy security, and environmental implications of using electricity as a major transportation fuel. Widespread use of plug-in electric vehicles has the potential to simultaneously reduce U.S. oil dependence, air pollution, and greenhouse gas emissions, while improving management of electricity demand and enhancing grid stability. Transitioning to electricity as a fuel, however, would require unprecedented integration of the transportation and electricity sectors. In addition, supply chains developed for an expanding U.S. electric transportation industry would potentially create high-value jobs and boost economic competitiveness, but would also raise issues regarding sources of critical materials. This briefing reviewed the potential advantages and disadvantages of using electricity as a transportation fuel and what policies may be needed to address these issues.

• Widespread deployment of electric vehicles could reduce U.S. oil consumption by up to 4 million barrels per day by 2050 (current U.S. gasoline consumption is approximately 9 million barrels per day). Initial benefits for reducing carbon dioxide (CO2) emissions are more modest but significant and would increase dramatically as the carbon intensity of the electric supply decreases--by 2050, annual CO2 emissions could be reduced by an estimated 400-600 million metric tons.
• Researchers at Carnegie Mellon University estimated that every 10 million plug-in hybrid electric vehicles introduced in the U.S. fleet (which totaled approximately 245 million vehicles in 2009) would reduce gasoline consumption by 100,000-200,000 barrels per day, relative to a regular hybrid or conventional vehicle (assuming a 40-mile electric range). Every 10 million all-electric vehicles would reduce gasoline consumption by approximately 150,000-250,000 barrels per day.
• A National Research Council study projected a probable market penetration of 100 million vehicles by 2050 and maximum practical penetration of 250 million vehicles.
• Electric grid operators see two major benefits to widespread deployment of plug-in electric vehicles: electricity storage and frequency regulation.

1. Pumped storage in hydropower facilities is the only major option for electric storage being used at present and has limited capacity. Among other storage options--including flywheels and compressed gas--electric vehicles are the most promising, especially fleet vehicles which have predictable usage patterns and parking locations. The value of storage for the grid is significant, however, because there is no current market for storage, it cannot be precisely measured.
2. Utilities need to maintain an electric current at a consistent 60 Hz frequency. PJM Interconnection currently pays around $10 per day per vehicle for the frequency regulation services provided by grid-integrated vehicles (GIVs) at the University of Delaware. The value of frequency regulation plus other ancillary services, such as requirements for spinning reserves can exceed $3500 per vehicle per year.

• Electric vehicles will also allow for better integration of intermittent renewable resources. PJM Interconnection, which covers 13 states and the District of Columbia, is preparing for an increase in wind generation from 3 gigawatts to up to 45 gigawatts. Wind in this area blows strongest at night, when electricity demand is low. Plugged-in vehicle batteries could charge while parked at night and store electricity for later use.
• Most charging for plug-in hybrid and all-electric vehicles will initially occur at home. Approximately 94 percent of U.S. residences have feasible options for charging.
• Smart charging and new smart grid technology are not critical for electric vehicles to penetrate the consumer market. The grid can handle uncontrolled "less smart" charging.
• Reducing the cost premium for batteries and developing ways to capture the large economic value of plug-in vehicles to the electricity grid are critical to realizing the large potential benefits of electric transportation cost-effectively.
• Battery production costs are declining from upper range of $2000 in 2007 to a projected $400 in 2015. Battery manufacturing capacity is being developed in the United States, including a new plant in Holland, Michigan.
• Lithium and other rare metals used in battery chemistry are currently sourced outside the United States. Global supply limitations are not anticipated to be a problem during this century. Supplies of lithium and other metals can be maintained through recycling, stockpiling, and domestic lithium deposits that have not yet been developed.