Filling the Tank with Sunbeams and Breezes
Strategically timed vehicle charging can help green the grid.
Between the newly signed Inflation Reduction Act and last year’s Infrastructure Investment and Jobs Act, the federal government is committed to spending nearly $400 billion over the next ten years on the future of US energy and transportation. These expenditures include investments in transmission, renewable generation, nuclear power, electric vehicle charging, and consumer subsidies for electric vehicles.
Policymakers at the federal and state level are now faced with a raft of complex implementation decisions to enact dozens of new and expanded programs. The programs each have their own unique requirements and responsible agencies, but when it comes to the electric grid, everything is connected. Subsidizing a new transmission line can open up new areas for wind energy development. Government-supported technology breakthroughs that reduce the costs of nuclear or carbon capture and storage will affect the viability of competing technologies. New research from Stephen Holland (UNC Greensboro), Erin Mansur (Dartmouth) and Andrew Yates (UNC Chapel Hill) examines how policies interact and transform the electric grid in different ways. Last week California adopted new regulations that ban the sale of fossil-fueled vehicles by 2035, to be replaced primarily with electric vehicles. This new research shows how this transition could be a big win, or a loss, for the climate.
Modeling the Long-Run
I had always considered greening the grid and electrifying transportation as two separate steps toward decarbonizing the economy. On the one hand, policymakers would adopt policies that replace fossil fueled electric generation with zero carbon generation. And at the same time, they would pursue policies that replace fossil fueled transportation with zero carbon transportation. If these happen in concert, the economy ends up with a carbon free grid and a carbon free transportation system.
Prior research by the same authors, plus Matt Kotchen (Yale), shows what happens when the timing is wrong. In that paper, they found that charging electric vehicles in the U.S. got dirtier as the decade wore on. This is the opposite of what policymakers have been working toward. The paper attributes the trend to relying on coal power plants to meet the additional load. Lower carbon producing natural gas plants and renewable energy increased their fraction of total generation, but coal plants became more likely to be the ones ramping up to meet incremental demand.
The new paper develops a model to look beyond today’s grid to a future that could be dramatically different. The model lets the authors consider how different policies, on their own or in concert, could cause new plants to be built, and old ones to retire. They present snapshots of different future grids and carbon emissions. The model is not a precise description of the US power system, but it includes essential elements and allows them to run scenarios that illustrate how policies could interact.
Getting the Timing Right
The timing of electric vehicle charging emerges as a critical factor that could reshape the grid. Intuitively, charging electric vehicles at times when the sun is shining on solar panels and the wind is blowing past turbine blades would be best for cutting carbon emissions. The model highlights why and how this is the case.
When vehicle charging increases demand, wholesale power prices rise. This encourages companies to invest in power plants that can sell electricity at the higher prices. The timing of vehicle charging will determine which forms of generation are built.
Higher mid-day prices encourage more investment in solar generation. Higher prices that match the wind will encourage wind investment. Once a new solar or wind plant is built, it will not only produce energy when the vehicles need it, but will also produce energy at other times. The economics of competing technologies, such as natural gas, will suffer. Therefore if electric vehicle charging occurs when the potential for renewable generation is greatest and induces more investment in renewables, the vehicles can be not just carbon neutral, but carbon negative by pushing natural gas plants out of the market entirely.
However, the authors also investigate what would happen if the opposite occurs. If drivers primarily charge their vehicles in the evening – which is what other research shows is happening – power prices will increase at those times. Natural gas plants are better positioned to take advantage of the higher evening prices than renewables because they can generate at any time. Once these plants are built, they can operate during other hours too, discouraging investment in renewable energy and compounding the increase in carbon emissions.
The authors focus on natural gas generation as the fossil fuel option, but coal generation is still in the picture in the US too. In recent months some plant owners have delayed planned coal plant closures. In other words, the carbon impact from badly timed electric vehicle charging could be even worse than these authors model.
The researchers’ model points to concrete policy solutions.
Policies that increase charging vehicles when the wind is blowing and the sun is shining will help reduce carbon emissions. The authors discuss investing in charging stations in shopping centers and workplaces to enable convenient daytime charging. Fast charging at existing gas stations to serve people on their way to and from work and other daytime activities could also help. The best approach could differ by region, though. For example, in the southwest, noon-time charging when solar is at its maximum is most valuable. In the Midwest, the late afternoon when the wind is strongest is best.
The recent upgrades my family made to accommodate at-home vehicle charging run counter to the direction the paper is pointing. We made the investments to provide convenient access to charging in our garage at night. Maybe in the future we can make our home chargers available to the many contractors and apartment-dwelling work-from-home residents for whom our residential neighborhood is their workplace.
The analysis also emphasizes the benefits of technological cost reductions in renewable generation. Solar, wind and natural gas, and maybe nuclear and other more exotic forms of generation, will be duking it out in the marketplace. Capital costs for solar and wind have been declining, but natural gas capital costs have been declining too. The investment boost that wind and solar will get through the Inflation Reduction Act could potentially spur further innovation and accelerate cost reductions.
Federal and state policymakers have an exciting chance to make progress on many important aspects of the energy transition at once. In addition to electric vehicles, Holland, Mansur and Yates’ paper addresses other areas where the federal government is making big bets including nuclear, transmission and battery storage. Their research is an excellent example about how energy economists can provide insights to guide policymakers to maximize the impact of policy for the climate.
Keep up with Energy Institute blog posts, research, and events on Twitter @energyathaas.
Suggested citation: Campbell, Andrew, “Filling the Tank with Sunbeams and Breezes” Energy Institute Blog, UC Berkeley, August 29, 2022, https://energyathaas.wordpress.com/2022/08/29/filling-the-tank-with-sunbeams-and-breezes/
Andrew G Campbell View All
Andrew Campbell is the Executive Director of the Energy Institute at Haas. Andy has worked in the energy industry for his entire professional career. Prior to coming to the University of California, Andy worked for energy efficiency and demand response company, Tendril, and grid management technology provider, Sentient Energy. He helped both companies navigate the complex energy regulatory environment and tailor their sales and marketing approaches to meet the utility industry’s needs. Previously, he was Senior Energy Advisor to Commissioner Rachelle Chong and Commissioner Nancy Ryan at the California Public Utilities Commission (CPUC). While at the CPUC Andy was the lead advisor in areas including demand response, rate design, grid modernization, and electric vehicles. Andy led successful efforts to develop and adopt policies on Smart Grid investment and data access, regulatory authority over electric vehicle charging, demand response, dynamic pricing for utilities and natural gas quality standards for liquefied natural gas. Andy has also worked in Citigroup’s Global Energy Group and as a reservoir engineer with ExxonMobil. Andy earned a Master in Public Policy from the Kennedy School of Government at Harvard University and bachelors degrees in chemical engineering and economics from Rice University.
Another advantage of daytime EV charging is that it is more likely that one charger can charge several vehicles/day. At a workplace this would likely happen through a rule that would allow 4-5 cars to each get up to 2 hours of charging from a level 2 or level 3 charger. At a business it would be similar, but with shorter charging sessions on level 3 chargers. Home chargers used mostly at night are unlikely to be used by more than one car per day, though a two-EV household could well charge both cars on alternate nights from a single charger.
The relatively high up-front cost of installing level 2, and especially level 3, chargers are barriers to their installation, so it makes sense to me that we try to use those that are installed as intensively as possible, and that means having them be used by many cars each day. The fact that this approach is compatible with EV ownership by people living in multi-family residences is another reason to favor it.
Are the numbers available? Does EBCE’s storage have enough “outflow” capacity to cover any shortfall between the nighttime demands of its “Renewable 100” customers and the supply from its wind turbines, even when it’s not very windy? If yes, great! If no, I’m not sure what to make of that.
Good argument for more hydrogen vehicles. Generate hydrogen from renewables when available. Fill your car like you do today.
Or electric vehicles, using power from hydrogen-fueled CCs
I trickle charge my EV in the day off my own solar panels. see https://egpreston.com/solarpanels.jpg There is no need to overload the grid or burn fossil fuels.
I think there’s a bit of a flaw in the economic logic of building solar plants to meet daytime charging demand based on short-run prices. In California’s wholesale electricity market, which you and I are both familiar with, short-run prices are determined largely by the marginal cost of gas-fired generation. Solar plants are largely compensated through contractual payments that are decoupled from wholesale market prices. Even if solar generators were compensated at the prevailing short-run wholesale prices, there’s a point at which gas-fired generation no longer sets price and under the current rules, hourly prices go to zero because the marginal cost of operating a solar plant is also zero. That is not a trivial problem.
Until and unless regulators and market monitors disabuse themselves of the notion that short-run electricity prices have to reflect the marginal cost of generation, no sensible developer of solar plants is going to build a plant that gets paid solely on the basis of short-term market revenues.
You’re right. There are growing questions about the use of short run market prices as indicators of market value of generation assets for a number of reasons. This paper critiquing “surge” pricing on the grid has one set of aspects that undermine that principle: https://arxiv.org/abs/2103.06355
There’s deeper problem with the Holland et al papers (that I plan to respond to more formally.) The chart that Fowlie pulls from the article showing that marginal emissions are rising above average emissions while average emissions are falling is not mathematically possible. (See for example, https://www.thoughtco.com/relationship-between-average-and-marginal-cost-1147863) For average emissions to be falling, marginal emissions must be falling and below average emissions. The hourly emissions are not “marginal” but more likely are the first derivative of the marginal emissions (i.e., the marginal emissions are falling at a decreasing rate.) If this relationship holds true for emissions, that also means that the same relationship holds for hourly market prices based on power plant hourly costs.
All of that said, it is important to incentivize charging during high renewable hours, but so long as we are adding renewables in a manner that quantitatively matches the added EV load, regardless of timing, we will still see falling average GHG emissions.
Of course average emissions can fall over time while marginal emissions rise. Like in the situation in which the baseload shifts from coal steam to gas CC (pushing average emissions down), while the marginal mix becomes more and more coal-heavy. Or if renewables, almost always inframarginal, lower the average, while the marginal supply increasingly includes oil peakers, increasing marginal emissions. The paper you link to looks at the change in the margin and average as output grows, not over time.
The marginal power supply to serve a newly purchased EV includes the renewables that the supplier must obtain, as well as the change in fossil output.
No, it is mathematically impossible for average emissions to fall while marginal emissions are rising if the marginal emission values are ABOVE the average emissions, as is the case in the Holland et al study. What analysts have heuristically called “marginal” emissions, i.e., hourly incremental fuel changes, are in fact, not “marginal”, but rather the first derivative of the marginal emissions. And as you point out the marginal change includes the addition of renewables as well as the change in conventional generation output. Marginal must include the entire mix of incremental resources. How marginal is measured, whether via change in output or over time doesn’t matter. The bottom line is that the term “marginal” must be used in a rigorous economic context, not in a casual manner as has become common.
What about transforming the grid to direct current, which would increase transmission efficiency and thereby facilitate transregional power power sharing and expand generation choices?
Can you transform DC voltage down to secondary economically?
“…..the owners of buildings who are making decisions about how much capital to put into causing them to be zero emissions or low emissions are not the people who are paying the rent.” – John Doerr
State sanctioned utility monopolies all profit from the buildout of transmission, and can justify more buildout and more peak demand charges during times of high energy need on the grid.. By blocking rooftop solar, the utilities effectively keep demand high, especially at crucial high-demand times. The utility company business model is based on providing guaranteed income to a relatively few wealthy investors. It’s just another energy market manipulating exploitation model….…..like authoritarian petro-states & BigOil. A free, open market doesn’t look like that. And you don’t need to keep finding new deposits, extract, refine, store & ship sunshine.
Perhaps more important are the knock-on effects. When Battery Electric Vehicle (BEV) sales, including fleet & used vehicles, reach about 25% of the California market, owners of leased commercial property like large apartment buildings, neighborhood shopping centers & business parks will finally begin responding to market demand for vehicle-to-grid (V2G) chargers with integrated parking lot canopy solar & stationary battery storage. These relatively high power demand properties will become the hubs of 1 to 2 mile radius micro-grids networked across typical suburban neighborhoods. Good used PHEV & BEV vehicles will cost under $10k. Electrical consumers, including lots of hard working lower income folks, will become “Prosumers” instead of just passive consumers of power, and reap grid stabilizing service fees from their connected EV vehicles, at home &/or work. That’s how we get grid reliability & price stability with social equity to replace autocratic petro-states and fossil fuel & utility company monopolies. Think about how much reducing & stabilizing utility bills and transportation costs will benefit young families & everyone living on modest incomes. For a peek into the direction we’re headed, see:
Click to access 69017.pdf
This paper is very interesting, and applicable to other people. I pay a premium to East Bay Community Energy for “Renewable 100”, under which I “…get 100% California solar & wind energy” no matter when I charge my EV. Right?
Not at night when only wind power is available, and the wind is not blowing. East Bay community energy does have battery storage and will claim the output, you receive at night, is from that storage but when placed upon the PG&E grid, it just gets mixed into the mix including nuclear, hydro, PG&E storage at Moss landing and some natural Gas power plant electricity. PG&E states it uses only 8.5% fossil fuels power in its distribution area and 39% Nuclear power. The premium you pay to get “Renewable 100” is just to pay for the more expensive battery storage costs and to make you feel good about your usage. The good thing about “Renewable 100” is that all of us “net producers” with excess rooftop solar energy, get paid more for it by East Bay Community Energy based on the NEM kilo watt for kilo watt compensation. But again, it is only during the daylight hours. The peak time power pays more, and daylight savings time actually makes the 4:00 PM to 9:00 PM for profitable for net producers. Year around Daylight Savings Time would be good for net producers of rooftop solar and with batteries, could actually break even on the investment if dumped onto the grid at peak times with peal pricing. I am also a “Renewable 100” East Bay community Energy customer because it pays more for my solar output but not because they will guarantee 100% renewable at my utility meter.