Tesla’s Model S has now been on the road, with private customers behind the wheel, for almost a month. The styling and performance will certainly draw attention, and the early reviews are nothing short of glowing, but do these new owners really deserve to be viewed as enablers of a green revolution?
In the first article of this series, EV Myths & Realities, Part 1: The Battery Crisis, I looked at the supply and production constraints on battery availability for EVs, and demonstrated that they could readily scale to meet any foreseeable demand. In Part 2, I will discuss whether EVs are really ‘Clean and Green’, or just misrepresented as such.
This is an important issue for investors and buyers alike. EVs are seen as a big step forward on the path to a clean and energy independent future – if they only move the pollution over the hill to a coal power plant then their market position and consumer adoption may suffer, spelling bad news for the EV trail breakers. Whether you’re looking at taking a long position in an EV manufacturer or buying an EV as an informed consumer, you should be confident that the products’ ‘Green & Sustainable’ credentials will last the distance.
Let’s start with three key objectives in mind:
Addressing these in enough detail to reach a conclusion is going to take a fair bit of space, and even then I’ll rely on the vast amount of existing work in the field for the details. To try and keep things under control and in readily digestible portions, I will split this post into four sections:
As part of keeping things under control I take a fairly U.S.-centric approach in this analysis. This is not an inherent cultural bias, rather just that the issue is hard enough to address looking only at one country, let alone hundreds. As a large, diversified, and highly developed economy, the USA is a good representative for the challenges faced by the world as a whole when it comes to clean mobility. If anything, the challenges are greater as the USA has generally been somewhat slow (historically, recently improving) to adopt emissions reduction initiatives in the electricity sector, and has a huge vehicle population and associate infrastructural lock-in. If we can demonstrate that problems can be solved there then we’ll have a template for solving them elsewhere (as opposed to, for example, solving the emissions conundrum for Switzerland, France, Norway, etc which already have extremely ‘clean’ electricity and hence represent a somewhat trivial example). The other great thing about the USA is that it’s the subject of a lot of highly detailed and comprehensive research and studies, all published in English, which save me a lot of time.
Greening the Grid
Starting with a bird’s eye perspective, this whole topic is basically a question of different energy sources — how clean they are, and how abundant.
Oil from fossil sources is neither clean (11kg+ CO2 per gallon burnt… to say nothing of accidental spills) nor secure, with grave concerns about the rate at which additional production capacity might be bought online to meet new demand — concern that remains even considering unconventional sources. Electricity can be very clean, but it can also be very dirty — as is the case with old coal power plants. Supplies are more secure, however, ranging from several decades with natural gas, to 100 years+ with coal, to millennia with advanced nuclear, to aeons for Solar/Wind.
Broadly speaking, that’s Objectives 2 and 3 taken care of – the diversity of sources available to generate electricity, including many highly secure and sustainable on an order of millennia, mean that while there is a strong likelihood of short term price volatility and periodic shortages, the mid term ‘electricity supply’ picture is generally positive. The electrical vehicle energy supply challenge is basically one of emissions. Sadly for those who were hoping for a short article, addressing that first obective is going to be much more complicated.
The trend, as economies become more advanced, is universally one of increasing electrification, and creating that electricity in a ‘clean’ manner is one of the biggest challenges we face – to the extent that Bill Gates (no slouch on technology or policy) said he’d dedicate his ‘one wish’ to finding a solution. To his credit he’s not just wishing.
To put the problem in perspective, in 2008 the U.S. Transport Sector emitted 1.93 GigaTons of CO2. The same year the U.S. Electricity Sector emitted 2.4GT, with coal responsible for 82% (despite only delivering 45% of the total energy). Since both secure electricity and low CO2 emissions are both critically important to our future quality of life, basically every major public policy entity acknowledges the need to massively decarbonise the electricity sector. The International Energy Agency says complete decarbonisation by the second half of this century is the minimum we should aim for. Many other entities advocate even more aggressive reduction targets to limit the extent and impact of global warming.
Thankfully, we have a pretty broad base of technologies to draw on to achieve massive emissions reductions in the electricity sector, even while increasing total generation. In the USA the average is around 600g/kWh, but the only modern generation technology worse than that is coal.
The above chart shows the emissions in gCO2/kWh of the majority of existing generation technologies. There’s no true consensus on this — I’ve taken the data from a very good IEA study that aggregates the results of numerous other studies, and added in the exact reported values for a number of newer products (USC, A-USC, & CCS Coal, Gas CT, Gas CC). Generally the green and purple numbers above represent ‘new’ power plant options, with the red numbers being outdated solutions or unusual circumstances. In the developed world, coal is actually in decline, caught between the dual pincers of both public opinion and economics. A coal phase out is strongly advocated by many environmental agencies, and the telltale signs are clearly evident in planned capacity increases in the USA. Conventional coal is dirty, CO2 intensive, comparatively inflexible, and no longer competitive for new build.
We have the makings of the solutions we need, and we clearly have a strong incentive to make the shift with near universal consensus that ‘clean, renewable electricity’ is the way to go. The challenge is going to be making the switch in a sufficiently short time. If we do, we win – if we don’t then any discussion of transport sector emissions reduction is a little irrelevant anyway.
So, we know that we need to shift to clean energy, and we know that we ARE shifting, and we know that if we don’t shift then this whole ‘clean mobility’ topic is only one of energy security (where EVs clearly win). Great! But not the answer to the real question, which is ‘are EVs cleaner than ICE’? Answer: It depends on the emissions profile of the electricity you put in. Garbage in, garbage out.
But that’s unclear too! Do we need to get the grid to carbon-zero before EVs become cleaner than ICE?
No, and not by a long shot. There’s a number hiding here (we’ll find it!) that represents the electricity generation CO2/kWh at which Electric Vehicles becomes cleaner than ICE equivalents for a given combination of:
We also need to include another number – gCO2/Mile embodied, which captures the difference between the embodied emissions of the EV and the ICE. I take this as 3 Tons CO2 to the EVs debit, giving a 17g/mi advantage to the ICE (12,000mi/annum, 15y life).
The figure below show the relationship between these numbers, for all combinations of EV wh/mi and ICE MPG.
Shown are MPG ranges from 10-70 and wh/mi ranges from 250-500, with the ‘breakeven’ generation gCO2/kWh calculated and plotted for each point. I’ve thresholded the ‘breakeven’ generation at 1000g/kWh, as by the time we reach that results it’s pretty clear the EV is preferable and it gives us better resolution at the lower numbers we’re interested in. It’s not even close between an efficient EV (say 300wh/mi) and an average car (say 30mpg) — the EV is cleaner even when running off a filthy coal plant. In the foreground, however, we see a challenge — an inefficient EV (500wh/mi) would need to be charged with electricity that averaged less than 300g/kWh in order to beat an ultra-efficient 70MPG ICE car.
The purpose of the last chart is mostly to give you an idea of the overall landscape (and to add some much needed color). This next is a contour plot of the same data, much more useful as it allows us to read comparisons directly.
You’ll note I’ve added several straight lines with the names of particular vehicles (For the EV wh/mi numbers I’ve used the EPA figures, which include charging losses, to which I’ve added 6% to account for transmission loss). The contours map onto the color chart on the right, each contour is labeled with the gCO2/kWh it equates to.
Now we can do quick comparisons – life is good.
The only thing not considered in this chart is the increase in CO2/Gallon for gasoline as extraction becomes more difficult. A Prius running on gasoline from a Coal-to-Liquids plant would have an MPG equivalent of only 25 on this chart; meaning it would be worse than a Tesla S running off a coal plant.
Combining what’s shown here with what was shown in the previous section re: the need to green the grid, we can happily conclude that even if we can only charge our EVs with energy from a modern gas power plan,t they will equal or better the emissions of the most efficient ICEs. The Tesla S beats its most efficient segment competitors even when charged with decidedly average coal power.
Ramp-up and The Integral Effect
Now that we can easily see the relationship between generation emissions and EV ‘cleanliness’, you could be forgiven for assuming that we shouldn’t begin switching to EVs until we can be sure that the grids marginal emissions are below the critical point. After all, why introduce a new vehicle technology only to connect it to a coal power plant with net emissions even worse than oil? We know the grid needs to ‘green’, should we not wait until it has? And when would that even happen anyway?
The easiest statistic to use for ‘grid greenness’ is the average gCO2/kWh for the region in question, but this gives arguably flawed results. To establish the worst case consequence of adding EVs to the grid we should consider not the average but rather the marginal emissions. Marginal emissions are best understood as the emissions profile of the generation asset that’s generating electricity because you are charging your car… and would not be otherwise. This is actually an extremely complex problem to solve (we must consider the generation mix for the region, what’s running anyway, what the transmission constraints are etc) and we will look at that during ‘Complexities’. For now let’s just consider the ‘average of the worst’ that are likely to be on the grid — some mix of coal and gas, trending to gas as coal is phased out, and trending eventually towards the ‘clean options’ as we close in on that IEA goal towards the middle of the century. Remember it’s the average marginal emissions that matter; if your car is charged, considering the yearly average, on 20% nuclear, 20% Gas CC, 20% Gas SC, 20% coal, and 20% hydro, then your average marginal emissions will be around 380g/kWh.
The profile I have assumes a far worse mix than this (extremely pessimistically so, as we’ll see later) – with the ‘marginal EV’ emissions starting at 900gCO2/kWh, decrease slightly below the existing U.S. average by 2020, reaching 220g/kWh in 2050 (lagging well behind the IEA target), and finally closing in on ‘clean’ around 2100. Really we should aim to be a LOT faster than this to avoid the worst of climate change, but let’s wear our negative hats. It could be argued that I’m being unreasonable in the speed of my forecast early reductions, were it not for the average marginal emissions already being well below my starting figure.
The reason the reductions start quickly and then get slower is that the cleaner the grid gets, the harder it is to improve. Shutting down old coal and replacing it with clean coal, gas, etc is quite easy. Replacing clean gas with CCS, Solar, Nuclear, Wind, etc is harder (though, ironically, wind and solar are much easier to manage with a grid full of EVs). So now we have an, admittedly pessimistic, estimate for when the Nissan Leaf becomes ‘cleaner’ than the Prius – 2022. Should we wait until then to begin introducing EVs, or at least subsidizing their introduction?
The answer is no – the time to begin introducing EVs is now — and the reason (aside from the fact that many grids are already sufficiently green at the margin – as we’ll see in section 4) is found when we look at new technology adoption rates, market share, fleet penetration and replacement intervals.
Shifts between technologies usually obey a logistic curve. For EVs this will be evident in their market share as a fraction of total vehicles on the road. I assume the following profile of new vehicle sales in the USA – EVs increase to 50% of annual sales in 2033, saturating at 90% in 2053 (100% would be better, but some ICE may well remain, even if they run on synthesized zero emissions fuel).
Their share of the total vehicle fleet will lag this ratio considerably though, using the generally accepted 15 year time between vehicle purchase and retirement. The chart below shows the EV fraction of the total U.S. vehicle fleet; first for the case shown above, and second for the case where we delay introduction by 10 years (waiting until the Leaf is certainly cleaner than the Prius under our speculative marginal emissions profile).
The area between those EV early and late curves is the vehicle-years of additional ICE emissions that result from waiting, though of course it’s also vehicle-years of EV emissions that are avoided.
We’ve compared early EV adoption with late EV adoption in terms of the time taken for EVs to penetrate the vehicle fleet, but what we actually care about is the effect on the cumulative CO2 emissions. Note: cumulative - the CO2 mankind releases into the atmosphere in a single year wouldn’t, in isolation, have a huge effect. The problem is that we do it year after year, and in ever increasing quantities. If we could emit twice the usual quantity of CO2 next year, and then stop completely, most climate scientists would consider that a huge win (except for the fact that the only likely way to achieve this would be a global nuclear war/plague).
Above I’ve presented all the data we need as an input to calculate the cumulative CO2 emissions from the USA vehicle fleet under our scenarios; time for a look at the output.
Here we see that, whatever happens, the U.S. light vehicle sector is still going to make a huge mess over the next century. Behavioral changes to reduce that are really welcome, and should be actively pursued. Drive less, walk more, bike more, switch to EVs earlier, etc. But the point here is the relative emissions of our various EV adoption scenarios. You’ll see I’ve thrown a third in the mix, where we NEVER shift to EVs but rather just see rapidly increasing ICE efficiency.
The best outcome of the three is an early switch to EVs, at 46GT cumulative emissions. The small penalty we pay in the early days (running them on the dirtier grid) is completely insignificant (for those counting, the Early scenario results in cumulative emissions in 2016 of 7.091862 GT, while the late scenario results in 7.091377 GT) and more than compensated by the benefits that come from more rapid fleet penetration. Waiting until the grid is ‘green-ish’ results in an increase of 3GT cumulative emissions; while abandoning EVs altogether in favor of high efficiency ICE, means an increase of 23.2GT (and ongoing beyond 2100).
You might be a little shocked that, even if we start moving to EVs now, the light vehicle sector will still emit 46GT of CO2 by 2100. That’s the penalty of slow replacement, and the fact that in my model almost 20% of the vehicle fleet is still ICE at the end of the century. EVs themselves are responsible for only 7.3GT in that time, and at the end of the century, despite comprising 80% of the vehicle fleet, have annual emissions of only 0.04GT running on our clean grid.
That’s more or less the story told, at least in terms of overall principles. In the next section I’ll look at some of the complexities I ignored until now to try to keep the size under control (for all the good THAT did!), but feel free to just skip to the conclusion.
Still reading? Like a boss. I’d like to quickly touch on these topics:
Some countries already have significantly lower energy intensity than the USA – this chart drawing on CARMA data from 2007 shows the averages of the 35 largest generators globally.
As you can see, a lot of them are still quite dirty. But there are some countries (including big ones – France, Brazil) that are already very clean. A quick shout out to Switzerland and NZ (where I live and where I’m from, respectively) that are also well down at the low emissions end. Those countries with a ‘clean’ mix are unlikely to start switching to dirty sources just to accommodate the additional 20% load of EVs (all that would result in the USA if the entire vehicle fleet switched). If you live in NZ (which only HAS one coal power plant, and it already runs all the time) then you can buy an EV immediately with a completely clean conscience. If you live in Australia, on the other hand, get outside with a placard! I’ll chip in for marker pens. It’s pretty shameful that such a rich country has such a filthy electricity mix (and proof of the negative impact of massive mining lobbies).
Marginal Generation Emissions
We gave the marginal generation topic a pretty cursory treatment before, and adopted a negative outlook for the sake of minimizing argument. The reality is not nearly so bad. During daytime charging coal power is basically never the marginal generation source. The coal plants (cheap once they’re built, slow to respond) are almost always running flat out anyway. Even during the night, in many grids, coal is treated as ‘must run’ base load.
Coming from this basic principle to a solid number is very difficult – I probably don’t have the skill to do it and I certainly don’t have the time right now. Fortunately, the heavy lifting has already been done. The chart below, from this excellent UC Davis journal article, calculates the time dependent marginal emissions rate for today’s electricity mix in California, and investigates the impact on overall emissions if the grid mix was used to charge EVs.
Interestingly, the daytime marginal emissions are actually higher than at night – daytime slightly above 600, nighttime slightly below 500 (give or take). More interestingly – looking back at our contour plot from before – A Nissan Leaf charged on the overnight mix in California is already cleaner than a Toyota Prius, and a Tesla S has less than half the emissions of a Mercedes E400. California’s off-peak marginal emissions are already below what my model assumed for 2022! EVs romp home with the win.
That’s California today though; what about considering the whole USA in 2030, once EVs actually comprise a significant fraction of the vehicle fleet? We’d need to consider economic dispatch, grid transmission constraints, new planned capacity, EV charging profiles… argh! Thankfully the good folk at Pac Northwest National Labs have already done that for us too.
This chart shows the generation mix which would be used to charge a fleet of EVs with a mixed day-night profile, considering each of the 13 major control regions in the USA. PNNL have used the EIA 2009 Annual Energy Outlook to arrive at the 2030 generation mix. This anticipates only a very small role played by solar, the conclusions were arrived at before the huge PV System cost reductions in 2011.. and also before the massive reductions in coal sourced generation observed in the last year. But even without solar, there are some interesting features. Firstly coal, even in the coal-heavy Midwestern regions (ECAR, MAIN, MAPP) plays a very small role. The bulk of the supply in this scenario is met by Single and Combined cycle gas turbines, modern versions of which have CO2/kWh of approximately 500g and 380g respectively. We can therefore reasonably conclude that, U.S. nationwide in 2030, the marginal emissions will be well below 500g. Which is to say: Leaf beats Prius. Tesla beats E400 hollow. And we can do MUCH better.
EVs Supporting Low Emissions Electricity
This is another entire topic in itself, so I’ll come back to it sometime and only give a very brief treatment here.
While EVs are a new load on the grid, they are a load with interesting features.
This, combined with the fact that vehicles spend more than 90% of the time parked, allows EVs to help significantly in the integration of renewables such as solar and wind. Consider a grid region with 100GW of load and 100GW of solar PV — as well as around 100GW of other generation for when the sun don’t shine. EVs with a daytime charge profile could accommodate the peaks and lulls in solar during a sunny day by adjusting their charging behavior to match, easing the integration of the resource for the entire grid, and reducing the required conventional standby generation. On a cloudy day, the standby generation (primarily SC and CC gas and hydro – coal will be too expensive at low load factors) will fill in.
Even with fairly dirty electricity, EVs are – indeed – cleaner than ICE ones. We only need to get to an average marginal generation CO2 intensity of 500g/kWh to have a Model S be cleaner than a Prius… and many markets are already there! The only modern generation technology that is worse than this is coal, and even it can be improved with Carbon-Capture-&-Storage (not that I think CCS is really the solution… but with a gas powered car it’s not even an option). Comparing like-for-like, the Model S Performance is cleaner than a Mercedes E400 hybrid even if it’s running on a reasonably modern coal plant output.
If you see a new EV buyer lobbying FOR new coal plants, then you can perhaps accuse them of environmental ignorance. Otherwise, give them a pat on the back – they’ve put a decent chunk of their money on the line and braved a new technology to make the switch… and as long as we don’t totally fail the energy generation challenge it’s a switch with a huge net benefit for everyone. If we DO totally fail the energy generation challenge… well… the whole topic is moot really. Green the grid!
I’m optimistic about the future of EVs, and I have invested in both Tesla and Kandi. These are volatile stocks, and there’s uncertainty in the future of both companies. But one thing I’m not worried about is the mid term ‘green’ image. EVs are not perfect, but they beat the snot out of any like-for-like midterm alternative on the radar today.