(Reuters) – During several brutally cold days in Texas, the city of Austin saw its fleet of 12 new electric buses rendered inoperative by a statewide power outage. This problem will be magnified next year, when officials plan to start buying exclusively electric vehicles.
The city’s transit agency has budgeted $ 650 million over 20 years for electric buses and a charging facility for 187 of those vehicles. But officials are still trying to resolve the dilemma of power outages like the Texas freeze.
“Power redundancy and resiliency is something we’ve long understood will be an issue,” Capitol Metro spokeswoman Jenna Maxfield said.
Austin’s predicament highlights the challenges governments, utilities, and automakers face when responding to climate change. More electric cars will require both charging infrastructure and much more power grid capacity. Utilities and power producers will need to invest billions of dollars to create this additional capacity while facing the challenge of replacing fossil fuels with renewable energy sources.
Extreme weather events add additional difficulty levels.
“Reliability keeps you awake,” said Siva Gunda, a member of the California Energy Commission, in an interview.
Power outages during a heat wave in California last year prompted the state to order its utilities to procure emergency generation capacity for this summer and reform its reserve energy planning .
The state plans to aggressively phase out sales of gasoline and diesel cars and trucks by 2035 – which, if achieved, would require vast increases in power grid capacity. (For a graph on the extra horsepower that will be needed for electric cars, click tmsnrt.rs/3rhyX4S)
Chart: Estimated US capacity if 66% of all cars are electric vehicles by 2050 –
The energy and transportation sectors combined account for more than half of greenhouse gas emissions in the United States. Their simultaneous greening is seen as essential for the United States – the world’s second-largest emitter behind China – to meet its obligations under an international agreement to combat global warming. (For a graph of the energy sources that currently power transportation in the United States, click tmsnrt.rs/387haFR)
Chart: Fossil fuels power the U.S. transportation sector –
The goal is to power electric cars with renewable energies rather than the coal and natural gas that currently dominate the US electric supply. To realize this vision, electricity from intermittent sources like wind and solar will need to be stored, presumably through battery technology, so that cars can recharge at night or at other times when supply. exceeds demand.
DOUBLE THE POWER CAPACITY
A model utility with two to three million customers is expected to invest between $ 1,700 and $ 5,800 in EV grid upgrades through 2030, according to Boston Consulting Group. Assuming 40 million electric vehicles on the road, this investment could reach $ 200 billion.
So far, investor-owned companies have approved plans for just $ 2.6 billion in charging programs and projects, according to the Edison Electric Institute business group.
“The electrification of the transportation sector will take most utilities a bit off guard,” said Ben Kroposki, director of the Power Systems Engineering Center at the National Renewable Energy Laboratory (NREL).
The organization estimates that by 2050, the electrification of transportation and other sectors will require a doubling of US production capacity.
If not managed carefully, the necessary investments could result in higher energy bills for consumers, according to a report last month from the California utility regulator. Another challenge: Low-income customers often cannot afford to invest in electric cars, home batteries, and rooftop solar systems that could save them money in the long run.
CHICKEN AND EGG PROBLEMS
Utilities are embracing growth in EV sales both as a promising new revenue stream and as an opportunity to utilize excess wind and solar power generated in very windy or sunny weather when supply exceeds demand .
Grid and charging infrastructure investments that are clawed back from taxpayers could add $ 3 billion to $ 10 billion in cumulative cash flow to the average utility through 2030, according to Boston Consulting Group. The forecast also includes potential revenue from new products outside of regulated utility activities, such as routing customer vehicle fleets or maintaining charging stations.
The revenue opportunity is still nascent, however, with electric vehicles accounting for less than 2% of all vehicles registered in the United States. And utilities must now invest in infrastructure to make consumers feel secure in purchasing an electric vehicle, said Emily Fisher, general counsel for the utilities trade group Edison Electric Institute.
“There is definitely a chicken-and-egg situation with charging infrastructure,” she said.
AUTOMAKERS ARE BETTING BIG ON EVs
Major US automakers General Motors and Ford have announced significant investments in electric vehicle development to keep pace with electric car pioneer Tesla Inc and prepare for the prospect of tighter emissions regulations. The share of electric vehicles could reach 15% by 2030, according to forecasts by the US Department of Energy.
The electricity to power all of these cars would have to come mainly from renewable energy sources and natural gas, according to NREL. Even if natural gas production increases to support electrified transportation, overall emissions are expected to decrease, the organization said.
Large new investments can pose challenges for utilities already facing weather challenges. In Texas, many of the companies that would make these investments are facing a financial crisis following last month’s cold snap. Utilities and electric utilities face billions of dollars in costs associated with the outage, and several have filed for bankruptcy.
Daimler Trucks, the world’s largest manufacturer of heavy haulers, plans to sell electric vehicles in Europe, North America and Japan by next year. But the company is wondering how to charge what will one day become hundreds of thousands of battery-powered trucks, said Daimler Trucks president Martin Daum.
The need for massive investments in network infrastructure and charging stations “cannot be underestimated,” Daum said.
Ford CEO Jim Farley last week called on U.S. government leaders to support electric vehicle sales with favorable regulations and subsidies for the production of batteries and charging infrastructure.
But Robert Barrosa, senior director of Electrify America at Volkswagen AG, which builds fast-charging stations across the country, said the gradual pace of EV adoption will allow utilities to adapt.
“We are not in a catastrophic situation,” Barrosa said. “We are not going to 80% of battery power sales overnight … it will be a natural transition.”
Barrosa said that the decline in energy use in the United States over the past 20 years, due to efficiency gains in appliances and the transportation sector, means that the U.S. electricity system has enough established capacity. to support the growth of electric vehicles without requiring large immediate investments. (For a graph of electricity production and consumption in the United States, click on tmsnrt.rs/3e5f6SH)
Graph: The United States produces more electricity than it consumes –
Utility Xcel Energy said adopting EV is unlikely to require additional capacity until 2030, and short-term investments will be primarily in distribution systems. The company plans to accommodate 1.5 million electric vehicles in its Midwestern and Western service territories by 2030, about 30 times more than its current capacity.
In December, the utility received approval to spend $ 110 million on electric vehicle charging infrastructure in Colorado, which passed a law in 2019 requiring utilities to develop transportation electrification plans. in large scale. The plan is expected to add 65 cents per month to residential customer bills.
Electric vehicles – especially commercial vehicles with large batteries – can help stabilize the grid in the long term by feeding energy back into the system during peak periods, using chargers that allow electricity to flow. in both ways. Passenger cars that sit idle most of the day could one day make money by feeding electricity back into the grid using two-way chargers, utilities predict.
During the Texas blackouts, some Twitter users said they were using their electric vehicles to power their homes. But wider applications of this vehicle-to-network technology would require larger infrastructure changes and the involvement of utilities.
“The planning is going to be more sophisticated,” said Ryan Popple, co-founder of Proterra, which produced some of Austin’s electric buses. “And as the vehicle-network becomes more common with our commercial fleets, it’s actually going to make the overall technology even more attractive.”
Reporting by Nichola Groom and Tina Bellon; edited by David Gaffen and Brian Thevenot