Category Archives: Risks of climate change

Even if we don’t know if the magnitude is large, can we afford to be wrong?

Getting EVs where we need them in multi family and low-income communities

They seem to be everywhere. A pickup rolls up to a dark house in a storm during the Olympics and the house lights come on. (And even powers a product launch event when the power goes out!) The Governator throws lightning bolts like Zeus in a Super Bowl ad touting them. The top manufacturer is among the most valuable companies in the world and the CEO is a cultural icon. Electric vehicles (EVs) or cars are making a splash in the state.

The Ford F-150 Lightning pick up generated so much excitement last summer that it had to increase its initial roll out from 40,000 to 80,000 to 200,000 due to demand. General Motors answered with electric versions of the Silverado and Hummer. (Dodge is bringing up the rear with its Ram and Dakota pickups.)

Much of this has been spurred by California’s EV sales mandates that date back to 1990. The state now plans to phase out the sale of new cars and passenger trucks entirely by 2035, with 35% of sales by 2026. In the first quarter of 2022, EVs were 16% of new car sales.

While EVs look they will be here to stay, the question is where will drivers be able to charge up? That means recharging at home, at work, and on the road when needed. The majority of charging—70% to 80%–occurs at home or at work. Thanks to the abundance of California’s renewable energy, largely from solar power including from rooftops, the most advantageous time is in the middle of the day. The next big hurdle will be putting charging stations where they are needed, most valuable and accessible to those who don’t live in conventional single-family housing.

The state has about 80,000 public and shared private chargers, of which about 10% are DC “fast chargers” that can deliver 80% capacity in about 30 minutes. Yet we likely need 20 times more chargers that what we have today.

Multi-family housing is considered a prime target for additional chargers because of various constraints on tenants such as limitations on installing and owning a charging station and sharing of parking spaces. Community solar panels can be outfitted with charging stations that rely on the output of the panels.

California has a range of programs to provide incentives and subsidies for installing chargers. Funding for another 5,000 chargers was recently authorized. The state funds the California Electric Vehicle Infrastructure Project (CALeVIP) that provides direct incentives and works with local partners plan and install Level 2 and DC fast charging infrastructure. This program has about $200 million available. The program has 13 county and regional projects that contribute $6,000 and more for Level 2 chargers and often $80,000 for a DC fast charger. A minimum of 25% of funds are reserved for disadvantaged and low-income communities. In many cases, the programs are significantly oversubscribed with waiting lists, but the state plans to add enough funding for an additional 100,000 charging stations in the 2022-23 fiscal year, with $900 million over the next four years.

California’s electric utilities also fund charging projects, although those programs open and are quickly oversubscribed.

  • Southern California Edison manages the Charge Ready program with a focus on multi-family properties including mobilehome parks. The program offers both turn-key installation and rebates. SCE’s website provides tools for configuring a parking lot for charging.
  • San Diego Gas & Electric offered Power Your Drive to multi-family developments, with 255 locations currently. SDG&E has added the Power Your Drive Extension to add another 2,000 charging stations over the next two years. SDG&E will provide up to $12,000 for Level 2 chargers and additional maintenance funding.
  • Pacific Gas & Electric offered the EV Charge program in which PG&E will pay for, own, maintain and coordinate construction of infrastructure from the transformer to the parking space, as well as support independent ownership and operation. The program is not currently taking applications however. PG&E’s website offers other tools for assessing the costs and identifying vendors for installing chargers.
  • PG&E is launching a “bidirectional” EV charging pilot program with General Motors that will test whether EVs can be used to improve electric system reliability and resilience by using EVs as back up energy storage. The goal is to extend the program by the end of 2022. This new approach may provide EV owners with additional value beyond simply driving around town. PG&E also is setting up a similar pilot with Ford.
  • Most municipally-owned electric utilities offer rebates and incentives as well..

Community residents have a range of incentives available to them to purchase an EV.

  • The state offers $750 through the Clean Fuel Reward on the purchase of a new EV. .
  • California also offers the Clean Vehicle Rebate Project that offers $1,000 to $7,000 for buying or leasing a (non-Tesla) to households making less than $200,000 or individuals making less than $135,000. Savings depend on location and vehicle acquired.
  • Low-income households can apply for a state grant to purchase a new or used electric or hybrid vehicle, plus $2,000 for a home charging station, through the Clean Vehicle Assistance Program. The income standards are about 50% higher than those establishing eligibility for the CARE utility rate discount. The average grant is about $5,000.
  • The federal government offers a tax credit of up to $7,500 depending on the make and model of vehicle.
  • Car owners also can scrap their gasoline-fueled cars for $1,000 to $1,500, depending on household income.
  • Several counties, including San Diego and Sonoma, have offered EV purchase incentives to county residents. Those programs open and fill fairly quickly.

The difference between these EVs coming down the road (yes, that’s a pun) and the current models is akin to the difference between flip phones and smart phones. One is a single function communication device, and we use the latter to manage our lives. The marketing of EVs could shift course to emphasize these added benefits that are not possible with a conventional vehicle. We can expect a similar transformation in how we view energy and transportation as the communication and information revolution.

What “Electrify Everything” has wrong about “reduce, reuse, recycle”

Saul Griffith has written a book that highlights the role of electrification in achieving greenhouse gas emission reductions, and I agree with his basic premise. But he misses important aspects about two points. First, the need to reduce, reuse and recycle goes well beyond just energy consumption. And second, we have the ability to meet most if not all of our energy needs with the lowest impact renewable sources.

Reduce, reuse and recycle is not just about energy–it’s also about reducing consumption of natural resources such as minerals and biomass, as well as petroleum and methane used for plastics, and pollution caused by that consumption. In many situations, energy savings are only a byproduct. Even so, almost always the cheapest way to meet an energy need is to first reduce its use. That’s what energy efficiency is about. So we don’t want to just tell consumers to continue along their merry way, just switch it up with electricity. A quarter to a third our global GHG emissions are from resource consumption, not energy use.

In meeting our energy needs, we can largely rely on solar and wind supplemented with biofuels. Griffith asserts that the U.S. would need 2% of its land mass to supply the needed electricity, but his accounting makes three important errors. First, placing renewables doesn’t eliminate other uses of that land, particularly for wind. Acreage devoted to wind in particular can be used also for different types of farming and even open space. In comparison, fossil-fuel and nuclear plants completely displace any other land use. Turbine technology is evolving to limit avian mortality (and even then its tall buildings and household cats that cause most bird deaths). Second most of the solar supply can be met on rooftops and covering parking lots. These locations are cost effective compared to grid scale sources once we account for transmission costs. And third, our energy storage is literally driving down the road–in our new electric vehicles. A 100% EV fleet in California will have enough storage to meet 30 times the current peak load. A car owner will be able to devote less than 5% of their battery capacity to meet their home energy needs. All of this means that the real footprint can be much less than 1%.

Nuclear power has never lived up to its promise and is expensive compared to other low-emission options. While the direct costs of current-technology nuclear power is more than 12 cents a kilowatt-hour when adding transmission, grid-scale renewables are less than half of that, and distributed energy resources are at least comparable with almost no land-use footprint and able to provide better reliability and resilience. In addition, the potential of catastrophic events at nuclear plants adds another 1 to 3 cents per kilowatt-hour. Small modular reactors (SMR) have been promoted as a game changer, but we have been waiting for two decades. Nuclear or green hydrogen may emerge as economically-viable options, but we shouldn’t base our plans on that.

California could buy back GHG allowances cost-effectively

California is concerned that entities that emit greenhouse gases (GHG) have accrued a too-large bank of allowances through the Air Resources Board (CARB) cap-and-trade program (CATP.) The excess is estimated at 321 million allowances (one allowance equals one metric tonne of carbon dioxide equivalent (CO2e) emissions). This is more an a year’s worth of allowances. About half of these were issued for free to eligible energy utilities and energy-intensive trade-exposed (EITE) companies.

The state could consider purchasing back a certain portion to reduce the backlog and increase the market price so as to further encourage reductions in GHG emissions by retiring those allowances. Prices in the last allowance auction ranged from $28 to $34 per allowance/tonne. If California bought back half or 160 million allowances at those prices, it would cost $4.5 to $5.5 billion. That would create effectively a reduction of 160 million tonnes in future GHG emissions.

That should be compared to the various benchmarks for the benefits and costs of reducing GHG emissions. The currently accepted social cost of GHG emissions developed by the U.S. Environmental Protection Agency (US EPA) is ranges from $50 to $150 per tonne in 2030 (and recent studies have estimated that this is too low.) That would create a net social benefit from $2.5 to $19.6 billion.

CARB’s AB 32 Scoping Plan update estimates the average cost of reductions without the CATP to be $70 per tonne in 2030. The incremental avoided costs of the CATP are estimated at $220 per tonne. The net avoided costs on this basis would range from $5.7 to $30.4 billion.

Deciding if solar installation is suboptimal requires that the initial premises be specified correctly

A recent article “Heterogeneous Solar Capacity Benefits, Appropriability, and the Costs of Suboptimal Siting” in the Journal of the Association of Environmental and Resource Economists finds that distributed solar (e.g., rooftop solar) is not being installed a manner that “optimally” mitigates air pollution damages from electricity generation across the U.S. Unfortunately the paper is built on two premises that do not reflect the reality of available options and appropriate pricing signals.

First, the authors appear to be relying on the premise that sufficient solar, grid-scale or distributed, can be installed cost-effectively across the U.S. While the paper includes geographic variations in generation per installed kilowatt of capacity, it says nothing about the similarly widely varying costs per kilowatt-hour. They do not acknowledge that panels in the Pacific Northwest will cost twice that of those in the Desert Southwest. This importance of this disparity is compounded by the underestimate of the social cost of carbon and the possible conflation of sulfur dioxide and particulate matter damages. The currently accepted social cost of GHG emissions developed by the U.S. Environmental Protection Agency (US EPA) is ranges from $50 to $150 per tonne in 2030 (and recent studies have estimated that this is too low), compared to the outdated $41 per tonne in the article. Most of the SO2 damages arise from creating PM so there is likely double counting for these criteria pollutants. (The study also ignore the strong correlation between GHG and SO2 emissions as coal is the biggest source of both.) The study also fails to account for the enormous transmission costs that would be incurred moving solar output from the Desert Southwest to the Northeast to mitigate the purported damages.

Second, the authors try to claim that rooftop solar has not relieved transmission congestion by looking at grid congestion prices. The problem is that this method is like looking at an empty barn and saying a horse never lived there. Congestion pricing is based on the current transmission capacity situation. It says nothing about the history of transmission congestion or the ability and efforts to look forward to mitigate congestion. The study found that congestion prices were often negative or small in areas with substantial rooftop solar capacity. That doesn’t show that the solar capacity has little value–instead it shows that it actually relieved the congestion effectively–a completely opposite conclusion.

In contrast, the California Independent System Operator (CAISO) calculated in 2017 (contemporaneously with the article’s baseline) that at least $2.6 billion in transmission projects had been deferred. And given the utilities’ poor records on load forecasting, these savings have likely grown substantially. CAISO had anticipated and already relieved the congestion that the authors’ purported metric was searching for.

This disparity in economic results highlights the nature of investing in long-lived infrastructure that requires multiple years to build–one cannot wait for a shortfall to emerge to respond because that’s too late. Instead, one must anticipate those events and act even when its uncertain. This study is yet another example of how relying on the premise that short-run electricity market prices are reflective of long-run marginal costs is mistaken and should be set aside for policy analysis.

What is the real threat to electrification? Not solar rooftops

The real threat to electrification are the rapidly escalating costs in the distribution system, not some anomaly in rate design related to net energy metering. As I have written here several times, rooftop solar if anything has saved ratepayers money so far, just as energy efficiency has done so. PG&E’s 2023 GRC is asking for a 66% increase in distribution rates by 2026 and average rates will approach 40 cents/kWh. We need to be asking why are these increases happening and what can we do to make electricity affordable for everyone.

Perhaps most importantly, the premise that there’s a “least cost” choice put forward by economists at the Energy Institute at Haas among others implies that there’s some centralized social welfare function. This is a mythological construct created for the convenience of economists (of which I’m one) to point to an “efficient” solution. Other societal objectives beyond economic efficiency include equitably allocating cost responsibility based on economic means, managing and sharing risks under uncertainty, and limiting political power that comes from economic assets. Efficiency itself is limited in what it tells us due to the multitude of market imperfections. The “theory of the second best” states that in an economic sector with uncorrected market failures, actions to correct market failures in another related sector with the intent of increasing economic efficiency may actually decrease overall economic efficiency. In the utility world for example, shareholders are protected from financial losses so revenue shortfalls are allocated to customers even as their demands fall. This blunts the risk incentive that is central to economic efficiency. Claiming that adding a fixed charge will “improve” efficiency has little basis without a complete, fundamental assessment of the sector’s market functionality.

The real actors here are individual customers who are making individual decisions in our current economic resource allocation system, and not a central entity dictating choices to each of us. Different customers have different preferences in what they value and what they fear. Rooftop installations have been driven to a large extent by a dread of utility mismanagement that makes expectations about future rates much more uncertain.

The single most important trait of a market economy is the discipline imposed by appropriately assigning risk burden to the decision make and not pricing design. The latter is the tail wagging the dog. Market distortions are universally caused by separating consequences from decisions. And right now the only ability customers have to exercise control over their electricity bills is to somehow exit the system. If we take away that means of discipline we will never be able to control electricity rates in a way that will lead to effective electrification.

What “Don’t Look Up” really tells us

The movie Don’t Look Up has been getting “two thumbs up” from a certain political segment for speaking to truth in their view. An existential threat from a comet is used metaphorically to describe the resistance to the import of climate change risk. After watching the film I have a somewhat different take away that speaks a different truth to those viewers who found the message resonating most. Instead of blaming our political system, we should have a different take away that we can act on collectively.

Don’t Look Up reveals several errors and blind spots in the scientific and activist communities in communicating with the public and influencing decision making. The first is a mistaken belief that the public is actually interested in scientific study beyond parlor room tricks. The second is believing that people will act solely based on shrill warnings from scientists acting as high priests. The third (which isn’t addressed in the film) is failing to fully acknowledge what people see that they may lose by responding to these calls for change. Instead these communities should reconsider what they focus on and how they communicate.

The movie opens with the first error–the astronomers’ long winded attempt to explain all of the analysis that went into their prediction. Most people don’t see how science has any direct influence on their lives–how is digging up dinosaurs or discovering the outer bounds of the universe relevant to every day living? It’s a failure of our education system, but we can’t correct to help now. Over the last several years the message on climate change has changed to highlight the apparent effects on storms and heat waves, but someone living in Kansas doesn’t see how rising sea levels will affect them. A long explanation about the mechanics and methods just loses John Q. Public (although there is a small cadre that is fascinated) and they tune out. It’s hard to be disciplined with a simple message when you find the deeper complexity interesting, but that’s what it will take.

Shrill warnings have never been well received, no matter the call. We see that today with the resistance to measures to suppress the COVID-19 pandemic. James Hansen at NASA first raised the alarm about climate change in the 1980s but he was largely ignored due to his righteousness and arrogance in public. He made a serious error in stepping well outside of his expertise to assert particular solutions. The public has always looked to who they view as credible, regardless of their credentials, for guidance. Academics have too often assumed that they deserve this respect simply because they have “the” credential. That much of the public views science as mysterious with little more basis than religion does not help the cause. Instead, finding the right messengers is key to being successful.

Finally, and importantly overlooked in the film, a call to action of this magnitude requires widespread changes in behaviors and investments. People generally have worked hard to achieve what they have and are risk averse to such changes that may severely erode their financial well-being. For example, as many as 1 in 5 private sector jobs are tied to automobiles and fossil fuel production. One might extoll the economic benefits of switching to renewable electricity but workers and investors in these sectors are uncertain about their futures with no clear pathways to share in this new prosperity. Without addressing a truly valid means of resolving these risks beyond the tired “retraining” shibboleth, this core and its sympathizers will resist meaningful change.

Effecting these solutions likely require sacrifice from those who benefit from these changes. Pointing to benefit-cost analyses that rely on a “faux” hypothetical transaction to justify these solutions really is no better than the wealthy asserting asserting that they deserve to keep most of their financial gains simply because that’s how the market works. Compensating owners of these assets and making what appears to be inefficient decisions to maintain impacted communities may seem unfair for a variety of reasons, but we need to overcome our biases embedded in our favored solutions to move forward.

What to do about Diablo Canyon?

The debate over whether to close Diablo Canyon has resurfaced. The California Public Utilities Commission, which support from the Legislature, decided in 2018 to close Diablo by 2025 rather than proceed to relicensing. PG&E applied in 2016 to retire the plant rather than relicense due to the high costs that would make the energy uneconomic. (I advised the Joint CCAs in this proceeding.)

Now a new study from MIT and Stanford finds potential savings and emission reductions from continuing operation. (MIT in particular has been an advocate for greater use of nuclear power.) Others have written opinion articles on either side of the issue. I wrote the article below in the Davis Enterprise addressing this issue. (It was limited to 900 words so I couldn’t cover everything.)

IT’S OK TO CLOSE DIABLO CANYON NUCLEAR PLANT
A previous column (by John Mott-Smith) asked whether shutting down the Diablo Canyon nuclear plant is risky business if we don’t know what will replace the electricity it produces. John’s friend Richard McCann offered to answer his question. This is a guest column, written by Richard, a universally respected expert on energy, water and environmental economics.

John Mott-Smith asked several questions about the future of nuclear power and the upcoming closure of PG&E’s Diablo Canyon Power Plant in 2025. His main question is how are we going to produce enough reliable power for our economy’s shift to electricity for cars and heating. The answers are apparent, but they have been hidden for a variety of reasons.
I’ve worked on electricity and transportation issues for more than three decades. I began my career evaluating whether to close Sacramento Municipal Utility District’s Rancho Seco Nuclear Generating Station and recently assessed the cost to relicense and continue operations of Diablo after 2025.
Looking first at Diablo Canyon, the question turns almost entirely on economics and cost. When the San Onofre Nuclear Generating Station closed suddenly in 2012, greenhouse gas emissions rose statewide the next year, but then continued a steady downward trend. We will again have time to replace Diablo with renewables.
Some groups focus on the risk of radiation contamination, but that was not a consideration for Diablo’s closure. Instead, it was the cost of compliance with water quality regulations. The power plant currently uses ocean water for cooling. State regulations required changing to a less impactful method that would have cost several billion dollars to install and would have increased operating costs. PG&E’s application to retire the plant showed the costs going forward would be at least 10 to 12 cents per kilowatt-hour.
In contrast, solar and wind power can be purchased for 2 to 10 cents per kilowatt-hour depending on configuration and power transmission. Even if new power transmission costs 4 cents per kilowatt-hour and energy storage adds another 3 cents, solar and wind units cost about 3 cents, which totals at the low end of the cost for Diablo Canyon.
What’s even more exciting is the potential for “distributed” energy resources, where generation and power management occurs locally, even right on the customers’ premises rather than centrally at a power plant. Rooftop solar panels are just one example—we may be able to store renewable power practically for free in our cars and trucks.
Automobiles are parked 95% of the time, which means that an electric vehicle (EV) could store solar power at home or work during the day and for use at night. When we get to a vehicle fleet that is 100% EVs, we will have more than 30 times the power capacity that we need today. This means that any individual car likely will only have to use 10% of its battery capacity to power a house, leaving plenty for driving the next day.
With these opportunities, rooftop and community power projects cost 6 to 10 cents per kilowatt-hour compared with Diablo’s future costs of 10 to 12 cents.
Distributed resources add an important local protection as well. These resources can improve reliability and resilience in the face of increasing hazards created by climate change. Disruptions in the distribution wires are the cause of more than 95% of customer outages. With local generation, storage, and demand management, many of those outages can be avoided, and electricity generated in our own neighborhoods can power our houses during extreme events. The ad that ran during the Olympics for Ford’s F-150 Lightning pick-up illustrates this potential.
Opposition to this new paradigm comes mainly from those with strong economic interests in maintaining the status quo reliance on large centrally located generation. Those interests are the existing utilities, owners, and builders of those large plants plus the utility labor unions. Unfortunately, their policy choices to-date have led to extremely high rates and necessitate even higher rates in the future. PG&E is proposing to increase its rates by another third by 2024 and plans more down the line. PG&E’s past mistakes, including Diablo Canyon, are shown in the “PCIA” exit fee that [CCA] customers pay—it is currently 20% of the rate. Yolo County created VCEA to think and manage differently than PG&E.
There may be room for nuclear generation in the future, but the industry has a poor record. While the cost per kilowatt-hour has gone down for almost all technologies, even fossil-fueled combustion turbines, that is not true for nuclear energy. Several large engineering firms have gone bankrupt due to cost overruns. The global average cost has risen to over 10 cents per kilowatt-hour. Small modular reactors (SMR) may solve this problem, but we have been promised these are just around the corner for two decades now. No SMR is in operation yet.
Another problem is management of radioactive waste disposal and storage over the course of decades, or even millennia. Further, reactors fail on a periodic basis and the cleanup costs are enormous. The Fukuyama accident cost Japan $300 to $750 billion. No other energy technology presents such a degree of catastrophic failure. This liability needs to be addressed head on and not ignored or dismissed if the technology is to be pursued.

Electric vehicles as the next smartphone

In 2006 a cell phone was portable phone that could send text messages. It was convenient but not transformative. No one seriously thought about dropping their landlines.

And then the iPhone arrived. Almost overnight consumers began to use it like their computer. They emailed, took pictures and sent them to their friends, then searched the web, then played complex games and watched videos. Social media exploded and multiple means of communicating and sharing proliferated. Landlines (and cable) started to disappear, and personal computer sales slowed. (And as a funny side effect, the younger generation seemed to quit talking on the phone.) The cell phone went from a means of one-on-one communication to a multi-faceted electronic tool that has become our pocket computer.

The U.S. population owning a smartphone has gone from 35% to 85% in the last decade. We could achieve similar penetration rates for electric vehicles (EVs) if we rethink and repackage how we market EVs to become our indispensable “energy management tool.” EVs can offer much more than conventional cars and we need to facilitate and market these advantages to sell them much faster.

EV pickups with spectacular features are about to be offered. These EVs may be a game changer for a different reason than what those focused on transportation policy think of–they offer households the opportunity for near complete energy independence. These pick ups have both enough storage capacity to power a house for several days and are designed to supply power to many other uses, not just driving. Combined with solar panels installed both at home and in business lots, the trucks can carry energy back and forth between locations. This has an added benefit of increasing reliability (local distribution outages are 15 times more likely than system levels ones) and resilience in the face of increasing extreme events.

This all can happen because cars are parked 90-95% of the time. That offers power source reliability in the same range as conventional generation, and the dispersion created by a portfolio of smaller sources further enhances that availability. Another important fact is that the total power capacity for autos on California’s road is over 2,000 gigawatts. Compared to California’s peak load of about 63 gigawatts, this is more than 30 times more capacity than we need. If we simply get to 20% penetration of EVs of which half have interconnective control abilities, we’ll have three times more capacity than we would need to meet our highest demands. There are other energy management issues, but solving them are feasible when we realize there will not be a real physical constraint.

Further, used EV batteries can be used as stationary storage, either in home or at renewable generation to mitigate transmission investments. EVs can transport energy between work and home from solar panels.

The difference between these EVs and the current models is akin to the difference between flip phones and smart phones. One is a single function device and the we use the latter to manage our lives. The marketing of EVs should shift course to emphasize these added benefits that are not possible with a conventional vehicle. The barriers are not technological, but only regulatory (from battery warranties and utility interconnection rules).

As part of this EV marketing focus, automakers should follow two strategies, both drawn from smart phones. The first is that EV pick ups should be leased as a means of keeping model features current. It facilitates rolling out industry standards quickly (like installing the latest Android update) and adding other yet-more attractive features. It also allows for more environmentally-friendly disposal of obsolete EVs. Materials can be more easily recycled and batteries no longer usable for driving (generally below 70% capacity) can be repurposed for stand-alone storage.

The second is to offer add on services. Smart phone companies have media streaming, data management and all sorts of other features beyond simple communication. Automakers can offer demand management to lower, or even eliminate, utility bills and appliance and space conditioning management placed onboard so a homeowner need not install a separate system that is not easily updated.

AB1139 would undermine California’s efforts on climate change

Assembly Bill 1139 is offered as a supposed solution to unaffordable electricity rates for Californians. Unfortunately, the bill would undermine the state’s efforts to reduce greenhouse gas emissions by crippling several key initiatives that rely on wider deployment of rooftop solar and other distributed energy resources.

  • It will make complying with the Title 24 building code requiring solar panel on new houses prohibitively expensive. The new code pushes new houses to net zero electricity usage. AB 1139 would create a conflict with existing state laws and regulations.
  • The state’s initiative to increase housing and improve affordability will be dealt a blow if new homeowners have to pay for panels that won’t save them money.
  • It will make transportation electrification and the Governor’s executive order aiming for 100% new EVs by 2035 much more expensive because it will make it much less economic to use EVs for grid charging and will reduce the amount of direct solar panel charging.
  • Rooftop solar was installed as a long-term resource based on a contractual commitment by the utilities to maintain pricing terms for at least the life of the panels. Undermining that investment will undermine the incentive for consumers to participate in any state-directed conservation program to reduce energy or water use.

If the State Legislature wants to reduce ratepayer costs by revising contractual agreements, the more direct solution is to direct renegotiation of RPS PPAs. For PG&E, these contracts represent more than $1 billion a year in excess costs, which dwarfs any of the actual, if any, subsidies to NEM customers. The fact is that solar rooftops displaced the very expensive renewables that the IOUs signed, and probably led to a cancellation of auctions around 2015 that would have just further encumbered us.

The bill would force net energy metered (NEM) customers to pay twice for their power, once for the solar panels and again for the poor portfolio management decisions by the utilities. The utilities claim that $3 billion is being transferred from customers without solar to NEM customers. In SDG&E’s service territory, the claim is that the subsidy costs other ratepayers $230 per year, which translates to $1,438 per year for each NEM customer. But based on an average usage of 500 kWh per month, that implies each NEM customer is receiving a subsidy of $0.24/kWh compared to an average rate of $0.27 per kWh. In simple terms, SDG&E is claiming that rooftop solar saves almost nothing in avoided energy purchases and system investment. This contrasts with the presumption that energy efficiency improvements save utilities in avoided energy purchases and system investments. The math only works if one agrees with the utilities’ premise that they are entitled to sell power to serve an entire customer’s demand–in other words, solar rooftops shouldn’t exist.

Finally, this initiative would squash a key motivator that has driven enthusiasm in the public for growing environmental awareness. The message from the state would be that we can only rely on corporate America to solve our climate problems and that we can no longer take individual responsibility. That may be the biggest threat to achieving our climate management goals.

Drawing too many conclusions about electric vehicles from an obsolete data set

The Energy Institute at Haas at the University of California published a study allegedly showing that electric vehicles are driven about only one-third of the average standard car in California. I responded with a response on the blog.

Catherine Wolfram writes, “But, we do not see any detectable changes in our results from 2014 to 2017, and some of the same factors were at play over this time period. This makes us think that newer data might not be dramatically different, but we don’t know.“

A recent study likely is delivering a biased estimate of future EV use. The timing of this study reminds me of trying to analyze cell phone use in the mid-2000s. Now household land lines are largely obsolete, and we use phones even more than we did then. The period used for the analysis was during a dramatically changing period more akin to solar panel evolution just before and after 2010, before panels were ubiquitous. We can see this evolution here for example. Comparing the Nissan Leaf, we can see that the range has increased 50% between the 2018 and 2021 models.

The primary reason why this data set is seeing such low mileage is because is almost certain that the vast majority of the households in the survey also have a standard ICE vehicle that they use for their extended trips. There were few or no remote fast charge stations during that time and even Tesla’s had limited range in comparison. In addition, it’s almost certain that EV households were concentrated in urban households that have a comparatively low VMT. (Otherwise, why do studies show that these same neighborhoods have low GHG emissions on average?) Only about one-third of VMT is associated with commuting, another third with errands and tasks and a third with travel. There were few if any SUV EVs that would be more likely to be used for errands, and EVs have been smaller vehicles until recently.

As for copurchased solar panel installation, these earlier studies found that 40% or more of EV owners have solar panels, and solar rooftop penetration has grown faster than EV adoption since these were done.

I’m also not sure that the paper has captured fully workplace and parking structure charging. The logistical challenges of gaining LCFS credits could be substantial enough for employers and municipalities to not bother. This assumption requires a closer analysis of which entities are actually claiming these credits.

A necessary refinement is to compare this data to the typical VMT for these types of households, and to compare the mileage for model types. Smaller commuter models average less annual VMT according to the California Energy Commission’s vehicle VMT data set derived from the DMV registration file and the Air Resources Board’s EMFAC model. The Energy Institute analysis arrives at the same findings that EV studies in the mid 1990s found with less robust technology. That should be a flag that something is amiss in the results.