Tag Archives: electric vehicles

Per Capita: Climate needs more than just good will

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I wrote this guest column in the Davis Enterprise about the City’s Climate Action and Adaptation Plan. (Thank you John Mott-Smith for extending the privilege.)

Dear Readers, the guest column below was written by Richard McCann, a Davis resident and expert on energy and climate action plans.

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The city of Davis is considering its first update of its Climate Action and Adaptation Plan since 2010 with a 2020-2040 Plan. The city plans to update the CAAP every couple of years to reflect changing conditions, technologies, financing options, laws and regulations.

The plan does not and cannot achieve a total reduction in greenhouse gas emissions simply because we do not control all of the emission sources — almost three-quarters of our emissions are from vehicles that are largely regulated by state and federal laws. But it does lay out a means to putting a serious dent in the overall amount. 

The CAAP offers a promising future and accepts that we have to protect ourselves as the climate worsens. Among the many benefits we can look forward to are avoiding volatile gas prices while driving cleaner, quieter cars; faster and more controllable cooking while eliminating toxic indoor air; and air conditioning and heating without having to make two investments while paying less.

To better adapt, we’ll have a greener landscape, filtered air for rental homes, and community shelter hubs powered by microgrids to ride out more frequent extreme weather.

We have already seen that adding solar panels raises the value of a house by as much as $4,000 per installed kilowatt (so a 5 kilowatt system adds $20,000). We can expect similar increases in home values with these new technologies due to the future savings, safety and convenience. 

Several state and federal laws and rules foretell what is coming. By 2045 California aims to be at zero net GHG emissions. That will require retiring all of the residential and commercial gas distribution lines. PG&E has already started a program to phase out its lines. A change in state rules will remove from the market several large natural gas appliances such as furnaces by 2030.

In addition, PG&E will no longer offer subsidies to developers to install gas lines to new homes starting next year. The U.S. Environmental Protection Agency appears poised to push further the use of electric appliances in areas with poor air quality such the Sacramento Valley. (Renewable gas and hydrogen will be too expensive and there won’t be enough to go around.)

Without sales to new customers or for replaced furnaces, the cost of maintaining the gas system will rise substantially so switching to electricity for cooking and water heating will save even more money. The CAAP anticipates this transition by having residents begin switching earlier. 

In addition, the recently enacted federal Inflation Reduction Act offers between $400 and $800 billion into funding these types of changes. The California Energy Commission’s budget for this year went from $1 billion to $10 billion to finance these transitions. The CAAP lays out a process for acquiring these financial sources for Davis and its residents. 

That said, some have objected to the CAAP as being too draconian and infringing on personal choices. The fact is that we are now in the midst of a climate emergency — the City Council endorsed this concern with a declaration in 2019. We’re already behind schedule to head off the worst of the threatening impacts. 

We won’t be able to rely solely on voluntary actions to achieve the reductions we need. That the CAAP has to include these actions proves that people have not been acting on their own despite a decade of cajoling since the last CAAP. While we’ve been successful at encouraging voluntary compliance with easy tasks like recycling, we’ve used mandatory permitting requirements to gain compliance with various building standards including energy efficiency measures. (These are usually enforced at point-of-sale of a house.)

We have a choice of mandatory ordinances, incentives through taxes or fees, and subsidies from grants and funds — voluntary just won’t deliver what’s needed. We might be able to financially help those least able to afford changing stoves, heaters or cars, but those funds will be limited. The ability to raise taxes or fees is restricted due to various provisions in the state’s constitution. So we are left with mandatory measures, applied at the most opportune moments. 

Switching to electricity for cooking and water heating may involve some costs, some or most of which will be offset by lower energy costs (especially as gas rates go up.) If you have an air conditioner, you’re likely already set up for a heat pump to replace your furnace — it’s a simple swap. Even so, you can avoid some costs by using a 120-volt induction cooktop instead of 240 volts, and installing a circuit-sharing plug or breaker for large loads to avoid panel upgrades. 

The CAAP will be fleshed out and evolve for at least the next decade. Change is coming and will be inevitable given the dire situation. But this change gives us opportunities to clean our environment and make our city more livable.  

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

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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.

Proposing a Clean Financing Decarbonization Incentive Rate

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by Steven J. Moss and Richard J. McCann, M.Cubed

A potentially key barrier to decarbonizing California’s economy is escalating electricity costs.[1] To address this challenge, the Local Government Sustainable Energy Coalition, in collaboration with Santa Barbara Clean Energy, proposes to create a decarbonization incentive rate, which would enable customers who switch heating, ventilation and air conditioning (HVAC) or other appliances from natural gas, fossil methane, or propane to electricity to pay a discounted rate on the incremental electricity consumed.[2] The rate could also be offered to customers purchasing electric vehicles (EVs).

California has adopted electricity rate discounts previously to incentivize beneficial choices, such as retaining and expanding businesses in-state,[3] and converting agricultural pump engines from diesel to electricity to improve Central Valley air quality.[4]

  • Economic development rates (EDR) offer a reduction to enterprises that are considering leaving, moving to or expanding in the state.  The rate floor is calculated as the marginal cost of service for distribution and generation plus non-bypassable charges (NBC). For Southern California Edison, the current standard EDR discount is 12%; 30% in designated enhanced zones.[5]
  • AG-ICE tariff, offered from 2006 to 2014, provided a discounted line extension cost and limited the associated rate escalation to 1.5% a year for 10 years to match forecasted diesel fuel prices.[6] The program led to the conversion of 2,000 pump engines in 2006-2007 with commensurate improvements in regional air quality and greenhouse gas (GHG) emission reductions.[7]

The decarbonization incentive rate (DIR) would use the same principles as the EDR tariff. Most importantly, load created by converting from fossil fuels is new load that has only been recently—if at all–included in electricity resource and grid planning. None of this load should incur legacy costs for past generation investments or procurement nor for past distribution costs. Most significantly, this principle means that these new loads would be exempt from the power cost indifference adjustment (PCIA) stranded asset charge to recover legacy generation costs.

The California Public Utility Commission (CPUC) also ruled in 2007 that NBCs such as for public purpose programs, CARE discount funding, Department of Water Resources Bonds, and nuclear decommissioning, must be recovered in full in discounted tariffs such as the EDR rate. This proposal follows that direction and include these charges, except the PCIA as discussed above.

Costs for incremental service are best represented by the marginal costs developed by the utilities and other parties either in their General Rate Case (GRC) Phase II cases or in the CPUC’s Avoided Cost Calculator. Since the EDR is developed using analysis from the GRC, the proposed DIR is illustrated here using SCE’s 2021 GRC Phase II information as a preliminary estimate of what such a rate might look like. A more detailed analysis likely will arrive at a somewhat different set of rates, but the relationships should be similar.

For SCE, the current average delivery rate that includes distribution, transmission and NBCs is 9.03 cents per kilowatt-hour (kWh). The average for residential customers is 12.58 cents. The system-wide marginal cost for distribution is 4.57 cents per kilowatt-hour;[8] 6.82 cents per kWh for residential customers. Including transmission and NBCs, the system average rate component would be 7.02 cents per kWh, or 22% less. The residential component would be 8.41 cents or 33% less.[9]

The generation component similarly would be discounted. SCE’s average bundled generation rate is 8.59 cents per kWh and 9.87 cents for residential customers. The rates derived using marginal costs is 5.93 cents for the system average and 6.81 cent for residential, or 31% less. For CCA customers, the PCIA would be waived on the incremental portion of the load. Each CCA would calculate its marginal generation cost as it sees fit.

For bundled customers, the average rate would go from 17.62 cents per kWh to 12.95 cents, or 26.5% less. Residential rates would decrease from 22.44 cents to 15.22 cents, or 32.2% less.

Incremental loads eligible for the discounted decarb rate would be calculated based on projected energy use for the appropriate application.  For appliances and HVAC systems, Southern California Gas offers line extension allowances for installing gas services based on appliance-specific estimated consumption (e.g., water heating, cooking, space conditioning).[10] Data employed for those calculations could be converted to equivalent electricity use, with an incremental use credit on a ratepayer’s bill. An alternative approach to determine incremental electricity use would be to rely on the California Energy Commission’s Title 24 building efficiency and Title 20 appliance standard assumptions, adjusted by climate zone.[11]

For EVs, the credit would be based on the average annual vehicle miles traveled in a designated region (e.g., county, city or zip code) as calculated by the California Air Resources Board for use in its EMFAC air quality model or from the Bureau of Automotive Repair (BAR) Smog Check odometer records, and the average fleet fuel consumption converted to electricity. For a car traveling 12,000 miles per year that would equate to 4,150 kWh or 345 kWh per month.

[1] CPUC, “Affordability Phase 3 En Banc,” https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/affordability, February 28-March 1, 2022.

[2] Remaining electricity use after accounting for incremental consumption would be charged at the current otherwise applicable tariff (OAT).

[3] California Public Utilities Commission, Decision 96-08-025. Subsequent decisions have renewed and modified the economic development rate (EDR) for the utilities individually and collectively.

[4] D.05-06-016, creating the AG-ICE tariff for Pacific Gas & Electric and Southern California Edison.

[5] SCE, Schedules EDR-E, EDR-A and EDR-R.

[6] PG&E, Schedule AG-ICE—Agricultural Internal Combustion Engine Conversion Incentive Rate.

[7] EDR and AG-ICE were approved by the Commission in separate utility applications. The mobile home park utility system conversion program was first initiated by a Western Mobile Home Association petition by and then converted into a rulemaking, with significant revenue requirement implications. 

[8] Excluding transmission and NBCs.

[9] Tiered rates pose a significant barrier to electrification and would cause the effective discount to be greater than estimated herein.  The estimates above were based on measuring against the average electricity rate but added demand would be charged at the much higher Tier 2 rate. The decarb allowance could be introduced at a new Tier 0 below the current Tier 1.

[10] SCG, Rule No. 20 Gas Main Extensions, https://tariff.socalgas.com/regulatory/tariffs/tm2/pdf/20.pdf, retrieved March 2022.

[11] See https://www.energy.ca.gov/programs-and-topics/programs/building-energy-efficiency-standards;
https://www.energy.ca.gov/rules-and-regulations/building-energy-efficiency/manufacturer-certification-building-equipment;https://www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20

PG&E takes a bold step on enabling EV back up power, but questions remain

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PG&E made exciting announcements about partnerships with GM and Ford last week to test using electric vehicles (EVs) for backup power for residential customers. (Ford also announced an initiative to create an open source charging standard.) PG&E also announced an initiative to install circuit breakers that facilitate use of onsite backup power. PG&E is commended for stepping forward to align its corporate strategy with the impending technology wave that could increase consumer energy independence.

I wrote about the promise of EVs in this role (“Electric vehicles as the next smartphone”) when I was struck by Ford’s F-150 Lightning ads last summer and how the consumer segment that buys pickups isn’t what we usually think of as the “EV crowd.” These initiatives could be game changers.

That said, several questions arise about PG&E’s game plan and whether the utility is still planning to hold customers captive:

  • How does PG&E plan to recover the costs for what are “beyond the meter” devices that typically is outside of what’s allowed? And how are the risks in these investments to be shared between shareholders and ratepayers? Will PG&E get an “authorized” rate of return with default assurances of costs being approved for recovery from ratepayers? How will PG&E be given appropriate incentives on making timely investments with appropriate risk, especially given the utility’s poor track record in acquiring renewable resources?
  • What will be the relationships between PG&E and the participating auto manufacturers? Will the manufacturers be required to partner with PG&E going forward? Will the manufacturers be foreclosed from offering products and services that would allow customers to exit PG&E’s system through self generation? Will PG&E close out other manufacturers from participating or set up other access barriers that prevent them from offering alternatives?
  • Delivering PG&E’s “personal microgrid backup power transfer meter device” is a good first step, but it requires disconnecting the solar panels to use, which means that it only support fossil fueled generators and grid-connected batteries. This device needs a switch for the solar panels as well. Further, it appears the device will only be available to customers who participate in PG&E’s Residential Generator and Battery Rebate Program. Can PG&E continue to offer this feature to vendors who offer only fossil-fueled generators? How will PG&E mitigate the local air pollution impacts from using fossil-fueled back up generators (BUGs) for extended periods? (California already has 8,000 megawatts of BUGs.)
  • How will these measures be integrated with the planned system reinforcements in PG&E’s 2022 Wildfire Mitigation Plan Update to reduce the costs of undergrounding lines? Will PG&E allow these back up sources and devices for customers who are interested in extended energy independence, particularly those who want to ride out a PSPS event?
  • How will community choice aggregators (CCAs) or other local governments participate? Will communities be able to independently push these options to achieve their climate action and adaptation plan (CAAP) goals?

What is the real threat to electrification? Not solar rooftops

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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

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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.

Electric vehicles as the next smartphone

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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

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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

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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.

Charging with the sun…really!

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MITSUBISHI MOTOR SALES OF AMERICA, INC. CYPRESS CHARGING STATION

Severin Borenstein at the University of California’s Energy Institute at Haas posted on whether a consumer buying an electric vehicle was charging it with power from renewables. I have been considering the issue of how our short-run electricity markets are incomplete and misleading. I posted this response on that blog:

As with many arguments that look quite cohesive, it is based on key unstated premises that if called into question undermine the conclusions. I would relabel the “correct” perspective as the “conventional” which assumes that the resources at the margin are defined by short-run operational decisions. This is the basic premise of the FERC-designed power market framework–somehow all of those small marginal energy increases eventually add up into one large new powerplant. This is the standard economic assumption that a series of “putty” transactions in the short term will evolve into a long term “clay” investment. (It’s all of those calculus assumptions about continuity that drive this.) This was questionable in 1998 as it became apparent that the capacity market would have to run separately from the energy market, and is now even more questionable as we replace fossil fuel with renewables.

I would call the fourth perspective as “dynamic”. From this perspective these short run marginal purchases on the CAISO are for balancing to meet current demand. As Marc Joseph pointed out, all of the new incremental demand is being met in a completely separate market that only uses the CAISO as a form of a day to day clearinghouse–the bilateral PPAs. No load serving entity is looking to the CAISO as their backstop resource source. Those long term PPAs are almost universally renewables–even in states without RPS standards. In addition, fossil fueled plants–coal and gas–are being retired and replaced by solar and wind, and that is an additional marginal resource not captured in the CAISO market.

So when a consumer buys a new EV, that added load is being met with renewables added to either meet new load or replace retired fossil. Because these renewables have zero operating costs, they don’t show up in the CAISO’s “marginal” resources for simple accounting reasons, not for fundamental economic reasons. And when that consumer also adds solar panels at the same time, those panels don’t show up at all in the CAISO transactions and are ignored under the conventional view.

There is an issue of resource balancing costs in the CAISO incurred by one type of resource versus another, but that cost is only a subcomponent of the overall true marginal cost from a dynamic perspective.

So how we view the difference between “putty” and “clay” increments is key to assessing whether a consumer is charging their EV with renewables or not.