Why electric vehicles are the natural customer for renewable energy generators

Brief Why ElectricUsing renewable energy to power electric vehicles (EVs) makes sense for drivers because:

 - Switching to electric vehicles powered by 100% renewable electricity can deliver a big reduction in carbon emissions. An average car produces over 4 tonnes of emissions each year.

– The cost difference between green and black electricity is only a tiny part (less than 5%) of the costs of running an EV, which are influenced more by the capital cost of the battery. As battery costs continue to fall and petrol prices rise, running an EV on renewable electricity will be cheaper than petrol for more and more drivers.

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Supplying electric vehicles (EVs) makes sense for renewable electricity generators because:

– EV charging times can be coordinated to match the variable output of renewable generation plants such as wind farms.

– EV charge network operators will be signing long term power purchase agreements to support the financing of new renewable energy plants.A

Significant carbon emission reductions can be achieved with the mass adoption of renewable energy-powered electric vehicles. As the chart below shows, electric vehicles can deliver substantial reductions in greenhouse gas emissions, especially when powered by 100% renewable energy. Every 100,000 EVs on the road powered by renewable energy would prevent approximately 400,000 tonnes of carbon emissions per year.1 Indeed, switching to EVs powered by renewable energy sources such as wind is considered to be one of the most effective ways of reducing carbon dioxide emissions amongst all the options available.2

chart electric vehicles renewable electricty

Renewable energy powered electric vehicles also reduce other forms of air pollution. EVs have zero tail-pipe emissions, removing harmful SOx and NOx pollution from our cities resulting in improved urban air quality and lower health and related external costs. Using renewable power also eliminates air pollution at the source. A Curtin University study in 2009 found that, compared to a Euro 3 or Euro 4 standard compliant petrol vehicle, an electric vehicle will reduce air pollutants at a rate of between 10-20 g/km.4 Based on this estimate, every 1 million EVs on the road (8% of Australia’s national fleet) will lower emissions of these pollutants by 150,000-300,000 tonnes each year.

Compared with the cost of petrol in a traditional car, electricity is a very small part of the total cost of operating an EV. As a result, the incremental cost of using renewable rather than “black” electricity is small. Green electricity adds less than 5% to the running costs of an EV, which are influenced more by the capital cost of the battery. This already small cost difference is likely to shrink as renewable generation technology improves and the benefits of aligning the recharge patterns of EVs and generation patterns of intermittent renewable plants are realised.

Major EV charge network operators such as Better Place are already committed to using 100% renewable energy for their customers. Many governments, corporate fleets and households are also keen to maximise the ability of EVs to reduce their carbon footprint by using 100% renewable energy to power EVs. Over time, as battery costs fall and petrol prices rise, running an EV on renewable electricity will be cheaper than running a petrol-driven vehicle for more and more drivers. On today’s prices, the average Australian car would be cheaper to run as electric at about 24,300 km p.a. (roughly the distance driven by the average new full-sized car).5

EVs can support increased levels of renewable electricity generation, helping reduce emissions from the stationary energy sector. EVs are definitely the best possible customers for intermittent renewable generators because they have energy storage. Unlike nearly every other electrical appliance, EVs draw energy then store it to use at a later time. Given most cars are parked for more than 20 hours a day and usually plug in when their battery is only slightly (less than 25%) depleted,6 EV charge network operators have a great deal of flexibility as to when the majority of EVs draw power.B

With an intelligent charging network, the amount of power flowing into a portfolio of EVs while they are plugged in can be coordinated to match the variable output of renewable generation plants such as wind farms, without impinging on drivers’ needs or flexibility. This storage benefit allows an increase in the total level of intermittent renewable production above the level that could otherwise be dispatched. This matching capacity is also of value to renewable generators because it means they do not have to pay to secure reserve supplies from other generators in the market (typically gas-fired peaking plants) to cover the periods their plants are not producing electricity.7

EV charge network operators such as Better Place have committed to provide their customers with 100% renewable electricity and will sign long-term offtake agreements with renewable power plant developers. In order to secure finance for their new plants, developers of renewable energy projects often sign power purchase agreements underpinning the majority of the revenues of the plant over the medium to long term. EV charge networks are ideally placed to sign these agreements because they need to secure reliable supplies of 100% renewable electricity for their customers’ charging needs.

In the longer term, there are even greater opportunities to use EVs to reduce stationary energy emissions. The first opportunity will be to utilise used EV batteries for storage. Batteries will generally be withdrawn from service in an electric vehicle when their capacity falls below 80%. Nevertheless, they remain serviceable batteries and much less expensive than other storage options currently available. Electricity from variable wind or solar renewable generators can therefore be stored in used car batteries and fed back into the grid in a coordinated manner, allowing renewable energy to effectively be dispatched on demand and earn stronger revenues as a result.

In the longer term, it is expected that manufacturers of EVs will introduce technology that enables EVs to feed energy from their batteries to the grid (“V2G”), making this service available throughout the life of the battery. While V2G would only use the top 10-15% of charge in EVs’ batteries, in aggregate in a large fleet of cars this is a substantial amount of power. The emergence of V2G is expected to further accelerate the penetration of renewable electricity generators. A study by Curtin University found that through V2G ancillary services, the distributed batteries in 1 million EVs could enable the generation of almost 45,000GWh of renewable electricity nationally.8 This would be the equivalent to doubling the Federal Government’s Renewable Energy Target. A study of US grid capacity expansion at the National Renewable Energy Laboratory in 2006 has shown that EVs with V2G could more-than-double the amount of wind energy capacity installed through the provision of services including frequency control, voltage support and standby reserve.9

References

A. For more detail on this issue see Better Place Australia technical note, Will there be enough renewable electricity in Australia to supply electric vehicles Nov 2010.

B. For more detail on this issue see Better Place Australia technical note, Can Australia’s electricity grid cope with electric vehicles  Nov 2010.

  1. The average Australian car drives 14,600 km per year with an average fuel eciency of 11.1 litres per 100 km (ABS Survey of Motor Vehicle Use, September 2008). This represents greenhouse gas emissions of 275g CO2-e per km (Full Fuel Cycle emissions, National Greenhouse Accounts Factors, June 2009). The average Australian vehicle therefore emits just over 4 tonnes of CO2 per year.
  2. Jacobson M. Z., ‘Review of solutions to global warming, air pollution, and energy security’, Department of Civil and Environmental Engineering, Stanford University, December 2008.
  3. Petrol vehicle is 2010 Toyota Camry. Hybrid vehicle is 2010 Toyota Camry Hybrid. Source for emissions is GreenVehicleGuide.gov.au. Electric vehicle is the Renault Fluence ZE with 22kWh battery. Renault Fluence energy usage is 13.75 kWh/100km. Average grid emissions intensity in Australia is 0.8t/MWh (Source: Australian Treasury reference scenario, Chapter 3, Australia's Low Pollution Future: The Economics of Climate Change Mitigation.)
  4. Simpson, A., Environmental Attributes of Electric Vehicles in Australia, Curtin University Sustainability Policy (CUSP) Institute, July 2009.
  5. Source: Better Place analysis comparing the cost of running a petrol car to the cost of running an electric car. For the purposes of this analysis, electric car running costs include electricity, battery, and the per vehicle share of capital and operating costs for an electric car charging network like Better Place.
  6. Research on EV drivers’ charging behaviour undertaken in a 2007-08 trial undertaken by Japanese utility Tepco found that the EVs batteries’ state of charge was 70% or more full in 70% of plug-in times. (CHAdeMO Association, Public Chargers for EVs, 18 May 2010.)
  7. Two sources with useful analysis on this benefit are: Austin Energy, “Testing of Charge-Management Solutions for Vehicle Interaction with the Austin Energy Electric  Grid”, 2009; and P. Denholm and W. Short, “An Evaluation of Utility System Impacts and Benefits of Optimally Dispatched Plug-In Hybrid Electric Vehicles”, National Renewable Energy Laboratory (US), 2006.
  8. Simpson, A., Environmental Attributes of Electric Vehicles in Australia, Curtin University Sustainability Policy (CUSP) Institute, July 2009.
  9. W. Kempton and J. Tomic, “Vehicle-to-grid power implementation: From stabilizing the grid to supporting large-scale renewable energy”, Journal of Power Sources