Will there be enough renewable electricity available in Australia to supply electric vehicles?

Brief Will thereMany drivers are eager to switch to an electric vehicle (EV) powered by 100% renewable electricity to help address climate change. Major EV charge network operators such as Better Place have committed to using 100% renewable energy to power their customers’ cars. However, some people question whether there will be sufficient renewable electricity available in Australia to support a mass conversion to EVs.

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There will be enough renewable electricity to supply EVs because:

1. Australia has plentiful renewable energy resources such as wind, solar and geothermal.

2. Financing of new renewable electricity plants to utilise these resources will be underwritten by contracts with EV charge network operators.A

Many drivers are eager to switch to an electric vehicle (EV) powered by 100% renewable electricity to help address climate change. As an increasing number of drivers make the switch to EVs, it will be important to ensure that sufficient renewable energy is available to meet their charging needs.

The amount of electricity an EV driver will need each year will depend on the number of kilometres they drive, the mix of city and highway driving they do, and the size of the motor in their vehicle, just like in petrol cars. If we assume a mid-sized EV (equivalent in size and performance to, for example, a 2.4 litre Honda Accord) which travels the Australian average annual mileage of 14,600 km,1 with a typical mix of city and highway driving, the amount of renewable electricity required will be around 2.5 megawatt hours (MWh) per year.2

For larger EVs (equivalent to, for example, the 3.6 litre Holden Commodore or the 4.0 litre Ford Territory four wheel drive) which travel above average annual mileage (30,000 kms), the amount of renewable electricity required will be 6 or 7 MWh per year.3 Compared to the electricity output of an average renewable electricity plant, this is a small amount of power. For example, just one 2 MW turbine at a typical wind farm produces around 7,000 MWh per year.4 That is, a single wind turbine can support approximately 2,800 mid-size EVs doing average annual mileage or 1,000 large EVs doing above-average annual mileage. If Australia’s entire national car fleet of 12 million vehicles ran on electricity today, we would need around 30,000 gigawatt hours (GWh) of electricity per year.5 This is equivalent to 13.2% of the electricity currently consumed in Australia per annum6.

enough renewable energy for EVs graphic

Given we will have perhaps 20 years for this transition to EVs to be complete, this is not a large amount of additional incremental capacity each year. Renewable energy generators are already a significant and growing source of our electricity. As at November 2009, there were 305 renewable power generation plants operating in Australia supplying around 6.8 percent of the electricity consumed in the National Electricity Market.7 By 2020, electricity retailers will be required to increase the percentage of electricity they source from renewable plants to 20% under the Federal Government’s Renewable Energy Target legislation. New plants capable of delivering an additional 30,000 GWh per annum of renewable electricity will need to be commissioned during this time.

Better Place will be supplying customers with renewable electricity which is additional to the amount that electricity retailers are required to source under the Federal Government’s 20% renewable energy by 2020 target. Wind farms are expected to be the predominant source of new renewable generation in the next decade. According to the Clean Energy Council, there were over 7,000 MW of new wind farms in development at the end of 2009.8 These new plants will supply around 17,500 GWh of electricity per annum – enough to run approximately 7 million mid-size EVs doing average annual mileage. Australia has significant untapped sources of renewable electricity.

The Australian Bureau of Agricultural and Resource Economics (ABARE) recently completed a comprehensive assessment of the nation’s energy resources9 confirming that we have some of the most extensive renewable energy resources in the world:

• WIND – ABARE reports that “Australia has a very strong wind energy resource base primarily located in our western, southwestern, southern and southeastern coastal regions but extending hundreds of kilometres inland and including highland areas in southeastern Australia. There are large areas with average wind speeds suitable for high yield electricity generation.” The report forecasts that the share of wind energy in total electricity generation will increase from 1.5 per cent in 2007–08 to 12.1 per cent in 2029–30.10

• SOLAR – ABARE reports that “Australia’s solar energy resource (annual solar radiation)… within 25 km of existing transmission lines (excluding National Parks), is nearly 500 times greater than the nation’s annual energy consumption.”11 The extent of cost reductions achieved in technologies such as utility scale photovoltaic and solar thermal will determine their rate of uptake in the decade ahead. The Australian Government has established the Solar Flagships Program at a cost of $1.5 billion to support the construction and demonstration of four large scale solar power stations delivering up to 1,000 MW.

• GEOTHERMAL - ABARE reports that “Australia has significant potential geothermal resources associated with buried high heat-producing granites and lower temperature geothermal resources associated with naturally-circulating waters in aquifers deep in sedimentary basins.”12 Most current geothermal projects in Australia are at early commercial demonstration stage. ABARE forecasts that geothermal energy will produce around 6 TWh of electricity in Australia by 2029–30. Electricity supply is likely to be from demonstration plants initially but commercial scale geothermal energy production is expected by 2030.13

EV charge network operators will support the financing of new renewable generation plants. In order to convert the extensive renewable energy resources described above into electricity for EVs, new wind farms, solar power plants and geothermal plants will need to be built. Developers of new renewable electricity plants typically need a long-term power purchase agreement in order to secure finance for the construction of a new plant. This locks in revenue for the electricity generated which reflects the underlying economics of the plant.

EV charge network operators will be entering into such agreements with developers of renewable electricity plants in order to meet their customers’ charging needs. For example, Better Place recently announced a renewable electricity supply agreement with ActewAGL valued at around $60m over 10 years. For every 2,000-3,000 new EVs coming into the system, there is a known energy demand for the next 15+ years thus enabling long term agreements to be signed. As the number of EVs on the road grows, additional agreements for increasing volumes of renewable electricity will be signed by EV charge network operators. This will ensure that new renewable electricity plants are financed and constructed over time and that as Australia’s fleet of EVs grows, the supply of 100% renewable power will grow to meet the demand.

References

A For more detail on this issue see Better Place Australia technical note, Why EVs are the natural customer for renewable electricity generators.

  1. Australian Bureau of Statistics, Survey of Motor Vehicle Use, 2007.
  2. The estimate of annual electricity required for a mid-sized EV travelling 14,600km per year is based on the mid-sized Renault Fluence EV. The Fluence has a stated electricity usage of 13.75 KWh per 100kms. (Source: Renault Press Release, Renault Fluence ZE and Kangoo Express ZE: Finalized designs revealed and pre-reservations open, 15 April 2010.) The estimate also includes an allowance for losses in electricity transmission and distribution and from the battery charger.
  3. This estimate assumes large EVs with electricity usage of 18 to 22 KWh per 100kms and annual mileage of 30,000km per year. The estimate also includes an allowance for losses in electricity transmission and distribution and from the battery charger. People who drive high mileages in large cars like this will actually be most financially advantaged by switching to EVs. Electric car economics are based on replacing the most expensive part of a petrol car – the fuel that powers it over its life – with a cheaper replacement: a battery and renewable electricity. Today, the incremental cost of driving one kilometre using renewable electricity is between one fifth and one third of the cost of using petrol, depending on the relative fuel eciency of the petrol car. This is because electric motors are a much more efficient technology than internal combustion engines (ICEs). A typical ICE converts a much lower proportion of the energy it consumes into propulsion compared to a typical electric motor. However, offsetting the savings in energy cost for EVs are the upfront fixed costs of a battery – this is currently around $15,000; more expensive than the cost of a petrol tank. So it is no longer useful to think in terms of litres per 100km or barrels of oil cost equivalence as it often is with other “alternative fuels”. The per kilometre cost comparison between petrol and electricity is non-linear and changes depending on the distance driven. The more driving you do (and petrol you consume), the more attractive the electric alternative becomes.
  4. Assumes a capacity factor for the wind farm of 40%. Source for assumption: Sustainability Victoria, Wind Energy: Facts and Myths, 2007.
  5. In 2009 there were 12 million road registered passenger vehicles in Australia (ABS Survey of Motor Vehicle Use, 2009). Assumes that the average car is mid-sized, travels average annual mileage per car of 14,600km and requires 2.5 MWh of renewable electricity per year.
  6. 227 terawatt hours of grid electricity was generated in Australia in 2007/08 (Energy Supply Association of Australia, 2009.)
  7. Refers to plants of greater than 100KW in size. Sources: Clean Energy Council, Clean Energy Australia Report, 2009 and Australian Energy Regulator, State of the Energy Market 2009
  8. Clean Energy Council, Wind Energy Factsheet, 2009.
  9. ABARE and Geoscience Australia, Australian Energy Resource Assessment, 1 March 2010.
  10. Ibid, page 239
  11. Ibid, page 262
  12. Ibid, page 203
  13. Ibid, page 203.