Electric Vehicles - The Ultimate Flex Fuel Machines

Travis Johnson, Vice President, Operation, Liberty Utilities

From time to time, I over hear conversations about electric vehicles(EVs). Often, the tone is supportive, sometimes it is not. One of the best ways I’ve found common ground on the topic is to talk about where electrical energy comes from in the U.S., the associated price of that energy, and where batteries will go when they retire from our cars. Once this is understood, most conversations end with something like “wow, I didn’t know that about EVs.”

In the 1970s, there was a fundamental shift by electric utilities to move away from oil as a primary energy source when world oil markets experienced sharp increases. This volatility was largely driven by the Arab Oil Embargo, the Iranian Revolution, and the Iran-Iraq war. As of today, 99% of the energy that moves through the U.S. electric grid doesn’t come from oil. Virtually all of the energy flowing through the U.S. electric grid comes from natural gas, coal, nuclear, hydro, wind, solar, geothermal, biomass, plus a few other small sources. These energy sources primarily come from within the U.S. with the exception of nuclear, which supplies around 20% of the energy on the U.S. electric grid.

By 2025, U.S. nuclear capacity will fall by 10.5 GW from the closings of twelve reactors.

As lithium-ion batteries age, they don’t typically die on a given day like lead-acid car batteries. Their capacity to store energy gradually fades. This makes them ideal for stationary, bulk energy storage alongside hundreds of other batteries

This retired capacity will most likely be replaced with renewable and natural gas sources which will drive the amount of domestically supplied energy on the U.S. grid appreciably higher than 80%.

From 2010 to Q1 2019, U.S. power companies announced the retirement of more than 546 coal-fired power units, totaling about 102 gigawatts (GW) of generating capacity. Natural gas, wind, and solar energy sources continue to replace coal because it is increasingly uneconomical and has challenges around emissions.

Now that we have a better understanding of where the energy comes from in the U.S., let’s talk about the cost of that energy. The Department of Energy developed a tool that helps compare the cost of electricity to gasoline. You can find it by searching “eGallon”. By selecting “US Average”, you will see the cost of gasoline and electricity in a $/gallon format. As I type, $2.62/gal and $1.21/gal are the average cost of gasoline and electricity respectively. So on average, electrical energy is currently less than 50% of the cost of gasoline. The national average state & federal tax included in a gallon of gas is around $0.55. Some of this tax will ultimately be applied to electric vehicles and in a few states it is already happening. However, in an apples-to-apples comparison, electrical energy will still be significantly cheaper.

The next topic that comes up in conversations about EVs usually centers on the battery. Where will all of these batteries go? They will ultimately go to the same place our lead-acid car batteries go: to recycling facilities.

However, they won’t take a direct trip; there is one logical and valuable stop along the way -stationary energy storage. 

As lithium-ion batteries age, they don’t typically die on a given day like lead-acid car batteries. Their capacity to store energy gradually fades. This makes them ideal for stationary, bulk energy storage alongside hundreds of other batteries where weight and size are not as much of a concern as mobile storage applications (i.e. cars and trucks). In the coming years, more car batteries will become available for stationary storage applications. At the same time,the need for electric grid storage will increase as utilities deploy more variable resources like wind and solar. Low cost “used” EV batteries will enable utilities to incorporate more renewable energy, firm up the variable nature of those resources, and keep electric rates affordable.

Lithium-ion battery recycling is not a pie-in-the-sky concept. Tesla announced in April 2019 that it will begin recycling its own batteries at the Gigafactory in Sparks, NV. Tesla will recover lithium, cobalt, aluminum, copper, and steel in a closed-loop system to make new batteries. BMW is taking a similar approach in a partnership with Northvolt. Virtually all of the large automakers are getting into the business of recycling electric vehicle batteries.

In winding up conversations about EVs, I ask friends to imagine a fueling station in the convenience of their garage that primarily provides American-made energy, from a diverse non-oil based resource mix, at half the cost of gasoline. This fueling station also allows them to BYOE (bring your own energy) in the form of rooftop solar if so desired. They leave home each day in a vehicle with a full “tank”that no longer requires oil changes. The battery in this vehicle will ultimately help electric utilities deploy more renewable energy projects which in turn make production and operation of this vehicle cleaner. That’s something to get excited about!