EVs and The Service Station of the Future

Tesla Motors is apparently in talks with Sheetz, Inc. to install electric vehicle (EV) Superchargers in the latter's chain of gas stations. This caught my eye, because I was involved in a much earlier effort to install EV recharging facilities in service stations in the late 1990s. It wasn't just ahead of its time; it was stymied by some of the same economic challenges noted in the Washington Post article, as well as physical and regulatory issues that weren't mentioned.

The logic of an alliance between Tesla and gasoline retailers like Sheetz seems sound. Tesla embarked on its strategy to build a network of quick-rechargers in order to sell more cars. Its Superchargers are likely to be more effective in that role if they're installed in places that are both convenient to highways and offer a variety of other amenities for drivers, while they wait 15 minutes or more to top up their car's range. High-volume fuel retailers like Sheetz have already optimized their sites for convenience of location, and they have a wider range of food and beverage choices than the average gas station.

They also provide another essential feature: space. When Texaco was evaluating adding rechargers for GM's ground-breaking EV1 electric car to its Southern California retail network nearly 20 years ago, the fire marshals with whom we met insisted that high-voltage electricity and pumps dispensing volatile fuels like gasoline could not share the same pump island. They had to be widely separated for safety, and few of our L.A. locations had large enough footprints for that. Sheetz, by contrast, typically has large stations--many in rural or suburban locations--that could accommodate EV charging without endangering customers filling up with gas or diesel.

Another obstacle I encountered at Texaco was that EV rechargers are expensive, while electricity is cheap. Even if you're allowed to charge customers for it--we weren't, for regulatory reasons--it takes a lot of usage to pay back the substantial investment in equipment and installation. With EV sales still occupying a small niche in the market, that calculation hasn't changed much in the intervening decades. However, Tesla's primary motivation isn't to make money selling electricity, but to generate profits and support its stock price by selling more premium EVs. I would hate to see the standalone P&L for Tesla's growing Supercharger network, but that's beside the point.

This resolves a major hurdle for Sheetz and other fuel retailers that might want to add EV recharging to expand their customer base, or "green up" their image to enhance the loyalty of current customers, especially among Millennials. The profitability of such an investment would still be questionable, even if they sold EV owners lots of premium coffee and snacks while they wait. But if someone else is footing most of the bill for the added hardware, the extra revenue in the convenience store is all upside.

The service station of the future has been slower arriving than my colleagues and I envisioned when we developed Texaco's first global scenarios for the future of energy nearly twenty years ago. Sales of EVs and cars running on hydrogen have not grown as fast as we expected, while the improving performance of gasoline cars has raised the bar for alternative vehicles. However, current trends suggest that our vision of facilities offering a diverse mix of transportation energy was more premature than wrong. I will be very interested to see how Tesla and Sheetz or others move ahead with this idea.

Energy Storage and the Cost of Going Off-Grid

• New energy storage offerings from Tesla and other manufacturers are widely expected to enhance the attractiveness of rooftop solar power and other renewables.
• However, recent analysis from the Brattle Group shows that even with rapid cost reductions, grid-independence will remain beyond the reach of most consumers.

Last month's Annual Energy Conference of the US Energy Information Administration included speakers and panels on topics such as crude-by-rail, potential US oil exports, and the role of the Strategic Petroleum Reserve, all of which should be familiar to my readers here. However, the topic that really caught my interest this year was energy storage.

Storage has been in the news lately, particularly since the launch of Tesla's new home and commercial energy storage products. In fact, Tesla's Chief Technology Officer spoke on the first morning of the conference. Much of his talk (very large file) focused on Tesla's expectations for the cost of storage to decline sharply as electric vehicles (EVs) and non-vehicle battery applications grow. Whether battery costs can drop as quickly as those for solar photovoltaic (PV) cells or not, storage is likely to become a more important factor in energy markets in the years ahead.

One of the most interesting presentations I saw examined a provocative aspect of this question. Michael Kline of The Brattle Group, which consults extensively on electricity, took a detailed look at whether rooftop PV and home energy storage might become sufficiently attractive that a large number of consumers would employ the combination to enable them to disconnect from the power grid entirely.  That would be an extremely appealing idea for a lot of people. The author of a book I received from the publisher a few years ago referred to it as a movement.

Most people by now appear to understand that solar panels alone can't make a household independent of the grid. The daily and seasonal incidence of sunlight aligns imperfectly with the peaks and troughs of typical home electricity demand. This is why "net metering", under which PV owners sell excess power to their local utility--effectively using the grid as a free battery--has become contentious in some electricity markets.

In a true off-grid scenario, net metering would be unavailable. Onsite storage would thus be necessary to shift in time the kilowatt-hours of energy produced from a home PV array. However, a standalone PV + storage system must be sized to deliver enough instantaneous peak power to handle periodic high-load events like the startup of air conditioners and other devices. Another presenter on the same panel had a nifty chart demonstrating how wide those variations can be, with multiple spikes each day averaging above 12 kilowatts (kW)--several times the output of a typical rooftop PV array.

Brattle's off-grid model included PV and storage optimized to "meet load in every hour given a battery with 3 days of storage (at average load levels.)" Although that is still probably less than the peak load such a system would encounter, it is the equivalent of multiple Tesla "Powerwall" units and would only be practical with the kind of drastic cost reductions Mr. Kline assumed by 2025: PV at $1.50/W and storage at $100/kWh, installed. That equates to around a third of last year's average US residential PV installation and 1/7th the estimated installed cost of Tesla's offering on a retail basis.  

Mr. Kline framed this exercise as a "stress test", not just of the off-grid proposition but of the future of the electric power grid. If many millions of customers were to "cut the cord" for electricity as others have for wireline telephone service, even a "smart" power grid would become much less important and might shrink over time. That same logic should extend to the power generators supplying the grid. If most consumers went off-grid, the value of even the most flexible generation on the grid, which today is often provided by natural gas turbines, would fall, as would demand for the fuel on which they run.

In Brattle's assessment, despite the assumption of very cheap PV and storage, that prospect seems remote. For the three markets analyzed (California, Texas and Westchester County, NY) the levelized cost of energy (LCOE) for the off-grid configuration modeled was significantly more expensive than the EIA's projected cost of electricity in those markets in 2025. In fact, for consumers in California and Texas, as well as in all cases of the parallel commercial customer analysis Brattle performed, PV + storage would  be expected to cost a multiple of retail electricity prices.

As Mr. Kline explained, under more realistic assumptions the comparison was likely to be even worse for off-grid options. However, his conclusion that , "going off-grid...is unlikely to be the least expensive option for most consumers" does not mean that some consumers would not choose to do so, anyway. To them, a premium of 10-20 cents per kWh might seem like a small price to pay for personal energy independence. Yet at that price, it is hard to envision it would become a mass-market choice. 

Mr. Kline made a point of reminding his audience that Brattle's analysis did not mean that distributed energy  would  not be competitive in the future, or that it could not provide valuable services to customers and to the grid. Importantly, the figures he presented underlined the continued value of the power grid to customers, even in a future in which large quantities of PV and storage are deployed.  As he put it, "Distributed energy is a complement to the grid, not a substitute for it."

By extension, flexible generating assets like fast-reacting gas turbines should also continue to provide significant value, especially during those seasons when daily solar input is low, and in locations where average sun exposure is generally much weaker than in the US Southwest and other prime solar resource regions.  As appealing as the idea might be to some, storage seems unlikely to make either the grid or any class of generating technologies obsolete for the foreseeable future. As Bill Gates recently observed, that has implications for the cost of a wholesale shift to current renewables and away from fossil fuels.

A different version of this posting was previously published on the website of Pacific Energy Development Corporation.

A Solar Car for the Masses?

• Ford is currently showing a concept car that addresses the shortcomings of solar-powered transportation in a clever way.

• If they can make it a cost-effective option, it would provide consumers a new kind of convenience, in contrast to the compromises inherent in most EVs.

It’s car show season again, with the annual crop of car-model launches like the new Corvette “supercar” and the Acura TLX prototype. However, my biggest regret in missing this year's Washington DC Auto Show was not seeing the Ford “C-MAX Solar Energi” concept, an unlikely marriage of electric vehicle (EV) and solar photovoltaic panels (PV). The car previously debuted at this year’s Consumer Electronics Show in Las Vegas.

This isn’t the first time a carmaker has put solar panels on the roof of a car, even if we exclude competitions like the Solar Car Challenge and other efforts to test how far or fast one-off solar vehicles designed by engineering students or enthusiasts could travel. However, I believe this is the first time an “OEM” has added solar panels to a production car for the purpose of providing a significant fraction of its motive power.
The biggest hurdles that any attempt to power a car with onboard solar panels must overcome are the low energy density of sunlight at the earth’s surface and the relatively low rate at which current solar panels can convert it into power. A typical EV requires 0.25-0.33 kilowatt-hours (kWh) of energy to travel one mile. 1.5 square meters of solar panel on the roof of a vehicle would receive on average only about 1.6 kWH per day in much of the US, assuming it was stationary and never parked under a roof or tree, and much less in winter. That’s only enough energy to travel 5 or 6 miles, or the equivalent of around 12 ounces of gasoline in a typical hybrid car. It's hard to fight physics.

The clever part of Ford’s solar design is its recognition that the rate of self-charging from the car’s rooftop wouldn’t be sufficient to liberate its owner from the gas pump without help in the form of an “off-vehicle solar concentrator.” This is essentially a glass carport that focuses the sun’s rays on the car’s PV roof and, according to the write-up in MIT’s Technology Review, works with the car’s software to move the car during the course of the day to keep the roof in the brightest area. That maximizes the amount of energy stored in the car’s battery, yielding enough for the daily needs of a fair percentage of drivers.

It’s not immediately obvious that combining two of the most expensive energy technologies of today — EV and PV — represents a good strategy for making them more competitive with the status quo, particularly given the likelihood of relatively stable gasoline prices for the next few years and the significant improvements being made in the fuel economy of conventional cars. 40 mpg highway is no longer considered remarkable. The ordinary hybrid version of the C-MAX is rated at 43 mpg combined city/highway, and the plug-in version on which the solar prototype is based is rated at 100 mpg-equivalent on electricity alone.

I have no idea what Ford would charge for the solar option should it eventually build the car, but it’s a good bet that it would be a significant multiple of the roughly $300 cost of the solar panels. Even without the Fresnel-lens carport, integrating PV into the car’s roof in a durable manner, together with the necessary changes to the car’s power management hardware and software, are unlikely to come cheap. Nor is it obvious that putting solar panels on a car’s roof is the best way to provide renewable electricity for vehicles. As Technology Review notes, Tesla is pursuing high-voltage (i.e., rapid) recharging facilities powered by stationary solar arrays, thus removing the constraint on effective PV area. It would be even simpler for many EV owners who want to avoid “exporting” their automobile emissions to fossil-fuel power plants to sign up for 100% renewable power from their local utility.

It’s no secret that EV sales have been disappointing, initially, for various reasons. 2013 sales figures for the US indicate that EVs, including plug-in hybrids like the non-solar C-MAX Energi, accounted for just under 100,000 new vehicles in 2013, or 0.6% of the US car market, compared to nearly 500,000 hybrids, or just over 3% of total sales of 15.5 million. If the US Congress eventually pursues tax reform along the lines suggested by recently retired Senate Finance Committee chair Max Baucus (D-MT), then the federal EV tax credit of up to $7,500 per car, which has helped push EV sales to current levels, would be in jeopardy. Carmakers should be thinking seriously about the long-term value proposition for EVs on their own merits.

The C-MAX Solar looks like a step in that direction. Once technology-hungry early adopters and the greenest consumers have been satisfied, the mass market will be seeking cars that compete on mainstream measures of convenience, cost and performance. In that light, even a Tesla that can be recharged to half its battery capacity in around 20 minutes via the company’s network of Superchargers falls short, compared to a gasoline car that can be refueled in under 3 minutes. No recharger on earth can deliver energy to a car at the effective rate of a gas pump, without dramatic changes in battery technology.

Yet the C-MAX Solar can do something that no other type of car can: make its own fuel, in a car that can also be refueled conventionally at any gas station, anywhere. That could provide a unique selling point, enhancing the convenience of cars in a totally new way, rather than requiring compromises on convenience as other plug-in EVs do.

I’ve long believed that the transition from fossil fuels to low-emission energy technologies has been hobbled by its dependence on government subsidies and would accelerate when those technologies can outperform on measures of “better, faster, cheaper.” Ford’s solar prototype must still demonstrate that it can become a real production car, rather just than a car show concept. If it does, it could help make EVs attractive to average consumers without requiring thousands of tax dollars in incentives. That could help create the basis for a truly sustainable transition to a new energy economy.

A different version of this posting was previously published on Energy Trends Insider.