Sunday, July 8, 2012

An Equation For Our Energy Future. EV+PV+ES=0



Some pretty smart and powerful people are projecting that EVs and PHEVs will gain 50% market-share in the next 20 years. What happens if 50% plus of our nation starts driving EV’s?

There is no question in my mind that this 50%  saturation can be accomplished easily with Solar PV plus Energy Storage or ES.  It can be done cheaper, better, cleaner and will be more reliable than our current monopolistic grid mix and utility distribution.

ES is the next frontier, the “Holy Grail” that will change our energy production and distribution model that remains largely unchanged for the past 90 years. It will happen at both the distributed energy and the utility scale energy levels.  Peaker plants, a very expensive energy source,  will be first reduced and then replaced by cheaper and better ES systems.

First a little background.

Six years ago we began driving EV’s powered by Solar PV.  In the early days it was a 2007 Gem E4 neighborhood electric vehicle. I remember that first year, our son with three friends drove the Gem about 10 hilly miles, 12mph up the hills and 25mph down the hills, they had to push the car back home the last mile as they ran out of juice. Although limited in capability, I loved the Gem E4, drove it several thousand miles, and the seed was planted. I was enslaved by the dream of one day driving a real car, real distances on real highways powered by sunshine via Solar PV.  My head was spinning with how this great combination of EV+PV would be and how dramatically it would change our world for the better. 

Today, that not so distant vision is a reality driving the BMW ActiveE powered by solar.  Last night our son and his friend took the ActiveE out on the town going to the movies, visiting with friends and returning several hours later having used only 30% of the charge after driving 30 miles.  Today and for the rest of our lives we will power both our home and our car for less than $3 a month. We have completely paid off our PV system with the gas and utility savings provided by The EV+PV combo  the past six years.
EV+PV  will soon become commonplace for all. 

EV’s are now as close as the nearest car dealerships,  and Solar PV permeates our airwaves, radio waves, social media and print advertisements ad nauseam.  In just a short year, you will be able to do both EV+PV with one visit to the BMW dealership as you purchase the BMW i3 or i8 and the Solar System in partnership with Real Good Solar. You will buy the car and the energy to drive that car forever at one time.  

That’s amazing progress in just six years…so what’s next? What is the next frontier?  The answer is reshaping our energy grid with renewable energy, electric cars and energy storage.


In this chart you can see our energy usage via our utility SDG&E. You can see the spike of charging the ActiveE at 8pm and our energy generation with 60% of our generation coming at peak hours beginning at noon.  It is an absolute truth that we generate on average 30kwh a day and we use on average 10kwhs a day to power the ActiveE, therefore we could charge the ActiveE during the day using 100% sunshine.  In reality there are two issues.  

1. We are not at home during the day. 2. We are motivated by price to sell the electricity at a high price and charge the ActiveE at a low price.

Power lines have the ability to send energy both to and from your home.  For the near term, it’s a good deal for the utilities to have the extra power provided by Solar PV at peak time, and they love the ability to sell you excess power at night for half price or less to charge your car.  For the long term, we need to add storage to the energy grid to buffer the renewable energy sources like wind and PV and to shave peak demand thus eliminating or reducing the needs for peaker plants.



Let’s look at our own residential system adding energy storage using three scenarios:  Price, Buffer and Off Grid.

1. Price.
Our energy rates from SDG&E are Super off peak, $0.14 per kwh, Off peak, $0.17 per khw, and Peak, $0.30 per kwh. If we added a 15kwh energy storage system to our home, our goal would be to store the extra 15kwh we generate during the morning off peak hours in the battery storage unit instead of selling them back to the grid (light blue.)  In the later peak hours of the day we would sell the energy back to the grid when the grid needs it the most (dark blue.) This would net us a gain of $0.13 per kwh.  Or $2.00 per day.   Accounting for some cloudy days this would be about $600 a year in savings.

Today, a 15kw energy storage  (ES) system is $15k. In the near term (the next 2-5 years) a 15kw ES  is going to be about $300 a kw for a cost of $4500.   This would give a payoff of 7.5 years.  The system life of these storage systems will be 20-25 years.

A better scenario will be the second life batteries coming off automotive use.  In ten years we can expect a $200 per kw new battery cost,  and  a 25% cost for a used battery with some repackaging cost, for an ES cost of $70 per kw.  A 15kw ES would cost $1050 and would have a payback of less than 2 years with a life span of 10+ years.  this price based model generally reflects what we know today for battery cost and battery cycle and calendar life.  Breakthroughs in price and cycle life will happen but it is unknown how dramatic they will be.

2. Buffer.

This is where the real benefit of energy storage will come into play.  It is important to point out that the current pricing structure of utility energy does not support using the ES as a buffer with the exception of level 3 DC fast charging in which demand fees are far greater than the cost of electricity..  

In this scenario we would have a 30kw ES. This would allow us to take our total overproduction of 30kwh during the day time and store it in the ES.  The ES would then be used to charge the ActiveE using 10kwh and to provide the 20kwh power to the home during the remaining hours when the sun is down.   

In this scenario, the home would only pull energy from the grid about 30 days of the year.   An additional 30 days a year the home would pull 1-5 kwhs a day to augment the usage on days of modest cloud cover.   In total the home and EV would still be grid connected and use energy from the grid at a rate of 1/10th the usage of a normal home. 

The cost for this scenario would be 30K today, $9k near term and $2k with used automotive batteries. 

3. Off Grid

At 60kw of energy storage for our home coupled with 20k of energy storage in the future BMW i3 and our home could be off grid.  The cost for that would be 60k today, 18k in the near future and 4k with used automotive batteries.

So imaging in the not to distant future, new homes that cost $500k now being able to provide a Solar PV system and 60KW of backup energy for an additional 40k. This will turn every home into a "gas station" providing "fuel" for their electric cars for life and will turn every home into an off grid or an extremely low energy usage grid connected home.   It will do so it 10% to 20% of the cost of the status quo which is gasoline and utility provided energy. 

In summary,

These scenarios also apply in various forms to commercial properties and commercial fleets.

In the short term battery storage or ES will be used simply to arbitrage the cost of energy, storing the energy at low cost and selling it at high cost.   This will have financial benefit to some as we seek to have more renewable energy sources replacing nuclear and coal, and will be of modest benefit to the grid lessoning the need for peaker plants.

In the long term, ES systems will revolutionize the grid. ES systems  will completely eliminate peaker plants, greatly reduce base load plants and place a strong emphasis on micro grids connecting distributed energy sources  in  localized grid systems stitched together by a national backbone of transmission.

In just a short decade or two, our utilities that have been relying on the same monopolistic practices for 90 years, will either die or adapt.  

Nothing remains rigid and survives.  Just one example how rigid long tenured companies can quickly become irrelevant.

The  first digital camera was invented by Steve Sasson, Kodak Engineer in 1975. It recorded the digits on a cassette tape.  Kodak invented the digital camera and had the right answer.


In January of 2012,  Eastman Kodak, the 131-year-old film pioneer, world icon and Captain of an entire industry,  filed for bankruptcy protection. SD/MMC cards were introduced in 2003 and in just 9 short years, Eastman Kodak was in bankruptcy.  

The energy world will change.
EV+PV+ES is the future.
Loving the BMW ActiveE

Cheers
Peder

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