Household generated electricity stands as a critical component to a nationwide electric vehicle rollout strategy. Anything short of this will be more damaging in terms of climate change than even the current fossil fuel vehicle population.
Toyota Motor Corporation President Akio Toyoda in mid December issued commentary framing electric vehicles as being ‘excessively overhyped’. He contended that EV advocates fail to consider the carbon emitted by the process of generating electricity in the first place, the energy loss inside its delivery value chain, along with the depreciated costs of developing a massive electric vehicle support infrastructure. Mr. Toyoda was reacting to local news reports in Japan last month citing that the Japanese government was to announce a ban on the sale of new gasoline-only powered cars starting in 2035.1 Certainly one could infer from Mr. Toyoda’s comments that he regards the quick panacea-to-climate-change thinking regarding electric vehicles, to be somewhat a Pollyanna proposition.
Don’t get me wrong, I like most people, probably including Mr. Toyoda, favor electric vehicles as the future of both private and public transportation. I am gravely concerned about our transportation infrastructure’s contribution to atmospheric carbon and the resulting climate change. I love my family’s Toyota Highlander Hybrid and would be pleased to drive an all electric vehicle as well. I ate lunch with the head of medical lab operations for one of my clients late last year, and he expressed how low maintenance costs were on his all-electric vehicle. He is a German engineer, trained on process design and systems, who describes a fossil fuel vehicle as involving too much ‘bewegliche’. Too many moving contraptions that are designed to fail along a planned maintenance revenue schedule. I will be looking at the Tesla Model S on my next car purchase as well. So count me as a big fan of electric vehicles. But I would be remiss if I did not examine the issue from a skeptic, value chain expert, and systems designer’s perspective before jumping onto the bandwagon.
Electric Vehicles Mandate We Develop New Energy Sources
I sat down this week and constructed a brief value chain analysis comparing several options for the generation and delivery of electricity to our upcoming world fleet of electric vehicles. An EV approach, if deployed incorrectly turns out to bear some pitfalls in terms of climate – negative impacts even more deleterious than the existing fleet of fossil fuel powered vehicles in terms of atmospheric carbon dioxide introduction. This is why matters involving decisions made on behalf of the entirety of society, a nation, or the world, demand multidisciplinary inputs and analysis from a systems theory perspective. Not blinders-on decisions based upon what sounds most virtuous to academics or their acolytes patrolling the streets of our major cities with baseball bats and gasoline.
Below I have assembled a brief value chain comparative among seven options as to powering our future of electric vehicles. An alternative comparative which reflects the existing fossil fuel to combustion value chain, along with two each (hydrogen and battery storage options) for fossil fuel, solar and wind farm, and household/micro solar and wind energy generation solutions. Each chain of value provision features normalized nodal-measures regarding levelized cost of electricity (LCOE), fully-loaded and traded-line-loss in electrical energy for transmission or charging, and finally the future-efficient pounds of carbon dioxide introduced into the atmosphere at that ‘node’ activity in the value chain. A value chain is a series of flows in expense, margin, and goal-enablement which flow across a series of fully leveraged nodes (necessary activities) which bring an objective into effect. It is a method of highlighting non-value-add activity and comparing different potential strategies to accomplish a goal (value). It is how a corporate or national strategy is analyzed.
Beware of deceptive puff-pieces such as Bloomberg’s Elon Musk Should Come Clean: Tesla’s Emissions Are Rising. They conflate the generation of power with its delivery and consumption in an electric vehicle, as constituting one thing. To wit the Bloomberg article states, “A current-model large car with a battery produced and charged in an average European Union country emits about 88 grams of CO2 per kilometer, compared to 284 grams for a petrol-powered equivalent. In a country with a low-carbon grid like Sweden or France, that drops to 50 grams or less.” This fabutistic arises simply from the fact that France generates 90% of its electrical energy from nuclear power, combined with other renewable sources.2
Such calculation is Yule-Simpson dishonesty. If you pro-rata this ’50 grams’ by France’s ratio of fossil fuel consumption, one ends up with a gross emissions of 500 grams of CO2 per electric vehicle kilometer, or a ratio of around 1.7 to 1 grams of CO2 generated versus a petrol powered one. The reader should note that we conservatively calculate in Footnote 4 and employ a 1.6 to 1 ratio versus a fossil fuel powered electric vehicle fleet later within this article (Value Chain 1 in Graphic A). This is the correct method of delineating the issue. All Bloomberg has done here is to unintentionally confirm that powering electric vehicles by means of a fossil fuel grid (our current direction), is the worst of all possible cost and climate combinations.
The above article excerpt elicits why such analyses as these must be developed inside a value chain framework. Moreover, once each value chain node is distinguished (what the author of the above Bloomberg article failed to do), the ‘load’ (value, risk, expense, margin, etc.) of each node (generation, storage, transfer, etc.) needs to be normalized to the future and not the present. Each of the measures in the chart below is normalized, as raw numbers and current costs/non-loaded energy demand per unit will only serve to skew a value chain analysis to conservancy. Something we observed in the Covid panic of 2020, when raw, specious, and red herring numbers served to incite a severely damaging overreaction on the part of government officials. All value chain node factors/data/constraints need to be normalized or they will offer the wrong answer – as the current practice will always seem like the best one (because realized economies of scale often bias to conservancy).
One example of this is the lower current cost to charge a vehicle during reduced nighttime electricity rate-tiers, an advantage which exists now, however will not exist once electric vehicles proliferate past a certain tip-in point among consumers. This analysis factors that non-diluted node differential out of the equation, so that conservancy is not introduced as bias. These are the lessons-learned one applies from having developed strategies which have been held accountable by governments and businesses for results, and not the academic pretend version thereof. Employing sophisticated MatLab applications in no way serves to lend any form of competence to this work. If you do not really know what is going on inside a value chain, then neither will fancy heuristics contain any functional application therein. Memorized pro forma and symbology hammers looking for the next nail, employed for the sake of outsider intimidation.
Electric Vehicle Power Alternative Value Chains – The Three C’s
Remember, to power your electric vehicle one must still generate the electrical energy somewhere. If that energy generation involves the combustion of a fossil fuel, all one will have done is move the engine of the vehicle to a remote location, one from which is it more difficult to access its energy output. This is depicted in the first conceptual value chain 1 in Graphic A below. Set aside of course the issue that one still has to extract those fossil fuels just as in value chain 4. By placing the point of combustion far from the point of accessing its energy one need burn even more fossil fuels (potentially more ‘sour’ API/sulfur and of a lower grade than gasoline by far or containing less chemical kinetic potential per atomic mass of carbon as with natural gas3), putting even more carbon into the atmosphere – simply to drive the same distance as before with a local fossil fuel engine. This disadvantage is only a portion of what I call value chain ‘line loss’ (in engineering terms or ‘chain loss’ when discussed in economic terms – see calculations/sources in footnote 4).4 Now one may dispute the absolute value used for line loss, as reflected by the 1.6 x additional energy needed in value chain 1 for example; however, if one claims it is negligible, one is a jamais l’a fait. Never done a value chain strategy, never participated in an energy plan for a nation, never designed nor run a power plant. Sometimes these types of ‘allies’ become climate change efforts’ worst enemies.
As well, line loss is not simply the amperage loss through heat (V=IR) inside transmission lines alone (which our team measured on a Southwest US energy project to be around 8-12% or 1.14 x (for EXPANDED infrastructure, not existing benchmarks, but is also much higher in the rest of the world)5, but the entire drop in kinetic potential from the point of kWh extraction from potential (we do not capture 100% of the fuel chemical energy when converting to electricity) to the point of beneficially expended drive torque in the vehicle. Every impact in terms of conversion, step-down, charge, battery cycle (fuel does not deplete while your vehicle sits for example, and all vehicles sit for the majority of their existence) and connection. In reality, between the sour fuel used and battery cycling/sitting, the chain loss in value chain 1 in Graphic A and Table A below is far greater than 1.6. But we stay with 1.6 (outlined in footnote 3) for purposes of this analysis as there is no reference or standard for the entirety of this type of chain loss yet, as such value chains are not yet mature.
If one then replaces this fossil fuel energy generation with solar/wind (or another non-fossil fuel source) – then one cannot possibly supply all the added energy needs and make up the incremental (not existing benchmark, remember this is a value chain) line loss incurred in this value chain (#2 in Graphic A). Indirect renewable energy sources are ubiquitously dilute, emergent-capacity constrained, and of intermittent reliability,6 paling in comparison to the reliable and robust 33.7 kilowatt hours per gallon of gasoline. Winter 2021’s electrical grid struggles in Texas highlighted the vulnerability a population bears with an aggressive 25% wind and solar makeup. Grid planners had, 1. failed to understand the impact of heat pump emergency heating coil load demand, and 2. the wind and solar network ended up not producing power, when Texas needed it the most.7 8 It would be ironic to have fossil fuel plant operators or fuel supply trucks stuck at home/origin, simply because their electric vehicles had no electricity which would power them to cart those operating assets to the power plants.
Moreover, ultimately the best value chain of generate-to-access energy, is to generate the energy as close to its torque demand as is possible; right there where it is accessed to create torque in a vehicle. This is why either micro/solar/home or fossil fuel value chains remain the best options to power our vehicles, and nothing in between. These are reflected in the bottom two value chains 3 and 4 depicted below in Graphic A. As a general principle the closer together are the generation (color icons in Graphic A) and access-to-torque (car on right in Graphic A) nodes, the more value-laden is the chain.
When analyzing or thinking about the above four value chains for powering electric vehicles, one must realize however, that these are theoretical optimal scenarios. The actual introduction of electric vehicles alone will cause an even greater negative impact to climate change than does our current gasoline-powered practice. Below in Graphic B we exhibit the principle that the current electric vehicle reality combines both, the chain loss incumbent with delivering electricity long distances to depleting batteries (Value Channel 1 in Graphic A), coupled with the reality that we have to emit proportionately more carbon to mine, transport and combust fossils fuels to power those chain losses as compared to a conventional gasoline value chain (Value Channel 4 in Graphic A). The worst of both worlds.
These are the principles which are entailed in the below brief value chain analysis regarding equivalent kilowatt hour delivery in vehicles. It is expressed in the form of three factors: Energy ‘Cost’ in terms of LCOE per 1 kilowatt hour, ‘Carbon’ in terms of pounds of carbon dioxide imparted to the atmosphere in one gallon of gasoline-equivalent energy (33.7 kWh), and finally ‘Control’ in terms of percent revenues offset from their existing regulated form, from 0 to 100%. In general, a value chain in this context includes: development, capitalization, construction, operation, extraction, generation, collection, processing, handling, cracking, piping, freight, conversion, delivery, step-down, storage, depletion, decay, access, and finally torque. It is the ‘torque’ beneficial use point where all measures must be struck as a comparable index, because this is the only apples-to-apples node between all 7 value chains roughly evaluated below.
Please note that the LCOE in cents per kilowatt hour is the cost (all factors from development and extraction to logistics and use) to kinetically move a vehicle, as indexed to kilowatt hours, not the cost to produce electricity per kilowatt hour nor the price to buy surplus energy at an auction. Value chains do not use such skewed figures as they serve to bias the analysis. The benchmark which must be used for comparison here is electrically-derived mechanical torque to combustion-derived mechanical torque – with the value channel fully loaded, fully normalized/diluted, and finally reflecting a full lifecycle cost burden for each technology.9 10
Chart 1 to the right depicts the relationship between the three C’s of decision making regarding powering electric vehicles: Cost, Carbon, and Control. These 3 C’s are extracted from the right hand side of the value chain comparative (Table A) above. Each is color coded to the bars inside those cells on the right of that table. If you take the time to examine the chart (first one must grasp that it is a chart and not an eighth-grade ‘x-y graph’), one can make several observations, among which include, cost factors:
1. The current approach of fossil fuel combustion is a very cost efficient method of powering vehicles comparatively (red line dip at center of chart) – even when alternatives are fully loaded to economies of scale. This is because
a. a gallon of gas can be pumped via extensive pipeline networks and ‘last mile’ trucks at very low cost per kilowatt hour of energy equivalent, i.e. 33.7 kWh per gallon of gasoline impart an LCOE of 5.3 cents per kilowatt hour. This cost is competitive with the wholesale cost of generating electrical power at its source. Indeed wholesale energy costs range around 4.2 to 4.5 cents per kilowatt hour nationwide.11 Note that if we move to electric vehicles, that cost jumps from 5.3 cents per kilowatt hour up to 14.7 cents per kilowatt hour for the sourced energy to drive our vehicles. But this cost may indeed be necessary if the solution entailed serves to significantly reduce net carbon dioxide imparted to the atmosphere. That is a big ‘if’ however, and is indeed the subject of this article.
b. a gallon of gas retains 100% of its chemical-kinetic-electrical energy potential throughout the entirety of its supply chain. This is extraordinarily effective when compared to electricity in either transmitted or battery-stored forms – which does not retain its potential and can lose from 15 to 45% of the generated kilowatt hours of electricity during the delivery and battery-charging/depletion/use processes. Think of it this way. If you introduce fuel into your car and get 25 miles to the gallon via a combustion engine, then switch that same vehicle to an electric version and charge that vehicle by means of a gasoline powered electric generator – that same car will drop to 15-18 miles to the gallon of gasoline consumed net-system. In other words, suddenly you are burning more fossil fuels not less (even net of fuel pipeline and last mile delivery impacts). Take note of this for later on when we examine the issue of ‘control’. Why would the fossil fuel industry oppose a solution which would end up consuming even more fossil fuels? Are they indeed the obstacle here as most presume?
However, inside a value chain, cost efficiency is rarely the overarching or guiding factor which drives a decision. This is part of the future of markets of which I have spoken so often. We are killing ourselves, our middle class, our economy and our environment through this blinders-on obsession over efficiency, expense and ‘lean’ operations. If the first thing you do as a newly hired executive is to enact efficiency, productivity, and cost savings programs – then you are just one step above a low-competence administrator. You are an academically trained babysitter. Anyone can do this. American business demands more responsibility that just cooking up buzzword-shrouded cost savings to improve the profits diverted to offshore billionaire Cronies. Further then one can observe that
2. Our current push to move to electrical vehicles (purple arrow at center of Chart 1) will not only cost us more in terms of infrastructure and household monthly bills for transportation, but as well will significantly damage the environment in terms of climate change, at a rate which is 30% higher than even the current levels of carbon dioxide contribution into the atmosphere (green line as it moves to the left of the Chart 1 and green bars in Table B). The pounds of carbon dioxide delivered into the atmosphere increases from 33 to 44 lbs per gallon-equivalent energy in kWh, by moving to electric vehicles as a stand alone strategic climate change move. This because
a. while electrical vehicles emit less carbon themselves, 33% more energy must be generated at the source to cover the line, charging, storage, depletion, and use losses incurred in an electrical supply chain as compared to the same energy delivered, stored, and combusted in the form of gasoline. Yes we have to pipeline and truck our gasoline, but those mediums and their associated transactions do not involve energy line loss, which is a more significant issue.
b. battery full lifecycle and charging station infrastructure will itself create a carbon load on the atmosphere, competitive with the current gasoline delivery infrastructure carbon load. While alkanes such as octane do emit other volatiles and carbon-pollutants into the atmosphere, so do the exotic metals which must be mined, delivered, forged, ionized and incorporated into the battery manufacturing and disposal infrastructure. Fossil fuels do not require a massive core and recycling network and batteries cannot be delivered via pipeline and with no energy loss. These 3-C principles are measured inside the ‘transfer haul’, ‘last mile’, ‘vehicle introduction’, and ‘storage medium’ nodes of the value chains in Table A above.
As one can see, our current push towards the Pollyanna of simply rolling out more electric vehicles, as if we have accomplished a major climate victory, is more damaging to the environment in terms of excess carbon contribution than is the current fossil fuel vehicle fleet. Most people do not realize that our current push is premature and in desperate need of a sound deployment strategy in order to avoid this excess-carbon environmental impact (I could lead this, but we have too many cleverly concealed egos in political and academic circles to accept the unwashed into their elite ranks). Moreover,
3. As one may note in Chart 1, while electric vehicles certainly mandate that non-fossil fuel sources of energy be developed on a massive scale, there are limitations to the scale at which these alternative sources can be provided by traditional government authorized monopoly and oligarch industry energy providers. The reality is that household-based electricity generation will be a mandatory aspect of successfully deploying electric vehicles on a large scale. Conducting this power generation at the point of demand effectively avoids half of the line loss entailed in transmitting the power across the grid (actually only a short geographical distance, as power is displaced, not ‘shipped’) and into homes nationwide. (As a note and of course, ‘household and home’ includes apartments, parks and condos which generate power from shared grids)
Indeed if one examines Chart 1 closely, they may note that the green carbon contribution line (and alkanes, acid rain, sulfides, etc. as well) drops to a very low level when electric vehicles are matched with the requisite generation of power in the household. As well, charged batteries or canisters of hydrogen can be traded and managed effectively between households – thereby reducing value chain friction (as I call it). Consumer energy bartering, what a concept.
Tesla has grasped this, as exemplified by their product offering of a roof mounted solar grid being sold alongside their electric vehicle offering. The image above right is a Fair-Use extract from their site promoting these products (apologies E).12 Roof mounted solar panels (or solar roofs for that matter) are a mandatory aspect of electric vehicle deployment on a large/nationwide scale. The difference in LCOE for a kWh of energy used is negligible (see red LCOE bars/line in Table B or Chart 1) and the carbon contribution is one fifth to one quarter of the industrial version of that same energy generation method (see green line in Chart 1). Elon Musk gets this. (Please also note that we should not dismiss hydrogen as an alternative to batteries in this role – as its value chain is very competitive to a battery-centric one13).
The bottom line is that small-in-scale, proximal-to-demand, modular-storage energy generation
stands as the critical complement to a nationwide electric vehicle rollout strategy.
These are two wings of the same bird.
Anything short of this will be more damaging in terms of climate change than even the current fossil fuel fleet.
Control: The Rub and Mount Stupid
In-home/private vehicle power sourcing, while costly up front,14 will reduce both the cost to operate a vehicle as well as the overall petroleum and meter-fees/taxes paid by the average consumer. And therein lies the rub.
4. The fact that these technologies are expensive for the consumer to install is not the critical issue; instead, control of long-term expense flows and a market channel is what’s at stake. Generation of vehicle power in the household will not only displace channel-expenditures on fossil fuel technologies, and reduce overall petroleum taxes/revenues and potential kilowatt hours sold by power utilities, but as well will serve to reduce overall government control of these vehicle energy supply chains. Energy generation itself, barring discovery of some novel, low-cost, and bountiful renewable centralized source, will force the issue of decentralization (and potential loss of control, mandating even more draconian laws). Almost like we are being delivered a universal message. Choose in favor of your citizens or choose centralized control and punishment, but you must choose nonetheless – your choice being a lens into the soul of your species.
The blue bars on the right of Table B and blue line in Chart 1 indicate a quick estimate of degree of revenue-control lost (0 to 100% of vehicle energy revenue controlled) inside each comparative value chain – this is called ‘The Hump’ or our climate change version of Mount Stupid. A degree of control will be lost on the part of the government in terms of revenues and supply as compared to the robust fossil fuel revenue/supply chain currently in use. Please note that it is not the absolute tax dollar amount which I am discussing here (as tax incentives already exist for the installation of solar systems in the home), rather control of supply. These are slightly different issues.
Prospectively, our governing officials will need to license solar panels for consumer use, net-meter, and own their outputs by law, despite their being purchased for use on private property and by the property owner – outlawing private and pirate off-grid solar panels as ‘fomenting insurrection’ or ‘anti-science’ in some fashion. The trade/barter of grey market batteries or hydrogen cylinders will be prohibited. I can see this coming, especially if this movement extends further into the household energy chain.
5. Of course another issue of Mount Stupid control has involved homeowner associations. Right now, I am prohibited by my homeowner association restrictive covenants from installing solar panels on my own roof (even if out of sight from the roadway). The association threatens us with big-name law firms to ensure that homeowners comply (the use of which they bill us for, in advance). This version of Mount Stupid control also needs to change. Note that House Resolution 2454, which would have forbid such actions on the part of homeowner associations was never brought to the floor of the US Senate.15 For the most part it is conservative red states which have sought to outlaw such restrictions.16
Therefore the astute ethical skeptic, once arriving at this point in their analysis, should note that it is not the Cost and Carbon elements of the value chain 3 C’s which constitute the primary obstacles to sound strategic deployment of electrical vehicles or even climate change solutions for that matter, but rather the third ‘C’, Control. The blue line in Chart 1 above shows the principle that it is loss of vehicle energy revenue-control on the part of the government which is the greatest obstacle to tackling this facet of climate change strategy. It is not a technological obstacle at all, and never has been – but rather one of empire, hierarchy, and control of mankind. That same big government which leftists enlist to enforce climate change solutions upon us all, is in fact the chief obstacle to ethical deployment of these technologies to begin with. Unless we figure out a way to tax and control this energy chain, this change will not happen soon. The victims (conservatives and small business owners) will of course then be assigned the blame as well. This is how it works.
A healthy climate is not the first order of business at stake after all – rather taking a price out of the hide of mankind remains the preeminent objective. It is a form of penance for our original sin. The future involves removing this principle of human rights abuse, and its ensuing forms of hierarchical power.
The Ethical Skeptic, “The Pitfalls of Electric Vehicles as Climate Change Panacea”; The Ethical Skeptic, WordPress, 4 Jan 2021; Web, https://wp.me/p17q0e-cbA
- Peter Landers, The Wall Street Journal: Toyota’s Chief Says Electric Vehicles Are Overhyped; 17 Dec 2020; https://www.wsj.com/articles/toyotas-chief-says-electric-vehicles-are-overhyped-11608196665
- World Nuclear Organization: Nuclear Power in France; Jan 2021; https://www.world-nuclear.org/information-library/country-profiles/countries-a-f/france.aspx
- Minnesota State: Chemistry 102 Notes, p. 5; http://web.mnstate.edu/marasing/CHEM102/Chapter%20Notes/Ch_04%20ho.pdf
- In general the principle and relevant range of line loss (chain loss), is cited by the National Academy of Engineering and California Energy Commission.
Of 100 units standard kinetic potential, to point of creation of torque:
Plant loss at coal combustion = 62 units coal (https://www.nap.edu/read/12204/#slide2)
Car loss at internal combustion = 68 units octane+ (https://energyeducation.ca/encyclopedia/Energy_loss#cite_note-RE1-2)
Line loss electrical = ~32 units (https://www.nap.edu/read/12204/#slide2)
Line loss vehicle = 0 units (torque = torque – benchmark strike point = 0)
Ratio = 94/68 = 1.59 or a 38 – 43% kinetic loss when comparing the two value chains, in a new infrastructure. You can then see this by comparing the yellow bar factors in Table A (1.00 versus .59 and .62 for value chains 1 to 2 and 3 respectively)
- Inside Energy: Lost In Transmission: How Much Electricity Disappears Between A Power Plant And Your Plug?; http://insideenergy.org/2015/11/06/lost-in-transmission-how-much-electricity-disappears-between-a-power-plant-and-your-plug/
- Planning Engineer; Climate Etc.: Assigning Blame for the Blackouts in Texas; 18 Feb 2021; https://judithcurry.com/2021/02/18/assigning-blame-for-the-blackouts-in-texas/#more-27097
- Planning Engineer; Climate Etc.: Assigning Blame for the Blackouts in Texas; 18 Feb 2021; https://judithcurry.com/2021/02/18/assigning-blame-for-the-blackouts-in-texas/#more-27097
- Newsweek: Graphic Shows What Percentage of Texas’ Energy Is Renewable; 18 Feb 2021; https://www.newsweek.com/how-much-power-texas-renewable-coal-gas-wind-turbines-1570238
- Wikipedia: Cost of electricity by source; https://en.wikipedia.org/wiki/Cost_of_electricity_by_source
- Solar Cell Central: Solar Electricity Costs; http://solarcellcentral.com/cost_page.html
- US Energy Information Administration: Wholesale Electricity and Natural Gas Market Data; 30 Dec 2020; https://www.eia.gov/electricity/wholesale/
- Tesla: Solar For Existing Roofs; https://www.tesla.com/solarpanels
- David Biello, Scientific American: Inside the Solar-Hydrogen House: No More Power Bills–Ever; 19 Jun 2008; https://www.scientificamerican.com/article/hydrogen-house/
- Lauren Schwahn, NerdWallet: What Do Solar Panels Cost and Are They Worth It?; 13 Mar 2020; https://www.nerdwallet.com/article/finance/solar-panel-cost
- Wikipedia: American Clean Energy and Security Act; https://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act
- Lynn Smith, Esq.,The Ins and Outs of Solar Panels In HOA Communities; https://www.hopb.co/blog/the-ins-and-outs-of-solar-panels-in-hoa-communities