Kicking fossil fuel out of industry

 From Just Have a Think

Gives an interesting perspective of just how fossil fuels are used in industry, and how we can replace almost all uses with green electricity.  As so often, up-front costs are key.  And as always, a decent carbon price would encourage a more rapid transition to carbon-free industry.

There are 4 main "sectors" where we need to de-carbonise, and they each require different solutions.  The emissions from each sector are not equal, but it helps to break down the problem like this.

1.  Electricity generation.  This is, globally, the sector with the biggest share of emissions, but that varies a bit depending on the country.  The solutions here are obvious, and happening, though not as fast as is needed.
2. Transport.  A mixed bag.  Land transport is moving rapidly towards zero carbon; air and sea transport still has a long way to go.
3. Industry.  This includes steel and cement production, and chemicals and paper.  This video discusses various solutions.
4. Food.  A combination of methane emissions by grazing animals, and deforestation to produce beef.  As big as electricity generation by many analyses, but the hardest to reduce, because people have an emotional relationship with their food.  Politicians interfere at their peril, so shy away.  Yet it is abundantly clear that something will have to be done.

The hybrid solution

I've been fairly dismissive of hybrids in the past.  After all, it appears to make no sense to have two engines in a car.  And eventually, battery prices will fall enough to make full-on electric the cheapest way to go.  But—the problem is that battery prices won't get cheap enough to give EVs an up-front cost advantage for 5 years (or more—see below).  Plus, the demand for batteries is so strong that there aren't enough to go round, as I discuss in The EV Bridge.  And there's the issue of range anxiety.  If you buy a Tesla, you'll have no problems.  But any other brand, here in Oz, at any rate, there are just too few chargers. 

So, while EVs are clearly the technology of the future, for the time being hybrids (whether serial or parallel, plug-in or not) are still cheaper and more popular.  And since we must cut emissions as rapidly as possible, we should encourage any electric car, hybrid (HEV) or plug-in hybrid (PHEV) or full-on electric (EV).

The price gap between hybrids and the un-hybrid version of a car model seems  to be low (see Toyota's biggest selling hybrid isn't the Prius)—just US$ 2,200.  And that will deliver a 30 to 40% cut in emissions. 

Here's the 2019 pricing of the Hyundai Ioniq in the US:

Hybrid                $22,400
Plug-in Hybrid   $25,350
EV                      $29,815

Let's assume there were a Hyundai Ioniq without an electric motor, an "un-electric" as it were.  Using the Corolla price gap, it would cost, say $20,000.  This means that the full-on electric would cost roughly 50% more than the un-electric, the plug-in hybrid 25% more.  Even though both the plug-in hybrid and the full electric will be cheaper to run than the un-electric, the sales of these cheaper electric versions of the Ioniq still wouldn't replace sales of the un-electric, because ppl have to find the up-front cost of the car, whereas the petrol costs are spread over its lifetime.  You can lease a car, but not everyone is able or willing to do that, and HP requires a deposit and the costs are still mostly up-front.

So, what to do?

Let's suppose we gave a subsidy of $2,500 to all electric cars.  Using the Ioniq as an exemple, that would remove the up-front cost disadvantage of the HEV, reduce it for the PHEV to where the HEV's is today, and reduce the cost premium of the full-on EV relative to the un-electric to 37% from 50%.  With a $2500 subsidy, rational consumers would buy electric.  At first, most would buy the simple hybrid, though some would buy plug-in hybrids, and a few would buy the full EV.  Emissions would fall by at least 40% as the car fleet transitioned.

I don't know how much the Ioniq EV's battery bank costs, but the petrol engine + gearbox + radiator + petrol tank must cost more than an electric engine—look at the small gap between the HEV and the un-electric, which represents the addition of an electric engine plus a small battery.  This means the Ioniq's EV battery bank costs, say, $12,000.  In five years' time, given that battery prices are falling by 20% per annum, it will cost just $4000, so the cost of an EV Ioniq will be close to the cost of the HEV, and below the cost of the PHEV ('cos you'll only need one engine).  At that point, the subsidy will encourage ppl to buy the 100% electric car instead of the HEV.

Eventually, the EV would be cost competitive even without subsidy.  On the Ioniq's current pricing, EVs will equal the cost of an un-electric in 8 years (longer than I had thought—I've been estimating 2023 or 2024, but this suggests 2028).  The trouble is, we haven't got 8 years to waste.  We must electrify our car fleet as soon as we can.

Instead of a subsidy, we could set rising targets for electric (of whatever kind) sales as a percentage of total sales, starting at 10% and increasing each year by 15%, so that by 2027 the EV/HEV/PHEV target would be 100% .   It works like this.  If a car wholesaler/manufacturer reached their target, there would be no penalty.  If they didn't, they would have to buy points from those who have.  Let's say the target is 10%, but they only reach 8%.  They'd have to buy points equal to 2% of their total car sales.  If they exceeded the target, they would have surplus points available for sale.  But unlike the Californian and Chinese schemes, under my scheme, the manufacturer would earn 1 point for each electric car, whatever its type, rather than 1/4 point for an HEV, 1/2 a point for a PHEV and 1 point for an EV*.

The Californian and Chinese EV targets encourage sales of EVs over PHEVs and PHEVs over HEVs, by giving more points to the EVs than lesser electric cars.  But that distinction is prolly unnecessary, and may slow the uptake of electric vehicles.  As EV costs decline, they will automatically be chosen over HEVs and PHEVs.  A target/subsidy which simply rewards buying an EV of whatever kind would lead to a much bigger take-up of electric cars than one which rewards EVs only, because hybrids are only a little more expensive than un-electrics.  As battery costs decline over the next 7 to 8 years, sales of full-on EVs would rise progressively, until 100% of electric sales are made up of EVs.  This would mean that we could start cutting emissions from transport now, not in 5 or 7 or 10 years while we wait for EVs to become cost competitive.

 If at first electric sales are mostly HEVs or PHEVs, it wouldn't matter, because each year emissions of 1/12 of the vehicle fleet (assuming a 12 year car life) would fall, by an increasing percentage, as the electric target bit deeper.  After 6 years, emissions of an additional 1/12th of the total car fleet each year would fall by 40%, rising progressively as EVs took a larger and larger market share.  This would mean that total car emissions would be falling by 3% per annum from 2025 onwards, and this decline would continue and accelerate as the percentage of EVs in the mix rises.  Over the first 10 years, the cut in emissions would come from hybrids, over the next 10 from a further step-by-step switch to EVs.

The world must, at a minimum, target a 3% per annum cut in total emissions if we are to avoid a climate catastrophe.  By being less purist about HEVs relative to EVs, we can rapidly reduce emissions from cars (and implicitly, lorries and busses) starting now.  Almost all manufacturers have one or other kind of hybrid in their line-up.  And they have them now.  The transition would be simple and easy.  And from 2026 onwards, we could take the next step: going for 100% electric.

Two reviews of the Ioniq:


Hyundai Ioniq Hybrid 2019 review

Hyundai Ioniq 2020 review: Plug-in Hybrid Premium

—————

* or rather 1 point for an HEV, 2 points for a PHEV and 4 points for an EV, which implies that the effective EV target is lower than the stated one.

6 times denser battery

From Melbourne's The Age newspaper.

Researchers in Australia believe they have solved one of the key problems holding back the battery of the future, a breakthrough that would allow them to develop cells that could run a smartphone for four days.

Lithium-sulphur batteries can theoretically store six times as much energy as the lithium-ion batteries currently used in phones and electric vehicles, but that extra power can cause them to swell and break.  The international research team discovered a simple tweak to the manufacturing process, which they said fixes the problem.

Their patented design was published in Science Advances earlier this week. A stack of battery prototypes have been built in Germany and will be tested in electric cars in the next few months.  The team have already fielded calls from companies around the world, including electric vehicle manufacturers keen to harness the technology.

"This technology is the heir-apparent to current batteries," said Dr Mahdokht Shaibani, the Monash University engineer who led the team. "We have proven prototypes, and that makes us and the whole industry very excited."

Lithium-ion batteries come with inherent problems: they are expensive, can explode and die after a certain number of uses. Scientists have improved their efficiency, but they're starting to reach their limits.  And cobalt, a key ingredient, is mined mostly in the Congo, often by child labourers.  But they remain state of the art because there is nothing better available.

Labs and companies around the world are working on several alternatives, including lithium-sulphur batteries. Sulphur is cheap, abundant and can theoretically hold six times more power at the same weight.  "That’s the irony," said Dr Shaibani. Lithium-sulphur batteries can hold so much power the sulphur swells up to almost twice its original size and breaks. Despite keen interest, that’s prevented commercialisation so far.

The team believe they may have solved the swelling problem with a simple tweak to how the electrode, the end of the battery that holds the charge, is made.  Factories make electrodes by mixing carbon and sulphur together into a wet paste, which then dries. Dr Shaibani’s team found that slowly mixing the ingredients with only a tiny bit of water produced a thick slurry – a bit like mixing detergent powder with a drop of water.

Under the microscope, the team discovered the slurry was filled with microscopic holes, like Swiss cheese. That meant the sulphur particles could swell up without breaking as they fill with charge.  

"It gives the sulphur particles some room to breathe," said Dr Shaibani.

Most research on sulphur batteries tries to solve problems using exotic materials or impractical techniques. That’s why industry is not picking it up, said Dr Shaibani.

"There have been over 8000 papers published in this field since 2010. Most of them are claiming breakthrough after breakthrough," she noted.

"I tried to use a solution that industry would accept: cheap materials, similar design."

A lab in Germany has been manufacturing prototype cells using the new technology. Dr Shaibani’s team has now received $1.1 million from the federal government to test the cells in electric cars this year. They hope to have a commercial product within two to four years.  Dr Shaibani’s research is partially funded by Cleanfuture Energy, a renewable energy company that hopes to use the technology to develop better storage batteries.

One of the reasons I am so confident that battery costs will continue to decline is the extensive research taking place around the world to improve them and to improve their energy density.   And if the lithium-sulphur batteries work, then electric planes will go mainstream.  The sustained yearly fall in battery costs will mean that EVs have the same sticker price as petrol (gasoline) cars, and that storage for the grid will become cheap.

Here's Smart Energy International's take on the new LI-S batteries:

Monash University researchers are on the brink of commercialising the world’s most efficient lithium-sulphur (Li-S) battery, which could outperform current market leaders by more than four times, and power Australia and other global markets well into the future.

The battery has the potential to power a phone for five continuous days, or enable an electric vehicle to drive more than 1000km without needing to “refuel”.

Dr Mahdokht Shaibani from Monash University’s Department of Mechanical and Aerospace Engineering led an international research team that developed an ultra-high capacity Li-S battery that has better performance and less environmental impact than current lithium-ion products.

Using the same materials in standard lithium-ion batteries, researchers reconfigured the design of sulphur cathodes so they could accommodate higher stress loads without a drop in overall capacity or performance.

Attractive performance, along with lower manufacturing costs, abundant supply of material, ease of processing and reduced environmental footprint make this new battery design attractive for future real-world applications, according to Associate Professor Matthew Hill.

The researchers have an approved filed patent (PCT/AU 2019/051239) for their manufacturing process, and prototype cells have been successfully fabricated by German R&D partners Fraunhofer Institute for Material and Beam Technology.

Some of the world’s largest manufacturers of lithium batteries in China and Europe have expressed interest in upscaling production, with further testing to take place in Australia in early 2020.

The study was published in Science Advances on Saturday, 4 January 2020 – the first research on Li-S batteries to feature in this prestigious international publication.

And here's an article on Li-S batteries from Wikipedia.

Associate Professor Matthew Hill, Dr. Mahdokht Shaibani and Professor Mainak Majumder (Image: Monash University)

Zero carbon by 2050

If we want to stop catastrophic climate change and global heating, we need to cut emissions of CO2 and methane to zero by 2050.  Let's split those 30 years up into decades, aiming to cut emissions by 1/3rd of the 2019 level each decade.

2020-2030

This will be the decade where we have to close down as many coal power stations as we can.  The good news is that in most countries, wind or solar or both are now cheaper than (new) coal.  In developed countries, most coal power stations are old, and will soon have to be retired.  When they are, they will be replaced by wind and solar.  Even with 10 hours of storage, wind and solar are the cheapest power source in the USA, except for existing coal power stations which have been fully depreciated and have had their debt paid off.  But of course, they are precisely the power stations which will need to be retired over the next decade.

Even in China, where coal is cheap, large-scale solar will this year reach grid parity, meaning it can compete with the wholesale price of electricity, which is determined by China's massive coal fleet.  China produces 35% or world CO2 emissions, and is the largest consumer of coal.   A change here will be very important for world emissions and the global climate.

So the target is that by 2030, the number of coal power stations still operating will be small.  They'll simply be too costly to keep going.  This is much faster then even the relatively optimistic BNEF forecasts (they forecast just 25% from renewables by 2030).  Nevertheless, the cost curves as well as the increasing global panic about catastrophic climate change suggest this will be likely.

During this decade, we should also try to switch heating from gas/oil to electric, and we will start the switch to electric transport.  Of which more below.   Electricity and heat production contributes 25% of global CO2 emissions, so we'll need to find more areas to cut emissions by 1/3rd by 2030.

2030-2040

This will be the decade where we electrify transport.  Battery costs are falling by 20% compound per annum.  This means that we should cross the $100/kWh battery pack cost line by 2023, which will mean that the "sticker price" of EVs will be comparable to ICEVs.  Already, in China and India (where it is very important that the growth in demand for personal transport isn't satisfied by petrol cars) small, cheap EVs are available.   Once again, the twin pincers of public anxiety about climate change and the plunging cost of EVs will rapidly squeeze fossil fuels out of the market. Assuming EVs reach 100% of new car sales by 2030, then by 2040, almost all the emissions from road transport will have stopped, assuming a 10 year vehicle life, which is lower than what it is now, but government will likely want to accelerate the transition by banning polluting cars and lorries from town centres as well as buying back aging fossil fuel clunkers.

In developed countries, these emissions are about 1/3rd of total emissions.  In developing countries, they make up a smaller proportion on average, though the percentages vary widely.  But demand for cars is growing fast in developing countries, so a transition to EVs will prevent big rises in emissions from this sector.

It will also be the decade when we make cement production and iron & steel carbon-neutral.  We have the technologies to do this now, but these processes are still more expensive than making them the old way.  Expect carbon taxes or regulations, to force a shift.

Battery technology may well have advanced far enough that we will be able to fly long distance without using jetfuel.  Or we will have shifted to carbon-friendly jetfuel.  Or we'll be flying long distance by SpaceX's suborbital shuttle, fuelled by green methane, and short distance by electric planes.  Once again, carbon taxes will help shift air travel towards zero-carbon alternatives. 

Emissions from transport and industry (iron & steel, cement, chemicals, mostly) make up another third of global emissions.  By 2040, these will have stopped.  They'll have to.  Together with what will have been done in the 2020s, total emissions will have fallen by roughly 2/3rds, a compound rate of decline of 5.5% per annum.

2015.  Source: EPA

2040-2050

By 2040, emissions from electricity generation, transport, and industry will have fallen dramatically.  But there will remain some emissions, by far the most important being agriculture, land-use, land-clearing, etc.  There's no particular reason to wait until 2040 to deal with these.  We could start transitioning now.  After all, we have alternatives to meat.  And perhaps by 2030 or so, most ppl will be terrified enough of climate change to change their personal lifestyles.  But change here will be hard.  With electricity generation, the future is already happening now.  Renewables are simply cheaper.   With EVs that will soon be the case.  But with meat, we're asking people to change life-long habits.  It'll have to be done, it's just that politicians will postpone action as long as they can get away with it.  Once again, a carbon tax would help the shift.   If you think that the outrage generated by trying to get our economy to switch to green electricity was over the top, wait till you tell people they must eat less meat.  Yet, I have hope.  Synthetic meats are taking off.  Vegetarianism and veganism are rising trends.   And if meat substitutes taste just like the real thing but don't inflict dreadful cruelty on animals and have a huge negative effect on the environment, then why not?

2020-2050

In each decade, the necessary year-on-year percentage decline will increase, even though as a percent of the starting point, the decadal declines will be roughly the same.   If we cut emissions 1/3rd by 2030, then we have to cut emissions by 1/2 from 2030 to 2040.  And from 2040 to 2050 by 100%.  These seem to be large percentages, but they will only look like that because of previous successes.

Many of the shifts will begin before the decade I've selected for each of them, though I expect my selected decade will be when they reach their culmination.  If the transitions are sped up, maybe we can reach near-zero emissions by 2040, if we move in all sectors.  And if we start massive re-afforestation we might achieve negative emissions, and will for the first time in the last 200 years see falling atmospheric concentrations of greenhouse gases.  We must surely hope so.

VW begins production of the ID3

This is the beginning of the EV revolution.  Yes, Tesla started it.  But for one of the world's largest car companies to seriously (and I believe they are serious) start the transition to EVs in its own production and sales is when EVs start going mainstream.

From CleanTechnica:

I flew into Germany at dawn today on my way to Zwickau, where Volkswagen has converted a factory that used to make almost 300,000 gasoline- and diesel-powered cars per year, most of them part of its Golf family of vehicles. In 2018, production at the Zwickau factory was phased out so crews could begin transforming it into a production facility devoted exclusively to making 100% battery electric cars.

Tomorrow, November 4, German chancellor Angela Merkel and a host of dignitaries will be on hand in Zwickau to witness the start of series production of the ID.3, Volkswagen’s first electric car built on the all new MEB platform. By 2021, the Zwickau factory will be turning out 6 different models for three different Volkswagen Group brands for a total of 330,000 electric vehicles a year.

“Production start of the ID.3 ushers in a new era for Volkswagen — one comparable to the first Beetle or the first Golf. Zwickau will become the lead plant for this new era in the automotive industry: The plant is undergoing a phased conversion — from 100% internal combustion engines to 100% electric drives. We are therefore initiating a system changeover in the automotive industry that will unfold over the next one or two decades,” says Thomas Ulbrich, Volkswagen board member for E-Mobility.

The stakes couldn’t be higher for Volkswagen. After a series of scandals rocked the company in 2015, there was a time when many thought Volkswagen — one of the largest automobile manufacturers on the planet — might actually go out of business. To stave off such a drastic result, the company committed to spending more than $35 billion on the design and manufacture of electric automobiles. It has committed to spending more than $50 billion for the batteries those cars will need over the next decade.

In short, it has gone back to basics and begun restructuring itself as an automobile manufacturing powerhouse for the 21st century. Shortly it will have 6 electric vehicle production facilities — two in Germany, one in the Czech Republic, one in the United States, and two in China. It says it will build 22 million electric cars between now and 2028.

The question on everyone’s mind is, will it find 22 million customers for its electric cars? It’s all well and good that its Porsche division is building great electric sports cars for the affluent, but to reach its volume targets it will need to have models that ordinary people can afford. Last spring, the company hinted it could offer versions of its electric cars that retail for as little as $22,000, albeit with smaller batteries and a range of around 125 miles.

But range may not be as much of a hindrance to EV sales in years to come as it once was. The charging infrastructure is expanding in Europe, where Volkswagen is part of the Ionity fast charging network, and in the US, where its Electrify America subsidiary is expanding rapidly. Volkswagen is also pushing ahead with EV charging infrastructure in China.

[Read more here]

125 miles (200 kms) of range is enough for 99% of trips for most people.   It's enough for commuting, going to the shops, visiting friends, picking up the kids from school.  It's inconvenient for long trips.  For example, on a Melbourne to Sydney trip (900 kms) you'll have to stop 5 times to recharge.  And in Australia, there still aren't many EV chargers.  But if you drive Melbourne to Sydney often, you won't buy an EV with a low range.  For everybody else, an EV with 200 kms range is adequate, and the total cost of running it will be half the cost of a petrol/diesel vehicle.  It was always likely that EVs would show a big range variation, with small cheap EVs with low ranges and luxury EVs with long ranges.  This is how the Chinese EV market is.

The revolution has begun.  EVs are already more than 7% of Europe's car sales.  Watch VW's range of electric cars drive that up to and beyond 20%.

VW's ID3 electric car

EVs price competitive with petrol by 2023

I've talked about Ray Wills' EV forecasts before.  He doesn't seem to have shifted his forecasts much, which is logical, because unlike most other forecasters who have been too conservative by far, he has correctly called the rapid rise in EV penetration.  

From The Sydney Morning Herald:

Electric cars will hit price parity with petrol [cars] by 2023 and be the only cars produced by 2026, while many city petrol stations will be obsolete within a decade, says a Perth 'futurist'.

Ray Wills is managing director of advisory firm Future Smart Strategies, which examines the growth of commodities in the marketplace.

Reacting to news of a spike in investment in West Australian petrol stations, Professor Wills, who is also a board member of remote energy services provider Horizon Power and former chief executive of the Sustainable Energy Association of Australia, said anyone thinking of buying a car would be well advised to wait a few years if possible.

“The future is coming faster than we think,” he said.

“And when it arrives, we always say it was faster than we thought.”

Future Smart had been modelling since 2012 and its models had been “robust” since 2014, he said It also “post-casted”, evaluating previous performance.

In 2015, Future Smart Strategies projected 1.85 million EVs would be sold globally in 2018; it turned out to be 2.02 million.

Professor Wills said his models, while more aggressive than those of traditional forecasters such as Bloomberg and Deloitte, were less so than his nearest neighbour in approach, Stanford University’s Tony Seba, who had estimated EVs would be the only vehicles produced by 2025.

He said the disruptive power of electrics was visible in their eclipse of hybrids: for the past decade, 1.5 million hybrids had been sold. More EVs than that were sold in 2018 alone.

“When you see a disrupted market, it’s the thing that has the momentum that rules the day,” he said.

“Nobody will ever be exactly right. But I have been labelled as a futurist and the art of a futurist is to be the least wrong.”

Professor Wills said last year, the global car industry announced a total [US]$400 billion investment into EVs and in addition so far this year, another [US]$100 billion forward investment up to 2025. Volkswagen had announced in excess of [US]$40 billion. Even Toyota, a “laggard” until recently, in May announced a [US]$20 billion forward investment on EVs and advanced plans for electrification by five years.

“Electrification as I see it will be virtually complete by 2026, the only cars built in my opinion will be electric, with the exception of some specialist bespoke vehicles.”

He said the average age of the 18 million cars in the Australian fleet was 10 years. He predicted 5 per cent of them would be replaced by EVs by the early 2020s, 50 per cent by 2036 and almost all of them by 2046.

Currently the cheapest EV in Australia was the Nissan Leaf, costing [A]$50-70,000, and while there was no doubt that people would wait until EVs were affordable to buy one, he said by 2022-3 they would be in the [A]$20,000 range. [Surely a typo or misreporting?  If battery costs keep on falling at 20% per annum, they'll fall by 2/3rds by 2023.  But the price of the whole car won't fall by that much.  If he argued that EV prices could drop by A$20K, that's plausible.]

While still dearer than a comparative petrol car, they would save $1000 per year on fuel costs which would outstrip the additional initial outlay within two years, he said.

Professor Wills said said the only car market in Australia growing was EVs; petrol car sales had stalled for 18 months and while economic conditions were part of it, he believed there was more to it than that.

“It’s seen with iPhone models ... we will hold on to the old one if we know a new one is coming," he said.

“People are thinking, I will wait and see what happens. Once EVs are here combustion prices will fall ... at some point they will become unsellable and that’s the point people won’t want to get caught in. It’ll be like buying a flip phone. People will know there’s a better option.”

He said anywhere you could plug in a hair dryer, you could plug in an EV.

"On the street you’ll need a little infrastructure,” he said.

“It’s not an NBN [Australia's National Broadband Network] rollout ... it’s not a $40 billion project, more like a $4 billion project.”

Petrol sales would thus be eroded and Australia would generate electricity for cars using local, renewable energy power plants, freed of the need to import $15 billion annually in oil and oil products for motor cars.

“Over the past 20-30 years, as we’ve gone to a self-serve petrol station then pay at pump, we lost all the corner store type stations ... replaced by the big main road stations,” he said.

“Next step will be a rationalisation of larger volume petrol stations. In the 2020s you will see some older petrol stations closing instead of being upgraded. The biggest ones will be the best protected and as the petrol and diesel market is eroded you’ll see the attrition of the outlets, just as the internet has eroded retail sales.”

On regional highways and national highways they would continue to operate as fast charging points.

“Australians will still have “range anxiety”, it’s prevalent here because of the distances, but there are already vehicles that can do 400 miles without a charge, and most of us can’t do that without a pee,” he said.

“You’ll need to recharge yourself before you’ll need to charge that car. Right now, 150KW is less than an hour; a stop for a tea, a pie and a tinkle.”

Key to the puzzle would be the arrival of electrified trucks, he said, and that would be a clearer situation within two years.

China was rolling out all buses, trucks and taxis to be electric, both for energy efficiency and air quality; building 181 electric buses per day. Australia had 36 electric buses in operation, by comparison.

Professor Wills was mystified by Transperth replacing its current fleet with diesels.

“They’ll say we need to trial [electrics]. Do we really? We could replace our fleet in a week with the manufacturing out of China.”

World EV sales in April a new high

World EV/PHEV sales in April reached a new record in absolute terms and as a percentage (2.4%) of total global car sales.  Sales are growing by 60% per annum.  At the beginning of 2014, EV sales formed just 0.4% of total car sales.  Four and a bit years later that percentage has risen 6 fold.  Note that both charts are drawn in log scales, which means that a constant rate of growth will show as a straight line.

If we assume that growth in EV/PHEV sales continues at 50% per annum, by end 2019, EVs will make up roughly 5% of total global car sales, by end 2022 roughly 16%, and by end 2025 well over half.  YEah, but could that growth rate slow?  Eventually, yes, as EV sales reach 70 or 80% of total car sales.  But if anything, sales growth could accelerate over the next 6 years, as more and more manufacturers expand their ranges of EVs and PHEVs, as consumers get used to the idea of EVs, as the cost of EVs falls, as charger networks expand, and as carbon taxes/cap-and-trade policies start in more countries/regions. 

It seems very plausible that in 10 years' time, 90% or more of car and light truck sales will be EVs.     It won't take till 2040 or 2050 for the switch to occur.  It's happening right now, and the growth rate is exponential.  The moral for oil producers and retailers and legacy car makers is abundantly clear.

➽ As usual, the source of basic data is Inside EVs, with my seasonal adjustment.  EV means (pure) electric vehicle, PHEV means plug-in hybrid electric vehicle.

The success of the Energiewende

The Energiewende is Germany's "energy transition" to renewable energy, and out of nuclear and fossil fuels.  It is pronounced with a hard g, as in English "get" and w is pronounced as a v.

It is often criticised as a failure, because

1. It's pushed up the price of electricity in Germany. Germany has among the highest electricity price in the world 
2. Germany still uses lots of coal, so what's the point?
3. They've been doing it for nearly 2 decades and they're still haven't reached 100% renewables.  Surely they should have done more?

When the Energiewende started in 2000, wind was very expensive.  Wind turbines were much smaller than today, and the electricity they generated was much more expensive than it is now.  But as the industry moved down the learning curve, costs fell--since 2009, wind has fallen 66% in cost.  Today, wind is the cheapest generation source.  Solar was even more expensive than wind in 2000.  Its costs have fallen 85% since 2009.  The feed-in tariff contracts signed were for a duration of 20 years, so it will take a while before the newer low-cost wind and solar start to influence electricity costs.  But electricity costs in Germany have probably peaked and will start falling from now on.

We must thank Germany (and Denmark) for their decision to install expensive wind turbines 17 years ago.  They started the world down the learning curve, making it cheaper and easier for us to do the same.  Die Welt sagt Danke, Deutschland.  Verden siger tak, Danmark

As part of the Energiewende, Germany had long-term plans to gradually scale back nuclear.  After Fukushima, the German government promised to close down all nuclear plants by 2022.  You can see what happened (in the chart below): nuclear halved from 10% of total supply to 5%.  Coal picked up the slack.  But through it all, renewables kept on rising, from 7% of total supply (mostly hydro) to 34%, a rise of 27 percentage points in 16 years.  I suspect coal has peaked, and will steadily decline from now on, even as nuclear goes to zero.  There's politics involved: lots of German coal miners.  But Germany is good at transitions, and will find a way.

Source Global Green Shift

The third criticism is plain silly.  Germany is a huge industrial economy, the largest to ever make this transition to a green economy (China will be next.) Although Denmark started before Germany, it was Germany which really got the ball rolling.  It's worth remembering that when they started in 2000, they didn't know how they would do the transition.  Biomass? Nuclear? Wind? Hydro?  Energy saving? Solar wasn't even in contention, it was considered too expensive, and it was thought that Germany was too far north for solar to be workable.  The Germans were pioneers, paving a road that the rest of the world could follow.  And despite the size of the German economy and its population, despite the huge learning curve they traversed, despite growing their heavily industrial economy and raising living standards, they still managed to lift renewables by 27% over 16 years.  If they repeat that achievement, renewables will provide  61% of their power by 2032 and 88% by 2048, very close to the necessary 0% by 2050.  

So far we've just been talking about electricity generation.  But that produces only part of global emissions.  Germany still needs to grasp the opportunity afforded by electric vehicles.  Germany is the auto powerhouse of Europe.  Even if the world gets to 100% green generation, it's still a long way from 100% green transport.  If Germany embraces EV targets as China and California have done, its car manufacturers, who have been dithering about EVs, will be forced into the technological future, a place Germany has always been comfortable in.  

[Read more here]

World EV sales soar

World EV & PHEV sales, i.e., sales of cars with a socket, whether completely electric or plug-in hybrids, reached a record 1.5% of total world car sales in March, triple the percentage reached just 3 years ago.

At the recent Macquarie companies conference in Sydney, the CEO of CleanTech (CLQ.AX) talked about his company’s plans to produce cobalt, which is used in EV batteries.  He stated that China has a target for EVs and PHEVs as a percentage of new car sales of 8% in 2018 and 12% in 2020.  Of course these targets are driven by China’s horrendous air pollution, and many of the cars will be tiny and with a small range.  Size and range prolly don’t matter a lot in China right now.  As battery costs fall, and the costs of EVs decline, both will increase.  The Chinese targets will also force non-Chinese car manufacturers to increase their EV range and produce more EVs, or risk being shut out of the world’s largest car market. 35% of all cars sold worldwide are sold in China — Europe is 25%, US just 10%.

In a previous piece, I forecast that by 2019 10% of US sales will be EV/PHEVs.  And Europe is likely to start pushing EVs far more aggressively from now on after the Volkswagen diesel scandal and several episodes of extreme air pollution in some of Europe's major cities. If China meets its targets, if the US reaches 10%, then 4.5% of global car sales will be EVs/PHEVs in 2019, ignoring Europe and other countries.  Thereafter, the continued declines in battery prices and the demonstration effect—for example, an acquaintance buys an electric car and boasts about how nice it is, and how cheap it is—will lead to more sales.  Expanding sales will lead to growing charging networks which in turn will drive sales even higher.  Some countries (India, Austria, The Netherlands & Norway) plan to ban all new petrol and diesel car sales from 2025 onwards, and Germany has said that the only way it can meet its Paris targets is by doing this too. EV sales will continue to grow exponentially.  ICE* sales will start to decline, and the decline will accelerate.

The percentage of EV sales tripled over the last 3 years.  It’s likely to more than triple over the next 3.  At that point, the EV revolution will be unstoppable—if it isn’t already.  It’s hard to say what the percentage will be in 10 years, but if the adoption of EVs follows classic S-curve technology adoption patterns, and the historic growth rate continues, it could be close to 100%.  (The percentage is tripling every three years, so, 2019 — 5%, 2022 —15%, 2025 — 45%, 2027 — 100%)  Which is good news for global warming, but very much not good news for oil. And not good news for what now look increasingly like heritage car manufacturers, who still cannot really believe that EVs will very soon sweep ICEs away, and are still dithering about addressing this market properly.

(Source of basic data: Inside EVs & OICA.  2017 world car sales estimated.  My seasonal adjustments and my graphic)

*ICE = Internal combustion engine

The tiger is out of its cage

Tesla has announced that battery cell production has begun at its gigafactory in Nevada.  Well, one in the eye for the Tesla haters, but not really earth-shattering news.  Except for this:

With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale. By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy.

[My underlining.  Read the original new release here]

Now Tesla has already reduced the cost of batteries by nearly 50% in one year.  And that's before it started producing its own batteries.  So what does a significant decline mean?  30%?  50%?  Whichever percentage, it's massive.   Up until a couple of years ago, lithium-ion battery costs fell by 15% per annum, which seemed really fast then!

Storage has been the missing link in the roll out of renewables.  For storing solar from the 9 am to 3 pm insolation peak for evening demand, or for smoothing out the random cyclical variability of wind supply, storage is essential if we are to go to 100% renewables in electricity generation, and of course it's essential for electrifying transport.   I've talked about CSP here and here.   That's a good option for utility level solar plus storage.

But for households, small businesses, and small town "micro-grids", rooftop solar PV plus batteries increasingly seems like a marriage made in heaven, and the attraction only gets hotter as battery costs fall.  I predict it will be the norm for households with solar to also have one Tesla Powerwall, which won't quite store enough for a day's usage, here in Australia, anyway, but will take us a long way towards it.  As long as the electricity suppliers pay half of nothing for the solar-generated electricity we put back into the grid, behind-the-meter batteries are going to be attractive.  That's in most countries outside the US, and especially Australia, where feed-in tariffs are sometimes zero, while electricity bought from the grid costs 25 cents per KWh.

The fall in battery costs means that the cost of an electric car will also cross that magical line where they have the same sticker price as petrol-driven cars.  They are already cheaper to run, because electric cars are more efficient, require far less maintenance, and depreciate slower.  They're far more fun to drive, much quieter and smoother, and produce no direct pollution.  If their sticker price is the same as a petrol (gasoline) car, then the only remaining negatives will be charging time and the absence of charging stations.  But those are mostly relevant only for long journeys, once you have more than 160 kms (100 miles) of range, as most ppl commute less than 100 k's (60 miles) per day, and so will only need to charge their cars at home overnight.

So if battery costs halve again over, say, the next 18 months, we are going to see an explosive growth in EV sales.  And as EV sales take off, the supercharging network will grow, and at some point petrol service stations will either close down or convert to EV charging stations offering you tea, coffee and a snack while your EV charges.  There will come a point where petrol-driven cars are less convenient than electric cars, where range anxiety will be something only owners of petrol cars experience,

Alternatively, those with electric range anxiety will buy a plug-in hybrid.  But my guess is that there will only be a brief period (5 years?) when they're financially worth it, because essentially hybrids have two engines and two energy storage devices, with all the disadvantages and expense of petrol vehicles.  Once there are superchargers everywhere, why bother about a petrol backup?

Tesla is inexorably and irreversibly shifting the energy landscape.  Thanks to them, we will all ultimately be able to live with cheap, reliable carbon-free energy.  And that shift is happening far faster than we thought, even just a year ago, let alone 5 years ago.  Trump and his dotty climate-denying, oil-loving buddies won't be able to stop it.  Actually, I don't think, after this latest news, they'll even be able to slow it.  The tiger is out of its cage.