Plug-in Electric Vehicle Cost-Benefit Analyses W E B I N A R : F E B R U A R Y 2 8 , 2 0 1 7 Authors: Dana Lowell Brian Jones David Seamonds Contact: Dana Lowell 47 Junction Square Dr. Concord, MA 01742 +1 978 369 5533 dlowell@mjbradley.com
Webinar Agenda Welcome and Opening Remarks Brian Jones, Senior Vice President, MJB&A Introduction and Overview Luke Tonachel, Director, Clean Vehicles and Fuels Project, Energy & Transportation Program, NRDC PEV Cost-Benefit Analyses Dana Lowell, Senior Vice President – Technical Director, MJB&A Q&A and Discussion Wrap Up 2
About M.J. Bradley & Associates, LLC MJB&A, founded in 1994, is a strategic consulting firm focused on energy and environmental issues. The firm includes a multi-disciplinary team of experts with backgrounds in economics, law, engineering, and policy. The company works with private companies, public agencies, and non-profit organizations to understand and evaluate environmental regulations and policy, facilitate multi-stakeholder initiatives, shape business strategies, and deploy clean energy technologies. About this presentation This presentation is based on the results of five state-level analyses of plug-in electric vehicle costs and benefits for different states in the Northeast, including Connecticut, Maryland, Massachusetts, New York, and Pennsylvania. These studies were conducted by MJB&A for the Natural Resources Defense Council, to provide input to state policy discussions about actions required to promote further adoption of electric vehicles. Summary reports for each state can be found here: http://bit.ly/2kJOfx0 3
What We Did Estimated state-wide net benefits of high levels of plug-in vehicle (PEV) penetration between 2030 and 2050: • PEV owner vehicle operating cost savings • Utility customer savings on electric bills • Societal benefits from GHG reductions States include CT, MA, MD, NY, PA Scenarios bracket short- and long-term state goals for PEV penetration and GHG reduction: • 8-state ZEV MOU • Economy-wide GHG reduction goals through 2050 State-specific analyses that account for differences in vehicle fleet, vehicle usage, energy costs, and grid characteristics 4
Current PEVs, State-Level PEV & GHG Goals Modeled PEV penetration rates bracket these short & long term goals For each state to meet its ZEV MOU 2025 PEV 2050 GHG commitments, PEV penetration would Goal * Goals need to be 6% - 7.5% in 2025 CT 150,000 -80% from 2001 MA 300,000 -80% from 1990 MD 300,000 -80% from 2006 NY 850,000 -80% from 1990 PA None None TOT 1,600,000 * 8-state Zero Emission Vehicle Memorandum of Understanding (ZEV MOU). Other states are CA (1.5 million), OR (130,000), RI (40,000) and VT (30,000) 5
PEV Penetration Scenarios • In the 5 states analyzed the trajectories set by the 8-state ZEV MOU goals will result in 17% - 25% PEV penetration by 2050, and a total of 8.4 million PEVs • To achieve long-term GHG reduction goals (80x50) 80% - 97% of light duty vehicles in these states in 2050 would need to be PEVs - a total of 35.8 million PEVs 6
Projected PEV Purchase Costs Modeled future PEV purchase costs based on two Actual & Projected Battery key parameters Costs for EVs [$/kW] • Battery costs ($/kWh) • Electric drivetrain costs ($/kW) Battery size based on BEV200 and PHEV50 Electric drive train size (kW) based on current PEV models Future battery & drivetrain costs based on DOE EV Everywhere goals and recent Bloomberg projections Source: Bloomberg New Energy Finance (2016) PEVs projected to still be more expensive to buy than gasoline vehicles through 2050, but incremental costs will be more than offset by fuel and maintenance savings 7
Other Major Assumptions • Baseline is based on current light-duty fleet in each state, and state projections for future vehicle and VMT growth • Future PEVs assumed to include both plug-in hybrid (PHEV) and battery-electric (BEV) cars and light trucks PHEV/BEV ratio based on current fleet in each state PEVs assumed to be mostly cars in 2030, with increasing percentage light trucks in later years, especially under 80x50 scenario • Future energy costs (gasoline, electricity) based on regional projections from Energy Information Administration (EIA) • Energy use by gasoline cars (baseline) and PEVs consistent with 2015 NRDC/EPRI modeling, and reflect EPA/DOT fuel economy standards (CAFE) through 2025 model year For PEVs added additional energy to cover winter cabin heating • PEV GHG emissions based on EIA projections for future grid carbon intensity (baseline), and a “low carbon” scenario in which grid emissions are reduced 80% by 2050 • Evaluated PEV charging load for both “baseline” and “off - peak” charging 8
PEV Charging Scenarios • 20% of PEVs charge both at home and at work • 80% of PEVs charge only at home • BASELINE: Start charge as soon as arrive at home/work Arrival times based on responses to 2009 Household Travel Survey Arrival times vary slightly by state • OFF-PEAK: 65% of home arrivals between noon and 11 PM delay charge start until after midnight (40%) 1 AM (40%) or 2 AM (20%) 9
Results - PEV Charging Energy (MWh) • In MA, CT, NY, and PA annual electricity use is projected to grow by only 5% -7% through 2050 MD electricity use is projected to grow by 32% due to much higher population growth • In these states, by 2050 PEV charging would increase electricity use by 3% -5% under ZEV MOU scenario 16% - 24% under the 80x50 scenario 10
Results – PEV Charging Load (MW) • By 2050 baseline PEV charging could increase afternoon peak load (MW) in these states by: 8-state ZEV MOU scenario: 5.6% (PA) - 9%(NY, MD) 80x50 Scenario: 34% (PA) - 40% (CT, MD) • Off-peak charging could reduce incremental afternoon peak load by 64% or more 11
Results – PEV Owner Benefits • If projected future reductions in Massachusetts Fleet Average Annual Operating Costs (nom $) battery costs are achieved, on average PEVs will be less GASOLINE VEHICLE 8-State ZEV MOU 80x50 expensive to operate than 2030 2040 2050 2030 2040 2050 gasoline vehicles by the early Vehicle Purchase $/yr $4,291 $5,483 $7,039 $4,408 $6,212 $8,105 Gasoline $/yr $1,285 $1,658 $2,126 $1,308 $1,819 $2,389 2030s, even without government Maintenance $/yr $255 $319 $394 $257 $329 $409 subsidies TOTAL ANNUAL $/yr $5,831 $7,460 $9,559 $5,972 $8,360 $10,903 • Estimated annual savings per PEV 8-State ZEV MOU 80x50 PEV (nom $) in these states will 2030 2040 2050 2030 2040 2050 range from: Vehicle Purchase $/yr $4,703 $5,800 $7,157 $4,818 $6,496 $8,432 Electricity $/yr $671 $749 $839 $682 $799 $920 2030: -$57 (PA) to $146 (MD) Gasoline $/yr $219 $252 $309 $222 $274 $344 Personal Charger $/yr $81 $101 $123 $81 $101 $123 2050: $545 (PA) to $939 (MD) Maintenance $/yr $135 $176 $219 $136 $179 $224 TOTAL ANNUAL $/yr $5,809 $7,078 $8,647 $5,940 $7,850 $10,042 • NPV of total state-wide savings for PEV owners in 2050 under Savings per PEV $/yr $22 $382 $912 $33 $510 $860 the 80x50 penetration scenario ranges from $0.8 billion (CT) to $3.0 billion (NY) 12
Results - Utility Customer Benefits • Increased load from PEV charging will produce net revenue for utilities that can be used to support maintenance of existing distribution infrastructure • This will benefit all utility customers by putting downward pressure on future rate increases • Off-peak charging can increase annual utility net revenue by 30% - 100% compared to baseline charging – due to lower peak capacity and infrastructure costs • Under the 80x50 scenario, net Utility revenue and net revenue is based on EIA projections of revenue from PEV charging in future regional energy costs, accounting for incremental costs of 2050 could reduce electric rates PEVs not included in EIA reference case. These include the cost by 3% -7% in these five states – of additional peak generating capacity and additional distribution savings the average household infrastructure to handle the incremental peak charging load $104 - $144 per year (nom $) 13
Results - Societal Benefits • Baseline light-duty fleet GHG emissions in these states are projected to fall by 28% to 45% even without high PEV penetration, as the fleet turns over to more efficient vehicles Differences due to start year for state GHG reduction goal • Electrification of the fleet can produce significantly greater GHG reductions, especially if the grid is further decarbonized • In 2050 the monetized value of annual GHG reductions (NPV) Monetized value of GHG reductions calculated from greater PEV penetration using Social Cost of CO 2 , as estimated by the U.S. government’s Interagency Working Group on under the 80x50 scenario range Social Cost of Greenhouse Gases. from $350 million (CT) to $1.4 billion (NY) 14
Results - Cumulative PEV Net Benefits • By 2050 the NPV of cumulative benefits from PEVs could exceed $32 billion in Massachusetts under the 80x50 scenario 51% will accrue to PEV owners from savings in vehicle costs 24% will accrue to utility customers from lower electric bills 25% will accrue to society from the value of GHG reductions • Similar distribution of net benefits for other states, but magnitude is NPV based on 3% discount rate proportional to the size of the fleet 15
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