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Plug-in Vehicle Deployment in California: An Economic Assessment - - PowerPoint PPT Presentation

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Plug-in Vehicle Deployment in California: An Economic Assessment David Roland-Holst Department of Agricultural and Resource Economics UC Berkeley dwrh@berkeley.edu 30 October 2012 Clean Air Dialogue (CAD) Working Group, Sacramento

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Plug-in Vehicle Deployment in California:

An Economic Assessment

David Roland-Holst

Department of Agricultural and Resource Economics UC Berkeley dwrh@berkeley.edu

30 October 2012 Clean Air Dialogue (CAD) Working Group, Sacramento

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Roland-Holst 2

Acknowledgements

  • This research was performed at the invitation of the California

Electric Transportation Coalition. We wish to thank the CARB and CalEPA staff for their data, Natural Resources Defense Council, Electric Power Research Institute and California Electric Transportation Coalition for their technical review, and Chris Yang, U.C. Davis, for data, insights and advice. We also thank the CARB and CalEPA staff for their data, and Chris Yang, U.C. Davis, for data and insights.

  • The author also wishes to thank many research assistants for

dedicated support during this project: Drew Behnke, Billie Chow, Melissa Chung, Elliot Deal, Sam Heft-Neal, Shelley Jiang, Fredrick Kahrl, Mehmet Seflek, and Ryan Triolo.

  • Financial support from CalETC is gratefully acknowledged.

30 October 2012

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Roland-Holst 3

Objectives

  • 1. Estimate direct and indirect

economic impacts of Plug-in Electric Vehicle (PEV) deployment.

  • 2. Inform stakeholders and improve

visibility for policy makers.

  • 3. Promote evidence based policy

dialogue.

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Roland-Holst 4

Summary of Findings

  • Light-duty vehicle electrification can be a potent catalyst

for economic growth, contributing up to 100,000 additional jobs by 2030.

  • On average, a dollar saved at the gas pump and spent
  • n the other goods and services that households want

creates 16 times more jobs.

  • Unlike the fossil fuel supply chain, the majority of new

demand financed by PEV fuel cost savings goes to in- state services, a source of diverse, bedrock jobs that are less likely to be outsourced.

  • Individual Californians gain from economic growth

associated with fuel cost savings due to vehicle electrification, whether they buy a new car or not. As a result of light-duty vehicle electrification, the average real wages and employment increase across the economy and incomes grow faster for low-income groups than for high-income groups.

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Roland-Holst 5

How we Forecast

California GE Model Transport Sector Electricity Sector Technology

The Berkeley Energy and Resources (BEAR) model is being developed in four areas and implemented over two time horizons.

Components:

  • 1. Core GE model
  • 2. Technology module
  • 3. Electricity generation/distribution
  • 4. Transportation services/demand

Time frames:

  • 1. Policy Horizon, 2010-2030
  • 2. Strategic Adaptation Horizon, 2010-2050

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Roland-Holst 6

Detailed Framework

National and International Initial Conditions, Trends, and External Shocks Emission Data Engineering Estimates Adoption Research Trends in Technical Change Prices Demand Sectoral Outputs Resource Use Detailed State Output, Trade, Employment, Income, Consumption,

  • Govt. Balance Sheets

Standards Trading Mechanisms Producer and Consumer Policies Technology Policies

California GE Model

Transport Sector Electricity Sector

Technology

LBL Energy Balances PROSYM/MARKAL/NEMS Initial Generation Data Engineering Estimates Innovation: Production Consumer Demand Energy Regulation RES, CHP, PV

  • Data
  • Results
  • Policy Intervention

Household and Commercial Vehicle Choice/Use Fuel efficiency Incentives and taxes Detailed Emissions

  • f C02 and non-C02

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PEV Deployment Scenarios

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Scenario Name Description 1 Baseline Assume California implements current commitments to state and post-1990 federal fuel economy standards, but continues growth at levels forecast by the Department

  • f Finance. This is the baseline scenario.

2 PEV15 Including the Baseline scenarios, but assuming 15.4% PEV deployment in the new light-duty vehicle fleet by 2030, this would be consistent with the ZEV regulations being met by PEVs. Tax credits for PEV vehicles are phased out by 2020,

and LCFS credits are awarded for pollution reduction (see section 3).

3 PEV45 Same as PEV15, except PEV deployment is accelerated to 45% of the new light- duty vehicle fleet by 2030.

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Macroeconomic Impacts

PEV15 PEV45 Real GSP 4.954 8.177 Net Job Growth 48,816 97,761

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Change from Baseline trend in 2030. Billions of 2012 dollars and FTE jobs.

Source: Author estimates.

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Employment Effects

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Change from Baseline trend in 2030. FTE thousands.

  • 20

20 40 60 80 100 120 PEV15 PEV45 Accelerated Job Growth Slowed Job Growth Net

Source: Author estimates.

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Roland-Holst 10 Retail Priv Services Construction Oil&Gas 0.01 0.10 1.00 10.00 100.00 Employmnet Content of Output (logarithmic scale) California Agriculture, Industry, and Service Sectors

Why it works

The carbon fuel supply chain is among the least job-intensive in the economy.

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Source: California Dept of Finance and Employment Development Office

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Index of Job Intensity by Sector

Sector Job Index Agriculture 20 Construction 42 Oil & Gas 1 Vehicle Manufacturing 5 Vehicle Sales & Service 19 Wholesale & Retail Trade 29 Other Service 34

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Source: California State Department of Finance and Employment Development Department

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Employment Impacts by Sector

(FTE thousands, change in 2030)

Sector PEV15 PEV45 Agriculture Other Primary Oil and Gas

  • 2
  • 6

Electric Gen and Dist 1 3 Natural Gas Dist. Other Utilities Processed Food Construction -– Residential 1 2 Construction -– NonRes 2 5 Light Industry 3 6 Heavy Industry 1 3 Machinery Technology 2 4 Electronic Appliances Automobiles and Parts 1 2 Trucks and Parts Other Vehicles 1 Wholesale, Retail Trade 15 30 Transport Services 2 4 Other Services 23 45 Total Net Jobs 49 98 New Employment 51 104 Reduced Job Growth

  • 2
  • 6

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Real Income by Household Tax Bracket

Household ZEV15 ZEV45 1 < $12k 0.2% 0.4% 2 $12-28k 0.2% 0.4% 3 $28-40k 0.2% 0.4% 4 $40-60k 0.2% 0.2% 5 $60-80k 0.2% 0.2% 6 $80-200k 0.2% 0.2% 7 $200k+ 0.1% 0.2% Average 0.2% 0.4%

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Source: Author estimates.

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Vehicle Adoption

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Percent of Final Year Market Share Normal Early Late

Source: Author assumption

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Fleet Composition

PEV$Passenger$Cars$(by$tech$type)$ $ PHEV20$ $ $ 33%$ PHEV40$ $ $ 33%$ BEV100$ $ $ 33%$ $ $ $ $ PEV$Light$Trucks$(by$tech$type)$ $ $ PHEV20$ $ $ 50%$ PHEV40$ $ $ 30%$ BEV100$ $ $ 20%$

Source: Author

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Vehicle Miles Traveled

5000 10000 15000 20000 5 10 15 Annual driving (mi/yr/vehicle) Vehicle age Light trucks Cars

median: 14-yr, 186k median: 17-yr, 234k

Source: CARB, 2008

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Vehicle Survival Rates

!"!!!! !0.20!! !0.40!! !0.60!! !0.80!! !1.00!! !1.20!! 1! 2! 3! 4! 5! 6! 7! 8! 9! 10! 11! 12! 13! 14! 15! 16! 17! 18! 19! Source: SHTSA, 2006

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CA Gasoline and Diesel Prices

2.00 2.50 3.00 3.50 4.00 4.50 5.00 2 9 2 1 1 2 1 3 2 1 5 2 1 7 2 1 9 2 2 1 2 2 3 2 2 5 2 2 7 2 2 9 2 3 1 2 3 3 2 3 5 Price ($/gallon) Gasoline Diesel

Source: EIA, 2012

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Baseline CA Electricity Price

10 11 12 13 14 15 16 17 18 19 20 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Price (cents/kWh) Year

Source: EIA, 2012

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Battery Cost Efficiency

Source: McKinsey, 2012

$0# $200# $400# $600# $800# $1,000# $1,200# 2012# 2013# 2014# 2015# 2016# 2017# 2018# 2019# 2020# 2021# 2022# 2023# 2024# 2025# 2026# 2027# 2028# 2029# 2030# $/kWh& PHEV10# PHEV40# BEV#

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Incremental Vehicle Costs

Source: Author estimates.

$0# $5,000# $10,000# $15,000# $20,000# $25,000# $30,000# 2012#2013#2014#2015#2016#2017#2018#2019#2020#2021#2022#2023#2024#2025#2026#2027#2028#2029#2030# PHEV20#PC# PHEV20#LT# PHEV40#PC# PHEV40#LT# BEV#PC# BEV#LT#

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Aggregate Incremental Cost: PEV15

Source: Author estimates.

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!$3,000& !$2,000& !$1,000& $0& $1,000& $2,000& $3,000& $4,000& $5,000& $6,000& 2012& 2013& 2014& 2015& 2016& 2017& 2018& 2019& 2020& 2021& 2022& 2023& 2024& 2025& 2026& 2027& 2028& 2029& 2030& Incremental&Costs& Fuel&Cost&Savings& Total&IncenBves& LCFS&Credit& Net&Savings&

Millions of 2012 dollars)

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Aggregate Incremental Cost: PEV45

Source: Author estimates.

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!$3,000& !$2,000& !$1,000& $0& $1,000& $2,000& $3,000& $4,000& $5,000& $6,000& 2 1 2 & 2 1 3 & 2 1 4 & 2 1 5 & 2 1 6 & 2 1 7 & 2 1 8 & 2 1 9 & 2 2 & 2 2 1 & 2 2 2 & 2 2 3 & 2 2 4 & 2 2 5 & 2 2 6 & 2 2 7 & 2 2 8 & 2 2 9 & 2 3 & Incremental&Costs& Fuel&Cost&Savings& Total&IncenBves& LCFS&Credit& Net&Savings&

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Conclusions

  • Vehicle fuel efficiency can be a potent catalyst

for economic growth and energy security.

  • Households and enterprises spend their fuel

savings on new vehicle technology and a broad range of other goods and services, stimulating net employment growth across the state economy.

  • By creating a market to incubate the next

generation of fuel efficient vehicles, California can promote job growth across it’s economy while capturing national and global market

  • pportunities for technology development.

30 October 2012

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Recommendations

  • More extensive analysis of program

design: incentive policies, vehicle adoption patterns, and welfare effects

  • More intensive analysis of likely

market and technology responses

  • Assessment of other transport classes

30 October 2012

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Discussion

30 October 2012