Electric cars could help balance the grid, charging their batteries when there is a surplus of renewable energy and providing electricity from their batteries when the vehicles are not in use.
The automotive industry is quickly moving to electrification. The number of electric vehicles and the percentage of new vehicles sold increased in almost all mature markets.
According to BloombergNEF’s (BNEF’s) Electric Vehicle Outlook 2021 report, “There are 12 million passenger EVs, 1 million commercial EVs, and over 260 million electric two- and three-wheelers on the road globally today. … Passenger EV sales are set to increase sharply in the next few years, rising from 3.1 million in 2020 to 14 million in 2025. Battery electric trucks of any size will become the cheapest option for several use cases in the 2020s.”
While this is good news for the environment, as it will significantly reduce pollution levels in cities, until we can ensure that power comes primarily from renewable sources, other forms of pollution are increasing.
Today’s energy mix is not ready for mass adoption of electric vehicles
Generating electricity to power today’s electric cars is still a problem in many markets. A large percentage of the energy used still comes from coal, gas, and waste-polluting power plants. There is no easy way to solve this problem except by speeding up the phasing out of those power plants and replacing them with energy from renewable sources.
According to BNEF’s latest Energy Outlook, in 2019, 83% of the electricity generated worldwide came from fossil fuels, 5% from nuclear, and only 12% from renewable sources.
During World Bank’s last Innovate4Climate summit in Singapore, John Roome, regional director for sustainable development at World Bank, argued that if a country such as Poland, with shares of passenger cars 20 years or older at 37.9%, suddenly changed half of those to electric vehicles, it could cause a much bigger environmental problem than the one it’s trying to solve. That is because in 2020, Poland produced only 15% of its electricity from renewable sources and the rest from fossil fuels, mainly from coal-fired power plants.
A fully electric car uses an average of 20 kWh per 100 km. It is fair to conclude that EVs could emit the same amount of CO2 as gasoline or diesel vehicles by using coal as an energy source.
In Germany, with the highest solar-power capacity in the European Union — 53,783 MW/year by the end of November 2020 — a sudden mass adoption of EVs could cause a higher dependency on imported natural gas if the country wants to phase out all the coal-fired power plants by 2030. Bloomberg estimates that in Germany, EVs will represent nearly 40% of total sales by 2025.
Fortunately, coal dependence on electricity generation is diminishing in most industrialized countries. As mentioned before, Germany wants to phase out coal-fired power plants by 2030. However, it still generates 30% of its electricity from those plants today.
Batteries on wheels, perfect for renewable energy
One of the biggest challenges of the transition to renewable energy is storage. Fossil fuels can produce electricity at anytime, anywhere, and with little advance notice. If a city or a regional grid needs another 100 MW of power at a specific time, coal- or gas-fired plants (depending on capacity) can produce those within hours. When the extra power is no longer needed or at night, those generators can be taken off the grid or shut down on demand.
Renewable energy, especially wind and solar, is hard to control. Sometimes, it doesn’t produce enough to substitute other forms of energy, and other times, it creates too much and has to be discarded or scaled down.
Today, the best way to store renewable energy is to have many batteries connected to the grid. When the electricity production from solar and wind exceeds the power required from those sources, the utility company could store it for later use. For example, solar energy produced during the day could be stored and released at night or during cloudy days.
Unfortunately, the cost of producing enough batteries and installing them to store the surplus of renewable electricity produced is prohibitive today.
Fortunately, new installations and facilities to manufacture Li-ion batteries for EVs are being built worldwide. Ultimately, those batteries could have several lives to help balance the grid and store renewable power.
First, using vehicle-to-grid (V2G) technology, electric cars — when not in use and connected to a charging outlet — could give the grid some of their stored electricity if the demand grows.
Later, when the batteries of an EV can no longer hold sufficient power, they can be installed in a facility managed by a power company to continue storing surplus power. And finally, after several years of continuous use, those batteries could be recycled and most of their components and minerals used to make new ones.
Li-ion batteries for energy storage will become a $20 billion/year market by 2040, a tenfold increase from today.
The path to sustainability
The automotive industry is transitioning from fossil fuels to electric vehicles. Many manufacturers, including Ford, GM, Renault, and Volkswagen, already have several models of electric cars and have made a commitment to phase out manufacturing of internal-combustion vehicles within a decade.
Simultaneously, the rate of adoption of renewable energy is increasing worldwide but not at a sufficient level to accommodate the large number of EVs that could be cruising our roads by 2030.
Furthermore, urgent action is needed from governments in all regions to encourage the transition to heavy electric trucks, as this sector is the most distant from achieving net-zero emissions. Governments should also consider incentives to move freight to rail and smaller trucks, which can be replaced by electric ones faster.
To ensure a sustainable future for EVs, manufacturers, governments, utility companies, and other stakeholders need to cooperate in developing the infrastructure necessary for 100% clean energy for EVs in 2030.