In order to successfully transition the US truck fleet to primarily electric vehicles, significant expansions to the electric grid will be necessary. The amount of additional grid capacity to power all of the semi-trucks currently in operation is calculated to be approximately 350,000 GWh per year (click for calculation). This is about nine percent of current US electricity demand, or 33 million average households.[1]McGrath, Glenn, and U.S. Energy Information Administration. “7. Electricity.” Total Energy Monthly Data, October 26, 2021. https://www.eia.gov/totalenergy/data/monthly/pdf/sec7.pdf.[2]U.S. Energy Information Administration (EIA), “Frequently Asked Questions (FAQs). How Much Electricity Does an American Home Use?,” October 7, 2021, … Continue reading Since there are currently only a few thousand electric semi-trucks in operation, out of nearly three million total semis, the fraction of electricity used by current electric vehicles can be deemed negligible.[3]McCoy, Kelly. “WoodMac: 54,000 Electric Trucks on US Roads by 2025.” GreenTechMedia, August 11, 2020. … Continue reading[4]“Truck Profile | Bureau of Transportation Statistics.” Accessed November 20, 2021. https://www.bts.gov/content/truck-profile.
For the electrification of the truck fleet to truly address carbon emissions, the additional electricity demand must be met with renewable sources. Since the overall environmental impact of the energy grid is outside this project’s scope, only the additional nine percent was considered. Building this nine percent to be completely renewable is enough to ensure that the carbon emissions of trucking are fully offset by the solution.
Since unpredictability of prices paired with recent supply chain issues makes it impossible to predict which renewable sources will dominate in coming years, this part of the analysis relies heavily on several assumptions. Primarily, certain sources were not considered in the cost analysis, for the following reasons:
- Coal, oil, and natural gas, since they are not carbon-neutral
- Nuclear, due to the prohibitively high costs of constructing new reactors[5]Schneider, Mycle, and Antony Froggatt. “The World Nuclear Industry Status Report 2019,” September 2019. https://www.worldnuclearreport.org/IMG/pdf/wnisr2019-v2-lr.pdf.
- Hydroelectric, since currently planned projects make up less than 1.5 GW of capacity[6]Uría-Martínez, Rocío, Megan M. Johnson, and Rui Shan. “U.S. Hydropower Market Report.” U.S. Department of Energy, January 2021.
- Geothermal, since it accounts for under 0.5% of US electricity generation[7]Center for Sustainable Systems, University of Michigan, “Geothermal Energy Factsheet,” 2021, https://css.umich.edu/factsheets/geothermal-energy-factsheet.
- Biofuels, since biofuels are not truly carbon neutral[8]U.S. Department of Energy, “Biofuels & Greenhouse Gas Emissions: Myths versus Facts,” n.d., https://www.energy.gov/sites/prod/files/edg/media/BiofuelsMythVFact.pdf.
The sources considered were solar and wind. This also fits with current US capacity additions, since solar and wind made up 70% of new capacity additions in 2020.[9]U.S. Energy Information Administration (EIA), “New Electric Generating Capacity in 2020 Will Come Primarily from Wind and Solar,” Today in Energy, January 14, 2020, … Continue reading
Next, the ratio between solar and wind additions is also unpredictable, since it’s not clear how prices will change in coming years. Current grid expansions were assumed to be a reasonable reflection of the market potential of different options, so data from 2020 was used as a baseline.
In the long run, this ratio would be of little consequence, because the levelized cost of electricity for solar and wind is almost identical (solar is about 0.5% cheaper per GWh).[10]U.S. Energy Information Administration. “Levelized Costs of New Generation Resources.” Annual Energy Outlook 2021, February 2021. https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf. However, in terms of initial capital, a different ratio could affect calculations by a reasonable margin: without weighting for capacity factors, solar is about 29% more expensive than wind per GW, and with weighting for capacity factors, it’s about 85% more expensive.[11]U.S. Energy Information Administration (EIA). “Average U.S. Construction Costs for Solar Generation Continued to Fall in 2019.” Today in Energy, July 16, 2021. … Continue reading[12]U.S. Energy Information Administration (EIA). “Electric Power Monthly. Table 6.07.B. Capacity Factors for Utility Scale Generators Primarily Using Non-Fossil Fuels,” October 26, 2021. … Continue reading These cost differences even out in the long run primarily due to longer life spans and lower operating costs for solar. Nevertheless, this does lend some uncertainty to the calculation.
Using this ratio of solar to wind, it was found that added power needs could be met by constructing 55 GW of new solar capacity and 75 GW of new wind capacity (click for calculation).
For reference, Figure 1 shows new solar and wind construction in 2020 compared to the new solar and wind construction that would be necessary to support the current truck fleet.
As the figure shows, about four times as much new capacity must be added to the grid as was constructed in 2020. This can be done over the span of several years, parallel to the implementation of electric vehicles. Since the implementation plan for electric vehicles accounts for all vehicles to be replaced by 2044, there are 23 years to expand grid capacity. Keeping all other factors constant, this would require about 5.7 GW (130 GW/23 years) of new solar and wind capacity installations each year.
Cost
The cost of these grid expansions will not be insignificant. Using data from the Energy Information Administration, a figure of 201 billion dollars was reached (click for calculation). Again, this cost would be spread over about 23 years, creating a figure of 8.74 billion dollars per year. The cost is sizable, but since utility companies can profit from electricity sales, and because an extensive subsidy program is already in place in the energy market, demand is likely to be met without further incentives. While the cost of electricity may go up in the short term, this effect is likely to be small, since the necessary growth rate for capacity is still reasonably slow (about a sixth of what was built in 2020, each year until 2044).
Furthermore, since over seventy percent, but not all, of new capacity in 2020 was renewable, it can be concluded that some increased incentives on renewable energy specifically could be useful to ensure that future capacity built is also renewable The sources considered were solar and wind. This also fits with current US capacity additions, since solar and wind made up 70% of new capacity additions in 2020.[13]U.S. Energy Information Administration (EIA), “New Electric Generating Capacity in 2020 Will Come Primarily from Wind and Solar,” Today in Energy, January 14, 2020, … Continue reading In particular, it is recommended that all subsidies are removed for new fossil fuel plants built after 2021. This will not raise the price of electricity produced by existing plants, since it applies only to new ones, but will help to de-incentivize construction of fossil fuel plants. Any money that would have been spent on those subsidies can be redirected towards renewable energy or another component of the Trucks plan.
Grid Storage and Flattening the Curve
Due to the intermittent nature of solar and wind power, this plan requires consideration of grid storage infrastructure. However, the potential need for expanded storage was considered negligible and out of the scope of this problem for three reasons.
First, the amount of storage necessary is heavily dependent on localized energy markets. Some sources estimate that up to 33 percent of the grid’s total power could be generated from wind and solar without a need for additional grid storage.[14]Lew, D., G. Brinkman, E. Ibanez, A. Florita, M. Heaney, B.-M. Hodge, M. Hummon, et al. “The Western Wind and Solar Integration Study Phase 2.” 15013 Denver West Parkway Golden, Colorado 80401: … Continue reading Since only about 10.7 percent of total electricity generation was from wind and solar in 2020, the effect of electric trucking alone – an additional 9 percent – would not put the grid over 33 percent.[15]U.S. Energy Information Administration (EIA). “Electricity in the U.S.,” March 18, 2021. https://www.eia.gov/energyexplained/electricity/electricity-in-the-us.php. At this level, since the rest of the grid’s capacity is still made up of non-intermittent sources, supply remains stable enough to meet variable demand.
Second, putting a higher price on electricity during peak hours would help flatten the variability of demand and incentivize trucking companies, as well as other consumers, to engage in their most energy-intensive activities during non-peak hours and when production is high (for example, at night or on a sunny or windy day). This would help reduce cycling costs and the need for grid storage. Since the most energy-intensive component of a truck route occurs when the truck is stopped at a charging station (with the exception of catenary), this might be helpful to truckers, because it would incentivize them to stop and charge at night or during windy conditions. For catenary, there could be unintentional consequences of a variable pricing system – for example, it might incentivize truckers to sacrifice their health by driving at night or risk their safety by driving in high winds. Therefore, this system might be implemented for charging stations but not for catenary. Regardless, it would reduce flexibility somewhat by making certain driving hours less favorable than others. For plans to offset this negative impact, see the page on Equity.
Third, the conversion of such a large volume of diesel vehicles to battery-powered electric vehicles can, in some ways, be considered as expansion of storage capacity to begin with. Especially with the incentives discussed above, fleet owners are likely to charge vehicles when prices are low, helping to stabilize the grid and effectively ‘store’ power. This could significantly reduce the need for additional storage infrastructure.
For these reasons, the need for additional storage capacity was not deemed a significant part of the problem, and was therefore not considered in cost calculations.
Take-Aways
- The cost of expanding the electric grid to accommodate an all-electric truck fleet is estimated to be $201 billion, if prices for wind and solar generating capacity remain constant.
- The capital cost is expected to be borne by utility companies, who will profit from the electricity sales. To help ensure that new capacity is renewable, subsidies will be eliminated for fossil fuel plants built after 2021.
- Storage costs were deemed negligible and not included in this calculation. Instead, a variable pricing system (as has been implemented in many markets already) would be used to balance supply and demand.
References
