- FOR ELECTRIC VEHICLES TO REALLY TAKE OFF, WE NEED TO EXPAND THE POWER GRID. THIS INVOLVES COSTS THAT ARE NOT INCLUDED IN THE PRICE OF ELECTRIC VEHICLES.
- THE POWER GRID IS THE REAL PROBLEM. WE STARTED PRODUCING ELECTRIC CARS BEFORE WE EXPANDED THE ELECTRICITY GRID. IT WOULD HAVE BEEN BETTER TO EXPAND THE ELECTRICITY GRID BEFORE BUILDING ELECTRIC CARS.
- WE MAY HAVE TO REGULATE ELECTRICITY CONSUMPTION IF THE ELECTRIC CAR EVER BECOMES CENTRAL TO OUR ENERGY SYSTEM. LET’S COMPARE THIS WITH DIESEL FUEL. WITH THE DIESEL ENGINE, WE CAN DRIVE WHEREVER WE WANT, WHENEVER WE WANT.
1. Grid expansion cannot keep pace with the current growth in the number of electric vehicles.
To make electric vehicles worth their salt, we have to rebuild our distribution network in large parts of the country. At this point, we haven’t even talked about the need to upgrade the existing infrastructure. Parts of the power grid date back to the 1970s and 1980s and need to be upgraded. That would come at a huge cost to build that infrastructure. But the arrival of electric vehicles means that we also need to significantly expand the distribution network. And not only that, we also need to expand the high-voltage grid to transport the electricity to where it is needed.
Unlike other countries, Germany relies on renewable energy sources to meet its electricity needs. The problem is that most of the potential for renewable energy is in the north of the country. In the north, Germany has invested heavily in the development of offshore wind energy. The main problem is that most of Germany’s production centers are located in the south of the country. This means that electricity has to be transported all the way from the north to the south. This also entails considerable electricity losses due to friction.
The expansion of the power grid requires thicker cables with a larger diameter. The copper wire needs more copper to reduce energy losses. At the same time, the more copper we use and the higher the copper grade, the more money we have to pay for it. This leads to additional costs. Copper can be recycled. But recycled copper is only a fraction of the total copper used by mankind. And a significant percentage of the copper produced is exported to China. Copper is mined in very few places. There were many more copper mines where copper could be mined. As the industrial age progressed, the ore quality of all kinds of metals gradually declined, so that copper is now mainly mined in countries like Chile.
At the same time, mining costs have started to shoot through the roof. The recent drop in oil prices has dampened operating costs in the mining business, but oil prices below $50 per barrel oil will not last forever. This puts us in a dilemma. Do we expand the power grid just for electric vehicles? Is the commodity price reflected in the selling price of electric vehicles? And if not, are all households indirectly subsidizing electric vehicles through the price per kWh they have to pay each month? Either way, the power grids need to be strengthened to deliver more electricity.
2. What happens when renewables become the base load in the power grid, replacing hydrocarbons and nuclear power?
There is (to our knowledge) no concept of how to build an EV charging infrastructure that:
1.) harmonizes with the national power grid.
2.) can significantly reduce the power losses of distribution networks and charging stations.
This is an acute problem in rural areas. As long as electric cars drive through the city, it is easy to imagine that they will find a charging station somewhere. The charging stations are relatively close together. That makes sense, since the population density is much higher than elsewhere. At the same time, network expansion is much easier commit to in urban areas than it would be in rural areas. The cost-benefit ratio is not good enough in rural areas. We cannot justify why we have to upgrade the distribution network just for EV. Let’s take this a bit further. What happens when electric cars travel to areas where there are few or no charging stations? That was one of the reasons why oil succeeded in the 21st century and displaced electric cars. Oil was easier to transport, store, had a higher energy density, didn’t lose as much energy over time, and could be used just about anywhere.
We have to expect that the power grid will not work as consistently as we are used to. Complex systems are more prone to spectacular failures. The cost of maintaining these systems increases exponentially. The more complex a power system is, the greater the effort to maintain it. Again, the cost-benefit ratio matters. At some point, there will be power outages. Power outages could undermine the whole concept of building an EV infrastructure. A power outage could damage the transformers. It could take weeks to repair all the damage and reconnect the grid, buy, install and operate new transformers. During that time, traffic would be severely limited. One could imagine a combination of hydrogen vehicles and electric vehicles operating side by side. But even if this were feasible, such a transportation system would still depend heavily on the provision of electricity.
A brief side note on hydrogen: We make hydrogen from natural gas. In the future, we would make hydrogen from electricity. If we don’t use the electricity directly, we would convert it from another energy source.
In addition, electric vehicles consume enormous amounts of electricity. Since electricity can’t be stored the way oil can, we need charging at specific time intervals. We would need to redefine when people can charge their car’s battery so that not everyone is charging their car’s battery at the same time. This would cause a spike in the power grid at certain times of the day, possibly at night. At this point, we have not taken into account the fact that countries are increasingly relying on renewable energy sources, such as wind and solar power, rather than hydropower as a source of electricity. In the worst case scenario, we have little renewable energy to fall back on while there is peak demand on the power grid. This would put a severe strain on the power grid. A blackout could be the result.
Regulation in some form would be necessary. But some car buyers may decide that a conventional diesel engine gives them more flexibility and freedom to drive when they want and where they want. The point of buying a car, for many, is just that. Otherwise, people might choose public transportation in the first place.
Besides the fact that electricity has become very expensive in Germany. It is also the fact that electricity consumption is competing with the growing use of the Internet. The internet consumes enormous amounts of energy. Assuming that more and more activities of our daily lives will be shifted to the digital sphere, the question arises as to how we will supply the population with sufficient electricity. While we won’t be as reliant on transportation to work, that could work against us in the long run.
The reason is that there will be less demand for the conventional infrastructure that powers diesel and so on. That means there will be underinvestment in oil. We can’t just go back to oil if we’ve decided to rely entirely on the power grid. That is, if we imagine that it is even possible to reduce our dependence on fossil fuels, because even the power grid and renewable energy production are dependent on fossil fuels. If we suddenly need oil, we will not be able to rely on oil. This problem will become acute in the event of a power outage. At this point, we haven’t even talked about Bitcoin usage, which shows a dramatic increase in electricity consumption.
3. Electric car batteries can have some safety issues that may need to be addressed.
There are also a number of safety issues related to the electric car that have not yet been fully resolved. A situation could arise in which the electric car collides with an object in an accident. Since the electric battery is still charged, it can be dangerous to rescue people from the car.
4. The disposal of batteries for electric vehicles is a challenge.
The disposal of car batteries remains a problem that cannot be solved so easily. A solution must be found. Electric car batteries are very difficult to dispose of and only a few components can be reused. Recycling is made more difficult because we don’t know how the materials in the car battery will be used when the battery is dead. The problem is also that disassembling an old car battery is a time-consuming and energy-intensive process. In addition, a used car battery is harmful to the environment if it is not taken care of.
5. Some problems with the energy source itself: We are becoming totally dependent on electricity and the power grid.
With an electric vehicle, everything dissolves around the electronics of the machine. This is an advantage, but also a real disadvantage. Without a power source nearby, the electric vehicle is essentially useless. It relies on a single power source, and that’s the charging station. So it’s very dependent on a specific input. But that’s not all. The electric car is based on the concept of electricity storage. Over time, that source of electricity diminishes as electricity losses accumulate over time. The same is not true for oil. Oil can maintain its calorific value for an incredibly long time. Oil can be stored almost anywhere and is not affected by solar storms or other external events.
6. The electric car is the crowning achievement of industrialization. It lends itself to achieving economies of scale. This will have an impact on regional development.
There will be some regions that will benefit enormously from the arrival of the electric car. East Germany has attracted a number of electric vehicle companies that have established their production and research centers in the region. They are building a whole supply chain to create a full-fledged European electric vehicle industry to serve the European market. But what happens to other regions that don’t participate in this transformation process? They will be left out.
The electric car is all about economies of scale, and once a particular region establishes itself as a hub for the electric vehicle industry, other regions will likely be left behind. The benefits of the electric car industry can accrue to players involved in the production, manufacturing and sale of electric cars. In regions that have held on to diesel engine manufacturing, this can lead to deindustrialization.
7. We should not give up on hydrocarbons (yet).
We see major efficiency gains in the upstream business for oil and gas. Major improvements have been made in mid-stream supply chain management. LNG is just gaining a foothold in global energy markets, while the pipeline network is being expanded across the entire Eurasian landmass. Major investments have been and will continue to be made in this area, if only because oil offers a much higher energy return on invested energy (EROI). This will prove to be an advantage when other energy sources reach a low point in price per kWh and cannot fall below that level. The only way to mitigate this fate is to further increase subsidies. Subsidies and grants continue to play a significant role in the production and operation of renewable energy technologies. Hydrocarbons, with the exception of some tight oil and tight gas formations, do not require subsidies.
Electric vehicles will likely become a niche and sell well in urban environments. Here there is a segment of the population that is able to pay for both the electricity to run electric vehicles, the charging of the EV, the insurance for the vehicle itself, the purchase of the electric car, and the disposal of the battery.
It is less clear whether the electric car has much of a future in rural areas, where it is less likely to be used in the same way as a conventional diesel engine. There will be a coexistence of different modes of transportation. It is unlikely that the diesel engine will be replaced by electric cars in the foreseeable future.
We haven’t even touched on the macroeconomic environment at this point. The struggling economy could discourage many potential buyers of electric cars from purchasing them. We’re not out of the recession yet. Buyers may well opt for a cheaper diesel car.
Many thanks for the shared interest in the energy world!