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Supercharge

Why plug-in hybrid cars are made for here

   Many of us are excited by the new plug-in hybrid vehicles (PHEVs) set to emerge later this year. They’re cool, high-tech and use less gasoline, reducing our dependence on countries that don’t like us very much and threaten America’s national security. Plus they’re a big winner for reducing pollution in the northern Illinois market. What’s not to like about cars with names like the Nissan Leaf or Chevy Volt?
   The devil is in the details, however, when it comes to whether driving and charging the PHEVs will lead to less, instead of more, pollution compared with the “conventional” hybrid gas-electric vehicles (HEVs) that are available to consumers today. As my real estate friends say, it’s about “location, location, location.” It’s also about what time you’re charging the PHEV. Whether the mix of electricity-generating sources used for charging is high-CO2 or low-CO2 depends a lot on the location and the time of day. If the charging source is electricity generated by old highly-polluting coal plants, on balance, that may hurt the environment more than it helps in some cases.
   That’s the conclusion of a 2009 study by the National Research Council of the National Academies and a 2007 study issued by the Minnesota Pollution Control Agency. When coal plants supply more than 50 percent of the power mix, the equation is not favorable for PHEVs compared to HEVs in terms of CO2 pollution (global warming) and SO2 (acid rain-causing) pollution; the data varies for other pollutants. HEVs work better for the environment in these places.
   PHEVs are an important emerging technology where cleaner energy power sources are used to charge their batteries. In Indiana, about 95 percent of the electricity is supplied by coal plants. It’s not a good place to look at PHEVs as a pollution solution. However, in northern Illinois, most of the power supplied at the margin at night is from low/no-CO2 wind power and nuclear power plants. Much better.
  Peak power prices are very high on hot summer afternoons when the most highly polluting plants tend to be running on the margin to meet soaring electricity demand from cranked-up air conditioners and fans.  However, at night, the northern Illinois power market has so much surplus nuclear and wind power available that prices are very low. Indeed, during some nighttime hours, as supply exceeds demand, the prices are so low that the can’t-easily-be-shut-down (so-called “must run”) nuclear plants and wind turbines are “running negative.” They make money selling power during the day, but are essentially giving it away at night.
   Here are three policies and actions help make the PHEV pollution equation work favorably:
  
1. Location Matters: Let’s push for PHEVs and favorable policies in those places where wind power, solar power, hydropower and nuclear power supply more than half of the power mix. Northern Illinois (nuclear and wind power) is a good market, along with South Dakota (hydro and wind power). Coal-heavy Indiana and southern Illinois are not. Sorry. In many places, HEVs work better for the environment.
 
2. Time Matters: In most Midwestern states, electricity rates are flat, while power market prices are not. On a hot summer day, consumers may be paying less then the market price per kilowatt of electricity, but on that same summer night, the utility may be charging much more than the power, transmission and delivery actually cost. Therefore, utilities have an incentive to encourage PHEV owners to charge their cars during off-peak night times. Time of use rates are economically justified, but complicated for many social, practical and equity reasons to implement on an across the board basis. However, there are steps that we can take in a sensible direction. Offering discounted off-peak rates that give an incentive to PHEV owners to charge their cars in their garages at night instead of during the day is a win-win-win-win when the location is right (as discussed above). The wind power, nuclear power and hydropower companies gain new, more profitable sales. The utilities gain profitable electricity sales, rather than losing money by selling peak-priced power at lower flat rates on hot summer days. Consumers who charge their PHEVs at night save money (about $150-$175 per year in northern Illinois) through the discounted off-peak rates.  All of us gain environmental quality benefits from PHEV charging when the energy mix equation results in less pollution instead of more. Let’s bring environmental groups, consumer groups, auto companies, utilities, nuclear plant owners and wind power owners and developers together to petition the state public utility commissions to authorize pilot programs of discounted off-peak rates for PHEV charging. New meters will be required, but those costs can be amortized through the rate savings over time.
   
3. Time Matters 2: Solar energy is most available on hot, sunny afternoons, when power market prices are highest and the power is needed most. If PHEV charging stations are powered by solar, the pollution equation works well. First, we should use planning, zoning and electric utility regulatory laws and policies to encourage the construction of charging stations in places where there is good solar access. Second, we should authorize favorable “net metering” rates for charging stations to sell solar-generated power back into the grid when it is not fully used for charging cars.

   President Obama stated his national goal of having one million PHEVs on the road by 2015. There are plenty of opportunities in northern Illinois to help make this happen, including the following:
  
   • Large market of car buyers and users in third largest metro area in the nation.
   • Significant amount of auto manufacturing and suppliers, including two existing plants that could potentially be retooled—the Ford plant on the southeast side of Chicago and the Chrysler plant in Belvedere.
   • Surplus wind and nuclear power, both current and under development. Some of this excess wind power supply is now being sold out-of-state.
  
   Getting more PHEVs on the road is a key step forward in terms of reducing our dependence on foreign oil, and in some parts of the country, they also can sharply reduce CO2 pollution. We should focus on supporting PHEV rollouts in northern Illinois and other places and at those times where there is excess low/no-CO2 wind, hydro and nuclear power available at the margin. Let’s drive the market to achieve common benefits for the car-buying public, clean energy generators and utilities, clean car manufacturers and autoworkers and national security.

Published: April 09, 2010
Issue: 2010 Spring Green Issue

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