Contrary to recent claims from
a group of our MPs, EV demands on our power system infrastructure do not lead
to national bankruptcy.
The All Party Parliamentary
Group opposing government policy on electric vehicles claim in a new report that
the required investment in electricity generation will “bankrupt UK plc”.
Unfortunately for this claim, it is based on some major errors of fact and
understanding. These exaggerate investment costs by a factor of 25 or more,
even on the basis of a rather pessimistic cost assumption that is the authors’
starting point.
Thirteen MPs and Lord Lilley
have endorsed a new report[1] from the
All Party Parliamentary Group[2] for Fair Fuel for UK motorists and UK
hauliers. The press release describes it as ground-breaking. However the report
consists largely of a stitching together of questionable “facts”, opinions and
arguments from multiple sources and special interest groups, and contains major
and consequential errors, of both fact and understanding, for electricity in
particular.
Inevitably a central focus of the
analysis, and for press headlines, is the additional investment cost required
to service the additional electric vehicles implied by government targets. It
is this estimate of required investment cost that has provoked the “bankruptcy”
claim and headline, so it is worth examining its credibility. The calculations are set out quite unambiguously in
the report.
“FairFuel UK and the
ABD have also analysed the economic consequences of dumping ICEs and concur
with ... [the] prodigious cost conclusions shown here, to all our lives. The Government’s unilateral decision to commit
UK to 75% reduction in carbon by 2030-2035 will increase our national debt by
£2.17 trillion.[3]
2020 Consumption of
petrol, diesel, bio diesel, bioethanol was 30 million metric tonnes per year. …
A 75% reduction target by 2030 -2035 or whatever target date is chosen, means
finding enough energy to replace 22.5 million tonnes of fuel per year.
The average energy
density of the fuels: petrol, diesel, bio diesel, bioethanol is 12.5 kWh per
kilo. That [equates to] 281.25 TWh pa.
Considering one
nuclear power station generates about 4 TWh/year, [this] means 70 nuclear power
stations are required to offset the 75% reduction in petrol and diesel.
A nuclear power
station costs £22 billion, so 70 nuclear power stations = £1.54 trillion.”
Order
of Magnitude Error 1. The calculation ignores
efficiency in use.
What matters to the consumer,
and hence for aggregate energy consumption, is the efficiency with which
different fuels can provide useful energy to deliver the service required. Internal combustion engines (ICE) have very
low efficiencies in the delivery of useful energy compared to electric vehicles
(EVs), but the report assumes they are the same.
A typical claim made for EVs by
charging networks is that EVs are 85-90% efficient while internal
combustion engine cars 17-21%. If accurate, this implies we should divide the
APPG estimate of 281.25 TWh by a factor of 4 or 5.
Calculating an equivalent
electricity requirement is not just a matter of comparing technical parameters.
The reality will depend on many factors including speed, driver behaviour and
driving conditions, so there is no single universal answer. Hence it is worth
comparing alternative sources and informed assessments. The following quote is from
the Australian Energy Council[4].
“EVs convert over 77 per cent
of the electrical energy from the grid to power at the wheels. Conventional
gasoline vehicles only convert about 12 per cent – 30 per cent of the energy
stored in gasoline to power at the wheels,” according to the US Department of
Energy. …. Particularly in city driving, IC engines waste fuel while idling or
operating at very low outputs compared to their design capacity, and engines at
low output achieve very low efficiencies. … And, unlike EVs, most conventional
vehicles do not recover the energy wasted to heat by braking for traffic lights.
The well-researched Committee
on Climate Change (in its Sixth Carbon Budget[5]) uses an efficiency
multiple of about 3, less than the above, but recognises that the nature of EV
load also implies a less than proportionate requirement for additional capacity,
a view shared by the National Grid.
Carbon Commentary also provide
a first approximation estimate[6] of total requirements, for
cars, based on an intuitively reasonable calculation from official transport
statistics.
A 2017 electric car will
typically get 4 miles from a kilowatt hour of energy.[NB
40 mpg for a typical petrol driven car would be equivalent to about one mile
per kWh] The average car in the UK travels about 8,000 miles a
year. That means that a typical electric car will use about 2,000 kWh a year. In 2016 there were 36.7 million cars on the road
in the UK. The total amount of energy required to power these cars if they were
all electric would be about 75 TWh a year.
The total consumption of electricity in the UK last year was about
300 TWh. So if all car and taxi transport was by electric vehicles, the total
amount of electricity needed would rise by approximately 20%.
This of course is an estimate
that covers only cars and taxis, but assumes 100% rather than 75% replacement. The
National Grid[7]
likewise does not seem to be unduly concerned with the issue and suggests that “even
if the impossible happened and we all switched to EVs overnight”, peak demand[8]
(measured in GW not TWh) would only increase by around 10 per cent, or about 6
GW. One reason for this rather low number for peak capacity requirement is that
vehicle charging load can be managed so that incremental TWh can potentially be
met by much less incremental capacity than would be required for other consumer
loads.
Order of Magnitude Error 2.
The report is also at odds
with reality in its depiction of the scale of output expected from a 3.2 GW nuclear
plant. It takes as its cost benchmark the reported numbers projected for the
construction cost of EdF’s 3.2 GW Hinkly Point C nuclear plant (over £ 20
billion), but assumes an electrical output of 4 TWh for that plant. Hence it
deduces the need for 70 Hinkly Point C equivalents, or 224 GW of additional capacity.
However EdF have quoted an annual output (assuming 90% load factor) of 25 TWh,
a scale confirmed by the government in its evidence to the Public Accounts
Committee.[9] A more accurate statement
of the expected output from this benchmark 3.2 GW plant therefore reduces the
scale of investment by a factor of 6.
The error factors are multiplicative,
and the result is that the implied 224 GW of capacity calculated in the report,
for a 75% switch to EVs, exceeds the more realistic 6 GW suggested by National
Grid, for a 100% changeover, by a factor of 37.
Is the Hinkly Point nuclear plant
a reliable cost benchmark anyway?
There are several reasons to
suppose it is not. The Public Accounts Committee was critical of government procurement
performance, and clearly feels the cost of this contract was excessive. It is also
generally assumed that subsequent nuclear power plant of similar design would be
cheaper. Not least, not everyone will agree with the assumption that all-nuclear
is the least cost route to expanding power generation, the implicit assumption that
underpins the report’s cost estimates.
Dieter Helm[10] and others have also argued
that about 50% of the estimated very high cost of Hinkly C is entirely
attributable to the very high return to be earned by EdF over the life of the
project. If this were indeed to be financed through addition to the national
debt, one might surely expect to apply a much lower rate of return, closer to
government borrowing rates. Helm argues for rates as low as 2 or 3%, halving the
cost of a station such as Hinkly C. By implication Helm’s arguments alone would
imply a further cost reduction by a factor of 2.
………………….
The misunderstandings in the
report, at least on relative efficiency and likely cost, and an overall error factor
of perhaps between 25 and 50, even on the basis of its own assumptions and
methodology, are all the more surprising given that the House of Commons
Library has just published (June 2021) an analysis, Electric Vehicles and
Infrastructure[11],
on the same subject. This is a brief but well-researched source of basic
information on the subject under discussion. One might assume it was available
to MPs.
In reality, if we do proceed
successfully with low carbon generation, electric vehicles have a major
positive role to play in helping to balance power systems associated with less
flexible generation from nuclear or renewable plant. This makes them an
economically net positive option in any low carbon future. But that is a bigger
subject to which we can return, and which I have addressed elsewhere[12].
………………
Updated on 3
September 2021 to include additional sources and references
[2]
Readers should note that these informal groups of MPs do not have the official
standing of parliamentary Select Committees.
[3] This
number seems to be the national debt in April 2021, as referenced later. It is
intended, one assumes, to be the £1.54 trillion calculated by the APPG
researcher.
[4] EVs:
Are they really more efficient? (energycouncil.com.au)
[6] 100%
EVs can be easily accommodated on the UK grid. | Carbon Commentary
[7] 6 myths about electric vehicles busted | National Grid Group
[8] In large power systems, it is important to distinguish between the additional energy requirement, kWh or TWh, and the amount of additional generation capacity required. The relationship between the two, for different types of consumption, is a crucial element of system economics.
[9] Hinkley
Point C - Committee of Public Accounts - House of Commons (parliament.uk).
The Department (BEIS) is recorded as stating that Hinkly Point C is expected to
supply about 7% of UK requirements, ie about 20-25 TWh.
[11] CBP-7480.pdf
(parliament.uk). Electric
vehicles and infrastructure June 2021
......................
ADDENDUM. 19 October 2021
This APPG report has been modified since the
above was posted, but the fundamental errors remain.
The relevant paragraphs have been revised to
suggest that the output of a nuclear plant of the same scale as Hinkly C could
be between 8 (not 4) and 25 TWh, and therefore that the EV requirement is for “between
12 and 35 new nuclear power stations” (not the more realistic 3 that use of
more conventional arithmetic would imply).
|
CHANGES |
previous |
current |
|
Estimated energy
requirement (c 4x factor error) |
281 TWh |
281 TWh |
|
Output of “a
Hinkly C” – a 3.2 GW station |
4TWh |
8 -25 TWh |
|
Number of
such stations required |
70 |
12-35 |
|
Cost of a station
(presumably a 3.2 GW station) |
£ 22 bn |
£ 10-50 bn |
So what has happened.
· The author has continued to ignore the ICE/EV efficiency
issue, which creates an error factor of about 4,
· and has also taken the point that EdF
are claiming an expected 25 TWh for Hinkly C, but simply made this one end of a
wide range. As far as I can judge from correspondence, the 8 TWh figure seems
to have been constructed in rather an odd way, by looking at the maximum output
of any current UK nuclear power station, ie about 1.0 GW, and
multiplying by 8000 as the approximate number of hours in a year. But of course
Hinkly C is a planned 3.2 GW, and Sizewell B, which is the most recent of
existing nuclear plant has a nameplate of 1.2 GW, ie about a third of
the size. This has all the hallmarks of someone who does’nt understand the
basic units of measurement, or indeed what they are doing at all.
· The author has also invented a new
figure of £ 50 billion as the upper end of the cost range for “a nuclear plant”
– implicitly another Hinkly C. This implicitly acknowledges my comment that a £ 22 bn cost of Hinkly might be over the top anyway (and not just because of cost of
capital issues), but only by putting in a lower end of £10 bn. The £ 50 bn is
sufficiently large, when combined with top end of the range on stations
required, to give a high final number that even exceeds the previous estimate
of total cost. But both bits are absurd numbers which remain unexplained.
John Rhys.
