Electricity Could Beat Oil Sooner Than We Think
February 09, 2017
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It’s notoriously hard to predict when a new technology will take off to disrupt the status quo. In 1943 Thomas Watson, CEO of IBM at the time, reputedly said the global market for computers would amount to ‘maybe five’.
The International Energy Agency knows all about that. Every year it publishes a forecast about the growth of renewable energy and every year it has it wrong. The annual forecasts - which are used to make decisions about long-term energy investments - consistently underestimate the growth of green tech. So much so that they have been accused of holding back the transition to a low-carbon energy system.
A new study by the Carbon Tracker Initiative seeks to remedy this with a simple and rather convincing maxim: Use the latest available data about the state of a technology as the basis of your predictive model. For example: if solar has been growing exponentially for decades, don’t plot your projections in a linear line.
Using this method the study’s authors have calculated the growth rates for solar PV and electric vehicle adoption. They estimate that solar power could supply 23% of global electricity generation in 2040 and 29% by 2050.
For EV the study predicts that price parity with internal combustion engine cars will be achieved as early as 2020. (More on this in the Elektor Energy section). That will be the point when electric driving really takes off. Already in 2025 the use of EVs will reduce oil demand by some two million barrels of oil per day (mdb). That’s roughly equivalent to the surplus of oil that flooded the market in 2014 and 2015. The supply-demand balance shifted a mere 2% resulting in the oil price collapse that sent the industry scrambling. Once electric driving has lift-off oil will be faced with a decline in demand that will only progress over time.
Image by David Falcone [Public domain], via Wikimedia Commons
The International Energy Agency knows all about that. Every year it publishes a forecast about the growth of renewable energy and every year it has it wrong. The annual forecasts - which are used to make decisions about long-term energy investments - consistently underestimate the growth of green tech. So much so that they have been accused of holding back the transition to a low-carbon energy system.
A new study by the Carbon Tracker Initiative seeks to remedy this with a simple and rather convincing maxim: Use the latest available data about the state of a technology as the basis of your predictive model. For example: if solar has been growing exponentially for decades, don’t plot your projections in a linear line.
Using this method the study’s authors have calculated the growth rates for solar PV and electric vehicle adoption. They estimate that solar power could supply 23% of global electricity generation in 2040 and 29% by 2050.
For EV the study predicts that price parity with internal combustion engine cars will be achieved as early as 2020. (More on this in the Elektor Energy section). That will be the point when electric driving really takes off. Already in 2025 the use of EVs will reduce oil demand by some two million barrels of oil per day (mdb). That’s roughly equivalent to the surplus of oil that flooded the market in 2014 and 2015. The supply-demand balance shifted a mere 2% resulting in the oil price collapse that sent the industry scrambling. Once electric driving has lift-off oil will be faced with a decline in demand that will only progress over time.
Image by David Falcone [Public domain], via Wikimedia Commons
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Discussion (12 comments)
Thack 8 years ago
It is confusing to compare oil with electricity, because oil is a primary energy source and electricity is a secondary source. In other words, electricity has to be generated, and one of the sources of generated electricity - now and for the near to medium term - is oil. So oil is part of electricity, so to speak. It's like apples are part of apple pie - it isn't a case of apple pies OR apples. Apples are in both.
I do understand that you can compare them in terms of the motive force for vehicles. But for electric cars to make a real difference in terms of CO2 production, then much of the electricity they use must come from renewables. Right now, all they really do is move the tailpipe emissions back to the power station chimney.
There is one last thing, which is really important. In the UK (I can't speak for other countries), electricity consumption accounts for only 15% of our total energy usage. In other words, even if every last watt of electricity were generated by renewables, that still leaves the other 85% for us to worry about.
There is lots of data online, but it is important to get it from sources you trust. uk.gov has some really useful and comprehensive data on energy usage.
The problem with the above report is that - for brevity - it has left out a whole lot of stuff that is essential to getting a full understanding of the issues. The issues are never as straightforward as they first seem.
Richard Galambos 8 years ago
In Canada, we are Hydro, Nuclear, Coal, and to a smaller extent wind and solar.
I don't see the correlation with oil here.
Thack 8 years ago
To be honest my main point was the questionable device of comparing primary and secondary energy sources, as it can lead to some misleading and apparently contradictory conclusions.
I do appreciate that the author probably had a word count limit, so there's only so much you can say in such a small space. Just to be clear: I'm not anti-electric car. I just wanted to point out that the story is much more complicated than it first seems from reading the article.
Tessel Renzenbrink 8 years ago
Oil hardly contributes to electricity generation. The IEA has it at less than 5% globally in 2014. Transport consumes the bulk of oil: almost 65%. [1] The comparison oil-electricity is interesting in my view because of emission intensity. Power generation has the potential to become cleaner over time while oil does not. In the EU for instance CO2 emissions from the power sector are consistently falling. [2] (Due mostly to a shift from coal to gas).
Oil on the other hand looks to become dirtier over time. Though there’ll probably be no peak oil, the majority of reserves newly taken into production are unconventional like tar sands. These are far more carbon intensive to extract and refine than conventional oil. [3]
If oil gets dirtier over time and electricity production gets cleaner it makes sense to shift your energy consumption from one to the other.
[1] https://www.iea.org/publications/freepublications/publication/KeyWorld2016.pdf
[2] https://sandbag.org.uk/wp-content/uploads/2017/01/Energy-Transition-in-the-Power-Sector-in-Europe-2016.pdf
[3] http://blog.ucsusa.org/jeremy-martin/five-facts-about-oil-carnegie-oil-climate-index-658
Thack 8 years ago
Without disagreeing with anything you say, my instinct as an engineer is still to raise a flag when I see a primary energy source and a secondary energy source being compared in a way which suggests they are somehow equivalent, or interchangeable.
Of course, some electricity (up to 20% or so in the UK) is - to all intents and purposes - a primary source as it comes from wind, solar, etc. But the rest is a secondary energy source, and I was keen to point out that, as such, it needs a primary energy source to produce it. In turn that makes the situation more complicated than a brief article might lead one to believe.
Again, speaking with my engineer's hat on, I have trouble with electricity being referred to as a "source" of energy (whereas you *can* say oil is a source of energy). On the whole it is much better to think of it as a convenient way of transporting energy from one place to another.
The same is true of hydrogen - another fuel that is getting some people excited. In reality it takes as much or more energy to "make" it (extract or electrolyse it) than you get from oxidising it in a fuel cell or engine, so again it is not actually a "source" of energy at all, but - like electricity - another way of transporting it.
I do accept that my initial statement was clumsy in pointing out the use of oil in making electricity. It was just intended to illustrate the difference between primary and secondary energy sources, and in particular how secondary energy sources can have a very complex story hidden behind them. Using electricity for transport is a highly complex issue at every point in the chain from generation to motive force. I'm sorry for not expressing myself more clearly.
Steve Hageman 8 years ago
Case in point: Renewables, specifically Solar.
Making Solar Cells is extremely polluting and takes a lot of energy. The last reports I saw suggested that the energy and CO2 pollution caused by making solar cells made the break-even point at about 12-15 years. That is the point where the solar cells themselves became "Neutral" with regards to the energy and pollution caused by making them. (And then: How long do solar cells really last in usage?)
Even with Solar then, you simply are moving the pollution from the "power station chimney" as Thack pointed out over to China and they are causing irreparable harm by dumping the pollution directly into waterways, etc.
A very complex issue indeed...
Thack 8 years ago
So actually, as Steve H says, it would be more accurate to say that we have moved our CO2 generation over to China. We sit pretty, but the nett effect on the planet is much less than we might suppose.
Lines Francis 8 years ago
BR - self 8 years ago
The comparison may be possible if reduced to the energy used to move vehicles. Electrical driving makes IMHO little sense, if the energy is produced by fossil sources.
A small (for sure incomplete) attempt to look at the overall efficiency:
Electrical car:
1kWh of driving energy. I assume an efficiency of ~80% from the plug to the wheel
-> We need 1,25kWh of electrical energy from our power plants
If I look to the my own country's mix (Germany), this was (2015) ~52% fossil, ~30% renewables.
-> We need the equivalent 0,65kWh electrical energy out of fossil sources
if I take the efficency of a usual coal plant of ~40% (sources differ from 40% to 44% average)
~> We need 1,63kWh in fossil prime energy
Conventional car:
1kWh of driving energy. A highly efficient motor in its best load range can get 45% efficiency (sources talk of 25-45% depending on the actual load)
-> We need 2,2 kWh of fossil prime energy.
Conclusion (small surprise for myself, I hope I didn't calculate something wrong):
Even currenlty, an electrical car helps to reduce the bill in fossil fuel, a country has to pay.
Of course we could do more complex comparisons, including the energy needed to create the various power plants, the energy needed to mine and transport energy etc. The calculation above, however, is reasonable if we assume that there is a market for energy which tells some truth over prices. (Germany has relatively high price for electrical energy, would assume the calculation in other countries would be more in favour of the electrical cars)
Thack 8 years ago
Various sources make various claims, and it all depends upon what assumptions you make in the places where you don't have solid, reliable data.
For instance, I remember reading about ten years ago that it takes more energy to manufacture a car than it uses in the first 8 years of its life. Now, I may have remembered the 8 years wrong, but I do recall it was a surprisingly long time.
Here is a classic example of the problem: at the time of that article, only one car manufacturer claimed to know what the energy-cost-per-car was. Several of the others made estimates (guesses, probably) which varied wildly, and some admitted that they had no idea.
When we try to work out how much energy is used to manufacture the batteries in electric cars, or to scrap and recycle the steel in petrol cars, in order to get a complete picture of their environmental cost, we end up with so many assumptions and estimates you can pretty well choose any figure you like.
Incidentally, electric cars use a shed-load of copper compared with petrol/diesel cars, and we must take into account the environmental impact of copper mining, especially as it becomes a scarcer resource. One source (sorry, I can't remember which) asserts that there isn't enough copper in the world to replace every petrol/diesel car with an electric one.
ruycold 8 years ago
Jim Shaddox 8 years ago