Plug-in Vehicles and Their Dirty Little Secret

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Over the last few months I've had a running debate with some die-hard EVangelicals who insist that plug-in cars will be cleaner than simple, reliable and relatively inexpensive Prius class HEVs. Since most of my readers have enough to do without slogging through the comments section, it's high time we lay the cards on the table and show why the myth of zero emissions vehicles is one of the most outrageous lies ever foisted on the American public. 

The following graph comparing the life-cycle CO2 emissions of conventional, hybrid and plug-in vehicles comes from a March 15, 2010 presentation by Dr. Constantine Samaras of Rand Corporation. It clearly shows that HEVs and PHEVs are equivalent emitters of CO2 if you take the analysis all the way back to the black earth and base the comparisons on national average CO2 emissions from electric power generation.

GHG Comparison

While the graph suggests that there is no meaningful air quality advantage to plug-in vehicles, the reality is much worse because the specific power generation assets that will be used for night-time charging of plug-in vehicles are dirtier than the national average. 

The following table is based on data extracted from US Energy Information Administration's recently released "Electric Power Industry 2009: Year in Review." It lists high emissions power from fossil fuels in the top section, zero emissions power from conventional sources in the middle section and "clean power" from renewable sources in the bottom section. Since the data was pulled from different parts of the report, estimates of total power generated from specific renewable sources can't be provided. Since renewables as a class are inconsequential to national power production, I don't think the missing data is relevant.

Power Generating Statistics

The most intriguing facts in the table are the capacity utilization rates for both natural gas and hydro power facilities. Natural gas facilities operated at 25% of capacity in 2009, which works out to a national average of six hours per day. You see the same thing with hydro power facilities which operated at 40% of capacity in 2009, or about ten hours per day. While some natural gas and hydro power plants run 24/7, the nation tends to operate both types of facilities as peak power providers rather than baseload power providers. We turn off the clean hydro power and natural gas at night. 

The two baseload elements of US power production are nuclear, which usually runs at a steady state 24 hours a day, and coal, which can be ramped up and down within a limited range to help match supply and demand. During night-time hours, the prime time for electric vehicle recharging, the vast bulk of electric power nationwide comes from nuclear and coal because operators want to conserve their more flexible resources including natural gas and hydro power for high value peak demand periods. As a result, coal accounts for a higher percentage of night-time power than it does day-time power or 24 hour power. There's just no avoiding the reality that electricity produced at night is significantly dirtier than the national average while electricity produced during the day is cleaner than the national average. 

As you shift the US average emissions line in the Rand graph to the right to reflect the differences between day-time and night-time power, plug-ins become seriously sub-optimal. The conclusions are inescapable when you study the data. 

I have searched without luck for a scholarly technical analysis that quantifies the emissions differential between relatively clean day-time power, which has a high proportion of variable hydro power and natural gas, and dirtier night-time power, which has a much higher proportion of coal. If you know of a credible study, I'd love to have a reference. 

The dirty little secret of plug-in vehicles is that they'll all charge their batteries with inherently dirty night-time power and be responsible for more CO2 emissions than a fuel efficient Prius-class HEV that costs a third less and doesn't have any pesky issues with plugs, charging infrastructue or range limitations. 

News stories, speeches and press releases can only maintain the zero emissions mythology for so long. Sooner or later the public is going to realize that it's all hype, blue smoke and mirrors, and that plug-in vehicles have little of substance to offer consumers. When the public comes to the realization that plug-in vehicles: 

  • Won't save their owners significant amounts of money;
  • Won't be as efficient as HEVs when utility fuel consumption is factored into the equation;
  • Won't be as CO2 efficient as HEVs when utility emissions are factored into the equation; and
  • Are little more than feel-good, taxpayer subsidized eco-bling for the politically powerful elite,

the backlash against EV developers like Tesla Motors (TSLA), General Motors (GM) and Nissan (NSANY.PK), together with battery suppliers like Ener1 (HEV) and A123 Systems (AONE), could be unpleasant.

Disclosure: None.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks , Investing Ideas

Referenced Stocks: AONE , GM , HEV , TSLA

John Petersen

John Petersen

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