Large Oil and GHG reductions with Plug-in Hybrid vehicles by oaw14128


                       Large Oil and GHG reductions with
                                 Plug-in Hybrid vehicles
                       Walter James (
                  Research Institute for Sustainable Energy (RISE),
                        Murdoch University, Perth, Australia
 Alternative Transport Energies Conference, 10-13 September 2006, Perth, Australia

Air pollution regulations in major cities of the world have encouraged car manufacturers to develop
petrol (gasoline)-electric vehicles or hybrids (HEV). These vehicles have a powerful battery on-board
and an electric drive train that combines with the internal combustion engine to provide power to the
wheels in a very efficient manner. The introduction of HEV has not only been extremely successful
in reducing pollution, but also fuel use. Manufacturers are now looking at providing an “electric”
driving range HEV by developing plug-in hybrids (PHEV) that incorporate higher capacity, lighter
and more advanced batteries. These batteries can be charged from “smart grids” using off-peak
electricity supplied from base load generators and renewable energy generators.
The interaction of PHEV with smart grids has the potential to achieve large reductions in oil,
greenhouse gases (GHG) and most air pollutants, at near zero cost. The connection of PHEV to the
grid in sufficient numbers could provide electricity storage capacity capable of supporting ancillary
services in the grid and the installation of higher levels of renewable energy generation capacity.
This study quantifies the effects of introducing these technologies and their applications to visualize
their logical deployments as battery costs fall to targeted prices

The HEV.
The Bureau of Transport and Regional Economics (BTRE) projected that in 2005 road transport
vehicles in Australia would consume 1,076 PJ of petroleum based fuels emitting 73.9 Mt of GHG
(CO2 equivalent). BTRE projects an increase to 1,338 PJ in fuel and a corresponding 93.0 Mt of
GHG by 2020. (1)
Fig.1.shows Australia’s Potential Crude Oil and condensate Supply and Demand. In 2000-1 Australia
was a net exporter of oil products with a positive trade balance of $4.2 billion dollars. In contrast in
2004-5 recorded a trade deficit with oil imports of $9.9 billion dollars and 12.8 billion dollars in
2005-6. (2)

  Figure 1 (source: Australian Petroleum Production and Exploration Association [APPEA])

This situation puts a great strain on oil supplies, the environment and Australia’s balance of trade.
Motor vehicles are the main source of air pollution (NOX, SOX, VOC, CO, particulates, etc) in
Australian cities (3). Many major cities in the world greatly affected by car pollution have legislated
to reduce it. One of the consequences of this legislation is the development of Hybrid Electric
Vehicles (HEV).
The HEV uses electric storage to improve vehicle efficiency. It captures benefits, like stop/start,
regenerative braking, torque assist at low engine speeds and brief power boosts. The result, when
compared to similar conventional vehicles is a reduction in petrol (gasoline) consumption of around
30%. This has the effect of reducing GHG and air pollutants by a similar amount. Fuel consumption
as well as all emissions, are at their relatively highest levels when traveling at low speeds (Fig 2).
The engine of HEV generally does not start until it has reached 25 to 30 km/hr.

                                       Figure 2 (source BTRE)

The HEV is proving so successful that manufacturers that started production with small sedans are
extending the HEV concept throughout their range of models. Sales in USA alone are averaging
20,000/month (July 06)(4). This maturing HEV industry is providing the volumes needed to achieve
lower costs of batteries and electric drive systems.
The reductions in fuel consumption and emissions as a result of the introduction of the HEV,
although quite spectacular, will only slightly alleviate the situation, as most of the existing
conventional fleet will be still on the road for a long time. Therefore, improved initiatives are
To examine the options it is useful to display fuel and technology options and select those that result
in much larger reductions in fuel and GHG emissions. The selection should be based on the full cycle
of the fuel, from extraction from the ground to the energy supplied to the wheels of the vehicle. This
is called “well to wheel” (WTW) energy. There are several American, European and Australian
studies on this subject. An excellent study by the University of Queensland (5) has been selected, as
it refers to an Australian mid-size sedan (VY Holden Commodore) and electricity generated by coal-
fired power stations, the dominant fuel in this country. Figures 3 and 4 shows a comparison between
different technological solutions, the WTW energy/km consumed and GHG/km emissions. They also
differentiate between the WTW into “well to tank” (WTT) and “tank to wheel” (TTW) energy and
GHG components. The fuels are grouped in coal, oil, natural gas and renewables.

                  Figures 3 & 4     (source A. Simpson University of Queensland)
Notes: ULP-ICV= Unleaded Petrol- Internal combustion; FC=Fuel cell; BEV=Battery Electric
The WTT stage accounts for all energy inputs throughout energy feedstock production and
transportation, fuel processing and distribution and finally, fuel storage in the tank of a vehicle.
The TTW stage is the energy actually used to propel the vehicle.
From the above figures it can be seen that the most energy efficient system with the least GHG
emission is the battery electric vehicle powered by renewables. In this particular analysis the BEV is
a purely electric vehicle with a 500 km range, (which is far in excess to what is required by a PHEV).
This indicates that electric drives and renewables are promising prospects for the PHEV.
The HEV technology has now been extended (not commercial yet) to a plug-in hybrid (PHEV) that
has a larger electric storage and the ability to charge its storage system from the utility grid. This
vehicle can draw power from the battery, engine or from a combination of both. On a fully charged
battery the vehicle can travel the daily commuting distance “electrically” and for longer trips it would
operate as a HEV relying on other fuels. The great advantages of this system are a much higher
efficiency (x3 to x4) of the electric drive compared to an internal combustion engine and that it can
be powered from the grid with relatively low cost electricity. The grid can be powered by fossil fuels
or renewables. The connection with the grid has great possibilities as is shown later in this paper.
This technology has the potential to greatly exceed the HEV performance provided the battery size is
selected according to the daily commuted distance traveled. The basis of the following PHEV
comparison analysis is the average distance traveled by a passenger car in Australia, being 14,400
km/yr (6) and a “utility factor” (7) that is the fraction of the total kilometers traveled electrically. A
PHEV30km was selected. Figure 5 shows the annual fuel use of the VY-Commodore configured as a
conventional internal combustion engine vehicle (ICV), HEV and a PHEV. The energy used as an
ICV and HEV was drawn from figure 3 and for the PHEV (2.35 MJ/km ULP+0.238 kWh/km) was
derived from the BEV with a smaller 12 kWh battery. The electric energy used is expressed in liters
of ULP fuel equivalent. (The energy content of ULP is 32.2 MJ/L).

                                                Figure 5
Fig. 6 shows the fuel reduction effect of 2 million HEV plus 1million PHEV introduced gradually in
2010 through to 2020 and projected nationally over the whole fleet.

                             Figure 6 (source of the original fig. BTRE)

Fig. 6 assumes that HEV and PHEV are introduced in 2010 and that by 2020 there would be 3
million of these vehicles on the road. (This is a subjective supposition, a market penetration analysis
for a longer period is required with normal, tax benefits and fuel constrained environments). The fuel
savings in 2019-20 amounts to 60PJ of ULP and approximately 300PJ over the ten-years. The fuel
reduction rate increases rapidly beyond 2020 as mature PHEV replace the ICV fleet.
Fig. 7 shows the annual GHG emissions from an ICV, HEV and PHEV. The net mitigated GHG
emission by a PHEV compared to a conventional ICV provided the electricity is supplied by
renewables is 2.6 t/yr. If a coal-fired grid supplies the electricity, the GHG savings would only be

                                                Figure 7

Fig. 8 shows the GHG effects of sales reaching 2 million HEV and 1million PHEV introduced
gradually in 2010 through to 2020 and projected nationally over the whole fleet if the electricity is
supplied by renewables.

                              Figure 8 (Source original figure BTRE)
The GHG reduction in 2019-20 amounts to 4.8 Mt and 24 Mt over the 10 years. Beyond 2020, as
more PHEV replace ICV the GHG emission figures would show a rapid decline for some time. A
similar improvement in air quality could be expected.

The Grid Connection.
A great number of utilities around the world are converting to variable price tariffs, reflecting more
realistically the cost of generation. In periods of low loads such as at night, the off peak tariffs are
around half of the conventional standard tariffs. During summer midday or winter evening (peak)
load period tariffs are around double and at other times (shoulder) they are approximately the same. It
is possible that in future utilities could adopt real time variable tariffs with shorter time intervals. This
is now made possible by electronic meters generally called Smart Meters providing among other
features a two-way energy/information path.
The immediate benefit for the PHEV consumers is that they can charge their vehicle’s battery at
night with the low tariffs, but as important is that consumers could also earn credits for providing
capacity support to the utility while the vehicle is connected to the grid. There is also the potential for
energy trading but this a secondary consideration. This concept is called a vehicle to grid (V2G).

Vehicles to Grid (V2G).
The electricity grid has essentially no storage, so generation and transmission must be continuously
managed to match fluctuating customer load. Turning generators on and off or “ramping” them up
and down, some on a minute-by-minute basis accomplishes this match. By contrast, PHEV have a
quick response time (seconds), low standby costs and low capital cost per kW. Electricity is grouped
in several different markets with correspondingly different control regimes (base load power, peak
power, spinning reserves and regulation or balancing) that differ in control method, response time,
duration on the power dispatch, contract terms, and price. Premium applications such as spinning
reserve and regulation are part of ancillary services for which a utility may contract with PHEV
owners. Figure 9 shows the different storage applications where PHEV in large numbers could be
very useful to the utility. To put a perspective on the magnitude of the potential of PHEV, the entire
Australian grid is 49GW and the passenger and light commercial fleet is estimated at 169GW
(assuming 13 million vehicles at 13 kW each).

                            PHEV time based storage applications

                           Figure 9    (Source: Energy Storage Assoc. ESA)
While the vehicle is parked (22hrs out of 24hrs) its battery can provide grid support in the form of
energy and capacity for ancillary services. A capacity contract with the utility refers to the power
(kW) and time (hrs) that the vehicle is available to the grid. The capacity payment is for the
maximum capacity and time duration (regardless of whether used or not). Spinning reserve could
typically be required 20 times/year at 20 minutes each whilst regulation (up and down) could occur
400 times/day with small energy throughputs (8). Regulation can provide the largest earnings for
PHEV owners. This will cause extra wear and tear on the battery. Brooks (9) indicates that the value
of regulation services greatly exceeds the battery costs (at production levels of 30.000/yr).

This scenario assumes that the PHEV would be commercially available in 2010 and that the batteries
would have reached their projected commercial value (A$ 1,000/kWh for NiMH “power” battery and
A$ 373/kWh for Li-ion “energy” battery with a 10 to 15 yr life)(10).
The following electricity prices are based on the Western Australian utility Synergy (ex Western
Power Corporation) that provides Smart Meters and variable price tariffs.
Most Australian utilities offer Green Power (i.e. wind, solar, etc) under a national accredited and state
audited program that offers consumers electricity produced with zero or near zero GHG emissions.
This Green Power is charged at a supplementary tariff of 3 to 4 c/kWh. Synergy’s is called Natural
Power and the supplementary charge is 3 c/kWh.
The V2G infrastructure for the purchase of capacity from residential customers is not established yet
so a scenario with and without V2G is considered.
The fuel is unleaded petrol (ULP) based on the price of oil at US$ 60/Barrel.The cost elements are:
-       PHEV30km/d and 14,400 km/year with a 10 kWh energy battery and 2 kWh power battery
-       HEV fitted with a 2 kWh power battery
-       Holden Commodore VY configured as a ICV, HEV and PHEV respectively
-       Oil – US$60/Barrel – ULP =A$1.15/L
-       Off-peak tariff 6.56 c/kWh
-       Shoulder tariff 13.12 c/kWh
-       Peak tariff        20.22 c/kWh
-       Natural tariff, add 3 c/kWh to all the above tariffs
-       All dollar values refer to Australian dollars ($A1.0=$US0.75 approx)
-       For the V2G scenario, capacity credit is at 1.45 c/kW-h as per IMO Western Australia (11)
-       The vehicle is connected to the grid for 18 hours per day and only the battery contributes to
the grid not the engine (the V2G concept normally considers both. Only capacity credits are
considered, no energy transactions).
Figure 10 shows the graph of fuel costs per year. The PHEV column shows ULP + electric energy

                                         Figure 10
The PHEV30km will save $929/yr compared to the conventional ICV. Table1 shows the 2010 cost of
“hybridising”(HEV) a Holden VY Commodore (2 kWh battery) as well as a PHEV30km version
(2kWh+10kWh battery) and compares them with an ICV. It shows simple payback periods without
V2G, with V2G regulation and V2G spinning reserve credits.
                                        Payback periods
  Vehicle Hybridization Fuel cost        Maint      Total Savings Payback Payback              Payback
  type    cost $        $/yr              $/yr      F&M   $/yr    yrs     V2G Reg.             V2G Sp
                                                                          yrs                  Res. yrs
  ICV       N/A             1,707     300           2,007 N/A     N/A      N/A                 N/A
  HEV       4,727           1,193     250           1,443   564       8.4  N/A                 N/A
  PHEV      9,953           182e+596f 200             978 1,029       8.2  2.56                5.8

                                              Table 1       e=electricity cost     f=fuel cost (ULP)
The V2G capacity earnings in Table 1 are discounted by the annualized cost of the wear and tear that
the batteries may suffer when providing ancillary services, it also includes the cost of a 15kW
residential electrical connection (for V2G operation). Renewable energy is a cost effective source
when supplying PHEV as it competes with the retail price of electricity (i.e. 19 to 23c/kWh). Several
calculations were done using consumer installed photovoltaic arrays to provide the energy to charge
the PHEV vehicle. The payback periods are slightly better (10%; with or without V2G) as the
consumer is not penalised with the Natural Power tariff surcharge imposed on its household load
during peak and shoulder periods of the day. This penalty has been incorporated as an extra
maintenance cost ($150) for the PHEV in Table 1. Although HEV and PHEV payback periods are
similar, PHEV use half the fuel and emit half the GHG. Note how valuable the introduction of
V2G is to amortize the high cost of early PHEV.
With ULP at $1.50/L the paybacks are 6.6 yrs for HEV and 5.5 yrs for PHEV, 2.2 yrs for
PHEV+V2G regulation and 4.3 yrs for PHEV+V2G spinning reserve. Higher fuel prices favor
PHEV. The costs of “hybridizing” smaller (as compared to the Commodore) vehicles would be much
Increasing Base Load Wind Generation Capacity with PHEV.
The established thought has been that the net wind generating output (name plate or rated capacity x
capacity factor) should not exceed 20% of the overall utility generating output (installed capacity x
capacity factor) to prevent instability in the system. It is expected that a large number of PHEV could
provide sufficient inexpensive storage to increase wind base load capacity well beyond the 20%
without affecting system stability.
A calculation was done using the method proposed by Kempton, Tomic (12)(University of Delaware,
USA). The results are shown in Table 2. The assumption is that PHEV storage is supplied for a
maximum period of 3hrs for 15% of the wind farm(s) nameplate capacity. As this reserve is a battery
(as opposed to a generator) it will not only cover shortfalls but also recover excess output or “spill-
over” that wind farms sometimes produce that otherwise would be lost.

                     Increased wind capacity in the grid due to PHEV

Vehicle    Vehicle     Vehicle     3 Hour      Max.Wind        Ave.Wind     %Australia’s   GHG
Qty        Storage     Capacity    Reserve     name-           output @     generation     Reduction
                       Available   Capacity    plate@15%       30% C.F.     (29 GW)
           GWh         GW(1hr)     GW          GW              GW           %              Mt/yr
1          12 kWh      4.4 kW      1.46 kW     9.75 kW         2.92 kW      N/A            N/A
1 Mill     12          4.4         1.46        9.75            2.92         10             26
2 Mill     24          8.8         2.92        19.46           5.84         20             52
3 Mill     36          13.2        4.38        29.19           8.76         30             79
4 Mill     48          17.6        5.84        38.92           11.68        40             105
5 Mill     60          22          7.3         48.6            14.5         50             131
                                        Table 2
Table 2 indicates that with 1 million PHEV by 2020 there could be sufficient reserve capacity to add
2.92 GW of wind average generation over and above the accepted 20% (5.4 GW) average generation
output. It would also mitigate an added 26Mt/yr of GHG. Australia’s present (2006) wind average
generation is 0.735GWx0.3cf =0.22GW(or less than 1% of Australia’s generation)(13).
 Figure 11 shows that five million PHEV (40% of the fleet, achievable before 2030) could support
14.5 GW of wind average generation (50% of Australia’s average generation) mitigating 131 Mt/yr
of GHG or 65% of the approximate 200 Mt/yr emitted by Australia’s coal fired power stations.
The Electric Power Research Institute (EPRI) electricity cost projection possibilities (14) for 2020
with modern power generation systems indicate that wind can generate at lower costs than a new coal
integrated gasification combined cycle plant (IGCC) with CO2 capture, transport and storage.
The energy industry has estimated that investments of at least 37 billion dollars in electricity and gas
will be needed over the period to 2020 (15). Wind warrants consideration as an important part of it.

                                               Figure 11

Fig 11 shows graphically the effect of partially replacing coal by integrating 50% of wind generation
into Australia’s total generation mix.

1- Well-to-wheel pathways based upon electric vehicles powered by electricity generated from
renewable sources offer near zero GHG emissions and the lowest energy path.

2 - PHEV provide a practical, stable, environmentally safer, secure and economic oil replacement
(over 50%) by wind and photovoltaic electricity with little or no infrastructure requirements.
Increasing hybrid electric capability will be the trend.
3 - Establishing the V2G regulation capacity system would potentially provide a financial incentive
for the adoption of early PHEV and the spinning reserve capacity provides earnings for the longer
4 - PHEV can provide sufficient stabilizing storage capacity to allow high levels of wind base load
energy in the grid with the corresponding benefits of large savings in fuel and large reductions in
GHG emission. In fact the mitigation effect that 1 million PHEV could have in electricity generation
(26Mt of GHG/yr) in 2019/20 overwhelms the benefit that it could have in transport (4.8Mt of
GHG/yr) in the same year. Five million PHEV providing 7.3GW of reserve capacity could allow
14.5 GW of wind generation and reduce the GHG from coal power stations by 65% from the
current 200Mt/yr to 69 Mt/yr.
5 - PHEV will generally use off-peak power, thus improving greatly the utility’s capacity factor and
business. The inexpensive storage can also reduce the costs of peak demand and improve power
quality. Any new or replacement generation capacity could come from renewables.

Acknowledgements: I’m grateful for the discussions and support received from Andrew
Simpson from NREL and to Mark McHenry from Murdoch University for his assistance in preparing
this document.

(1) Bureau of Transport and Regional Economics (BTRE)
(2) Australian Bureau of Agriculture and Resource Economics (ABARE) Sept 06. Australian mineral
statistics June quarter 2006
(3) Review of fuel quality for Australian Transport. Department of Environment and Heritage.
Australian government.
(4) www.greencarcongress.
(5) Full- cycle assessment of Alternative Fuels for Light-Duty road vehicles in Australia, Andrew
Simpson, University of Queensland, Australia. Data from this document has been updated (July
2006) in correspondence with the author.
(6) Australian Bureau of Statistics (ABS). Survey of motor vehicle use September 2005.
(7) Comparing the benefits and impacts of hybrid electric vehicle options. EPRI report 1000349.
(8) Vehicle to Grid power fundamentals: Calculating capacity and revenue. Willett Kempton, Jasna
Tomic. University of Delaware, Newark, DE 19716, USA. Dec 2004.
(9) Vehicle to grid Demonstration Project: Grid Regulation Ancillary Service with a Battery Electric
Vehicle. A. N. Brooks AC Propulsion Dec 2002.
(10) EPRI. M. Duvall. South Coast AQMD.PHEV Forum July 12, 2006 and other.
(11) Independent Market Operator (IMO) Newsletter Issue 2. Perth Western Australia.
(12) Vehicle to grid Implementation: From stabilizing the grid to supporting large-scale renewable
Energy. Willett Kempton, Jasna Tomic. University of Delaware, Newark, DE 19716, USA.
(13) Wind Energy Association of Australia
(14) Generation Technologies in a Carbon-constrained World. Steve Specker president and CEO
EPRI October 2005
(15) Securing Australia’s Energy Future. Section 3, Energy Markets

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