Electric Cars and the Green Energy Industry by suchenfz


									Electric Cars and the Green Energy Industry

               Nate DeSimone

                April 20, 2008
Table of Contents

1. Introduction ................................................................................................................................ 1
2. The All Electric Energy Industry ................................................................................................ 2
3. The Missing Energy Storage Technology................................................................................... 5
4. ZENN Motor Company .............................................................................................................. 7
5. The Chevy Volt ........................................................................................................................... 8
6. Stakeholders in the Electric Conversion ..................................................................................... 9
7. Conclusion ................................................................................................................................ 10
8. Works Citied ............................................................................................................................. 11

1. Introduction

Global warming has recently become one of the most talked about and most debated topics.
While there are still disbelievers, the scientific theory and evidence behind the hypothesis that
global warming is occurring and human activity is negatively affecting it has become undeniable.
However the much more important and debated point is, how much is human activity affecting
it, how much of a change in human activity is necessary to prevent a global climate crisis, and
how are we to go about implementing the required changes. The typical environmentalist
position is what I have come to call the global celery diet, where human consumption is highly
limited, to the point where standards of living will be noticeably decreased. While I do agree
that a reduction in consumption is necessary, I do not think it should be at the level where
standards of living will be impacted. Rather, I believe the problem of global warming should be
treated as an engineering problem. Carbon emissions, the cause of global warming, can be
eliminated by use of alternate energy technologies which do not cause harmful emissions.

One method of energy delivery which can be made totally carbon free is electricity. While the
majority of the electricity in the United States is currently generated from coal (Atmospheric,
Earth, and Energy Department at Lawrence Livermore National Laboratory), it is possible to
generate electricity without the release of any polluting agents, most of which involve direct or
indirect use of solar energy (solar panels, wind, hydro, etc.) However there are nonpolluting
methods which do not use solar energy, such as geothermal, and there is also nuclear which
releases an extremely small amount of pollutants that are easily captured and properly disposed
of. Many emission free electricity generation technologies still require additional refinement and
research, especially solar, but that is not the focus of this paper. Another benefit to the electric
energy industry is we would no longer be reliant on foreign oil. Indeed it is impossible to speak
about changing the energy industry without taking into consideration motor vehicles. The
electrification of cars is certainly a great first step to a green energy industry.

2. The All Electric Energy Industry

In order to have an all electric industry, cars must be switched to electric energy. Unfortunately
there is great expense involved in doing this. It would require replacing a huge amount of
already invested infrastructure (gas stations, repair tech training, etc.) Also the divestment in
liquid fuel infrastructure will occur at the same time as investment in the electric infrastructure,
as the grid capacity will now also have to accommodate the vehicle fleet.

This positive side to this is once the vehicle fleet is switched, we will be able to fuel it using any
energy source. Even multiple different types of energy sources can be used without ever needing
to change infrastructure or vehicle power train again. Liquid fuels would never allow this kind
of flexibility, even if ethanol becomes practical. Of course this would not be an instant transition
either, as the existing gas vehicles will need to slowly depreciate and exit service. Consumers
could also fuel their vehicles at home, without needing to go to a gas station to buy energy.

One benefit of electric motors is that they are much more efficient than internal combustion
engines. By efficiency, I mean out of all the energy stored in the chemical bonds of the gasoline,
what percentage of that is extracted as usable kinetic energy. Similarly for the electric car, out of
all the electromotive force stored in the battery, how much is converted into usable kinetic
energy. Since the internal combustion engine is a heat engine, it is bound by a theoretical

maximum efficiency, which depends on the temperature outside as well as inside the engine. Of
course this is a theoretical limit that does not take into consideration the second law of
thermodynamics, which will further decrease efficiency. The interested reader is directed to
study Carnot cycles. In the end, it turns out the theoretical limit of most steel engines is at most
37%, and the efficiency of real world engines is around 20% (Malte). Hence the vast majority of
the energy in gasoline is released as waste heat. Whereas the efficiency of the typical high
horsepower electric motor is around 95%, hence most of the energy stored in the car will be
directly translated to kinetic energy, decreasing the energy requirements for these vehicles
substantially. In fact in order to be NEMA design B compliant, motors over 125HP must have at
least 92.4% efficiency (The Engineering Toolbox).

Another benefit to using electric vehicles is that the regenerative braking technology originally
designed for hybrid cars can be installed with almost no additional cost, since it would add
minimal additional components. The main additional expense of hybrids (separate electric motor
and battery packs) would already be included in an electric car. These additional components
add approximately $3,000 to the cost of hybrid cars. Whereas the additional cost to electric cars
would be almost zero, hence it will become a standard feature on even the cheapest cars, further
increasing the efficiency over a gas car.

Another benefit to electric cars is the price of energy, I will demonstrate with a quick back of the
envelope rough calculation. One gallon of gasoline has about 131 MJ of chemical energy. Note
that this number will vary by as much as ±4%, depending on what time of the year it is, and by
which refinery it comes from. I will use an efficiency of 26% for the internal combustion
engine, which is being generous. At this efficiency level, of the 131 MJ of chemical energy in
the fuel, 34.06 MJ is converted into kinetic energy, and the rest is given off as heat. The
efficiency of an electric motor is 95%, and a kWh is 3.6 MJ by definition, so we will get 3.42 MJ
of kinetic energy per kWh. To compare the costs, we observe that                   , hence 9.96

kWh are needed to equal the kinetic energy output of a gallon of gasoline. The average retail
price of electricity in the United States is $0.0944 per kWh, hence 9.96     $0.0944 = $0.94 per
gallon, and as stated above, this is a conservative estimate. Gas prices have not been below

$0.94 per gallon for quite a while, so electric cars would be extremely cheap to operate. With
gasoline approaching $4 a
gallon, this is very

Of course one could expect
this huge increase in
demand to have a large
effect on the electricity
market. In order to roughly
analyze the price increase, I
start by looking the
Lawrence Livermore
National Laboratory’s

energy flow chart for 2002.     Figure 1 - US Energy Flow for 2002 (Atmospheric, Earth, and Energy Department
                                at Lawrence Livermore National Laboratory)
In line with what we would
expect, most of the energy used by cars is released as waste heat, so instead of looking at the
input side, we should look at the output side for the approximate amount of electrical energy we
would need to run the electric car fleet. Hence we need 5.6 EJ, of electricity to run the electric
car fleet for a year. 12.5 EJ of electricity was distributed throughout the year, so we will need to
add an additional 45% capacity to the national power grid approximately. Although the waste
from the transportation sector would go away, the waste from lost energy in the power
distribution grid will increase. If we assume that the increase in waste is linear with the increase
in power distributed, then the additional waste in the distribution grid will be 12.51 EJ, much less
than the 22.4 EJ that is currently wasted with gas cars. Of course if we fuel our electric cars at
central fueling stations that are connected to the high voltage backbone, then the additional waste
generated by the grid will be less than linear, so this number will be even lower.

Of course this says nothing about the price increase, for that we need a supply curve. While I
was not able to find a long run national electric supply curve, I was able to find a short run
supply curve for a region of twenty central states in the year 1995, which I have reproduced here.

Since this is a short run
supply curve, we can see
that there is some point
where electric demand
exceeds the current
electric plant capacity
and there is a point where
the utility will sell for
almost nothing because
of excess capacity. I
believe it is safe to expect

a long run graph to be         Figure 2 - Short run regional electricity supply curve (Thompson, Scott, & Berger, 2004)

completely linear, since in
the long run, plant capacity is in equilibrium. Hence we can use the elasticity in the linear region
to find the price increase. The total sales for this region at the time was 1.52 trillion kWh
(Thompson, Scott, & Berger, 2004), so a 45% increase in demand will be 0.68 trillion kWh. I
have drawn red lines roughly equal a 0.68 trillion kWh increase in demand on the linear portion
of the supply curve, and as you can observe, we can expect roughly a $0.0033 increase in the
wholesale price of electricity in the long run, much less than what most analysts expect the price
of gasoline to rise by during the same period.

Finally since the mechanical components in the electric car are much less complex and less
prone to wear, the vehicle will require less maintenance. This will further add to what is already
very financially attractive.

3. The Missing Energy Storage Technology

From the section above, it would seem like given how low the cost of electric cars are, someone
would have already capitalized on the idea. However there is one fatal flaw, currently an

electrical energy storage device that has a high enough energy density to be acceptable for
vehicle use does not exist. This is however, changing.

Gasoline has an energy density of 46.7 MJ/kg, however because of engine efficiency, 9.34 MJ/kg
of kinetic energy can be extracted (assuming 20% efficiency). It is possible to make acceptable
cars as long as the energy storage technology can be within this same order of magnitude.

There are two current technologies for storing electric energy, batteries and ultra capacitors.
Current chemical batteries have a better energy density than ultra capacitors, around 0.4 MJ/kg
(Hamilton, 2007), one order of magnitude lower than gasoline, which is not acceptable.
However new research at Stanford has produced improved Lithium Ion batteries with internal
nanowires, and has about 10 times the energy density of current designs, which would be
acceptable for use in vehicles if it was commercialized (ScienceDaily, 2007).

There is a major problem with chemical batteries however, is they require several hours to
charge. This is an unacceptable refueling time for vehicles. Also the batteries will wear and
only last a few thousand charges, meaning they will depreciate much faster than the vehicle they
are placed in. This wear is because the battery’s anode undergoes oxidation during discharging,
and even when it is recharged not all material reforms on the degenerated metal pole, resulting a
decreasing charge capacity over time. Some of the substances inside these batteries are toxic so
a waste management system would be needed, perhaps remanufacturing the battery packs. One
could envision a system where the gas station has a stock of charged battery packs and swaps the
pack in your car with a charged one, but accounting and charging consumers for depreciation of
the battery packs will be complex. And the actual battery packs will likely weigh over 100
pounds, so special equipment will be needed to do the swap.

The other electric energy storage technology is ultra capacitors. Current commercial ultra
capacitors have an energy density around 0.02 MJ/kg (Maxwell Technologies). This is two
orders of magnitude lower than gasoline, which is completely unacceptable. The energy storage

of a capacitor can be computed using the equation            , where C is capacitance and V is

voltage. Most ultra capacitor research revolves around attempting to increase the amount of

surface area for the electrons to gather on, the result is capacitors with very high capacitance but
low maximum voltage, since high voltage would destroy the extremely small and delicate
structures. It could be expected with the application of carbon nanotube technology that one
could increase the surface area enough to enable a capacitor with about as much energy density
as current lithium ion batteries, while this has wonderful applications in laptops, cell phones and
other portable electronics, it is not acceptable for use in vehicles.

There is however a startup called EEStor that has taken a different approach. They noted that
increasing the maximum voltage of the device can enable an increase in energy storage much
higher than increasing capacitance, since the voltage term is squared. This has resulted in the
patenting of a device called the EESU with an energy density of 1.008 MJ/kg (Hamilton, 2007).
This ultra capacitor has enough energy storage to be acceptable for use in cars. Indeed this
seems almost too good to be true, and many people have been skeptical about EEStor’s claims.
However after Lockheed Martin toured their facility they decided to sign an exclusive agreement
to use their device for military applications (Vanbebber, 2008), they have gained a fair amount of
credibility. Since rapid refueling is possible with capacitor technology, a full charge could be
delivered in minutes. The device uses an insulator that is used in many conventional capacitors
called barium titanite and a conventional parallel plate design. The innovation comes in refining
the barium titanite to extremely high purity and mixing it with a ceramic to remove air pockets in
the powder, which prevents the arcing at high voltage exhibited in conventional capacitor
designs. It should be noted that both barium and titanium are expensive metals, and that a device
like this will require a large amount of both. The cost of this device is likely in the thousands of
dollars. But this isn’t a huge issue, since the electric motor is very cheap compared to an internal
combustion engine, it will likely about be even overall. I would say that this is likely the best
technology for electric cars, assuming that it works.

4. ZENN Motor Company

ZENN Motor Company is an electric car manufacturer that currently builds impractical battery
based electric cars, primarily appealing to the rich environmentalist. Their current models have a

max speed of 25 mph, an eight hour charge time, can only go 35 miles on a charge (on average),
and have an MSRP of
$17,245. This type of car is
completely impractical for
the typical American
consumer. However, ZENN
Motors has partnered with
EEStor and has an exclusive
agreement for use of their
EESU devices in
automobiles. In fall of 2009,    Figure 3 - The ZENN Electric Car (ZENN Motor Company)

they plan to release a new
model based on EEStor’s device called the cityZENN which will have a maximum speed of 80
mph, and a 250 mile range (Technology News Daily, 2008). While this is still not quite as good
as a gasoline car, it is good enough that it could be used as a second car, with a gas car for long
trips. Only time will tell if this becomes a commercial success, though with electric energy
prices as they are, I doubt consumers will overlook it.

5. The Chevy Volt

General Motors has also realized the potential in electric cars, and has a concept car called the
Chevy Volt. The Volt uses lithium ion batteries, which won’t get the car very far. To make its
range acceptable, they are also including an internal combustion engine. So in reality it is more
like a hybrid, other than the fact that it prefers to use the electric motor whenever possible and
can do errands and small commutes completely under electricity. Time will tell if GM will copy
ZENN and try an all electric ultra capacitor approach. Also GM does not plan to release the car
commercially until well into the next decade. In general, it seems GM’s approach is very timid,
and that they still have a large mindshare in gasoline motors.

6. Stakeholders in the Electric Conversion

It is important to analyze the stakeholders involved in converting the energy industry to all
electric, and who the winners and the losers will be.

Firstly, it is quite obvious that the consumers stand to benefit. Not only will the costs of energy
for vehicle operation will decrease dramatically, but vehicle maintenance costs will be much
lower as well. It was well established back in the mid 1990’s with the GM EV1 that electric cars
will have much lower maintenance requirements than normal gasoline cars.

The US Government and ultimately the American taxpayer will also benefit. Elimination of the
need for foreign fossil fuel will remove the need to protect American interests in the middle-east.
While America may still have an interest in the protection of Israel, our presence in the region
can be substantially cut back.

The auto industry is a loser in the electric conversion. Since any well made electric vehicle will
break much less often, their sales of vehicle servicing and parts will decrease. Some estimates
put the reduction in maintenance as much larger than the reduction in energy costs. The lower
maintenance requirement is inherent in the electric car’s reduced mechanical complexity. While
this does have an effect on the earnings of auto manufacturers, it will have a much greater impact
on the auto services market. The number of auto mechanics jobs will decrease, leaving many
former mechanics unemployed. One can also expect many auto repair ships and dealers to close.
This is likely part of the motivation for GM to place internal combustion engines into the Chevy
Volt, to maintain their business model.

Oil companies and the energy industry will also lose from the electric conversion. The
production and distribution of electricity has lower profit margins then gasoline, and
significantly less capital is required. This will likely reduce the size of the energy industry, and
cause some firms to close.

Gas stations are also threatened by electric cars, as consumers are now able to refuel at home.
However this is unlikely to be a major issue since gas stations can purchase wholesale power
directly from the high voltage backbone. Wholesale electricity costs are around 2 cents per
kWh, instead of the residential retail price which averages about 9 cents per kWh. This means
that the centralized energy supplier can sell electricity at a lower price than the consumer can
purchase it from the utility. This will require the expansion of the high voltage grid, and the
addition of more ugly, tall high voltage lines to communities. One can also expect since electric
refueling stations will be cheap to install that big box retailers such as Wal-Mart and Target will
consider placing islands into their parking lots. This puts gas stations, which are often owned or
franchised under large oil names into direct competition with these large retail companies.

The middle-eastern countries and the OPEC cartel are losers, and they likely won’t appreciate
the loss of their primary customer. One could expect them to completely open the valves and try
to drive gas prices down as much as they can to stop the transition. Though as was shown above,
gas prices would need to be lower than they were in the 1970’s, it is unlikely that they could
push gasoline costs down this low, so they will only delay the inevitable. The federal
government could compensate by raising gas taxes, destroying any such effort. What will likely
happen is the developing nations like China and India will begin to purchase more fossil fuels,
and the customer base will shift.

7. Conclusion

Electric cars are not only a step toward a healthier planet, they are also economically favorable.
Unfortunately, the existence of several large players is threatened by electric cars. Unless the
public takes a stand, both with their votes and their pocket books, chances are the electric car
will never see mainstream adoption. Business as usual will prevail, and we run the risk of
changing the planet’s climate.

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8. Works Citied

Atmospheric, Earth, and Energy Department at Lawrence Livermore National Laboratory. (n.d.).
E&E: U.S. Energy Flow — 2002. Retrieved April 20, 2008, from Lawrence Livermore National
Laboratory: https://eed.llnl.gov/flow/02flow.php

Hamilton, T. (2007, January 22). Battery Breakthrough? Technology Review .

Malte, P. (n.d.). Improving IC Engine Efficiency. Retrieved April 20, 2008, from

Maxwell Technologies. (n.d.). Maxwell Technologies: Ultracapacitors - BCAP3000. Retrieved
April 20, 2008, from http://www.maxwell.com/ultracapacitors/products/large-cell/bcap3000.asp

ScienceDaily. (2007, December 20). New Nanowire Battery Holds 10 Times The Charge Of
Existing Ones. Retrieved April 20, 2008, from

Technology News Daily. (2008, April 1). cityZENN! Retrieved April 20, 2008, from Technology
News Daily: http://www.technologynewsdaily.com/node/9548

The Engineering Toolbox. (n.d.). Electrical Motor Efficiency. Retrieved April 20, 2008, from

Thompson, E., Scott, F., & Berger, M. (2004). Deregulation in the Electric Utility Industry:
Excess Capacity and the Transition to a Long-Run Competitive Market. Growth and Change , 1-

Vanbebber, C. (2008, January 9). Lockheed Martin Signs Agreement with EESTOR, Inc., for
Energy Storage Solutions. Retrieved April 20, 2008, from PressMediaWire.com:

ZENN Motor Company. (n.d.). ZENN Motor Company. Retrieved April 20, 2008, from

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