The Power to Charge Electric Vehicles comes from coal argument

The argument “The power to charge EVs comes from Coal” is thrown at EV enthusiast and early adapters of EV technology all the time. Although I am a big proponent of electric vehicles, I am not a blind supporter. I acknowledge the fact that emissions from coal fired power plants are major part of total emissions from EVs. So I decided to gather some basic data and crunch some numbers.

I will like to mention the assumptions made in this analysis

1. The emissions from the tailpipe are calculated using EPA formula.
2. Emissions from gasoline and hybrid vehicles are purely from burning the gasoline. Transport of crude oil, refining, transport of gasoline is not counted as I don’t have all the data.
3. MPG and kWh/mile are from EPA stickers and testing data.
4. All emissions shown are per mile.

With these assumptions in place, let us move towards actual math of it. Let us start with electric vehicles. There are various scenarios for emissions caused by electric vehicles. In real life there is zero tailpipe emission, but here “the power to charge EVs comes from coal” argument comes in. In today’s world, no power grid is using coal as a fuel for 100% of the electricity production. In US, Europe, India and China there is a good mix of natural gas, coal, nuclear, hydro power and renewable energy source. Considering this, I have created three different scenarios of grid power mix. 100% coal (for skeptics), 50% coal and 50% natural gas and 1/3^rd of each Coal, Natural Gas and renewable energy (Likely a 2020 scenario)

The information from eia.gov indicates the pounds of CO2 emitted per kWh of power generation. Let us assume all coal used for power generation is lignite coal (only 7% of this type is used in USA and this is the worst energy dense coal producing maximum green-house-gas emissions.  Please refer to the reference.  http://www.newcenturycoal.com/newscentre/coalinfo.php. Still to satisfy critics I am going to use highly polluting version of coal to calculate all emissions.)  So from the table below, it is shown that each kWh of electricity will emit 2.18 pounds of CO2.

Reference Link: http://www.eia.gov/tools/faqs/faq.cfm?id=74&t=11

Now let us take example of Nissan Leaf, the current largest selling electric car in the world. With EPA estimated range, Nissan leaf will consume 0.26kWh/ mile. Please consider that EPA estimated range is for 80% of battery usage so I am going to use that amount to calculate kWh/mile. So one mile operation of Nissan leaf will emit 0.57 pounds of CO2 when it is charged by electricity sourced 100% from coal fired power plant. I did similar calculations with Tesla and Chevy Volt, using the EPA estimated range numbers. All the calculations are available in the excel spreadsheet.  

Now let us take a look at emissions of conventional engines and hybrids. There are various types of vehicles with different MPG levels. To be fair, I used 15, 25, 35 and 45 MPG as standards. According to EPA, one gallon of gasoline produces 8887 grams (19.59 pounds) of CO2. Based on this data and formula mentioned below, I calculated CO2 emissions per mile using above mentioned MPG values. Again to be fair and non-biased, I added multiple MPG levels. I understand actual driving MPG can be lower but same can be said about EVs. Actual range of EVs also depends on driver behavior.

Reference: http://www.epa.gov/otaq/climate/documents/420f11041.pdf

So after crunching these numbers, I got very interesting results. The table below shows the numbers I got. The excel spreadsheet is available for download (Link: http://bit.ly/18bI2xV )

Emissions per gallon of gasoline	19.59	Lbs
Emissions	kWh/ Mile or MPG	Coal	Nat Gas	50-50	33-33-33
Emission per kWh based on grid mix		2.18	1.22	1.7	1.13
Leaf	0.26	0.57	0.32	0.45	0.30
Volt	0.35	0.76	0.43	0.60	0.40
Tesla	0.23	0.51	0.28	0.40	0.26
Gasoline	15.00	1.31	1.31	1.31	1.31
Gasoline	25.00	0.78	0.78	0.78	0.78
Gasoline	35.00	0.56	0.56	0.56	0.56
Hybrid	45.00	0.44	0.44	0.44	0.44
	Min Value	0.44	0.28	0.40	0.26
Diesel Bus	4.5	4.35	4.35	4.35	4.35
Electric Bus	1.9	4.14	2.32	3.23	2.15

The calculations were very close to my expectations. Only interesting fact that I observed is the fact that electric vehicle will reduce tremendous amount of emissions even if we just use natural gas instead of coal. I also calculated same emission calculation for heavy duty diesel buses. And surprisingly electric buses will emit less even if we use 100% electricity from the coal fired plants. So when we compare the results, we find with 100% coal power, hybrid vehicles with 45MPG fuel economy are the least emitting option. Overall emission from hybrid vehicles like Prius are lower than EVs when power is sourced 100% from Lignite (the worst quality coal available) based power plants.

Another major point is the fact that gasoline cars can never be made cleaner. Once you buy a new gasoline car, it can only get more polluting over time. But electric vehicle emissions can be reduced by improving the power mix of the grid. So as we move towards cleaner grid, automatically we will go towards cleaner EVs. We do not need to repair, install additional equipment or replace these vehicles to be cleaner.  

All this data crunching and efforts are to answer one argument, “The electricity to charge EVs comes from coal.” Of course this calculation is overly simplified version of the actual carbon footprint. But I will start adding data as and when I get access to it. There are transmission losses, charger to battery loses for an electric vehicle but similarly there are refining losses, leakages and spills in gasoline ecosystem. 

Signing Off

Nikhil Parchure

You can download the PDF copy of this analysis here: http://bit.ly/15seNED

The link for excel spreadsheet is : http://bit.ly/18bI2xV

Electric Vs Gasoline - The war of ecosystems.

by Nikhil Parchure

When people think of electric vehicles, they think about battery technology, electric drive train and charging systems. But to be fair, the electric vehicle revolution is far more than that. It is a total shift from the gasoline ecosystem we are living in for the past century. Let me explain what I mean by the gasoline ecosystem. Crude oil is pumped from the oil wells and then refined to produce gasoline, diesel, jet fuel, plastics, solvents, lubricants and tar. These multiple products are made from a single raw material. All these products are sold in high volumes and due to high volumes, petroleum refineries manage a near perfect (100%) efficiency. The investment required to set up oil wells, refineries and transport infrastructure is shared by 1000s of products derived from the crude oil. So when you look at the gasoline prices, it has a huge advantage of cost sharing with all other products. 

Now as the gasoline was cheaper and more energy dense than batteries storing the electricity, gasoline ecosystem won the race in the transportation sector. Prior to commercialization of gasoline cars, most of the cars were electric. In the United States companies like Baker electric were making electric cars. (See Jay Leno's Baker electric car demo : Link) but the cost effectiveness and convenience of gasoline cars made these electric cars obsolete. Gasoline cars succeeded because of the convenience and freedom from the limited range of electric cars. People using horse carts and slow trams were able to drive 10 times faster and were able to go to locations not reachable by other means available.

This boom of gasoline cars helped the development of efficient internal combustion engines and that engine technology made inroads in all modes of transportation. Trucks, buses, planes, boats and cars all shared platform developed on the gasoline ecosystem. More cars increased the demand for gasoline which in-turn boosted the output of refineries. This improved volume reflected in more efficiency and further reduction in the cost. The benefits of this cost reduction were significant and were seen across all industries. Many people blame gasoline as a major reason for the global warming but we cannot ignore the tremendous development that gasoline brought to the man-kind. We should not dismiss the achievements of gasoline as a fuel. Cars, tractors, emergency generators and even our lawn mowers are powered by gasoline engines. That may have accelerated the problems of global warming but at the beginning of the century our understanding of global warming was fairly limited. 

During this boom of the gasoline economy, one thing remained surprisingly constant and that is our source of electricity. Even though gasoline became cheaper and improved in efficiency, the internal combustion engine still could not match the efficiency of turbines in thermal power plants. Coal fired power plants are still more efficient than gasoline generators and have provided cheap electricity over past many decades. Cheap coal was hard to replace by gasoline as coal needs no refining or purification, it can be mined and directly used as a fuel. 

Now we are again at an interesting juncture in the history of the mankind. Electric vehicles with advanced battery technology are challenging the gasoline economy. People against electric vehicles may point out the cost and range as major hurdles in the mass adoption but they can not deny the fact that efficiency of the electric motor (95%) will give internal combustion engine (30% efficiency) a run for the money. 

Now the next major challenge for electric vehicle makers is the cost. Interestingly we can learn a lot from the rise of the gasoline economy. The strength of gasoline economy was not only the energy density and convenience of the system but also range of products supporting the system. To make electric vehicles successful, we can reapply the same principle to batteries (fuel storage for EVs) 

We have to make Electric vehicles part of the electric ecosystem. The war is not between who powers your car but war is between who can deliver the usable energy at the cheapest and most convenient way to the end user. The diagram below shows how the ecosystem supports various applications. Each application provides additional volume and advantage to the overall ecosystem. The base of the gasoline ecosystem is crude oil and base of new emerging ecosystem is the battery system. 

Comparing two ecosystems

As we bring more and more applications on a single platform, the efficiency of the manufacturing and cost of the system will drop. And as the cost of batteries and power electronics drops, more and more applications will become viable. This is a very good cycle which will be able to challenge the current gasoline ecosystem. Electric vehicles or any other new technology can win only if the whole ecosystem wins. The hydrogen fuel cell ecosystem is another ecosystem that can challenge the gasoline ecosystem but again to win the war, hydrogen fuel cell has to challenge the whole ecosystem and not succeed only in niche applications.  

I am convinced that the electric ecosystem will have the last laugh. The transition will be a slow gradual process and we will be able to see it pan out over next few decades. Although the issues of global warming will drive the change, the cost of the system remains the ultimate tipping point. By no means I am discrediting the gasoline ecosystem, it has contributed tremendously in the development of mankind but we need the electric ecosystem to take the next step. 

Distributed Generation : System right sizing approach

For many decades the power grid has been an integral part of the human society. Large scale power plants feed the power to the centralized grid, which is connected to distribution sub-stations which in-turn supply power to residential areas, offices and factories. Coal, natural gas, hydro and nuclear power plants with 1,000 MW to 16,000 MW are installed far away from the actual load location. The total power generation capacity in the world is listed as follows.

Source of Electricity (World total year 2008)

-	Coal	Oil	Natural Gas	Nuclear	Hydro	other	Total
Average electric power (TWh/year)	8,263	1,111	4,301	2,731	3,288	568	20,261
Average electric power (GW)	942.6	126.7	490.7	311.6	375.1	64.8	2311.4
Proportion	41%	5%	21%	13%	16%	3%	100%

Data source IEA/OECD (Table source http://en.wikipedia.org/wiki/Electricity_generation) 

From the table it is clear that although renewable energy sources such as Solar PV and wind are deployed on a large scale, it still constitute less than 5% of world energy production. With projected increasing demand, it will be extremely difficult to meet green-house-gas reduction targets. 

The current system of large scale power plants and grid works best when the gap between demand and supply is very small and the fluctuations in the grid can be managed by operating small feeder power plants. But now the difference between peak power and average power load has increased significantly. This poses a significant challenge for power generation and transmission. For example if the average demand is 600 MW for a city and peak demand is 1000 MW then power generation and transmission infrastructure has to be designed or upgraded to handle 1000 MW. But this same infrastructure will perform less efficiently at 600 MW. The machinery in the power plants are designed to operate efficiently at one power output level, any increase or decrease in these output levels will reduce the efficiency. Demand higher than planned capacity can reduce the life of these instruments or even cause a failure, demand lower than planned capacity will reduce the efficiency which will cause increase in cost per kWh and green-house-gas emissions. 

This situation poses a challenge for grid planning, but every challenge creates an opportunity. Combination of distributed generation and stationary storage provides a great opportunity. I created a simple block diagram to explain the system overview. This is a simplified version of the actual system which is implemented in smart grid projects. 

Using combination of renewable energy, energy storage and small scale locale generation can help fill the gap between peak demand and normal demand. The graph below shows the daily power consumption for the one week period. The difference between peak demand and non-peak demand is large. The difference will keep on growing as more and more people move to cities and follow common energy consumption pattern.

Energy Demand during one week (X axis represents time and Y axis represents kW)

This creates an opportunity to deploy distributed on-site generation to compensate for the peak power consumption. This can be done using hybrid system of stationary storage and Solar PV systems. This system right sizing approach will help in improving overall grid efficiency and stability. The cost of electricity from renewable energy or stationary battery storage systems is currently higher than grid power. But this cost difference is reducing rapidly and renewable energy technologies will achieve grid parity in the near future. By integrating renewable energy, stationary storage facilities and micro-turbine based power generation we can help stabilize the grid far better and allow grid to perform more efficiently. 
Ultimately achieving lower cost of electricity using combination of grid power, renewable energy, energy saving instruments and energy storage makes good business case. 


Signing off
Nikhil

Microsoft: May be time to launch a "Workbook" has arrived

When I look at the current technology market, I see huge gains in sales number of smart phones, tablets and phablets (phones with more than 5" screens). But at the same time market for traditional laptops and desktops is shrinking . Microsoft is trying its best to improve these sales by releasing Windows 8 and Surface line of Ultrabooks. Many OEMs are coming with tablet and notebook hybrids, HP envy X2 and Dell XPS 12 are some examples of such devices. But still these laptops are not flying off the shelves and people are still buying tablets from Apple, Samsung and Google. 

Microsoft has a strong portfolio of software products. Office 2013 is one solid productivity software which will perform well. Integration with Office 365 is a really good move by Microsoft and it will surely help Microsoft to sell many consumer and enterprise licenses. But still in the long run alternatives will pose a challenge to dominance of Office suit of software. Microsoft has to maintain its lead in this category as it lags in mobile and tablet market. 

Now as a marketing student, I thought about different strategies that Microsoft can implement to take advantage of its core products and improve the market share in mobile platforms. I tried to list down few challenges Microsoft is facing. 

Cloud technology: Cloud technology has improved significantly over past couple of years and servers are getting more powerful and can easily handle large applications. Business software makers such as "Salesforce.com" and "SAP" offer complete product portfolios from the cloud. Microsoft has not addressed this advancement in technology in Windows 8. Windows 8 still works on the platform which is based on Windows 7. They have done tweaks to improve the performance on tablets but integration with cloud is still limited. 

Multiple devices: Now-a-days people are carrying three or even four devices at a time. Smartphone, tablet and laptop are used for different purposes. Sometimes people carry two different sized tablets for different needs. Microsoft has to create software packages that address this need. One software fit all approach won't work.

Rise of Chromebook: Apple's Macbooks are never a threat to Microsoft's business because Macbooks are expensive and cater to a narrow target market. But Google's Chromebooks are direct threat to Windows 8. Google Apps for business still lacks a lot of capability but the gap is closing very quickly and Microsoft has to quickly address this. Though Chromebook is based on cloud based OS, Google is improving its offline capabilities and within few years Chrome OS will be a big competitor for entry level laptop market.

My Opinion. 

Now after looking at these challenges, I thought about how Microsoft can improve its sales in tablet and laptop market again. I came up with two approaches that can be used. 

1. Use Surface as Nexus line: There is nothing wrong in learning from your competitor. Google used Nexus line of products to demonstrate the desired user experience on Android devices. OEMs used it as a benchmark and developed phones and tablets that came close to those benchmarks. Speed of Android adoption improved rapidly and OEMs benefited by collaborating with Google. Samsung is now challenging Apple using Google's Android operating system. Samsung learned a lot by collaborating with Google on Nexus smart phones. Microsoft is a software company with similar model. Google borrowed OEM model from Microsoft and now its Microsoft's turn to learn from Google. Making Surface line of products as a benchmark Nexus line gives two great advantages to Microsoft.

• It removes the possibility of Microsoft competing with its own OEMs. OEMs will stop finding alternatives to Windows as they will not see surface products as threat but will rather see them as benchmarks. 
• It will reduce the pressure of sales. Though Surface Pro is a good product, it is entering already declining and crowded market. Removing pressure to deliver sales will help design engineers to test the uncharted waters and come up with breakthrough innovation. 

2. Ride the tablet wave: Now there are more than 80 million iPads sold. Many of these iPads are used in business application. But these devices are not good for content creation. You can do picture and movie editing but capabilities like word, excel and powerpoint are missing. So there is a great market opening for companion device. Chromebooks are kinda filling that gap but not completely. Microsoft can easily fill that gap by launching a "Microsoft Workbook". "Workbook" will be a companion device that will have a price point of $175 to $225. Workbook will have "Office 2013, Internet explorer and Skype" Nothing else. It will have a basic architecture of Windows but will have components essential to run Office, Skype and Internet Explorer. So when consumer boots up the device he will see tiles with only these programs. People will love such device, it will fill a big gap in their digital need. It will also counter the surge of Chromebooks. This will also help Microsoft separate profitable Office franchisee from Windows franchisee.  

Technology changes very rapidly so in the future there may be new innovations that may make these suggestions irrelevant, but as of today I think these two options will be worth consideration. 

Signing off

Nikhil