CEC NexSTEPS Kickoff Meeting Policy Task

Update:
Transition Costs in
Perspective
Lew Fulton, Joan Ogden
Institute of Transportation Studies
University of California, Davis
Presented at the NextSTEPS Synposium
August 18, 2015
MEETING 2050 GHG REDUCTION GOALS =>
EFF. LIGHT DUTY SECTOR W/ MAJOR USE OF
ELEC. DRIVE (Hybrid, Plug-in EV & H2 Fuel Cell)
4DS
2DS
FCV
+
PEV
International
Energy
Agency Energy
Source:Source:
IEA Energy
Technology
Perspectives
(2012) Technology
Perspectives 2012
TRANSITION ->SUSTAINABLE TRANSPORTATION
=> MULTIPLE CHALLENGES + COSTS
• Introduce new types of vehicles
• Modify existing or build new fuel
infrastructures
– Portfolio approach => more than one future fuel
– Develop low carbon primary supply
• Fuel/vehicle pathway face different
challenges: all take time, investment
– Buy-down cost of new types of vehicles
– Build new fuel infrastructures
TRANSITION COSTS?
• How much does it cost to launch various fuel/vehicle
pathways?
• National and international perspective on required
investments in vehicles and fuels
– to reach breakeven “competitiveness” with incumbents
– to fully build out fuel infrastructure
• How do long term costs and benefits compare to
BAU (energy system without transition)?
New Alt Fuel Vehicle Sales to 2030 (US)
(1000s/yr)
7000
6000
5000
4000
FCEV
3000
EV
2000
PHEV
1000
2030
2028
2026
2024
2022
2020
2018
2016
2014
2012
2010
0
Scenario for Fleet Mix to 2030
(1000s vehicles on road – US)
350000
16M
8M
40M
300000
250000
200000
150000
100000
50000
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
ICEVS
PHEVs
EVs
FCVs
Learned out vehicle price vs. time ($/car)
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2010
2015
2020
2025
FCVs
PHEVs
EVs
Gasoline Ref
Based on NRC 2013 vehicle costs
2030
Vehicle Price vs. time w/scaling $/car
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2010
FCVs
2015
2020
PHEVs
EVs
2025
2030
Gasoline Ref
Based on NRC 2013 vehicle costs, accounting for dis-economies of
small-scale, early vehicle production (scale elasticity = -0.25)
PHEV Buydown (million $/y)
40000
20000
0
-200002010
-40000
-60000
-80000
2015
2020
2025
2030
Diff Veh (gas-PHEV)
Diff fuel (gas-PHEV)
Diff TOT (gas-PHEV)
Cum TOTAL (millions)
H2 FCV Buydown ($million/y)
30000
20000
10000
0
2010
-10000
30000
2015
2020
2025
Diff Veh (gas-FCV)
Diff fuel (gas-FCV)
Diff TOT (gas-FCV)
Cum TOTAL (millions)
2030
BEV Buydown (million $/yr)
20000
10000
0
2010
2015
2020
2025
-10000
Diff Veh (gas-EV)
Diff fuel (gas-EV)
Diff TOT (gas-EV)
Cum TOTAL (millions)
2030
Break even year 2028
28 million PHEVs
Vehicle Subsidy to breakeven
year $157 B
Breakeven Year 2025
4 million FCVs
Vehicle subsidy to breakeven
year = $31 B
Breakeven Year 2024
3 million EVs
Vehicle subsidy to breakeven
year = $34B
NEW RESULTS: SENSITIVITY STUDIES
NEW RESULTS: IMPROVED MODEL OF H2 INFRASTRUCTURE
FOR US NAT’L ROLLOUT (“LIGHTHOUSE + CLUSTERS”)
• Analyze H2 FCV rollout in a series of “lighthouse
cities” (LA, NYC, etc.) between 2015 and 2030
• Adopt “cluster strategy” to build H2 infrastructure
in each city
• Estimate investment costs, station numbers,
hydrogen cost in each city
• Aggregate to find national H2 and infra. cost over
time
PHASED INTRODUCTION OF H2 FCVS IN US
“Lighthouse” Cities (USDOE 2007)
Regional Cluster strategy in each city (ex: So.Cal.)
Co-locate early FCVs & H2 sta. in a few early markets w/in region
Good Fueling Convenience W/ Sparse Early Network
(<1% Of Gasoline Stations)
Nicholas, Michael A. and Joan M. Ogden (2010) An Analysis of Near-Term Hydrogen Vehicle
Rollout Scenarios for Southern California. Institute of Transportation Studies, University of
California, Davis, Research Report UCD-ITS-RR-10-03.
THE BUYDOWN COST IS SENSITIVE TO HOW YOU BUILDOUT
H2 INFRASTRUCTURE
•
•
•
•
•
•
National H2 infra development using
“Cluster strategy” in sequence of
lighthouse cities captures the regional
nature of H2 infrastructure buildout.
Also uses industrial gas industry model
for supply.
National ave.H2 cost is higher than in
2009 NRC H2 Transition report,
– delays breakeven by 2-3 year
– transition costs slightly higher
3 cluster strat. cases differ in rate of
market growth and infra deployment.
Slow start, rapid growth=> higher early
H2 costs, lower costs later
Slower market growth means higher
transition costs
What might a feebate look like to achieve the targets?
•
A typical scenario that simply covers the cost of ZEV incentives
If you could cut the incentive in 2025 by 40% and eliminate
it by 2030, the max fee never rises much above $1000
Average fee per non-ZEV vehicle sold in year
Extras from here on
INVESTMENTS TO SUPPORT ALT FUELED VEH. (~$10sB/y FOR
VEH.AND INFRASTRUCTURE)
To
Breakeven
To 2030
H2
PHEVs
Battery EVs
Breakeven 2025
4 million FCVs
Breakeven 2028
28 million PHEVs
Breakeven 2024
3 million BEVs
~$6B for H2 supply
~$28 B for chargers
~$3-6 B for chargers
~$31 B to subsidize
FCV price
~$157 B to
subsidize vehicle
price
~$34B to subsidize
vehicle price
16 million FCVs
~$24 B for H2
infrastructure
$64 B if FCV
subsidized to 2030
40 million PHEVs
$50 B for chargers
8 million EVs
$8-16 B for home
and public chargers.
~$67B if EV
subsidized to 2030
~$231 B if PHEV
subsidized to 2030
SCALE ECONOMIES OF MASS PRODUCTION,
LEARNING, R&D COULD BRING COST OF
ELECTRIC DRIVE VEHICLES ~ GASOLINE ICEV
NRC 2013 study
analyzed technical
potential for
efficiency. Plug-in
EVs & H2 FCVs
reach first cost parity
with highly efficient
(80 mpg+) ICEVs c.
2035-2045
Earlier studies employing more modest ICEV efficiency measures => learned out
prices for PHEVs and H2 FCVs within $3-6K of efficient (40 mpg) ICEVs after
2025; Pure battery cars $5-10K more costly.
NRC 2013 “iconic figure”
•
Subsidies account for around $40B, 2015-2030 but societal benefits are far greater
Transition costs
• Our simple “portfolio” scenario breaks even ~2025.
• Beyond this, fuel savings outweigh incremental costs
for vehicles.
• Investments to breakeven are $10s-100 B, the
majority for vehicles.
• Infrastructure costs to break even are in the $5-20B
range (depending on the fuel).
• Of course, the results are sensitive to a lot of
assumptions (see extra slides in Appendix).
IS THIS A LOT OF MONEY?
In the US we will spend around $15 trillion
on new cars and fuels through 2030
Source: EIA/AEO 2012
Baseline vs Low-C
Fuel savings >
extra vehicle costs