Thursday, 15 July 2021

Electric Taxis and Hydrogen Boilers

 


(Bloomberg) -- It’s just after 5 p.m. on Friday in late July 2035. You’re driving home from work in your electric car. It’s peaceful — more cars than ever run on a quiet battery, too.

It was a good week. You’re two months into an apprenticeship program learning how to maintain wind turbines. Things were pretty rough for a few years after the factory where you used to make parts for internal combustion engines laid you off because the government banned new fossil fueled cars. But now you’ve joined a scheme that helps people find jobs in green industries.

That’s just a glimpse of the future in store if the policies contained in the European Union’s Fit for 55 climate package become reality. The plan, which could require a trillion euros of investment, will be the most radical change to European economy since the creation of the Euro and put the continent on a path reach net-zero emissions by mid-century. There are years of heated negotiations ahead, with politicians and company executives already pushing back against some of the most progressive proposals. But if the plans succeed it will force Europeans to remake almost every aspect of the way they live, work and travel. Cd

On that July day, 14 years from now, a panel on the wall in the downstairs hall beeps as you walk through the front door. It’s set to tell you when an energy-generation record has been broken by the community solar panels powering your neighborhood. The beeps are a regular occurrence in the summer. As always, you log today’s kilowatt-number into the carbon footprint app on your phone. Fireworks explode on the screen. You did it! You’ve earned enough points for a 10-euro grocery voucher.

A couple of taps, and the achievement has been shared on social media. The phone buzzes with more good news. When the sun wasn't shining quite as much earlier in the year, your electric car was picking up the slack. You’ve been using it as a battery to store electricity and sell it back to the grid when wind and solar farms aren’t producing enough. The money’s finally come in; it’s going straight into your vacation fund.

You open another app to check on your savings. You opted to have all your accounts be managed in a "socially responsible" way a decade ago when the EU introduced strict rules on what counts as green investments. That was one of the smartest decisions you made, you’re getting higher returns than your friends who haven’t made the switch.You’re about to start dinner when your teenage daughter comes running down the stairs. She wants to know when you’re going to give her the electric scooter you’d promised if she aced her exams. Fifteen years ago, you got your first e-scooter cheaply imported from China. But those days are gone. After years of legal battles, the EU finally imposed levies on imported aluminum goods from countries without tough climate laws. You’ll probably go for the German brand instead.

Still mulling over the scooter problem, you chuck two pizzas into the oven. They’re made with organic wheat thanks to an EU target to have a quarter of all agricultural land farmed without pesticides. Even the vegan cheese has improved a lot since the early 2000s. Governments stopped short of putting taxes on meat and dairy, but you gave it up at the turn of the decade anyway. With so many of your friends following plant-based diets, it was starting to become embarrassing being the only one ordering beef burgers.There’s no time for an elaborate meal tonight because the family’s busy packing for a holiday to Rotterdam tomorrow. A decade ago, you loved flying to Greek islands, but since the government increased carbon taxes on airlines, it’s too expensive, so you’re taking the train across Europe instead. Santorini is no longer that appealing, either. It gets uncomfortably hot at the height of summer these days. Rotterdam used to be one of the most polluted cities in Europe, but since the EU brought in new regulations on shipping, it’s become a tourist hotspot. You love sitting in the cafes at the harbor or wandering round the old town.The phone rings and you’re thrilled to hear the voice of an old school friend who moved to Boston a few years back. She has a question about heat pumps. They’ve been installed in lots of homes in Europe by now, but they’re only just moving to low-emission heating in America. To be honest, you tell her, it’s great that they’re better for the environment but they can be a pain when they break down. There just aren’t as many people who know how to fix them, unlike the gas boiler you used to have.

The conversation turns to the upcoming general election. You admit that you’re frustrated with the incumbent party. All these green policies are starting to bite. Governments were supposed to put packages in place to protect people from “energy poverty,” — that’s what they called it, at least — but it wasn’t so simple. For years there’s been bitter political fighting over how to pay for it. Now many of your friends say they dread getting their bills, particularly in winter. It’s led to a lot of resentment and you’re even starting to see a resurgence of those old climate skeptic politicians. At the railway station the next day, advertisements on the platform proudly declare that the train you’re taking will be powered entirely by green hydrogen by 2050. It’s already running on fuel cells today, but that was generated mainly from burning natural gas. In 15 years, the fuel will be made completely using renewable energy sources.

The journey is long and the kids squabble most of the way over who should get the window seat. You tune them out and open your laptop to check your email. It’s an old model from seven years ago, but it still works like new. It’s much easier to fix things now that the EU has forced companies to end practices that make their gadgets obsolete.

When you finally arrive at the hotel, via an electric taxi, the concierge happily talks up the property’s features. It was built last year out of green steel and concrete. The pool is heated with a hydrogen boiler. You look up at the fa├žade of the building — a living wall covered in plants — and take a deep breath. You have a feeling this is going to be a great vacation.


Electricity regulation might slow EV infrastructure

 

The millions of drivers behind the wheel of an electric vehicle — an estimated 18.7 million by 2030, up from a mere 1 million in 2018 — could upend a staple of the American landscape and local economies: the gas station.

That's thanks to the confluence of existing regulations that affect the price of electricity, the way gas stations make money, where EV owners live and how they charge up.

Today, most EV owners charge their vehicles at home using slower Level 2 chargers. Those without that capability, or drivers headed a long distance who need to charge along the way, can head to a charging station with a faster commercial Level 3 charger — typically located in a shopping center or apartment parking lot and only sometimes at a gas station.

It's "nearly impossible" for fuel retailers in most states to profit off EV charging, because of regulations in place that keep businesses from selling electricity for more than it costs them, AJ Siccardi, president of Metroplex Energy, a subsidiary of RaceTrac Petroleum, told CBS News.

While gas stations purchase liquid gas wholesale from refineries — allowing customers to look for a better price on fuel from one block to the next — the price of electricity is set by public utilities according to demand on the electric grid at any given time.

Siccardi says the ability to choose suppliers keeps the fuel market competitive and prices lower for customers, especially in the long term, while state and locally regulated utilities offer customers electricity or water efficiently, but via only one source.

Siccardi says legislators and regulators don't need to spend a lot of time figuring out how to make the market competitive.

"All they need to do is follow what's worked in the past in places like the fueling business."

But charging infrastructure across the country has not followed the liquid fuel model — and neither has the way people pay for it.

Tesla, which makes three of the top five most popular EVs in the country, has installed more than 25,000 charging stations around the world for their customers only. Owning the car is the buy-in to use Tesla's chargers.

Other charging providers, such as ChargePoint and EVgo, offer customers subscriptions or pay-as-you-go models to "refuel."

Charging providers can offer EV drivers per-minute rates for the time they're parked charging up or per-mile rates that are often allotted in monthly subscriptions. This allows them to operate where it is otherwise illegal to resell kilowatt hours of electricity.

Gas stations have been slow to install EV charging because doing so is expensive and any margins are slim at best. That's why EV retailers have been stepping in, said Garrett Fitzgerald, the head of electrification at the Smart Electric Power Alliance, a nonprofit that works with electric utilities to implement and deploy clean energy resources.

"Historically, nobody's profited on these public charging networks. It's a very challenging business model in the early days and you're constantly having to grow your network because the EVs are growing and you need to be a little bit ahead of that so your customers see your products out there in the market," he said.

Utilities typically bill commercial customers both for pulling power from the grid as well as for the electricity used.

"So if you have one charge session in the month or 100, that component of a bill is the same. So if you have a charger that's not very well utilized, you can still be paying a pretty high electricity bill. And so until you get utilization up on your charges, profitability is pretty low" for gas stations and independent providers who participate in subscription programs, Fitzgerald said.

Fitzgerald believes replicating the gas station model doesn't suit the needs of an electric vehicle. He expects most drivers will charge their EVs parked at home or at work, as 85% currently do.

But since "it's relatively uncommon" for utilities to own charging infrastructure, drivers will still have to rely on a middleman who owns the space for a charging station, pays for the electricity from the utility and provides it to customers.

Some partnering has already begun. Earlier this year, Shell agreed to install EV charging across Texas for General Motors customers. Tesla has partnered with numerous companies, including convenience store and gas station chain WaWa, in building its Supercharger network.

Ultimately, Fitzgerald said, the federal government and states may have to spend money to expand EV charging if the country hopes to have a carbon-neutral power grid by 2050 that includes fuel retailers, charging providers and utilities.

And without that federal funding, experts warn certain communities might be left out of the EV boom. Today, sales are significantly lower in rural and low-income communities. Since it's hard for a business to make money with an EV charger, Fitzgerald worries retailers and developers in areas where few people drive EVs won't build them — and because there's nowhere to charge, people won't buy new EVs. That would leave those areas — historically, some of the most affected by the pollution cars and trucks spew — the most reliant on the gas-powered vehicles of yesteryear.