White House Chronicle

News Analysis With a Sense of Humor

Electricity Is the Big Future Winner for Cars, Even Small Planes

electric car charging

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Electricity, the world’s silent workhorse for a century, is about to conquer new worlds.

While electric cars are coming on fast, their acceptance will speed up geometrically in the next decade, according to an extraordinary new study by RethinkX, a San Francisco-based research group and think tank. Indeed, the group is predicting a true revolution in electrified transportation.

In this revolution, futuristic companies with a lot of talent and a lot of money — like Uber, Google and Amazon — will be seminal players. Old-line car companies and the oil companies will have to deal with a new order in which their roles could be dramatically diminished.

The big winner in this transportation future is electricity. Even the electric airplane — an idea about as old as aviation — is surging forward.

While RethinkX raised the curtain on the future of ground transportation in its new study, Uber raised the curtain on the future of the electric airplane this month at its Elevate conference in Dallas. More than 500 aviation enthusiasts attended the conference: dreamers, designers, builders — and even venture capital investors, who have already signed their checks. Dozens of designs for small electric airplanes, using multiple rotors and batteries, were on display. Enthusiasm was incandescent.

This July, small, electric pilotless aircraft — crosses between drones and helicopters — are scheduled to go into service in Dubai. They are supposed to ferry single passengers from their hotels and other gathering points to airports and recreation centers in the largest and most populous city in the United Arab Emirates.

These small aircraft, with electric motors and batteries, have an endurance time of about 30 minutes. EHang, a Chinese company, developed them.

If Uber, and more than a dozen other U.S. companies have their way, similar aircraft will one day take their place in the skies of America and other advanced nations. Uber hopes to test-fly an electric airplane in 2020.

According to RethinkX, the private car is about to disappear, or to be rapidly reduced in importance. The report — which might boost the stock of futuristic companies and electric utilities, and depress the stock of oil companies and old-line car makers and oil companies — is making waves in the far reaches of corporate thinking.

Tony Seba, co-founder of RethinkX and co-author of the report, told me that mainstream analysts are not yet on board with the changes, which will rock the automobile, oil and electric industries. They have not understood the impact of technological convergence, he said.

He sees a future, about to happen, in which driverless electric cars, owned not by individuals, but rather by transportation companies like Uber, flood the streets, to be summoned by phone and directed by voice: “Take me out to the ballgame.”

Seba, an MIT-trained engineer and student of what he calls “disruption,” told me he expects a convergence between electric vehicles, automated driving and ride-sharing will come soon, reducing the number of vehicles on U.S. roads from 247 million in 2020 to 44 million in 2030.

“The average family will save $5,600 in transportation costs,” Seba says.

Apart from the transport companies, the big winner will be the utilities that will see a demand growth of 18 percent, Seba predicts. He believes present infrastructure can accommodate this growth surge because demand will be mostly off-peak.

There are similar expectations of a golden future for small, electric, vertical takeoff airplanes, incorporating drone and other technologies. The limit for the aircraft, which use lithium batteries, is the batteries. But the enthusiasts gathered at Uber’s conference say flight is possible now with present-day batteries and these will only get better.

Richard Whittle, a leading aviation journalist and author who chaired an Elevate session, told me, “It was a pretty impressive event.”

While the arguments by Seba and his co-author James Arbib, a Silicon Valley entrepreneur and philanthropist, point to an electrified transportation future, I have one question: Will people give up the personal, primal pleasure of owning a car?

Seba and Arbib think so, pointing out that people used to take pride in their LP and CD collections, but now they access their music electronically.

The future is pulling up on a highway near you; it may also be flying overhead.

 

Photo: Håkan Dahlström, “Electric car charging station” 2013. Used under the Creative Commons Attributions 2.0 Generic License.

Wind of Change Challenging Utilities

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On Feb. 3, 1960 in Cape Town, British Prime Minister Harold Macmillan shook up what was still the British Empire in Africa by telling the Parliament of South Africa that “the wind of change is blowing through this continent.”

His remarks weren’t well received by those who that thought it was premature, and that Britain would rule much of Africa for generations. The British ruling class in Africa – the established order — was shaken.

But Macmillan’s speech was, in fact, a tacit recognition of the inevitable. It was the signaling of a brave new world in which Britain would grant independence to countries from Nigeria to Botswana and Kenya to Malawi. Britain would not attempt to hold the Empire together. His speech was seminal, in that Britain had signaled that things would never ever be the same.

To me, the appearance of investor and entrepreneur Elon Musk at the Edison Electric Institute’s annual convention in New Orleans was a “wind of change” moment for the august electric utility. It was a signal that the industry was coming to terms, or trying to come to terms, with new forces that are challenging it as a business proposition in a way that it hasn’t been challenged in a history of more than 100 years.

But whereas Britain could swallow its pride and start a withdrawal from its former possessions, the electric industry faces quite a different challenge: How can it serve its customers and honor its compact with them when people like Musk, who is the non-executive chairman of the aggressive company SolarCity, and a passionate advocate of solar electricity, and Google are moving into the electric space?

At EEI’s annual convention, Musk didn’t tell his audience what he thought would happen to the utilities as their best customers opted to leave the grid, or to rely on it only in emergencies, while insisting that they should be allowed to sell their own excess generation back to the grid. Musk also didn’t venture an opinion on the future of the grid — and his interlocutor, Ted Craver, chairman and CEO of Rosemead, Calif.-based Edison International, didn’t press him.

Instead Musk talked glowingly about the electrification of transportation, implying — but not saying outright — that the electric pie would grow with new technologies like his Tesla Motors’ electric car.

The CEOs of EEI’s board were ready for the press by the time they held a briefing a day after Musk’s opening appearance. They spoke of “meeting the challenges as we have always met the challenges” and of “evolving” with the new realities. Gone from recent EEI annual meetings was CEO talk of their business model being “broken.”

The great dark cloud hanging over the industry is that of social justice. As the move to renewables becomes a flood, enthusiastically endorsed by such disparate groups as the Tea Party and environmentalists, the Christian right and morally superior homeowners, and companies like SolarCity and First Solar, the poor may have difficulty keeping their heads above water.

The grid, the lifeline of U.S. social cohesion, remains at threat. Utilities are jumping into the solar business, but they have yet to reveal how selling or leasing rooftop units — as the Southern Company is about to do in Georgia — is going to save the grid, or how the poor and city dwellers are going to be saved from having to pay more and more for the grid while suburban fat cats enjoy their sense that they’re saving the planet.

My sense is that in 10 years, things will look worse than they do today; that an ill wind of change will have reduced some utilities to the pitiful state of Amtrak — a transportation necessity that has gobbled up public money but hasn’t restored the glory days of rail travel.

People like myself — I live in an apartment building — have reason to fear the coming solar electric world, for we will be left out in the cold. The sun will not be shining on those of us who still need the grid. It needs to be defended. — This column was previously published in Public Utilities Fortnightly.

Nuclear Teetering on the Economic Precipice

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This will be a bleak Christmas for the small Vermont community of Vernon. It is losing its economic mainstay. The owner of its proud, midsize nuclear plant, which has sustained the community for 42 years, Entergy, is closing the plant. Next year the only people working at the plant will be those shuttering it, taking out its fuel, securing it and beginning the process of turning it into a kind of tomb, a burial place for the hopes of a small town.

What may be a tragedy for Vernon may also be a harbinger of a larger, multilayered tragedy for the United States.

Nuclear – Big Green – is one of the most potent tools we have in our battle to clean the air and arrest or ameliorate climate change over time. I've named it Big Green because that is what it is: Nuclear power plants produce huge quantities of absolutely carbon-free electricity.

But many nuclear plants are in danger of being closed. Next year, for the first time in decades, there will be fewer than 100 making electricity. The principal culprit: cheap natural gas.

In today’s market, nuclear is not always the lowest-cost producer. Electricity was deregulated in much of the country in the 1990s, and today electricity is sold at the lowest cost, unless it is designated as “renewable” — effectively wind and solar, whose use is often mandated by a “renewable portfolio standard,” which varies from state to state.

Nuclear falls into the crevasse, which bedevils so much planning in markets, that favors the short term over the long term.

Today’s nuclear power plants operate with extraordinary efficiency, day in day out for decades, for 60 or more years with license extensions and with outages only for refueling. They were built for a market where long-lived, fixed-cost supplies were rolled in with those of variable cost. Social utility was a factor.

For 20 years nuclear might be the cheapest electricity. Then for another 20 years, coal or some other fuel might win the price war. But that old paradigm is shattered and nuclear, in some markets, is no longer the cheapest fuel — and it may be quite few years before it is again.

Markets are great equalizers, but they're also cruel exterminators. Nuclear power plants need to run full-out all the time. They can’t be revved up for peak load in the afternoon and idled in the night. Nuclear plants make power 24/7.

Nowadays, solar makes power at given times of day and wind, by its very nature, varies in its ability to make power. Natural gas is cheap and for now abundant, and its turbines can follow electric demand. It will probably have a price edge for 20 years until supply tightens. The American Petroleum Institute won't give a calculation of future supply, saying that the supply depends on future technology and government regulation.

Natural gas burns cleaner than coal, and is favored over coal for that reason. But it still pumps greenhouse gases into the atmosphere, though just about half of the assault on the atmosphere of coal.

The fate of nuclear depends on whether the supporters of Big Green can convince politicians that it has enough social value to mitigate its temporary price disadvantage against gas.

China and India are very mindful of the environmental superiority of nuclear. China has 22 power plants operating, 26 under construction, and more about to start construction. If there is validity to the recent agreement between Chinese President Xi Jinping and President Barack Obama, it is because China is worried about its own choking pollution and a fear of climate change on its long coastline, as well as its ever-increasing need for electricity.

Five nuclear power plants, if you count Vermont Yankee, will have closed this year, and five more are under construction in Tennessee, South Carolina and Georgia. After that the new plant pipeline is empty, but the number of plants in danger is growing. Even the mighty Exelon, the largest nuclear operator, is talking about closing three plants, and pessimists say as many as 15 plants could go in the next few years.

I'd note that the decisions now being made on nuclear closures are being made on economic grounds, not any of the controversies that have attended nuclear over the years. 

Current and temporary market conditions are dictating environmental and energy policy. Money is more important than climate, for now. — For the Hearst-New York Times Syndicate