Navigant Research Blog

100% Renewable Energy by 2050

— May 15, 2017

In April 2017, the City of Portland and Multnomah County in Oregon committed to 100% renewable energy by the year 2050. Ted Wheeler, the mayor of Portland, said, “While it is absolutely ambitious, it is a goal that we share with Nike, Hewlett-Packard, Microsoft, Google, GM, Coca Cola, Johnson & Johnson, and Walmart. We have a responsibility to lead this effort in Oregon.” Other cities in the United States have also committed to renewable goals. Chicago, for example, has committed to 100% renewables for its municipal buildings and operations by 2025. Renewable goals are often tied with increased efficiency in buildings, as this assists in reducing the overall needed energy production, making it easier to rely more heavily on renewables.

At a National Level

Following in footsteps of Portland’s ambitious goal, Oregon Senator Jeff Merkley (D), Vermont Senator Bernie Sanders (I), and Massachusetts Senator Edward J. Markey (D) introduced legislation for the United States to reach 100% renewables by 2050. This 100 by 50 Act creates a plan for 50% of US electricity to be generated by renewables by 2030 and 100% by 2050. Additionally, it would require zero carbon emissions vehicle standards and ban government approval of oil & gas pipelines.

Both Merkley and Sanders understand the importance of local initiatives to propel these aggressive renewable energy goals into reality for the country as a whole. “Starting at a local, grassroots level and working toward the bold and comprehensive national vision laid out in this legislation, now is the time to commit to 100% by 2050,” said Merkley. Sanders already sees these changes occurring, and he believes in the importance of not being limited: “In Vermont and all over this country, we are seeing communities moving toward energy efficiency and we are seeing the price of renewable energy plummet. Our job is to think big, not small.”

The 100 by 50 Act is the first legislation introduced to Congress aimed to completely eliminate fossil fuels for the United States. While it is unlikely such a progressive proposal like this will initially pass, it opens the doors to additional discussions and ideas. The declining costs of renewables provide further incentive to assist in a shift toward greater reliance on renewable energy, such as solar and wind power. Local community initiatives and the individual sustainability goals of leading US companies are helping create a future that does rely 100% on renewable energy. Coupled with these siloed goals, members of Congress will continue to push toward more encompassing legislation, though it will inevitably be a long and trying endeavor.

 

Can Batteries Save the UK Solar Market?

— April 27, 2017

Last week, E.ON and EDF Energy both announced plans to launch solar plus storage programs for their UK residential customers. E.ON and EDF are two of Europe’s largest energy providers, and EDF is a large owner of coal, gas, and nuclear plants in the United Kingdom with a 13 GW portfolio.

EDF Energy has formed a joint venture with Lightsource, the largest solar operator in the United Kingdom, to launch Sunplug, a company that will be offering residential solar. Sunplug has indicated two contracting options for its systems:

  • One option will be to sign an index-linked, 20-year power purchase agreement with an initial price of £0.099/kWh ($0.123/kWh). Assuming 2% escalation over 20 years, this would average to £0.12/kWh. For comparison, the cheapest electricity tariff in the United Kingdom costs £0.12/kWh or £0.15/kWh ($0.15/kWh or $0.19/kWh) with or without fixed monthly costs, respectively. In this option, Sunplug is the owner of the system and receives any government incentives available to the installation and is responsible for any changes to it.
  • Sunplug’s second option will be a direct purchase for £7,999 ($9,999) that includes the equipment (5 kW PV system, inverter, and 6.6 kWh battery), 2-year labor cover, operations and maintenance, and a 2-year license for its home energy management system—but does not include installation or value added tax.

E.ON’s offerings are less clear, but the direct purchase for a typical system will start at £7,495 ($9,368) including the battery, or £4,495 ($5,618) for the PV system only.

The Economics of Self-Consumption

An interesting question is why both utilities decided to enter the UK residential market with solar plus storage programs rather than only solar. A key driver is the current regulatory environment, which has elevated the attractiveness of self-consumption in the UK solar market.

In the United Kingdom, a residential solar system can currently access the following revenue streams:

  • Generation tariff: This is paid for every kilowatt-hour generated, regardless of its destination. It is currently set at £0.0414/kWh ($0.05/kWh) and is indexed to the UK inflation rate.
  • Export tariff: In theory, this is paid for the electricity exported to the grid. For the time being, the government assumes that half of the kilowatt-hours generated are exported for installations smaller than 30 kW. Currently, the export tariff is set at £0.053 ($0.066).
  • Self-consumption: This is the customer’s bill reduction due to the avoided electricity consumption from the grid. In a northern European country, residential customers are typically only able to use about 20%-30% of the electricity produced by their own solar system without any storage or significant behavioral changes. Assuming 20% self-consumption and an electricity tariff of £0.12/kWh ($0.15/kWh), a solar system owner would save the equivalent of £0.024/kWh ($0.03/kWh) generated.

Taking these revenue streams into account, a residential solar owner with 20% self-consumption would receive £0.09 per kWh ($0.11/kWh) generated, whereas an owner with 100% self-consumption would receive £0.186 per kWh ($0.23/kWh) generated, 106% more. Of course, a battery would be necessary to achieve total self-consumption for a reasonably sized residential system. Using E.ON’s figures, the battery cost is £3,000 ($3,750). In other words, to earn 106% more per kilowatt-hour, the owner would need to invest only 67% more than the solar-only system—not a bad deal!

 UK Solar PV Plus Storage Revenue Streams

(Source: Navigant Research)

 

The Growing Importance of Recycling Spent Advanced Battery Materials

— April 27, 2017

Advanced batteries across all applications are proliferating the market in unfathomable numbers. Navigant Research expects advanced batteries to reach a cumulative 24.2 GW in new capacity globally by 2020—for stationary energy storage alone. As these assets have lifespans ranging from 4 to 20 years depending on the technology, the issue of what to do with these batteries when they reach the end of their usable lives is an important question that technology manufacturers, system owners, and customers must be able to answer. Second-use options are viable in some sectors, but recycling spent batteries will be a major market in the coming years. Manufacturers and governments around the world are recognizing the importance of recycling and how it translates to long-term sustainability goals.

Benefits of Recycling Batteries

Lead-acid batteries have been utilized in the market for several decades, but advances in more sophisticated technologies like lithium ion (Li-ion) and flow batteries have encroached on lead-acid market share. The spent lead-acid assets are retired and recycled in large amounts on a daily basis. An example of this is China’s announcement of doubling its lead recycling target to 2.5 million tons by 2020. China arrived at this target because the average lead-acid battery life is 4 years; batteries made in and around 2015-2016 will be available for recycling by 2020. Lead-acid battery recycling efforts are also ramping up in the United States. California lead battery manufacturers and consumers have to pay a $1 fee for each battery they make or buy following the implementation of the Lead-Acid Battery Recycling Act (AB2513). Among other recommendations, several California government officials requested adding an additional $15-$20 to each lead battery sold to help process it after its usable life.

Li-ion batteries are a bit trickier to recycle. Available in items ranging from consumer electronics to EVs, extracting the most valuable materials inside—namely, lithium and cobalt—are important to consider when reprocessing these batteries. Compounded with forward-looking lithium availability and supply chain issues, securing lithium access will be important for the industry in the future. Li-ion battery recycling is in its early stages, and there are only a handful of these plants in existence today. With few Li-ion battery chemistries available, the lack of standardization plays a role in limiting the emergence of more recycling facilities and best recycling practices for these batteries. Today, recycled lithium can be up to 5 times the cost of newly mined resources; the cost differences have limited demand for lithium recycling to date, but future price increases and new regulations can change this.

Raw material prices for advanced batteries have sporadically changed this past decade and lithium prices alone have nearly tripled. Other factors like demand in competing sectors (e.g., pharmaceuticals, construction, etc.), geopolitical relationships, and environmental concerns will also play a role in the future of battery material supply chains. Recycling advanced batteries is likely to be one of the principal methods to combat against volatile raw material prices and resource availability.

New Revenue Streams

Battery OEMs should look to partner with raw material suppliers, users, and governments to gain a strong position in their respective supply chains and increase collaboration across different sectors. Considering alternatives (e.g., second life usage), the battery recycling industry has the potential to generate significant returns. Companies that position themselves to take advantage of retiring assets will be able to access new revenue streams on top of existing businesses.

 

V2V Communications Finally Arrives in America with Updated Cadillac CTS

— March 10, 2017

More than 2.5 years after General Motors (GM) CEO Mary Barra announced plans to launch vehicle-to-vehicle (V2V) communications in the US market, the first of a new generation of connected cars is now on its way to dealers. GM has begun production of the updated 2017 Cadillac CTS sedan, the first of what is likely to be several models equipped with the technology within the next year.

At the time of Barra’s 2014 announcement, it was expected by most people in the industry that a mandate for V2V on new vehicles would be in place by now. That process was held up by efforts by the wireless industry to grab some of the 5.9 GHz spectrum that the Federal Communications Commission (FCC) had allocated for dedicated short-range communications. The final notice of proposed rulemaking (NPRM) was not published by the National Highway Traffic Safety Administration (NHTSA) until December 2016. Under the new administration in Washington, it’s not clear if the NPRM will get final approval.

Pressing Ahead

Nonetheless, GM has been a strong proponent of V2V and vehicle-to-external (V2X) communications for more than a decade, having conducted its first public demonstrations in 2007. Despite the fact that the CTS accounted for only 0.5% of GM’s more than 3 million US sales in 2016, the company is pressing ahead with the introduction, clearly hoping to start demonstrating the efficacy of the technology in real-world conditions.

There is also a strong likelihood that this is only the first of a number of GM vehicles that will add V2V in the near future. The launch of the Delphi-supplied V2V system coincides with the introduction of an all-new next-generation CUE infotainment system. The new version of CUE includes support for over-the-air software updates that can add new functionality. Initially, the CTS will provide drivers alerts when cars down the road have hazard lights on, activate stability control, or have a hard brake application.

“At launch, we are offering these three features. That doesn’t rule out additional alerts in the future, as we are always looking for ways to add additional safety features to our cars,” said GM spokesperson Chris Bonelli. “Coupled with the next-generation Cadillac user experience also launching on the 2017 interim model year CTS, we are able to provide over the air updates as needed for new features and safety.”

Cadillac has already announced that the ATS and XTS will get the new version of CUE when they begin 2018 model production later this year. These vehicles will likely get V2V as part of that package, with other models to follow in 2018 as they get the electronics updates.

Another factor that may be driving GM to push the technology forward even in the absence of a regulatory mandate is automated driving. It is moving forward aggressively with the development of an automated version of the Chevrolet Bolt EV for use with the Lyft ride-hailing service. GM is projected to begin pilot deployments of automated Bolts with Lyft as soon as 2018. V2V is expected to be an important component of automated driving, significantly expanding the situational awareness of the vehicle beyond the line of sight that is possible with sensors alone.

Growing Market

Navigant Research’s Connected Vehicles report projects that more than 70 million vehicles will be sold globally with V2V technology by 2025. Toyota launched V2V on several Japanese models in late 2015 while Honda has also been very active in the development and testing of V2X communications. Neither company has made product announcements for North America, but these two OEMs are likely to follow GM in the next year.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"Policy & Regulation","path":"\/tag\/policy-regulation","date":"5\/29\/2017"}