1. Weaning Automobiles off Gasoline onto Electricity Peter E Gunther Senior Research Fellow Connecticut Center for Economic Analysis (613) 823-0513 pgunther@bellnet.ca

2. Context Electric Vehicles Electric Generation Peak Rates and Systems Solar Rates Strategy – Solar, Bio or Combination Profit Potential Timing of Adoption – 98.8% of New by 2031 or 2050 Modeling Possible Impacts

3. Electric Vehicles 8 Hours to Fully Charge Distance Exceeds Daily Average of over 75% of U.S. Drivers All Electric Drive Gasoline Backup Generator Can Remember Time Charged Into Production 2010 Emerging Competitors May Be Better i.e. Go Further

4. CT Registered Vehicles

5. CT Electricity Generation Current # in MW 2 Nuclear 2,035 2 Coal-Fired 553 26 Oil-Fired 2,487 14 Natural Gas 1,463 26 Hydro 149 Solid Waste Fac. 184 PROBLEM: IF ALL AIRCONDITINERS RUN THEY DEMAND 3+ GW. SUMMER INTERRUPTIBLE POWER PENALTIES COST $700 MILLION IN 2007 ENVIRONMENTAL DIFFUCULTIES IN EXPANDING TRANSMISSION Urgently Need to: Supply Locally to Meet Peak Demands or Curtail Peak Demands Avoid Electric Vehicles Compounding Problems

6. Peak Rates FERC Finds Elasticities are Small but: Response Improves with the size of the Spreads Between Peak and Off-Peak Rates Programmed Cuts in Consumption Currently high CT interruption costs ≈ $200/capita

7. Solar Rates During Summer Peak Highest cost CT Generator at $1.17/kWh is Deployed Sparingly Any Generation at Lower Cost Is Better

8. Menova Energy Solar Systems Suitable for Rooftops Now 5 X Sun Experimental @ 10 X Sun

9. Strategy Build Green Generation to Reduce GHGs and PM Produce at Peak to Reduce Interruptible Charges Pay Above Peak Rates for Solar Entice Vehicle Owners to Charge Off-Peak Get Vehicle Dealers to Invest and Locally Feed the Grid Consider Rebating Electricity Used to Charge EVs Maximize Value of Hot Water Track CO 2eq Credits

10. Regional Modeling Strategy Use RETSCRREN To: Assess Energy Expansion Cost Alternatives Meteorological Data Examined: – Solar – Wind – Chips Environmental Impacts – GHGs and PM REMI For: Dynamic Assessment – Reduced Interruption Costs Impacts on Household – Energy cost & Peak Rates Import Substitution for Fossil Fuels CT Employment and Incomes Fiscal Impacts

11. Subsidy/ KW Installed GHG Credits $50/Tonne of CO 2eq Dealer Payments to Clients Years to Payout Equity at various Electricity Rates: Rates for Sale into Grid (cents/kWh) 16.62 (CT)37.8 (NJ)41.7 (CA)47 (ON) Subsidy/ KW Installed 1) NoneYN14.612.652.301.95 NN70.063.092.632.18 YYLoss4.173.372.67 NYLoss5.394.123.13 2) $251.25YN12.782.322.011.71 NN61.262.702.301.91 YYLoss3.652.952.34 NYLoss4.713.602.73 3) $375.00YN11.872.151.871.59 NN56.922.512.141.77 YYLoss3.392.742.17 NYLoss4.383.352.54 Years to Payout to Equity Holders from Electricity Revenues Only

12. Making It Pay Without Subsidy Dealers Producing Solar Will Be Paid Back within Three years if: Solar Rates Exceed California’s 41.7 kWh Solar Rates Exceed Ontario’s 47 kWh and Environmental TCs are $50/tonne of CO2eq and Dealers Rebate their Customers

13. Timing of Adoptions Slow Adoption: Growth of 0.02% in year one, 2009, followed by +10% of previous year’s growth rate. 98.8% of new vehicles are plug- ins by 2050. Cumulative vehicle gasoline savings of 9.5 billion gallons. Cumulative fuel taxes foregone $2.4 billion gross. CO 2eq reductions of 72.4 million tonnes Rapid Adoption: Growth of 0.02% in year one followed by +20% of previous year’s growth rate. 98.8% of new vehicles are plug-ins by 2031 and thereafter. Cumulative vehicle gasoline savings of 29.9 billion gallons. Cumulative fuel taxes foregone $7.5 billion gross. CO 2eq reductions of 226.7 million tonnes.

14. Modeling Solar Only Due to closer proximity to demand than in bio-based transmission loses 10%. Cumulative investment $23.9 billion (2008). Cumulative operating costs $198.9 million 100% human resources. Due to closer proximity to demand than in bio-based transmission loses 10%. Cumulative investment $53.1 billion (2008). Cumulative operating costs $442.0 million 100% human resources. Bio- based Only Transmission loses 25%. Cumulative investment $4.9 billion (2008). Cumulative operating costs $9.9 billion. Transmission loses 25%. Cumulative investment $10.6 billion (2008). Cumulative operating costs $31.0 billion.

15. CT Fuel Saved Annually (Millions of Gallons)

18. All Scenarios Generate Sufficient to Cover Lost Fuel Tax Revenues

24. Conclusions CT can build on its TOU smart metering to accelerate adoption of electric vehicles CT can overcome charges for interruptible power and strongly encourage electric vehicle owners to recharge their vehicles at off-peak Impacts to be positive in employment, labor force, population, personal income Over-reliance on bio-fuels could erode labor productivity, albeit that issue could be redressed with improved growing and harvesting technologies Increases in personal income taxes under all scenarios were sufficient to offset gasoline sales taxes foregone Impacts on labor productivity are mixed depending on the relative weights of solar or bio-fuels

25. Conclusions (Continued) Potential benefits are likely to exceed those modeled since no account has been taken of the health impacts of reduced emissions of both CO 2eq and PM. CO 2eq reductions are 72.4 million tonnes in the slow adoption cases and 226.7 million tonnes in the rapid adoption cases out to 2050. Estimating impacts on PM will require delineation of diesel vehicles by type and further evidence on the chip burning technologies where technology is improving. Results will vary massively among jurisdictions depending on the current & future generating mixes, excess capacities, peak pricing and rates of adoption of electric vehicles.

26. Weaning Automobiles off Gasoline onto Electricity Peter E Gunther Senior Research Fellow Connecticut Center for Economic Analysis REMI TORONTO November 6, 2009 (613) 823-0513 pgunther@bellnet.ca