Plug-in Electric Vehicle

Cost-Benefit Analyses

J u n e 2 7 2 0 1 7

Contact:

Paul Allen

47 Junction Square Dr.

Concord, MA 01742

+1 978 369 5533

pallen@mjbradley.com

We Might Get There From Here

PEV Cost-Benefit Analyses

Conducted by Dana Lowell, Senior Vice President – Technical Director, MJB&A

With Brian Jones, David Seamonds, Paul Allen

Vehicle & Mobility Electrification Reshapes Relationships with Customers

Vehicle & Mobility Electrification Reshapes Entire Economies

Convergence of Tectonic Forces:

gasoline engines

improved electric drive trains

traditional utility businesses

competitive retail electricity supply businesses & evse suppliers

digitized customers

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What We Did

Estimated state-wide net benefits of high levels

of plug-in vehicle (PEV) penetration between

2030 and 2050:

• PEV owner vehicle operating cost savings

• Utility customer savings on electric bills

• Societal benefits from GHG reductions

States include CT, MA, MD, NY, PA

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Scenarios bracket short- and long-term state goals for PEV

penetration and GHG reduction:

• 8-state ZEV MOU

• Economy-wide GHG reduction goals through 2050

State-specific analyses that account for differences in vehicle fleet,

vehicle usage, energy costs, and grid characteristics

Current PEVs, State-Level PEV & GHG Goals

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2025 PEV

Goal *

2050 GHG

Goals

CT 150,000 -80% from 2001

MA 300,000 -80% from 1990

MD 300,000 -80% from 2006

NY 850,000 -80% from 1990

PA None None

TOT 1,600,000

* 8-state Zero Emission Vehicle

Memorandum of Understanding (ZEV

MOU). Other states are CA (1.5

million), OR (130,000), RI (40,000)

and VT (30,000)

Modeled PEV penetration

rates bracket these short &

long term goals

For each state to meet its ZEV MOU

commitments, PEV penetration would

need to be 6% - 7.5% in 2025

PEV Penetration Scenarios

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• In the 5 states analyzed the trajectories set by the 8-state ZEV MOU goals will result in

17% - 25% PEV penetration by 2050, and a total of 8.4 million PEVs

• To achieve long-term GHG reduction goals (80x50) 80% - 97% of light duty vehicles in

these states in 2050 would need to be PEVs - a total of 35.8 million PEVs

Results - Utility Customer Benefits

• Increased load from PEV

charging will produce net

revenue for utilities that can be

used to support maintenance of

existing distribution

infrastructure

• This will benefit all utility

customers by putting downward

pressure on future rate

increases

• Off-peak charging can increase

annual utility net revenue by

30% - 100% compared to

baseline charging – due to

lower peak capacity and

infrastructure costs

• Under the 80x50 scenario, net

revenue from PEV charging in

2050 could reduce electric rates

by 3% -7% in these five states –

savings the average household

$104 - $144 per year (nom $)

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Utility revenue and net revenue is based on EIA projections of

future regional energy costs, accounting for incremental costs of

PEVs not included in EIA reference case. These include the cost

of additional peak generating capacity and additional distribution

infrastructure to handle the incremental peak charging load

Net revenue from PEV charging could reduce rates by

over 3% in 2050

• Under the 80x50 scenario, net revenue from PEV charging could reduce electric rates by

3.5% in 2050 – savings the average MD household $109 per year

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$20

$16$29

$60

$80

$163

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2030 2040 2050 2030 2040 2050

8-State ZEV MOU 80x50

PEV Penetration Scenario

Maryland: NPV Utility Costs & Net Revenue from PEV ChargingBaseline Charging

($ millions)

Generation Cost Transmission Cost Peak Capacity Cost

Infrastructure Cost Net Revenue Revenue

Results - Cumulative PEV Net Benefits

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• By 2050 the NPV of

cumulative benefits from

PEVs could exceed $45

billion in Pennsylvania under

the 80x50 scenario

51% will accrue to PEV

owners from savings in

vehicle costs

21% will accrue to utility

customers from lower

electric bills

28% will accrue to society

from the value of GHG

reductions

• Similar distribution of net

benefits for other states,

but magnitude is

proportional to the size of

the fleet

NPV based on 3% discount rate

Results - PEV Charging Energy (MWh)

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• In MA, CT, NY, and PA

annual electricity use is

projected to grow by only

5% -7% through 2050

MD electricity use is

projected to grow by

32% due to much higher

population growth

• In these states, by 2050

PEV charging would

increase electricity use by

3% -5% under ZEV MOU

scenario

16% - 24% under the

80x50 scenario

PEV Charging Scenarios

• 20% of PEVs charge both at

home and at work

• 80% of PEVs charge only at

home

• BASELINE: Start charge as

soon as arrive at home/work

Arrival times based on

responses to 2009

Household Travel Survey

Arrival times vary slightly by

state

• OFF-PEAK: 65% of home

arrivals between noon and 11

PM delay charge start until

after midnight (40%) 1 AM

(40%) or 2 AM (20%)

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We Might Get There From Here

But First We Have a “Chicken and Egg” Situation to Work Through

Range Anxiety is a drain on PEV adoption

Solutions – primarily public charging infrastructure -- pose non-trivial regulatory considerations

States and Companies are Interested in Lessons from California

Market Transformation is Becoming a Shared Goal There

Proposals are Emerging in Northeast & Mid-Atlantic:

National Grid

Eversource

ConEd

BGE & Pepco

Can PEV Market Transformation Become a Shared Goal More Broadly?

Don’t Forget – You Cannot Steer a Parked Car

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Concord, MA

Headquarters

47 Junction Square Drive

Concord, MA 02145

USA

T: +1 978 369 5533

F: +1 978 369 7712

Washington, DC

1225 Eye Street, NW, Suite 200

Washington, DC 20005

USA

T: +1 202 525 5770

F: +1 202 315 3402

For more information, visit www.mjbradley.com

M.J. Bradley & Associates, LLC

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Other Major Assumptions

• Baseline is based on current light-duty fleet in each state, and state projections for future vehicle and VMT growth

• Future PEVs assumed to include both plug-in hybrid (PHEV) and battery-electric (BEV) cars and light trucks

PHEV/BEV ratio based on current fleet in each state

PEVs assumed to be mostly cars in 2030, with increasing percentage light trucks in later years, especially under 80x50 scenario

• Future energy costs (gasoline, electricity) based on regional projections from Energy Information Administration (EIA)

• Energy use by gasoline cars (baseline) and PEVs consistent with 2015 NRDC/EPRI modeling, and reflect EPA/DOT fuel economy standards (CAFE) through 2025 model year

For PEVs added additional energy to cover winter cabin heating

• PEV GHG emissions based on EIA projections for future grid carbon intensity (baseline), and a “low carbon” scenario in which grid emissions are reduced 80% by 2050

• Evaluated PEV charging load for both “baseline” and “off-peak” charging

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Results – PEV Charging Load (MW)

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• By 2050 baseline PEV charging could increase afternoon peak load (MW) in

these states by:

8-state ZEV MOU scenario: 5.6% (PA) - 9%(NY, MD)

80x50 Scenario: 34% (PA) - 40% (CT, MD)

• Off-peak charging could reduce incremental afternoon peak load by 64% or more

Results – PEV Owner Benefits

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• If projected future reductions in

battery costs are achieved, on

average PEVs will be less

expensive to operate than

gasoline vehicles by the early

2030s, even without government

subsidies

• Estimated annual savings per

PEV (nom $) in these states will

range from:

2030: -$57 (PA) to $146 (MD)

2050: $545 (PA) to $939 (MD)

• NPV of total state-wide savings

for PEV owners in 2050 under

the 80x50 penetration scenario

ranges from $0.8 billion (CT) to

$3.0 billion (NY)

Massachusetts Fleet Average Annual Operating Costs (nom $)

GASOLINE VEHICLE

2030 2040 2050 2030 2040 2050

Vehicle Purchase $/yr $4,291 $5,483 $7,039 $4,408 $6,212 $8,105

Gasoline $/yr $1,285 $1,658 $2,126 $1,308 $1,819 $2,389

Maintenance $/yr $255 $319 $394 $257 $329 $409

$/yr $5,831 $7,460 $9,559 $5,972 $8,360 $10,903

PEV

2030 2040 2050 2030 2040 2050

Vehicle Purchase $/yr $4,703 $5,800 $7,157 $4,818 $6,496 $8,432

Electricity $/yr $671 $749 $839 $682 $799 $920

Gasoline $/yr $219 $252 $309 $222 $274 $344

Personal Charger $/yr $81 $101 $123 $81 $101 $123

Maintenance $/yr $135 $176 $219 $136 $179 $224

$/yr $5,809 $7,078 $8,647 $5,940 $7,850 $10,042

Savings per PEV $/yr $22 $382 $912 $33 $510 $860

TOTAL ANNUAL

8-State ZEV MOU 80x50

8-State ZEV MOU 80x50

TOTAL ANNUAL

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Comparing the States – NPV Annual Net Benefits per PEV

• Total net benefits are lower in PA primarily due to lower average mileage per vehicle

Annual PEV owner benefits are positive after 2032

• PEV owner benefits vary among the states based on differences in electricity costs

• Utility customer benefits are highest in NY due to higher electricity rates, and a lower

percentage of utility revenue spent on generation & transmission

2030 2050

PEV

Owner

-$37

Maximum benefits, including off-peak charging and low carbon grid scenario

Comparing the States – NPV Cumulative Net Benefits

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80 x 50 SCENARIO NPV CUMULATIVE NET BENEFITS [$ billions]

2030 2050

PEV

Owner

Utility

Customer

GHG

ReductionTOTAL

PEV

Owner

Utility

Customer

GHG

ReductionTOTAL

CT $0.04 $0.08 $0.07 $0.19 $9.4 $3.6 $4.4 $17.3

MA $0.03 $0.16 $0.12 $0.31 $16.8 $7.8 $8.0 $32.7

MD $0.13 $0.11 $0.08 $0.32 $21.6 $4.5 $7.6 $33.6

NY $0.06 $0.65 $0.27 $0.98 $34.1 $24.3 $17.5 $75.9

PA -$0.09 $0.24 $0.17 $0.32 $23.1 $9.6 $12.8 $45.6

TOT $0.17 $1.24 $0.69 $2.12 $105.0 $49.8 $50.3 $205.1

• Cumulative benefits are generally proportional to the size of the vehicle fleet

• State-to-state differences in projected electricity costs affect both PEV owner and utility

customer benefits

• State-to-state differences in 2030 grid carbon intensity affect GHG reduction benefits

Results - Societal Benefits

• Baseline light-duty fleet GHG

emissions in these states are

projected to fall by 28% to 45%

even without high PEV

penetration, as the fleet turns

over to more efficient vehicles

Differences due to start year for

state GHG reduction goal

• Electrification of the fleet can

produce significantly greater

GHG reductions, especially if the

grid is further decarbonized

• In 2050 the monetized value of

annual GHG reductions (NPV)

from greater PEV penetration

under the 80x50 scenario range

from $350 million (CT) to $1.4

billion (NY)

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Monetized value of GHG reductions calculated using Social Cost of CO2, as estimated by the U.S. government’s Interagency Working Group on Social Cost of Greenhouse Gases.

Projected PEV Purchase Costs

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Source: Bloomberg New Energy Finance (2016)

Actual & Projected Battery

Costs for EVs [$/kW]

PEVs projected to still be

more expensive to buy than

gasoline vehicles through

2050, but incremental costs

will be more than offset by fuel

and maintenance savings

Modeled future PEV purchase costs based on two key parameters

• Battery costs ($/kWh)

• Electric drivetrain costs ($/kW)

Battery size based on BEV200 and PHEV50

Electric drive train size (kW) based on current PEV models

Future battery & drivetrain costs based on DOE EV Everywhere goals and recent Bloomberg projections

About M.J. Bradley & Associates, LLC

MJB&A, founded in 1994, is a strategic consulting firm focused on energy and environmental issues. The firm includes a multi-disciplinary team of experts with backgrounds in economics, law, engineering, and policy. The company works with private companies, public agencies, and non-profit organizations to understand and evaluate environmental regulations and policy, facilitate multi-stakeholder initiatives, shape business strategies, and deploy clean energy technologies.

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This presentation is based on the results of five state-level analyses of plug-in electric

vehicle costs and benefits for different states in the Northeast, including Connecticut,

Maryland, Massachusetts, New York, and Pennsylvania. These studies were conducted

by MJB&A for the Natural Resources Defense Council, to provide input to state policy

discussions about actions required to promote further adoption of electric vehicles.

Summary reports for each state can be found here: http://bit.ly/2kJOfx0

About this presentation