PHEVs cost more to operate than gas cars?
Depending on when you charge your Plug-in Hybrid Electric Vehicle (PHEV) and the price of gas, it may be more economical to buy gas according to a soon-to-be-released study. Future PHEV owners might actually find it's more costly for them to plug in their cars, hurting adoption of PHEVs and discouraging PHEV owners from plugging them in. I came across this conclusion in a report (the link is to a PDF file) commissioned by the state of California. Here is exactly what it said.
"If PHEV owners bought electricity according to this tariff, they would not save money by charging at peak hours unless gasoline cost more than $3.73 per gallon. And they would want to charge their vehicles during off-peak hours as long as gasoline prices remained above $1.96 per gallon or they were using more than twice their baseline allowance and so paying more than $0.149/kWh. PG&E's experimental EV tariff would likely deter PHEV owners from charging during summer afternoon hours, but this effect depends upon the actual adoption of such a tariff by the vehicle owner, upon the specific peak hour rates, and upon the current prices of substitutable liquid fuels."
Go below the fold for more.
[Source: Low-Carbon Fuel Standard for California study]
First, lets be clear. The report states, "Under almost any scenario, plug-in hybrid electric vehicles (PHEVs) would be responsible for fewer greenhouse gases (GHGs) per mile driven when running in all-electric mode than when running in gasoline-fueled hybrid electric mode." I am talking about the economics of owning PHEVs. Not emissions. Operating costs matter, right?
Say what you like about current hybrids but regenerative breaking is free. You could argue you pay more upfront but there are real savings in gas after you buy and this is a real selling point. The system pays for itself even if it takes a large number of miles and years. This becomes more complicated with PHEVs and it could hobble adoption of such vehicles.
This is exactly how I came across the report. I was watching Your Green Report. It had an interview with the man behind the report that references the study. The final policy report was just released. I tracked down the official website. It was linked from this article. I noticed the technical report and started reading it. The references for the PHEV conclusions were studies by "Lemoine, D., D.M. Kammen, and A.E. Farrell" and "Lemoine, D., D. M. Kammen, et al." After the titles it said "forthcoming" and "under review." So I assume they are still under peer review.
So what do you think? Could this hurt PHEV's adoption or does this study have flaws?
Reader Comments (Page 1 of 1)
Mike Z 8:28PM (8/10/2007)
Well Duh, its for California, with some of the most expensive electrical rates in the county!
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art vatsky 8:44PM (8/10/2007)
Lascelles: This report sounds pretty suspect to me. First, it should be done on some sort of fleet basis not based on 1 vehicle and 1 type of driving. There are almost 40 million people in CA. PHEVs are not a panacea, especially in places where the grid is already over extended but there are so many variables that could tip this analysis one way or the other. It would be good to know who funded it.
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NotEnough4DaLatest 8:56PM (8/10/2007)
It's not so much about cost, but the emissions that is of concern here.
If I had a PHEV, I'd plug it in at work, in great spot and the boss is happy to pick up the tab. Or at home to the grid, but my rooftop solar panels would offset the electrical costs. That is when I do own a PHEV and have a solar panel installed on my house.
It's so called studies like these that it's no wonder the US is still the biggest consumer of petrol.
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small-wee-wee 9:08PM (8/10/2007)
People that want electric cars want them for their emissions and I agree with #2 and #3!
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Mike Z 9:08PM (8/10/2007)
The future price of power and gas is the real determinants.
For example, its possible the Westinghouse AP-1000 Nuclear reactor might produce power at under $0.04/kWh which would make PHEVs kick gasolines butt price wise.
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Lascelles 9:14PM (8/10/2007)
Everyone, If you could ask the authors questions, what would you ask? Did you consider different types of cars and driving? Who funded your study?
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Anth 9:43PM (8/10/2007)
The answer on how they came to this conclusion is easy - among other things, they assumed that the PHEV got 52MPG on gasoline and hybrid systems alone. This might work with the Prius or Insight, but not everyone is going to be driving those kind of compact cars. If I were in charge of the study I would have assumed a more reasonable 35-40PG on gasoline+hybrid systems (which is a little bit better than what a Camry or Escape HEV gets today).
The next assumption they made is that everyone has tiered rates like PG&E does. This isn't true, as I pay 12c/kWh no matter how much I use, and I live next door to California in NV. And especially how PG&E's tiered rates go up dramatically - the highest tier is just about 3x the cost of the first tier.
To be concise, at 12c/kWh and 40MPG for the gas+hybrid systems, gas prices would have to drop below $1.20 for me to want to fill up with gasoline again. Fat chance.
I really need a spreadsheet to get into detail and explain how they got their numbers and where you could argue they made some poor choices. But here are some simple calculations on their standard residential tariff...
52mi at 250Wh/mi = 13,000Wh or 13kWh
13kWh at 11.43c/kWh = $1.49
So with that scenario, its cheaper to use electricity as long as the price of gas is above $1.49. However, as you use more electricity, the price goes up the further you get away from the baseline...
13kWh x 34.648c/kWh = $4.50
In this case if you're 3x the baseline (300% of baseline) then its only worth it to use electricity if gas prices are above $4.50. However it seems their study assumes that the baseline wouldn't move up if a whole bunch of people starting buying and charging PHEVs. In fact the whole peak/off peak system could fall apart if people charged their PHEVs at night because it would be more or less constant.
To put it another way, using their assumptions, right now with gas around $3/gal the cost of electricity would need to be 22.7c/kWh to equal the cost with their 52MPG/250wH per mile car.
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kballs 10:28PM (8/10/2007)
Why not put the PHEV outlets in your garage on timers so they won't connect before 10pm?
Or even better, put solar panels on the roof of the house, it's California after all, the land of massive solar panel rebates and steep grid rates... it would easily pay for itself in short order if you're driving a PHEV.
I'd also be curious how a series PHEV/all-electric would cost to run compared to a regular parallel HEV (non-PHEV)... probably equal or cheaper even at peak rates... and definitely cheaper than a regular ICE vehicle... but see my points above to minimize cost/mile.
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Chris M 10:39PM (8/10/2007)
The report was concerned mainly about greenhouse gasses and CO2 emissions, the cost analysis was mainly concerned about possible factors that might limit use of plug-ins. The only time it would be cheaper to drive on petrol is if the price of petrol dropped and charging was done at peak rates on a "time-of-use" meter for the most expensive utility in the state. In other words, highly unlikely to happen. Note that if petrol prices go over $3.73 a gallon, even the most expensive peak electric rates are cheaper.
My own rough calculations, based on the average efficiency of various plug-ins and petrol cars, and average electrical rates and petrol costs, indicates a cost of $0.01 to $0.04 per mile for electric, and $0.06 to $0.30 per mile for petrol.
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Bill 10:53PM (8/10/2007)
I pay under 8 cents/kWh.
Commercial rates are even cheaper (i.e. if I "plugged in" @ work)
Wonder how governments will compensate for the loss of fuel taxes when PHEVs are mainstream?
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PJD 12:50AM (8/11/2007)
I'm in Southern Cal Edison territory. Here if you have any gas service to your house you get very low baseline electric. Because the house I bought has electric appliances (despite having gas service), I've ended up paying a marginal rate of $0.24/kWh some months. These rate structures make no sense, in that they would certainly discourage the use of heat pumps and PHEV, both of which would be great from an environmental standpoint... especially considering that CA is over 45% non CO2 producing electricity. But they set the rates where one would be crazy to buy the technology.
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rgseidl 5:10AM (8/11/2007)
The implicit assumptions here are:
a) PHEV owners would want to recharge their vehicles quickly during daytime hours, even at great expense. There is really no basis for this claim. The only reason battery manufacturers make hay about rapid charging is to meet a specific requirement of California's ZEV mandate, which was largely refocused on FCVs after the EV-1 fiasco.
b) California's utilities would not offer new service levels to cater to PHEV owners that generate additional base load exclusively during the night. There is also no basis for this. The grid is underutilized at night and power generators make more money when their capital investments yields returns around the clock.
c) No new power stations will be built in California and the grid will not be upgraded. This is also suspect because PHEVs and BEVs would likely appeal to many consumers/voters if their total cost of ownership over the life expectancy of the vehicle is affordable. These consumers/voters would then presumably be far more amenable to capacity upgrades, because they would be contributing to a reduction in demand for gasoline. Besides, the incremental profitability from improved nighttime utilization of the infrastructure would help pay for such upgrades.
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kert 6:10AM (8/11/2007)
MPG calculations nonwithstanding, a typical EV old lead-acid conversion gets about 3 miles per kwh. So if you pay 12 cents for Kwh, thats 25 miles on a dollar, or 75 miles for three dollars, i.e. a price of a gallon of gas.
Having a solar roof to help offset charging costs makes things even better.
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grimmex 11:58PM (8/11/2007)
Gee whiz, what a brilliant analysis!
Perhaps, just *perhaps*... late summer afternoons would be the time when you burn gasoline, instead of charging it? Or maybe you've already filled your batteries by noon because you plugged it in at 8am? Or maybe it would take a rocket scientist to realize you could spend $20 on a timer that would charge your batteries when it's the very cheapest?
So yeah, I'm sure that it *would* cost you more to run a PHEV, IF you charge it during peak times, and IF you do it in the state with the highest electricity costs in America.
But if you're like me, and you live in British Columbia, where the cost of electricity is dirt cheap, then a PHEV will cost considerably less.
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Lascelles 7:57AM (8/12/2007)
Grimmex and everyone else, later today, there will be a new article about this. So, please watch out for that. You are all right and very smart. Our readers may be too smart :D I thought it was interesting gas could compete at all! Imagining that is brilliant if you ask me. I mean, is it possible that there are times when you should just switch over to a propane or gas electric generator? Industries that require a lot of electric must have ran from the state!
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Eric 10:19AM (9/11/2007)
A bogus study worth questioning. All things being equal, the electric grid is far more efficient than internal combustion engines, this is fact. Aslo, we can power the grid by any means necessary. This has more upside than down. Sure, grid prices go up with demand, but fossil fule demand is only increasing in the developing east. It's only going to get worse in the long haul.
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