This page has been archived and commenting is disabled.
Getting Something For Nothing
I just contracted to buy all the gasoline I want at 24 cents a gallon. No, I have not struck oil in my backyard, or come into an inheritance from a long lost Kuwaiti relative. That is the de facto price that PG&E is billing me for a full charge on the all-electric Nissan Leaf that will be delivered to me in December.
That works out to $1.20 to recharge a vehicle that will transport me 100 miles, at the price of five cents a kilowatt hour. That compares to the $15 I currently pay to top up the tank on my conventional gasoline engine driven car. This is less than half the 11.8 cent/hour I pay to run the rest of my appliances, and a tiny fraction of the 40 cent/hour peak rate I pay to run the air conditioner in the summer.
PG&E has exactly one engineer to talk to its 10 million customers about this ground breaking new technology, and after much effort, I managed to get him on the phone. I asked who was paying the subsidy? Were those profligate bastards in Washington involved? He answered that there was no subsidy, that power sold at night was cheap because there was no other market.
So I inquired as to who was paying for all of the equipment upgrades, like the new transformers and power lines that were needed? Do I sense the heavy hand of Sacramento? He replied that there was no capital cost because the same infrastructure that delivered power to me during the day would be used to power my car at night. Only a couple of bucks would be spent on the installation of a new “time of use meter”.
Of course, they have subsidized the hell out of the Leaf itself. The car that is costing me $22,000 here in California sells for $32,000 in Japan. That beats the hell of the Chevy Volt, which is expected to hit the market at $42,000 and only goes 40 miles on a single charge. I know we’re supposed to be cutting the deficit by eliminating handouts like this. But you’ll only take my subsidies by prying my cold dead hands away from them. Take someone else’s subsidies, not mine! It is the American thing to do these days.
Shortly after our conversation, a technician came out to visit me. The good news is that the installation of a new 50 amp circuit breaker for the EVSE charging dock (see below) was going to cost only $750, half of which is tax deductable. This is a simple inverter which converts the AC off the grid into DC to charge the battery. Since the charging dock will have a 25 foot cable with a SAE standard J1772 universal plug, it can be used to top up a Leaf, a Volt, or any other electrical vehicle that comes down the pike. It is also over engineered to handle triple the Leaf’s load demand to accommodate future upgrades with heftier battery packs.
It was quite entertaining chatting with the tech, drawing as much as I could from an ancient electrical engineering course I took in college. Some of his customers were “extreme” environmental early adopters, with bidirectional “time of use” electric meters that allow their solar panels and wind mills to make them net suppliers of power to the grid. My new PG&E (PGE) smart meter actually scored poorly on its SAT test, as it was still awaiting some future upgrade to become fully functional. He then pinned a life sized poster of my new charging station to the wall in the appropriate location, presumably so we and our gardening tools can learn to live with it.
As he left, he thanked me for taking the technology a long awaited leap forward. Wow! When was the last time someone thanked me for my business?
He did mention that one unanticipated problem had arisen. My ears perked up. Many wealthy Tesla Roadster owners in Los Altos Hills were impressing so many girlfriends with rides that they were requiring multiple daytime recharges, even though they promised to recharge only at night. Not only did this send their electricity bills through the roof, it was causing problems with the grid as well. I guess its all part of the teething process, a cost of making the great leap forward to the next generation. Who knew that Match.com would be involved?
I never thought I’d get something for nothing, but it looks like this time I will. That is, as long as the damn car works, and my kids don’t run the battery down playing rap music all night. For a glimpse at the future and further insights into this amazing technology, please visit Nissan’s Leaf website at https://www.drivenissanleaf.com/ .
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
- advertisements -
Once again: 5 min. of research will save you a handful of junks, everytime...
"... it was causing problems with the grid as well"
For the record, this is utter nonsense. It's inconceivable that order of magnitude of use would cause any sort of problem.
Except for electricity generated by water power behind dams where the water can be held until needed, all other generation is cheaper at night because of the very high fixed component of the cost per kilowatt. And even water generated power is cheaper at night.
Nothing tricky about it. Simple math expressed in cost accounting. Production costs against Period (time) costs.
Kayman-
I can't speak for Hoover Dam , but most hydros are licensed as "run of the river" plants and generate 24/7 , sometimes more power (unit load higher , or more units on )sometimes less , according to precipitation . And some Hydros are "peakers" , which store up water in the pond at night (generally) , then generate during the day during peak hours , if possible .Again , precip can cause them to run 24/7 as well . Their contribution to the national grid is negligible. Steam plants (coal or nuke) do generate less at night , and have more running reserve at that time for peaking if neccessary at night . As more Elec cars are added to grid , power prices will rise ( supply and demand ?!?! ) . And last caveat . Power plants are aging , with few new plants in the works ( enviro freaks like Gore , Greenpeace , et al tossing in the wrench ) power prices will rise for both night and day usage .
My state power is same price 24/7 , tiered for second residence . K-man aka Pondmaster
Pondmaster
I agree with all your points. However, without getting into details I cannot divulge, along with generating dams, there are also dams whose sole purpose is to hold back water during the evening for daytime generation, thereby getting the highest power (daytime) rates. Run-of-rivers are notorious for having too much or too little water.
And I fully agree, each generation type has its own cost issues.
Nonetheless, ANY revenue, less variable costs that goes against fixed costs makes a power company more profitable.
I would be happy to rent you my office from 6pm to 6am at half price, if you promise to stay out of my filing cabinets.
even on good subjects you have to twist the narritive to increase your position. $22k vs $42k that is how we are suppose to read that comparision right, brainiac? And no say of the milage of the leaf? and that the volt switches to gas power after the 40 so you never get stuck?
what a great truthful piece of garbage... what else do you cloak for your clients
the cost is not in fuel but in your road system tough guy. nice try, tho.
There is a decent amount of the population that can reasonably take advantage of these cars. ie they dont go more than 100 miles in a car. Natural gas cars have same problem 100-120 miles before you refill at a Nat gas filling station. These cars are great if you are a 2 car family. Good luck with it.
I can imagine a world where people own electric cars to get to work and back and rent gasoline vehicles for out of town trips.
I also left out the part about the profits on the Japanese car you bought leaving the country for good.
Not being critical, just matter of fact...
MB it will encourage innovation in American co.'s if it catches on? (FYI: a lot of American car co.s have a good chunk of their production overseas these days anyway)
Not being critical, just some matters of conjecture and fact...
As far as I know there are several companies working on such automobile innovation, so that is a plus. There would be even more innovation if it we're practical and profitable. Most of the Japanese innovation has been subsidized by their government, much like their auto industry was.
And the US car companies that manufacture things overseas? Well, just like the Japanese companies, the profits generally make their way back to the home country...
profits mb ( and that is one big mb these days), wages: not so much.
Japanese innovation gov't subsidized? First off: SO WHAT? Second: how many times has the US bailed out its car companies again? How come bailouts don't count as 'subsidies'? Oh I know: because the public who provide the cash have little or no control over where the money goes, because it's already been spent/lost, unlike gov't sponsored R&D. What a great deal for America.
Bailouts are the worst kind of subsidies...But, if you're alluding to the Chrysler loan in the early 80's, that was a loan payed back early-with interest; not much chance of that happening today with GM. The same UAW that essentially extorted, with the government's blessing, GM out of business was rewarded by being awarded a major shareholder position; at the expense of legitimate bondholder, some of whom were hedgefunds that were intimidated by their notoriously liberal clients to either go along with the administrations thuggery quietly, or face the immediate demand for their funds.
Government sponsored R&D is acceptable for national security reasons, and in somne academic settings, but otherwise is not. That's socialism, and ultimately didn't work for the Russians-they ran out of other people's money.
Your Margaret Thatcher badge is showing; who's pushing agendas here again?
The ol' Iron Maiden might have said that socialists run out of other people's money, but what she meant was plutocrats will never run out of yours.
The Leaf isn't socialist, anyway, it's electric.
Just youtubed to let you rocket surgeons know it could be done, even by those who only made it to brain scientist, let alone professional auto co. engineers. Say, do you work for estes? http://www.estesrockets.com/
And I know D Cheney and Bush and Rove and all those guys are like, sooo 2008 and everything, but I'm not letting it go, sorry.
Speaking of 2008, check out how Norway, a socialist democratic state, fared late in the year...
Regards
Good luck with that. Toys are always fun to have, but in the end, not very practical.
A hybrid makes much more sense, you get the same sense of inflated ego (cause your "saving the planet") without giving up range.
Just remember: TINSTAAFL
The LexusLS hybrid is very nice!
(Unfortunately the batteries result in the boot/trunk being considerably smaller.)
One real problem with battery cars (or hybrids) is how QUIET they are, it causes big problems with pedestrians and children.
(Anyone who has been to Zermatt, for example, knows this! It is "petrol car free", i.e. there are huge numbers of extremely fast, very heavy, completely quiet electric "mini cars" and "mini trucks" on the streets...ouch)
so how about some "car tones" downloaded? got to be some money in that.
This was always my main thing with electrics. What the hell fun is a car you can't feel and hear? But, there are lots of people working on this. The Fisker Karma was(is?) supposed to have some options, and check this whacky shit out: http://www.guardian.co.uk/environment/video/2009/nov/16/halosonic-electr...
For those who haven't treated themselve to it yet, Caturday laughs (my first playlist for ZH):
http://www.youtube.com/view_play_list?p=8584FE99F413E42F
http://i8.photobucket.com/albums/a44/SpiderGirlie/Caturday.jpg
You make some good points. But what you are not taking into account would be the infrastructure costs to upgrade the grid if all Americans began driving electric cars.
Although there is a possibility of Solar power coming to bear; providing the necessary energy in some cases, there are others, like in, say, large cities (L.A., NYC, Chicago, etc...) where that won't really be feasable. Nor will recharging individuals cars who live in high-rise buildings without integral parking facilities.
It already costs an arm and a leg to park in NYC. Imagine what that expense would go to if the garage HAD to provide recharging capability, as well as recover the capital expense of such a retrofit...
Electric cars are a nice idea, and in the scheme of things will be helpful; but current battery technology doesn't allow for the energy density of gasoline, diesel, or LPG-an important consideration in vehicle design.
"Electric cars are a nice idea, and in the scheme of things will be helpful; but current battery technology doesn't allow for the energy density of gasoline, diesel, or LPG-an important consideration in vehicle design."
But the much, much lower efficiency of an internal combustion engine and drivetrain vs. electric motor direct drive more than negates this argument.
Electric motors don't need to idle at stop lights, either.
In all likelihood these are going to be great city cars. Keep your F45000 King Ranch CrewCab Hummer Wannabe for pulling the fifth-wheel/cabin cruiser train on weekends to Lake Pisitcomfromie.
Are we learning yet?
Also, please see this article:
http://tinyurl.com/385gtcw
For some discussion on shortcomings, false claims, and more details of the leaf.
You know, for the facts...
That was conjecture.
I mean if this guy can do it:
http://www.youtube.com/watch?v=9va9_nEYbYg&feature=related
I imagine Nissan's engineers would find this to be a cakewalk.
"There is no such thing as a free lunch, my man. As other commenters noted you need to consider the car, the generating plant, and transmission lines as a closed system when doing the thermodynamic analysis."
(Heh, if you think the price of oil takes this into account, I got a tarsands site or two for you to clean up free of charge because according to you reclamation cost is zero. 'Externalities', are what Mankiw likes to call 'em, I think)
Who said anything about 'free lunches'? But agreed, that is definitely the key variable: what's charging the batteries? However, electrical engineer or no, you must admit that it is entirely possible to build your own alternative electricity generating infrastructure to recharge an electric car; whereas constructing/chasing the locals off your own private oilfield/refinery to fill the Hummer is limited to the likes of Dick Cheney and co.
You can label their critique as conjecture of you'd like, but if you read Nissan's leaf page, they stipulate that the 100 miles/charge is under best-case, EPA test regimen LA4, conditions. As important is the caveat that it is under ideal temperature conditions, in daylight, with neither heat nor A/C running.
Oh, and I'm an aerospace engineer-a rocket scientist-just for the record, but it's a broad based discipline; besides, power and energy issues are all thermodynamics when it comes right down to it.
And I never said reclamation cost was zero. But the oil companies build their costs into the fossil fuel they sell; and so too will the electric companies if the grid demand expanded exponentially-which it would if just half the people in America began to use electric cars. In short, the cost of electricity would have to increase by a similar scale if placed under the demand of such a dramatic increase in EV utilization. Admittedly you could build an alternative energy source to recharge the car, such as a solar grid, but, that would have to be incredibly large, on the order of 1500 square feet by the most generous estimate, to supply the power level equal to the factory charger; unless, of course, you're willing to take a few days to charge the vehicle in between uses.
I sense by your invocation of Mankiw, Cheney, and Hummers that you have an underlying political agenda to your commentary, and have to wonder just how much your judgement is colored by that partisan ideology.
Why not forget about the youtube videos and websites. Run the numbers yourself. You'll see what I'm getting at. It's more satisfying to prove ot to yourself than take someone else's word for it.
We would all like to be free of dependance on foreign oil, in my case mostly for financial and national security reasons, but for long term environmental reasons as well. But that still doesn't make battery powered EVs a panacea. That will belong to fusion powered ones, whenever they come down the pike...
Admittedly you could build an alternative energy source to recharge the car, such as a solar grid, but, that would have to be incredibly large, on the order of 1500 square feet by the most generous estimate, to supply the power level equal to the factory charger; unless, of course, you're willing to take a few days to charge the vehicle in between uses.
Thanks for being big enough to admit that, albeit grudgingly.
We don't use our cars every day as it is, nice.
Solar is only one of many alternative ways to generate electricity depending where you live and what is available. Hell, even solar isn't limited to panels http://www.wired.com/science/discoveries/news/2002/09/54917 (just a single eg too) . But a rocket surgeon like yourself should already know this..
I thank you for your objective input. I would be grateful to hear anything you might have to say about vehicles powered by fuel cells. Any useful links would be nice too.
You are right - it is an illusion. But Cheney is still a dick.
"<i>
But the much, much lower efficiency of an internal combustion engine and drivetrain vs. electric motor direct drive more than negates this argument.</i>"
Friend, you're not an engineer, are you. Of course the I.C. engine is not as "effecient" as an electric motor with respect to output vs. input. But as a pragmatic design factor this is more than offset by the limited energy density, per pound, of batteries vs. gasoline/diesel/LNG. So the differences in propulsion effeciencies doesn't "negate" the argument at all.
Furthermore, you never addressed the increased load on the electrical grid I mentioned...
The charging time is 20 hours at typical line votage (120), unless you install the special charging station in your home. And then, even though it charges quicker, it still costs the same because one is charged by watts consumed. And speaking of efficiency, do the electrical calculations and you'll find that the amount of power consumed in charging is much less than the 24kWh the leaf's battery pack holds. At 110v the difference represents a 50% effeciency, at 240v that increases to 62.5%. Yes, clearly higher than ICEs, but not high enough to offset the far reduced energy density per pound of the batteries vs. fossil fuels.
There is no such thing as a free lunch, my man. As other commenters noted you need to consider the car, the generating plant, and transmission lines as a closed system when doing the thermodynamic analysis.
I and other commenters have noted that this car may fit the bill for some urban and suburban drivers who drive less than 100 miles a day, and have access to the necessary infrastructure to facilitate recharging. but it is no panacea.
In fact, what makes infinitely more sense, until batteries energy density can be increased or fuel cells become a practical alternative, would be to have a hybrid car that uses an electric drivetrain and a high effeciency gas turbine to drive the generator; kind of like the Jaguar show car.
-Regards-
"There is no free lunch". Then don't you have to consider the military, environmental, subsidy, extraction, and transportation costs of fuel, along with the thermodynamic efficiency of the the IC vehicle as a closed system?
He dare not; if he did that his arguments would crumble faster than a cookie in a milkstorm. Which is why he kneejerks the word 'agenda' if I mention Mankiw's 'externalities', even though it is, as you obviously know, entirely applicable.
But in Rocket's magicland externalities should only be considered if you're talking about alternatives.
If that were the case, electric cars would have a higher range before recharge than a typical gas powered car. When they can hit 300 miles on a single charge, then their total energy density will equal a gas car. In thermodynamic terms, draw the control volume around the whole car, not just the powertrain. :)
Right,
but in the utilization of the energy the batteries can store, even with current tech, the electric motor direct drive is vastly more efficient than the internal combustion engine. I should have been clearer on that point, apparently.
Taking into account getting that energy in the batteries has its own set of variables, however, from practically free (late night hydro) to very expensive (coal fired generators).
Night electricity is almost free because there is no demand and the generators are still running. It costs more to turn them off and then back on again than to leave them running.
Good argument, there. It's not like one has to forgo one for the other. Sorta like the folks who say owning gold is scary because somebody might take it from you. Not if you think forward enough to have a little lead on hand as well!
Gas engines don't need to idle at stop lights either and mine doesn't. A car limited to a hundred miles a day works for a few folks but when a few tesla roadsters in palo alto can "cause Problems on the grid" me thinks we ain't ready for prime time yet....
You realize that only about a hundred Tesla's have been sold, right? Clearly the claim that they are screwing up the grid is either hyperbole the completely jumps the shark or a joke that has no punch line.
Given MHFT's propensity for being completely full of shit, it occurred to me the remark about a couple of Teslas charging during the day causing problems on the grid was just made up. A search on Google reveals nothing but some folks musing that maybe someday if enough cars were trying that it might cause a problem. It is counter-intuitive anyway. The effect of Teslas on anything is miniscule. Electric cars, well, who knows.
On hot days in Ca, the grid goes down due to AC demands , so the story is not that far fetched...charging current for a single electric car is nontrivial...
Gas engines don't need to idle at stop lights either and mine doesn't
Sure it doesn't. No, I believe you, really.
Next you will be telling me it's possible to recharge a gasoline tank by braking...
I drive a hybrid. The gasoline engine turns off when the vehicle stops. The electric motor acts as a starter when I place the car in gear, nice and quiet like.
<tips hat>
thank you voice of reason.
Don't you remember, TARP will pay for upgrading the grid and bringing us to the forefront of smart-grid technology.
So when do they start?
5467 (the year)
I'll stick with my Shelby Mustang, bite my carbon foot print.
My 1966 Chevell SS ain't no gas sipper neither. But it ain't a daily driver.
Did anyone say you shouldn't?
It (the Leaf) sounds like a great little car to shuttle the Lisa Simpsons off to college...
Costs the same to generate at night as in the day, so, if not subsidized, they are either loosing money at night or way overcharging you during the day.
That's also a real big heap of dough for a battery charger.
ummm...no...think of electric power plants like a bakery...everyone want fresh bread, no will buy even 1 hour old bread, so baker must have huge capacity to meet big demand at meal times, but them all this capacity sits idle between meal times and all nite long....so baker has fixed cost of bakery, ovens, storage space, full-time salary employees etc, that will not change if he makes and sells bread at night...and he has variable cost to produce bread...if the bread he sells at night is one cent over the variable cost to produce it, he is money ahead and such smoothed demand could be highly profitable to him, as his fixed costs are no longer wasted but cover but revenues generated all day and all night long. However, if suddenly, the extra demand for bread came at the exact peak times, he would have to build another bakery, just for top hour of bread sales, so the extra sales of bread a peak period might make him nothing, in fact it might cost him, but unless he wants to breed competition, he better supply all the bread the costumer wants...so more bread demand at peak demand hours costs, while more bread demand at off peak hours profits...so there is double reason to keep demand at night, so baker incentivezes his customers accordingly
It costs as much but the electric companies all over the world charge less for you to use power at night as they have no way to store the power at night. So to encourage you to use power at night they offer a cheaper rate. It has the added bonus to the producer of balancing the load a little better.
In other words a method of storing the power by say, forcing water up hill at night and releasing the water downhill though a turbine would be a good idea. Kinda like hydro electric.
Long story short they can't shut down the production as it takes too long to bring it back up.