Talking points

Electric cars: is there enough power to fuel them?

Electric cars are the future of motoring. But can our infrastructure cope with the coming revolution, asks Alina Gregory

11/05/2018

Alina Gregory

Alina Gregory

Associate Portfolio Manager

The average person in the UK is estimated to produce 15 tonnes of carbon emissions per year. To meet the UK’s target to reduce carbon emissions by 80% by 2050, each one of us will have to reduce our annual carbon footprint from 15 tonnes per year down to just three tonnes. To put the scale of this task into context, a one-way flight from London to Hong Kong would use up a little over 70% of an individual’s yearly carbon budget, and assuming the traveller planned to come back home, the carbon cost of the return flight would start eating into next year’s allowance. As part of this commitment to carbon-cutting, the sale of new petrol and diesel cars and vans is to be banned in the UK from 2040, so the importance of electric vehicles (EVs) cannot be overstated. There are now more than 115,000 EVs in the UK, meaning 115,000 more electricity-thirsty devices relying on the existing charging network. At-home charging puts more strain on the local low-voltage power grid than specifi cally designed stations, and ultimately means that the source of power is still traditional coal and gas. Without low CO2 power sources, total emissions from EVs are actually higher than for a regular internal combustion engine car.  

Plug and play

The grid as we know it is not equipped to deal with the EV revolution: it has to get smarter; power storage has to improve; and a higher proportion of power has to come from renewable sources if EVs are to have a meaningful  impact on decarbonisation. The first telephone network required operators to physically plug in wires to connect callers. Progress in electromechanics saw the use of automatic switching devices and, later, digitisation turned voices into data so features such as call holding, voicemail and caller ID could become the norm. The telephone network became smarter when the infrastructure behind it progressed, but the power grid has remained dumb. A smarter, sensor-enabled network would be able to assess live power demand and current usage, transferring power from place to place as needed, reallocating or postponing charging times automatically and potentially allowing us to identify the ultimate source of the power – a sort of call holding, voicemail to calm their nerves, imposing an extra 2,800MW demand on the grid. It was ‘TV pickup’ – the phenomenon of extra demand being placed on the grid when popular shows break for adverts – on a grand scale. When EVs form a key part of the daily household routine and charging patterns nationally align, ‘EV pickup’ may well stretch the capacity of our existing grid beyond what it was built for, and into blackout territory.


Who’s got the power?

Clearly, we have to bolster our grid with more power from clean and renewable energy sources. While mapping the output from solar and wind plants across the year gives a relatively even spread, the windier winter days compensating for the shorter daylight hours,
and caller ID system for the grid. Those at the helm of our National Grid are not unaware that the new EV era will place an extra strain on the existing network, especially when multiple cars are charging at the same time. Their webpage dedicated to the subject
remarks that: “People arrive home at different times and have different routines, with only one in five expected to charge at peak times. It’s a little bit like every home having a kettle, but we don’t all make a cup of tea at the same time.” It would be more accurate to say
that we don’t usually all make a cup of tea at the same time. On 4th July 1990 at 9.38pm, the penalty shootout between England and West Germany came to an end in the FIFA World Cup semi-final, and emotional Brits across the country switched on their kettles the intermittency problem means lithium-ion batteries are needed to store the output from wind and solar until it is required.The batteries of EVs themselves could act as mobile power storage units, feeding renewably sourced power back into the grid when not in use. 

Batteries are excellent power stores for small amounts of energy to be distributed quickly, but for larger amounts of energy that need to be stored for longer and released more slowly, pumped-storage hydroelectricity offers a better solution. Some hydroelectric power facilities can go from cold to full generating capacity in a matter of seconds and some, such as China’s Three Gorges Dam and America’s Hoover Dam, have long been providing an essential source of clean power. In the UK, however, hydroelectricity currently represents less than 2% of the total electricity produced. 

Elidir Fawr (pictured above) looks just like any other peaceful mountain in Snowdonia from the outside, but enclosed within its hollowed out peak is the Dinorwig Power Station, a hydroelectric power station with enough capacity to power just under 700,000 kettles in 16 seconds – almost enough to meet the kettle needs of the 1990 World Cup semi-final. Aside from being an impressive feat of engineering, ‘Electric Mountain’ is helping the grid become a little smarter. 

Forward-thinking companies are incorporating the EV revolution into their existing operations. Royal Dutch Shell acquired smartcharging infrastructure company NewMotion in October 2017 and has begun installing a small number of fast-charging stations in some of its petrol stations. 3M is developing battery and energy storage solutions for EVs, while Illinois Tool Works has its focus on designing and manufacturing the critical components that will be needed in electric and hydrogen-powered cars and autonomous vehicles.


Ready for the revolution

As for spending our entire yearly carbon budget and more on longhaul flights, the electrification of air transport is also starting to take off. Still in its early development phases, start-ups and independents represent 46% of the companies working on cutting-edge electric
aerospace and aviation projects. Electrification is essential to meeting long-term emissions targets, and EVs will soon be ubiquitous. It is clear that upgrades to the power network through renewables, storage and additional investment in household-to-grid infrastructure are critical. After all, if the fastest charging stations currently take 30 minutes for an EV to reach an 80% full battery, it would be nice to know that the grid had enough power left for us to put the kettle on while we wait.

Author

Alina Gregory

Alina Gregory

Associate Portfolio Manager

Alina joined through the Graduate Programme in 2014 after reading Economics with French at Durham University. She holds the Investment Management Certificate and is currently studying towards the CFA qualification. 

This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

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