No, this is not about climate change or a debate about if it’s real enough or an existential threat to humanity or not. In the new world, this has been aptly monikered ‘Energy Transition 2.0’. And as the electric vehicle market is growing at a faster pace than any other ‘green’ adoption in any other industry, it’d be interesting to examine the infrastructure available to support the consequential increased demand in power.
EVs require charging power. It doesn’t matter if it’s the superchargers you see on highways or the charging points in private homes or garages. For every EV sold, there is additional demand for power. Let’s take a look at the numbers at a very high-level.
DEMAND AND… SUPPLY?
A typical 60KW battery that gives a 200-mile range – fully charged if used for an average of 10,000 miles a year – would require 3000KWh of energy. There are more than 285 million privately-owned cars in the USA alone. Rudimentary calculations indicate that it would require additional power usage of 858 billion KWh if every privately-owned vehicle was an EV.
Compare that to total power usage in USA in 2020 of 3.4 trillion KWh. It comes to an additional 24% of consumption that needs to be fulfilled.
Which raises the following questions:
- Is there a plan to accommodate the increasing power demand? Keep in mind that it takes anywhere between 36 to 72 months to build a new power plant of medium level capacity
- Are EV mandates by various states realistic to meet, considering the lead-time required to set-up new power plants?
- Can the additional power be generated through renewable resources in an efficient and cost-effective manner? Or will this merely increase the dependence on traditional hydrocarbon-based fuel?
- What will the impact and mitigation steps be on the transmission and distribution infrastructure?
And that is an appropriate segway to another consideration: what kind of opportunities arise as a result of widespread demand for more power? Not only in terms of jobs and infrastructure spend, but trading and risk management, liquidity and credit risk.
Considering all of the above, we believe the future of power in a green energy world is going to be full of higher volatility, increased demand and every now and then, a crisis or occasional black swan moment.
And all that translates to increased demand for better technology in the ETRM space as well… and my final questions: are you ready for it and which vendors will make the cut?