The debate about future energy alternatives can be an emotional and heated one. Many people believe that renewables, such as wind and solar power, are the answer; others dismiss those technologies outright. The same is true for energy applications, including passenger cars, where various alternative concepts are under evaluation or beginning production – including more efficient internal combustion engines, electric vehicles, and hydrogen powered cars.

Often, proponents lose their objectivity when defending a particular approach. At IIER, we see it as our responsibility to provide an unbiased perspective on alternative technologies, aimed at helping individuals, companies and governments make their decisions.

How we compare technologies

IIER runs comparisons at the societal level factoring in all aspects that might influence energy related decisions with respect to individual countries or the world. We see it as our responsibility to explore cost and usability implications of a new technology on an entire economy or the world as a whole. This translates to the following principles:

• When comparing technologies, we examine cost net of subsidies and taxes, except for cases where initial technology uptake based on subsidies needs to be modeled. Accounting for total cost helps to understand what final energy cost a society has to expect from a new technology, irrespective of who pays for it. This is particularly important for areas where certain technologies are burdened with taxes, while new technologies receive subsidies.
• For technology evaluations, we include necessary investments into the picture. For example, when evaluating smart grid technologies as a method to offset the disadvantages of intermittent power sources such as wind and solar power, we model the cost (and energy requirement) for building and maintaining a much more complex grid infrastructure into the cost, energy need and carbon footprint per kWh of those sources.
• When analyzing net energy use (and carbon-dioxide emissions), we perform a life-cycle analysis that not only includes operations cost, but also energy needs during the mining, manufacturing, transport and disposal of infrastructure components.

Below, two examples explain some of our current research and of how we look at those topics.

Electricity

One of the key energy sources of today's societies is electricity. In most OECD countries, but increasingly around the world, we are accustomed to the availability of reliable energy from sockets anywhere in any building. Twenty-four hours a day, 365 days a year, we rely on the availability of energy at a fingertip, as much as we want, for whatever use. Blackouts are so rare that they make news headlines and disrupt our lives significantly; no more cooking, no more light, no computer work, and no industrial production.

This is a remarkable service, particularly given the fact that electricity, unlike gasoline, cannot easily be stored in a tank. It has to be consumed in the exact same moment it gets produced, and if 100 people turn on the light at the same time, a power plant somewhere has to increase its output to match that demand. Once those 100 people go to bed and switch off their lights, power production has to be reduced by the same amount. In order to keep networks stable, grid operators try to keep input and output matched with less than a 0.5% deviation, and a 1% margin between supply and demand is considered the maximum that is tolerable during emergencies.

In order to make this work, grid operators have developed sophisticated systems that ensure uninterrupted supply. A mix of different power generation technologies, ranging from coal and gas fired power plants to nuclear generation and hydroelectricity, is managed and controlled to follow demand peaks and lows as closely as possible. Increasingly, those traditional sources get complemented by wind and solar power, and other new generation technologies that are being discussed and tested, such as tidal power. Renewable sources, particularly wind and - in some countries - photovoltaic solar panels, have shown significant growth in the past ten years, and soon, electricity generated from reliable and well tested onshore wind turbines is expected to be cost-competitive with newly built thermal (coal or gas fueled) power plants or nuclear reactors when it comes to producing one average kWh (the key unit power gets measured and billed in).

What direct cost comparisons between renewable and traditional sources of electricity often do not include - and this is where IIER's research comes in - is the cost required to accomplish the final objective any source has to be compared against: reliable electricity available 24 hours on 365 days. And there, renewable technologies that are dependent on an uncontrollable source like wind or the sun are at a significant disadvantage. If it is our goal to integrate large contributions from those technologies into our electricity networks, we have to find a way to still manage grid stability when the wind doesn't blow or the sun doesn't shine. Technologically, this can most likely be done, but there is a distinct extra effort involved, and significant cost. So in order to understand the true cost of one kWh of wind power to be delivered to a socket near you, efforts required to provide backup capacity, storage and stronger long-distance interconnections need to be factored in. Only when including this cost will we be able to understand what the true economic effect of a new power source mix will be.

Currently, IIER has a number of research projects underway trying to understand this larger picture of delivering reliable electricity anytime.

Passenger Cars (ELVs and PHEVs)

In 2010 and 2011, automobile manufacturers are slated to release a number of vehicles fueled wholly or in part by electricity. These so-called ELVs (Electric Light Vehicles) or PHEVs (Plug-in hybrids) are in the concept or testing phase, or like the Tesla roadster, are already sold in small quantities. The key difference between ELV and today’s gasoline or Diesel powered cars is that they do not require fossil fuels during their operation, or only as a backup (for plug-in hybrids). Mainly, power is drawn from the electricity socket, stored in a battery and applied to the wheel by an electric motor. Direct advantages of using electricity instead of fossil fuels in combustion engines are huge, because an electric motor is able to convert between 85-95% of the energy coming from the battery into motion, while even the best Diesel engine is unable to turn more than 40% of the energy stored in the fuel into moving the car and its passengers. The rest gets dissipated as heat. Also, electric vehicles have no emissions during operations. On top of that, fuel costs per mile or km are significantly lower than those of gasoline, typically less than one third per mile.

With all these advantages, it seems obvious that electric cars are seen as a key provider of future mobility, as fossil fuels become scarcer and more expensive, and as the world attempts to reduce carbon dioxide emissions. Interestingly enough, some of the first cars in the early 20th century were battery-powered, and there have been repeat attempts at making electricity a key power source for our mobility. Until today, without success. Here are some of the reasons still present today, which require more detailed research to understand if and how electric vehicles can truly compete:

• The biggest challenge of electric vehicles has been and still is the battery. With energy densities of 12-14 kWh/kg for gasoline and Diesel, a large amount of energy can be stored in a small tank. Even most advanced Lithium-Ion batteries offer only 200 Wh/kg. In other words, the same amount of stored energy in the Li-ion battery is 60 times heavier. If one assumes an efficiency of 90% for ELV vs. 20% for a typical passenger vehicle powered by gasoline, the electric vehicle would require a battery weighing 640 kg or 1410lb to convert the equivalent amount of stored energy in a 60 L (15.85 gal) gasoline tank into motion. This weight increases when charge and discharge patterns are taken into account - which typically limits the usable capacity to 60-80% of the nominal total capacity to prevent damage to the battery. Over time, when batteries slowly degrade, storage capacity is further reduced. As it makes no sense to pack a battery this size into a car, electric vehicles will have to operate within smaller ranges and be used as city or commuter vehicles, or be supplied with extra combustion engines for longer drives (PHEV), which adds extra complexity, vehicle weight, and cost.
• Batteries come at a high price. It is estimated that a Chevrolet Volt, one of the first plug-in hybrid cars with a 40 mile electric range, will be about 10-15'000 dollars more expensive when compared to a similar car using gasoline. Over time, this price difference will likely be lower, but industry projections on battery prices suggest that even in the long run, ELVs or PHEVs likely will cost significantly more than traditionally powered vehicles. Initially, government subsidies will help reduce the gap, but subsidies won't be sustainable in the long run, so the overall economics need to be carefully reviewed.
• Batteries will be the component with the shortest life-span in a car, except for items like brake pads, light bulbs and other parts subject to wear and tear. In most OECD countries, a typical car - as long as it does not get prematurely scrapped due to an accident - has a life expectancy of approximately 15 years, during which it typically gets re-sold 3-4 times. In poorer societies, cars live 20 or 30 years, or people there buy our 10-15 year old cars and drive them for another 15 years. Most Li-ion battery producers expect a battery to live between 8-12 years, but there is not enough experience yet to confirm this under rough street conditions involving heat and cold. Cold weather testing of the Chevrolet Volt only begins in the winter of 2010. If ELVs or PHEVs are to have a lifetime equivalent to conventional cars, one should expect that an electricity-powered car will require at least one new battery during its regular "first" life, and one or two more if it gets transferred to an emerging economy. This will likely severely affect mobility options for the poor in Western societies and for emerging economies.
• A comparison of operations cost for electric vs. gasoline powered vehicles often is done using retail prices of fuels, sometimes even factoring in subsidies for early adopters. While this is a correct assumption to understand the attraction for early buyers, it cannot be used to establish a long-term view. For example, fuel taxes, which account for 20-60% of gasoline retail prices in most OECD countries, are often used to build roads or other traffic infrastructure. Electricity, on the other hand, does not get taxed the same way. Now when we imagine a future where electric vehicles achieve a market share of 20% or more, a large amount of money will be missing for infrastructure maintenance. Thus, it is probably fair to assume that there will be an increasing pressure to tax road use at that point, independent of energy used in driving a car.
• When looking at carbon-dioxide emissions from electric vehicles, the energy mix used to generate electricity plays an important role. Globally, about two thirds of all electricity is produced in fossil fuel power plants, often at conversion efficiencies between 30-40%. This efficiency is comparable to an excellent Diesel-powered engine. It seems unrealistic to believe that fossil fuels will be replaced by large amounts of renewable energy soon, particularly if demand rises quickly with electric vehicles being introduced. For a significant amount of time, total energy input and carbon dioxide emissions from electric vehicles may thus not be significantly better than of efficient conventional cars.

In order to truly understand the potential and the implication of introducing electricity-powered vehicles at a larger scale, all these aspects need to be assessed. Ultimately, not only a technology review is required, but a key question needs to be answered: How will mobility look in the future given the change in cost and available options?