Reforming electricity rates to enable economically competitive electric trucking

Abstract

The imperative to decarbonize long-haul, heavy-duty trucking for mitigating both global climate change as well as air pollution is clear. Given recent developments in battery and ultra-fast charging technology, some of the prominent barriers to electrification of trucking are dissolving rapidly. Here we shed light on a significant yet less-understood barrier, which is the general approach to retail electricity pricing. We show that this is a near term pathway to $0.06/kWh charging costs that will make electric trucking substantially cheaper than diesel. This pathway includes (i) reforming demand charges to reflect true, time-varying system costs; (ii) avoiding charging during a few specific periods (<45 h in a year) when prices are high; and (iii) achieving charging infrastructure utilization of 33% or greater. However, without reforming demand charges and low utilization of charging infrastructure, charging costs more than quadruple (to $0.28/kWh). We also illustrate that a substantial share of current trucking miles within select large regions of the United States can be reliably electrified without constraining electricity generation capacity as it exists today. Using historical hourly electricity price and load data for last 10 years and future projections in Texas and California, we show that electricity demand is at least 10% lower than yearly peak demand for at least 15 h on any given day. In sum, with electricity rates that closely reflect actual power system costs of serving off-peak trucking load, we show that electric trucks can provide overwhelming cost savings over diesel trucks. For reference, at diesel prices of $3.16/gal and charging costs of $0.06/kWh (inclusive of amortized charging station infrastructure costs), an electric truck's fuel cost savings are $251 000 (NPV), providing net savings of $61 000 (18% of lifetime diesel fuel cost) over the truck's lifetime at battery price of $170/kWh, or up to $148 000 (44% of lifetime diesel fuel cost) at a battery price of $100/kWh (figure 1).

Big batteries on wheels: converting diesel trains to battery electric can provide significant economic, environmental, and grid resilience benefits

“…2 These estimates represent upper bounds for battery-electric trains, because they assume a battery price of $250/kWh (almost double current battery prices) and an electricity price of $0.17/kWh, three times higher than prices already seen for long-term power-purchasing agreements in California. 26 Although electrification via catenary is widespread in Europe and Asia, the context is not directly transferable, because U.S. locomotive power requirements are approximately 10 times greater than requirements in Europe, dramatically increasing the average costs per mile. 21 Furthermore, the frequent use of double-stack containers in the United States makes catenary requirements problematic; infrastructure would need to be 23.5 feet higher than the tracks to accommodate such trains.…”

“…We adapt the method from previous research on TCO for electrifying the trucking sector 26 to the rail sector, estimating the unit cost of charging as the total of the levelized cost of equipment, the cost of generation, and the cost of T&D. Table 3 describes the inputs used to estimate unit charging costs for the ERCOT market. Following their method, 26 we model the unit charging cost for a retail customer who is able to access wholesale energy prices in ERCOT territory. This scenario is realistic under current regulations.…”

“…The levelized cost of equipment, in this scenario, is defined as the minimum price per unit of energy delivered (kWh) that a charging service provider should charge the consumer to break even on the investment in charging equipment and grid interconnection. 26…”

Application of rapidly improving battery technology for direct electrification of intraregional container shipping

“…Using methods from Phadke et. al (2019), we estimate the levelized cost of a 300-MW charging station interconnected at the transmission level to be $0.03 kWh -1 at 50% utilization inclusive of hardware, installation, grid interconnection, and annual operations and maintenance costs across the system lifetime [37].…”

“…In the baseline scenario-which assumes a battery cost of $100 kWh -1 , battery energy density of 732 Wh L -1 , charging station utilization of 50%, wholesale electricity price of $0.035 kWh -1 , and HFO cost of $0.048 kWh -1 (equivalent to $538 t -1 )-the TCP of a battery-electric ship is lower than that of the incumbent ICE vessel only for ship classes larger than 8,000 TEUs over voyages of less than 1,000 km [38,32,28,5,37]. Over longer voyages, the additional cost of the battery system and charging infrastructure outweighs the savings from fuel switching and the e ciency gains of direct electri cation.…”