Study Finds That Without a Price on Carbon, Regular Hybrids Can Lower Lifecycle CO2 Emissions As Effectively as Plug-in Hybrids, and At Lower Cost
A new working paper from Duke University finds that in the absence of a price signal for CO2, regular hybrids can lower lifecycle carbon dioxide emissions as effectively as plug-in hybrids, and at a considerably lower cost.
In the paper, Eric Williams, co-director of Duke’s Climate Change Policy Partnership (CCPP), compares the two hybrid technologies to see which could lead to lower carbon dioxide emissions, operating costs and overall consumer costs. Williams used six plug-in hybrid penetration scenarios, each of which begins in 2012 and ends in 2030 with a final penetration into vehicle stock ranging from 2% to 56%. He also analyzed four additional scenarios, based on penetrations of 2% and 56%, that have CO2 prices of $20 and $40 per ton. He found that:
Without a CO2 price signal, plug-in hybrids are essentially no better than regular hybrids at reducing lifecycle CO2 emissions;
With a significant CO2 price signal, plug-ins reduce moderately more CO2 emissions than regular hybrids;
Plug-in hybrids are significantly more expensive than hybrids at current gas prices; plug-ins become cost-effective at $6 a gallon.
The evening and night-time (off peak) charging of plug-in hybrids makes base-load power more attractive to utilities, Williams reasons. Currently, utilities build only enough base-load power to allow their base-load units to run almost continuously. To meet peak demand, utilities build units with low capital cost and high operating cost, knowing that these units will be needed for only short periods of time and can be turned off when demand drops. The largely night-time plug-in hybrid electricity consumption changes the shape of the demand curve so that utilities can build and run more base-load and fewer peaking units.
Taking a 56% plug-in hybrid penetration as an illustrative example, additional plug-in hybrid electricity consumption is directly responsible for 16.5 GW of new coal capacity by 2030. Renewables also increase by around 2 GW by 2030. Over 17 GW of combustion turbines and nearly 5 GW of oil and gas steam plants are avoided or retired as a result of plug-in hybrids. Overall, capacity needs are lower with plug-in hybrids because the base-load capacity that is built in response runs more frequently and alleviates the need for around 4.5 GW of total capacity. Lower penetrations of plug-in hybrids have similar results, though combined cycle builds tend to be less consistent (builds go up and down) at different plug-in hybrid penetrations. Generally speaking, without a CO2 price present, investment in coal and avoidance of combustion turbines (and to some extent oil and gas steam) is proportionate to plug-in hybrid electricity consumption.—Williams (2008)
In terms of actual generation, not capacity, Williams concludes that generation increases by around 235 TWh with a 56% penetration of plug-in hybrids whether or not a CO2 price is present. This generation increase is needed to meet the electricity demand of plug-in hybrids. Under this scenario, coal generation increases by 190 TWh by 2030, while generation from natural gas and wood biomass increases by 15 and 18 TWh, respectively, and generation from other sources increases only slightly. Different penetrations of plug-in hybrids follow similar patterns.
If a $40-per-ton CO2 price is present, then a 56% plug-in hybrid penetration results in an additional 132 TWh of coal generation, 75 TWh of nuclear, 14 TWh of wood biomass, and only 5 TWh of natural gas generation by 2030. Both coal and natural gas generation are lower with a $40-per-ton CO2 price than without, and nuclear fills the gap.
It’s not a simple equation. Plug-in hybrids save gasoline but consume electricity. In most of the country, electricity generation relies on fossil fuels, which means that plug-ins would lead to an increase in electricity sector fossil fuel consumption and CO2 emissions. At the same time, plug-ins would reduce direct vehicle emissions. Taking this into account, I wanted to see how net emissions change, regionally and nationally, as a result of plug-ins.—Eric Williams
The answer to that question, he notes, depends largely on whether there is a price signal for CO2 emissions. If federal or regional climate legislation places a limit on the amount of CO2 allowed, it will create a price signal that will drive the electricity sector to become more efficient and less carbon intensive. In this case, Williams says, plug-in hybrids would typically enjoy lower CO2 emissions nationally and in most regions compared to regular hybrids.
However, in a few carbon-intensive regions where electricity generation relies heavily on coal, plug-in hybrids would have lower net emissions than conventional vehicles, but not lower than regular hybrids. With respect to carbon mitigation, policymakers may want to focus on regular hybrids for certain regions rather than plug-in hybrids, even with a CO2 price signal.—Eric Williams
In the absence of a price signal for CO2 emissions, Williams’ analysis gives the edge to regular hybrids. Nationally, plug-ins and regular hybrids reduce CO2 emissions by about the same amount without a CO2 price signal, he finds, but regular hybrids can do it more cost-effectively.
CCPP is an interdisciplinary research partnership of Duke’s Nicholas Institute for Environmental Policy Solutions, Nicholas School of the Environment and Center on Global Change. CCPP researches carbon-mitigating technology, infrastructure, institutions and systems to inform lawmakers and business leaders as they lay the foundation of a low-carbon economy.