Electric cars are coming fast – is the nation’s grid up to it?
The main challenge is not so much generating more energy but dealing with the notion of many TWH of battery capacity being plugged into the grid and leveraging that. Which at face value would be part of the solution except it isn&#x27;t. That would be too easy. The real challenge is dealing with 2 orders magnitude of magnitude drop in price per kwh for the grid and the consequences that has for demand. Hint: it will sky rocket; the projected demand for charging cars is peanuts compared to that.<p>People have trouble dealing with exponentials; they lack the imagination. But the fact is, we&#x27;re about to see an orders of magnitude shift in prices and capacity when it comes to energy production. If you are thinking in terms of the current supply and demand, you&#x27;re basically off by magnitudes. Our very near future is this market being disrupted to the extreme.<p>An EV is basically a big battery with plenty of capacity for soaking up excess energy during off-peak hours and delivering back to the grid during peak hours. So, you could be deceived into thinking that the challenge is simply infrastructure for leveraging this capacity. People are actually working on this and it&#x27;s not particularly hard from a technical point of view.<p>For reference, most grid battery being installed currently is still sub GWH. Anything over a few hundred MWH is considered news worthy. A Tesla has about 60kwh. A million of those is 60GWH; that&#x27;s some serious capacity. There are about a quarter billion cars in the US; or about the equivalent of 12.5 TWH if we set the average EV battery to 50KWH and they would all be converted to electric. The US produces about 4000 TWH of energy every year (a bit over) currently; so 12.5 TWH of battery that can be charged&#x2F;discharged in hours, is a lot of capacity. Arguably much more than actually needed (currently). So plug that in, and problem solved.<p>Of course, that&#x27;s not the solution to this challenge but a very narrow tunnel vision of a hypothetical part of the solution (involving just car batteries). It will never happen because it won&#x27;t be economical.<p>In reality, there will be mass deployment of wind, solar, and all sorts of grid energy storage that is probably a lot more cost effective than car optimized lithium ion batteries. Companies will be producing this as fast as they can for the foreseeable future and it will be like printing money in terms of business opportunity. Basically demand will be insatiable for the foreseeable future. The lower the prices get, the higher the demand and there is not enough supply as it is so prices are pretty good.<p>We have decades to crack this nut; so charging cars is going to be a complete and utter non issue by the time all those quarter billion cars have converted (2040-2050 timeframe). But the flip side is that operating the remaining ICE vehicles will have become uneconomical long before that (about 5 years from now). So, people will be buying EVs at a premium just to get in on the action of lowering their cost for the foreseeable future. If you can afford it; great but lots of people will be burning cash (quite literally) for some time to come because they can&#x27;t.<p>Actually, when everybody finally has converted, energy prices will have dropped so low that the upside of renting out your car battery for grid support won&#x27;t be worth the trouble unless you can do it at scale. It makes sense at today&#x27;s prices but with a few decades of improvements in cost and efficiency it won&#x27;t; not even close.<p>This is the bit people struggle with. Energy is expensive currently and people assume this will remain true. The lesson of the past decade is that solar went from being 100x more expensive to being the cheapest option. It&#x27;s not done dropping in price unless you happen to suffer from extreme pessimism regarding scientific and industrial progress on this front in the next decades. This being HN, I assume you are not that foolish. IMHO the only debate worth having right now is on the number of orders of magnitude we are talking. I worry about being too conservative here.<p>With solar and wind, the cost of energy is basically a function of the purchase cost of the infrastructure and how long it will keep mining energy from the sun&#x2F;atmosphere (for absolutely nothing whatsoever). Current equipment is rated for decades of use. So, as that stuff gets cheaper and better, the $ per kwh will continue dropping to the point where it is no longer interesting for consumers to worry about such mundane things as efficiency or price per kwh. When a GWH is basically a dollar, why bother renting out your car battery for pennies? It doesn&#x27;t make sense. When the equipment needed to generate a lifetime supply of energy for the vehicle is a fraction of its purchase price, why even think of it as variable cost?<p>Charging a Tesla at grid prices currently costs you about the price of a cup of coffee (maybe plus a cheap lunch if you use a supercharger, which of course you won&#x27;t most of the time). That&#x27;s right now at rates that are basically reflecting the old expensive coal+gas+nuclear world we are still in. It&#x27;s a hard sell as it is to spend a lot of time and energy monetizing that. Imagine that dropping by 100x. That&#x27;s roughly what is going to play out over the next few decades. Any math involving today&#x27;s prices is basically going to be wrong by orders of magintude.<p>That&#x27;s the real challenge for grid suppliers: surviving in a world where most of their current infrastructure is obsolete and about 100x more expensive than the market rate for energy. It&#x27;s going to be brutal if you are in that line of business unless you keep up. If your business is burning coal, your life is going to suck. But good riddance.<p>The challenge for grid operators is continuing to function in that world. It will involve aggressively investing in renewables + cheap storage + transport (aka. wires) just to stay in business. That&#x27;s basically what they are doing. Some more so than others. Investors already moved their money.