Energy Information Administration Analysis of Alternative GHG

Transcription

1 Beyond CAFE: Vehicles Dr. David L. Greene Oak Ridge National Laboratory Environmental and Energy Study Institute Briefing Russell Senate Office Building Washington, DC January 17, 2008

2 The BAD NEWS: Pricing Carbon is no panacea for transportation: A C-price that would cut utilities C emissions in half by 2030 would have little impact on transportation emissions. (EIA, 2006) Energy Information Administration Analysis of Alternative GHG Reduction Policies ($30/tCO2 in 2010, $50/tCO2 in 2030) Million Met tric Tons CO O2 Equivale ent Transportation Reference Transportation ti $50/tCO2 Electric Power Reference Electric Power $50/tCO

3 No single policy will do the job for transportation. 1. Major government role in decision making. 2. Energy efficiency market failure. Total < Sum of Co omponents 50% Sources of Transportation GHG Reductions, 2015 and % Information and Education. 40% 30% 20% 10% 0% Systems Infrastructure Pricing Carbon Cap Hydrogen Low-Carbon Fuels Air Efficiencyi Heavy Duty Truck Effic. LDV Efficiency Source: Greene and Schafer, Pew Center on Global Climate Change, May 2003.

4 Meeting the Lieberman-Warner goals will require continuing i progress in vehicle technology. What will the new EISA fuel economy standards get us? Where can/should we go with energy efficiency after 2020? What must we give up to get energy efficiency? What policies will be needed and why?

5 EISA calls for a 40% increase in light-duty vehicle fuel economy to 35 mpg by Consistent with NAS 2002 cost- efficient criteria at 35 current gasoline 30 prices. 25 Two years lead time plus 10 years 20 to apply technology 15 to all vehicles. 10 Rate of about 5 3.5%/yr. is slower 0 than rate of 5%/yr. EPA Combine ed Test MPG New Light-Duty Vehicle Fuel Economy, Cars %/yr. Trucks %/ 4.2%/yr Passenger Cars Light Trucks Combined

6 Where next? Continued improvement in fuel economy for conventional gasoline and diesel vehicles. Direct injection, turbo-charging, engine downsizing. Mass reduction via materials substitution. Improved aerodynamics, rolling resistance, accessory efficiency, etc. Advanced electric drive vehicles. Advanced motors and controllers (DOE/FCVT) Advanced batteries ($250/kWh PHEV, $750/kWh HEV) Advanced fuel cells ($50/kW FC, $15/kWh storage)

7 A 2007 MIT study predicts MPG gains of 80-85% 85% for model year 2030 vehicles via continuous improvement of conventional technology at a rate of 2-2.5%/year. 2.5%/year. Potential for Advanced Technologies to Increase Fuel Economy by EPA Combi ined MPG Camry 2.5L Camry 3.0 F-150 Pick-up Base 2030 Adv Diesel 2030 Turbo SI 2030 Hybrid Source: Kasseris & Heywood, SAE Technical Paper , April, 2007.

8 What must we give up? The horsepower & weight race. dex 1087 = 1.0 In Weight Horsepower MPG 223 hp 4, hp Source: U.S. EPA, Light-Duty Automotive Technology and Fuel Economy Trends: , p. ii.

9 The greater energy efficiency of electric drive technologies can cut well-to to-wheel GHG emissions in half and more. 300 Well-to-Wheel GHG Emissions of Advanced Vehicle Technologiess 250 gc CO2/km Tank-to-Wheels Well-to-Tank Base 2030 NA SI 2030 Turbo SI 2030 Diesel 2030 HEV 2030 PHEV PHEV PHEV H2 FCV Source: Kromer & Heywood, Assumes H2 from natural gas, electricity is EIA 2030 mix BEV

10 The GOOD NEWS: If there is a meaningful carbon policy, electricity will be a low-carbon source of energy for transportation Energy Information Administration Analysis of Alternative GHG Reduction Policies ($30/tCO2 in 2010, $50/tCO2 in 2030) Million Met tric Tons CO O2 Equivale ent Transportation Reference Transportation ti $50/tCO2 Electric Power Reference Electric Power $50/tCO

11 The base case (based on AEO 2007) projects a doubling of vehicle travel by 2050, with fuel use and CO2 emissions increasing by two thirds. 250% Base Case In ndex 2005 = % 150% 100% 50% VMT Fuel Use CO2 GHG MPG 0%

12 The higher fuel economy standards of the EISA should restrain the growth of fuel use through 2025, saving about 20 billion gallons in 2025 and 25 billion gallons in % EISA 2007 = 1.0 Ind dex % 150% 100% 50% VMT Fuel Use CO2 GHG MPG 0%

13 And, if we could double new LDV fuel economy by 2030, that would hold CO2 emissions approximately constant through % 2X by 2030 = 1.0 Ind dex % 150% 100% 50% VMT Fuel Use CO2 GHG MPG 0%

14 In addition, if we could triple light-duty vehicle fuel economy by 2050 that would reduce CO 2 emissions below their 2005 levels. 300% 3X by 2050 In ndex 2005 = % 200% 150% 100% 50% 0% VMT Fuel Use CO2 GHG MPG

15 Reducing C emissions to Lieberman-Warner levels will require new sources of energy AND C-constraining policy. (e.g., $10/tCO2 in 2010 to $25/tCO2 in 2025). CO2 Emissions From LDVs kg) CO2 tons (trill Giga Scenario0, CO2 Tax = $25/MT Scenario3, CO2 Tax = $25/MT Scenario3, CO2 Tax = $00/MT

16 Observations on vehicle policy: What market failure? Consumers do not follow the rational economic model (Turrentine & Kurani, Energy Policy, 2007). Uncertainty and loss aversion sufficient to account for a significant ifi energy efficiency i market failure. Value of performance and weight may also involve comparative utility and externalities. Energy efficiency market failure may extend to all energy using markets to a greater or lesser degree. Affects R&D as well as adoption and application of energy efficient technology.

17 Asked about fuel economy payback, consumers respond with short payback periods. But few actually think about gas mileage in financial terms (Turrentine & Kurani, 2007) Payback Periods Inferred from Responses to Two Survey Questions About Fuel Savings and Vehicle Cost May 20, 2004 Saves $400/Yr. in Fuel Vehicle Costs $1,200 More Year rs Mean Median Mean w/o "none" Median w/o "none" Measure of Central Tendency

18 Rational economic model: Assuming certainty and precise preferences, a 25% increase in MPG would be optimal (& cost-efficient). But in reality the payoff is very uncertain. Price and Value of Increased Fuel Economy to Passenger Car Buyer, Using NRC Average Price Curves Co onstant $ $2,500 $2,000 $1,500 $1,000 $500 Greatest net value to consumer at about 35 MPG $ $500 Miles per Gallon PV = L δt 1 1 PM t oe E t= o E 0 1 Fuel Savings Price Increase Net Value Assumes cars driven 15,600 miles/year w hen new, decreasing at 4.5%/year, 12% discount rate, 14 year vehicle life, $2.00/gallon gasoline, 15% shortfall betw een EPA test and on-road fuel economy. e rt dt

19 Uncertainty about key factors makes higher fuel economy a risky bet. Sure, there s a fuel economy label but what MPG will I get? What will gasoline cost? How much driving will I do? How long will my car last? (How long will I last?) What will I have to give up to get better fuel economy? (How much will it cost?)

20 A simulation reflecting these uncertain factors indicates that the fuel economy bet has an expected present value of $405. Distribution of Net Present Value to Consumer of a Passenger Car Fuel Economy Increase from 28 to 35 MPG 0.25 Relative Frequ uency X <= -$1556 5% Mean = $405 X <= $ % $3,000 -$1,500 $0 $1,500 $3,000 $4,500 $6, Dollars

21 Applying Kahneman and Tversky s typical consumer loss aversion function changes the value of the fuel economy bet to -$32. Net Present Value Distribution of Loss Averse Consumer 0.20 Relative Freq quency X <= -$1449 5% X <= $ % 0.04 Mean = -$ $3,000 -$1,500 $0 $1,500 $3, Dollars

22 The practical effect of a 3-year payback vs. loss aversion & uncertainty t are essentially the same. Price and Value of Increased Fuel Economy to Passenger Car Buyer, Using NRC Average Price Curves $2,500 $2,000 nstant $ Co $1,500 $1,000 $500 Greatest net value to customer at about 30 MPG $ $500 Miles per Gallon Fuel Savings Price Increase Net Value Assumes cars driven 15,600 miles/ year when new, decreasing at 4.5%/year, 12%discount rate, 14 year vehicle life, $2.00/gallon gasoline, 15%shortfall between EPA test and on-road fuel economy.

23 Effective vehicle policies must get around the uncertainty+loss t aversion market failure. Regulatory standards EU, US, Japan, China, et al., have them. Feebates Market-based policy road not taken Provides continuing i incentive Research, Development & Demonstration All of the above?

24 THANK YOU.

25 How do we know? Engineering-Economic Economic analysis of what can be achieved by proven technologies. Proven: in-use in some mass-produced poduced vehicle (market ready). No change in vehicle size or acceleration performance. Cost efficient: marginal cost to consumer = expected marginal present value of fuel savings to consumer.

26 Technology/Cost analysis produces a list of technologies, ranked by cost-effectiveness and accounting for synergies. (EEA 2006). Short Term ( ) Medium Term ( ) Long Term ( ) TECHNOLOGY TYPE Cumulative GHG Benefit [%] Cumulative RPE [US$] Cumulative GHG Benefit [%] Cumulative RPE [US$] Cumulative GHG Benefit [%] Cumulative RPE [US$] Early Torque Converter Lockup Rolling Resistance Reduction by 10% Drag Reduction by 10% Rolling Resistance Reduction by 20% Drage Reduction by 20% Aggressive Shift Logic Improved Lube Oil Engine Friction Reduction by 8% I4 Technology Stoichiometric GDI I Weight Reduction by 5% Engine Friction Reduction by 15% I DOHC VVT (Intake) I VVT (Intake plus Exhaust) DOHC I Engine Friction Reduction by 8% V Alternator Improvements VVL Discrete OHV-2v V Stoichiometric GDI V VVL Discrete OHC-4v I Engine Friction Reduction by 8% V Engine Friction Reduction by 15% V VVLT Intake Continuous DOHC I Engine Off at Idle(Manual Transmission) VVL Discrete OHV-2v V Engine Friction Reduction by 15% V Electric Power Steering Five Speed Automatic Transmissions Six Speed Automatic Transmissions Seven Speed Automatic Transmissions Continuously Variable Transmissions (Engines < 2.8L) /5 Valves I Camless Valve Actuation I Stoichiometric GDI V Weight Reduction by 10% g y Turbocharging & GDI with Engine Downsize V6 to I DOHC VVT (Intake) V DOHC VVT (Intake) V VVT (Intake plus Exhaust) DOHC V VVT (Intake plus Exhaust) DOHC V VVL Discrete OHC-4v V VVLT Intake Continuous DOHC V Continuously Variable Transmissions (Engines > 2.8L) Turbocharging & GDI with Engine Downsize V8 to V /5 Valves V VVL Discrete OHC-4v V VVLT Intake Continuous DOHC V Cylinder Deactivation V6 with Noise Cancellation & Cont. VVLT Cylinder Deactivation V8 & Cont. VVLT Camless Valve Actuation V6 Incl. Cyl Deact Camless Valve Actuation V8 Incl. Cyl Deact Engine Off at Idle (Auto. Transmission & AC) Weight Reduction by 15% Electric Water Pump Homogeneous Combustion Compression Ignition (HCCI) I Homogeneous Combustion Compression Ignition (HCCI) V Medium Term Potential Cumulative % FC Red. Cost % FE Incr. Early Torque Converter Lock-up 0.50% $ % Rolling Resistance Reduction by 10% 1.99% $ % Drag Reduction by 10% 3.95% $ % Rolling Resistance Reduction by 20% 5.30% $ % Drag Reduction by 20% 7.00% $ % Aggressive e Shift Logic 7.58% $ % Improved Lube Oil 8.50% $ % Engine Friction Reduction by 8% I4 9.52% $ % Stoichiometric GDI I % $ % Weight Reduction by 5% 14.85% $ % Engine Friction Reduction by 15% I % $ % DOHC VVT (Intake) I % $ % VVT (Intake plus Exhaust) DOHC I % $ % Engine Friction Reduction by 8% V % $ % Alternator Improvements 17.96% $ % VVL Discrete OHV-2v V % $ % Stoichiometric GDI V % $ % VVL Discrete OHV-4v I % $ %

27 Not all technologies are applicable to all vehicle types. (Compare 2006 study by EEA with 2002 NAS results) Increase e in RPE (2005 $U US) Fuel Economy Increase Cost Curve Large Domestic Pick-UP (EEA, 2006) $4,500 $4,000 $3,500 EEA Data $3,000 Predicted $2,500 NAS Lg PU $2,000 $1,500 $1,000 $500 $0 0% 20% 40% 60% Percent MPG Increase Increase e in RPE (2005 $U US) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 Fuel Economy Increase Cost Curve Small Car Domestic Standard (EEA, 2006) EEA Data Predicted NAS Compact NAS Subcompact $0 0% 20% 40% 60% Percent MPG Increase Increa ase in RPE (2005 $US) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 Fuel Economy Increase Cost Curve Large Domestic Car (EEA, 2006) EEA Data Predicted NAS Large NAS Midsize $0 0% 20% 40% 60% Incre ease in RPE (2005 $US) Fuel Economy Increase Cost Curve Large Domestic SUV (EEA, 2006) $4,500 $4,000 $3,500 EEA Data $3,000 Predicted $2,500 NAS Lg SUV $2,000 $1,500 $1,000 $500 $0 0% 20% 40% 60% Percent MPG Increase Percent MPG Increase

28 The NAS cost-efficient method sets MC = MV, maximizing expected net value to the car buyer. Net value varies only a little around the optimum. Price and Value of Increased Fuel Economy to Passenger Car Buyer, Using NRC Average Price Curves $2,500 $2,000 Constant $ $1,500 $1,000 $500 Greatest net value to customer at about 36 MPG Fuel Savings Price Increase Net Value $ $500 Miles per Gallon Source: Calculated from data in NAS, Assumes cars driven 15,600 miles/ year when new, decreasing at 4.5%/ year, 12%discount rat e, 14 year vehicle lif e, $2.00/ gallon gasoline, 15%shortf all bet ween EPA t est and on-road fuel economy.

29 Depending on the price of fuel, increasing LDV fuel economy by 30% to 50% would be cost efficient at gasoline prices from $2 to $3 per gallon. Cost-Efficient Increase in Light-Duty Fuel Economy NAS 2002 Method 60% Increase e LDV MPG 50% 40% 30% 20% 10% 0% Full Lifetime Fuel Savings 3-year Payback $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 Price of Gasoline per Gallon ($2005)

30 The marginal value of fuel savings is the consumer s demand curve for increased MPG. The derivative of the quadratic cost curve is the manufacturer s supply curve. Effect of Technology and Consumer Rationality on Supply and Demand for Fuel Economy $200 $ $ $150 $125 $100 $75 $50 $25 $ MPG Sierra Res. MIT (Derived) Full Life WTP 3-Yr Payback Full Life $2 3-Yr $2

31 Historical fuel economy increases track the standards d closely. l 35 U.S. Passenger Car and Light Truck Fuel Economy Standards Miles per Gallon Passenger Car Standard New Car MPG New Light Truck MPG Light Truck Standard

32 Fuel economy standards have worked well, and today save motorists t about 70 billion gallons per year. Passenger Car and Light Truck Travel and Fuel Use e Miles (b billions) Vehicl Vehicle Miles 500 Fuel Use 50 ions) lons (bill Gal

33 MIT also analyzed the technical potential & cost for electric drive to raise energy efficiency i by Cost v. Energy Efficiency of Future Electric Powertrain Technologies $16,000 $14,000 Battery Electric Powertra ain Cost $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 H2 Fuel Cell PHEV 60 PHEV 30 PHEV 10 HEV Diesel Turbo SI NA SI 2006 Base $ Energy Use: MJ/km Source: Kromer & Heywood, LFEE RP, May, 2007.