The Problem and The Promise
The incoming Biden-Harris Administration has lofty climate goals. It has committed to a 100% clean energy economy and net zero emissions in the US by 2050. And to meet that, it has promised to enact legislation and create enforcement mechanisms by the end of its first term i.e., 2025 and an investment of $1.7 trillion in this sector over the next 10 years
This is indeed admirable and forward thinking but needs lots of planning and execution.
Let us dig deeper into what is involved in meeting this goal.
The latest EPA data for Greenhouse Gas (GHG) Emission shows the breakup below:
As we can see, about 90% of this can be tied to transportation, electric and heating or other forms of consumption in residential, commercial or industrial settings.
The good news is that in the US, businesses are already undergoing an environmental renaissance, committing to growth through sustainable means and pledging to net zero emissions in coming decades. That leaves the residential sector, the topic for this discussion.
An average US household consumes about 10.6 kWh of electricity and a typical individual drives about 17.8K miles per year (derived from data at EIA with # of household used as 118M). So, we will focus on how to reduce the GHG emission of these 2 factors.
As almost globally agreed, one of the best ways to mitigate GHG is to use renewable energy sources. So, in this article we will focus on how to enhance the adaptability of renewable energy sources (mainly solar) in the 2 sectors; residential electricity generation and residential transportation (electric vehicles, and storage of electricity).
Proposal
The major tenet of this proposal is to accelerate the production, storage and consumption of renewable energy by using the existing technology mainly EVs.
1. Require EVs to permit V2V and V2G Charging (& entice them through tax credit)
At current count, the US has about a million fully electric vehicle EVs on the road but this number is expected to reach 18.7M by 2030 (source). All EVs have batteries which range in size from 20 to 100 kWh and the capacity is increasing by the year as companies try to provide even longer range vehicles.
An EV charging at daytime, powering up the house at night
Our current model of using EVs is to charge at night, when the grid load is the minimum and then use it at daytime when the users need to commute. This sounds logical but this needs to change.
Many EVs have batteries big enough (60–70 kWh batteries are most common these days) to not only meet the daily commuting need (48 miles or 12 kWh of battery consumption) but also to meet our household electricity demand on the daily basis (29 kWh) and then some. And if the batteries are solar charged, they can meet the dual goal of running both transportation and residential electricity requirements purely through solar. Which means no GHG from residential consumption (all of these figures are derived from the above referenced EIA data).
But there are challenges:
- Current EVs can only draw power from home but not dispense power to home
- We drive to work during daytime, this is when we could charge our car from solar
With EVs, we all are driving around with a big, bulky battery, about 2–5 times the battery that could power our whole house for the day.
So, why not use the same battery for powering our house?
Because you can’t. EVs ports (EVSE) are programmed to power only one way, you can only charge up the battery but not charge out. This is where V2V, V2H, and V2G come into picture. These are the technologies using which a vehicle can power another vehicle (V2V) or can power a home (V2H) or can even send electricity back to the grid (V2V) for someone else’s use.
One may wonder why these technologies are not in widespread use? They will obviously reduce the need for someone to buy home storage batteries and will definitely reduce the load on the grid.
Mostly because of conflicts of interests.
Tesla, for example, sells a full home energy solution called Powerwall. So, though they are the market leader in EV sales, it’s not in their interest to provide their cars as a substitute to power your home too
This is not a technical issue as a bunch of EVs in a few market segments do provide exactly this (Hyundai Kona in Japan for example). The battery chemistry difference between the two types batteries (EVs and Storage) is not a significant enough hurdle here.
This doesn’t make sense and the Biden administration should strive to change that.
The $7500 Federal tax credit for EV purchase or 26% storage tax credit on home batteries should be extended to EVs and should be limited to only those vehicles which permit Vehicle to Vehicle/Grid/Home charging (V2V, V2G, V2H) charging. This will not only spur growth in EV sales and usage but also reduce stress on the EV charging infrastructure by spinning out p2p EV charging, similar to Uber and Airbnb.
The BH administration’s promise of setting up 500,000 EVSE by 2030 can also be fulfilled much faster once the P2P networks kicks on, without the need for any government funding.
For the second point, the car, wherever parked, should be allowed to charge. That way it can charge during daytime when the sun is shining.
How? Read on to the second point below.
2. Build a new Renewable Energy Marketplace
With solar and EVs batteries, anyone can be an energy trader, IF the regulations permit. If the regulations are tweaked appropriately, the government won’t need heavy handed measures (think subsidies) to spur growth in the solar and storage sectors as America’s public and corporations are smart enough to exploit viable economic opportunities.
Energy ( mainly electricity) should be allowed to be traded freely and fairly. One of the biggest hurdles in enabling that is the last mile connection. If I have solar on my roof, the only buyer I have is the one who is physically connected to my solar panels i.e. my electricity provider. This should change to spur free energy trade.
And it can be changed by the usage of a new national (or even global) renewable energy marketplace to transact energy. Blockchain can be a technology to power this marketplace which will ensure all transactions are recorded in a transparent, secure and irrefutable way and with the lowest overhead/cost.
The BH admin can issue guidelines for developing and monitoring such a marketplace and not actually build one. Overall it will need 2 policies for such marketplace to be successful:
- A new Renewable Energy Marketplace should be created — or the SREC marketplace (Solar Renewable Energy Credit) be tweaked-
We have something similar already existing in SREC but it has limitations. There is a need to either create a new marketplace or revamp the existing one, specifically:
- It should permit not only energy generation but also consumption
- An EV as well as EVSE (Electric Vehicle Supply Equipment) should be allowed to participate
- Even small transactions of sub kWh should be permitted to include retail, end users transactions
- All transactions should be blockchain based to reduce overhead costs, enhance immutability and transparency and security.
- Similarly Grid tied solar & wind inverter should permit connecting to a market place (of customer’s choosing)) to update its generation related transactions.
- The utility provider needs to serve everyone
Utilities need to permit anyone’s inter connections irrespective of whether the user is its own customer or not. If the user is not its customer, it can impose a connection fee, whose value can’t exceed more than 1% of the transaction current charges, through the customer’s marketplace. It will be very similar to a person withdrawing cash from a third party ATM. The customer is served whether or not she has a bank account with the bank providing the ATM. The ATM provider simply charges customers a convenience fee.
In other words, if a Pepco customer plugs in his Tesla in his office charging station served by BGE or at his friend’s house served by Duke Energy, his car will be allowed to charge. His company or friend won’t be charged for this energy draw. And BGE or Duke will be paid through the marketplace by the customers directly at the marketplace, using blockchain transactions directly, without Pepco or any other third party in the picture.
How will it be possible? Fortunately for us, all EVs and EVSE these days are smart and connected devices with their own digital identities. They record all charging and discharging data already and even provide them into their dashboards for customers to view. Requiring automakers and EVSE manufacturers to create a blockchain transaction and upload this to the new Renewable Energy Marketplace shouldn’t be a huge lift.
3. Build new renewable energy network for renewal energy all across US
One of the biggest concerns with solar is that the sun doesn’t always shine. This is a fair enough point but there is another side to this argument and that is that the sun is always going to rise and set, unlike gas or coal reserves which will run out soon. So, a grid of solar power-plants can not only extend the sunlight by 3 hours from coast to coast it can also reduce the local weather & geographic phenomenon (think cloudy days) and enhance reliability for generations to come.
Once electricity is allowed to be traded freely across geographical regions (see#2 above), the next thing remaining will be to make it available all across the US and possibly even globally.
Enter the (ultra) High Voltage Direct Current (UHVDC or HVDC) network built mostly for renewable energy farms.
Removing the last mile hurdle for energy trade (#2 above) will unleash huge economic opportunities for setting up energy farms (solar, wind and storage), and trading energy in the open market. One of the current limitations hindering the growth of rooftop solar or renewable energy farms is the restrictions imposed by current utility suppliers as they don’t have the infrastructure to sell or store the extra energy that customers may produce and so they don’t want customers to produce more than they can consume. With the market expanding across state lines, and their customers just transmitting the energy for the last mile, utilities won’t have economic or technical reasons to limit the growth of renewables (though they might need a piece of the pie too as they will need to upgrade their last mile connectivity). This will make renewable energy more accessible and reliable and further cheaper.
The good news is that HVDC is already recognized as a valuable infrastructure technology to invest in. Just that it needs to be prioritized and interconnection rules to the network need to be simplified and made user- friendly, permitting both smaller individual players and big power companies to connect to it. If I have an acre of land which I want to convert to a solar farm, I need not worry about finding how to interconnect buyers and how to sell my energy; that should be the goal.
Conclusion
In conclusion, below are the 3 steps that the Biden-Harris administration should take to revolutionize the residential energy sector and to smooth out its transition towards green energy, away from fossil fuel.
