The Pandemic’s Surprise Revelation: A Vision of a Cleaner Future and an Opportunity for Fleet Electrification

By Julio Romero Agüero

On 1 May 2020, the IEEE Power & Energy Society (PES) published a white paper titled Sharing Knowledge on Electrical Energy Industry’s First Response to COVID-19, sharing inputs, experiences and best practices from utilities and system operators across the globe who have been facing the challenges brought on by the pandemic. The following is the first in a three-part series from some of the authors of the paper, reflecting on key takeaways, trends and observations from its findings from a U.S. point of view.

One of the most noticeable effects of stay-at-home orders put in place by governments around the world was the significant reduction in carbon emissions, partly due to the decrease in global vehicle and air traffic, as well as the temporary shutdown of commercial and industrial facilities. The pandemic-induced economic slowdown provided an opportunity to perceive cleaner, quieter skies and streets, a tangible window onto a sustainable future.

Precise data on the reduction in carbon emissions in the United States during the COVID-19-related slowdown in commercial/industrial and transportation activity remains elusive. However, models forecast that the reduction in 2020 could be 11 percent over 2019 levels.

Those models also suggest that emissions will rebound to pre-pandemic levels by 2025, under a business-as-usual scenario, as economic activity rebounds. That would mean virtually no impact on our longer-term emissions trajectory.

But as Forbes magazine reported in May: “If the government’s COVID-19 response includes green investments and smart policy, the U.S. could recharge its economy by kick-starting clean industries with the potential for serious decarbonization.”

One of the most important steps towards that future is the electrification of transportation, particularly fleet electrification. According to 2018 data from the Environmental Protection Agency (EPA), the transportation sector generates the largest share (28.2 percent) of total greenhouse gas emissions in the United States, primarily from cars, trucks, ships, trains and planes. This is closely followed by electricity production (26.9 percent).

The U.S. Energy Information Administration (EIA) reports that CO2 emissions (in billion metric tons) in the transportation sector increased from 1.82 in 2009 to 1.89 in 2019. Meanwhile, the EPA reports that in 2017, light-, medium- and heavy-duty vehicles accounted for 82 percent of this sector’s emissions.

These forecasts and figures point to the benefits of electrifying fleets. The fleet category includes the behemoths of retail, freight and food, such as Amazon, FedEx and Frito-Lay, but extends to the U.S. Postal Service, municipal bus systems, school districts, Uber, Lyft and others. In the United States, such a transition is already underway. Frito-Lay has operated electric delivery vehicles for nearly a decade. At the end of 2018, FedEx announced it would add 1,000 electric delivery trucks to its California routes. Last year, Amazon ordered 100,000 electric delivery trucks by 2030. Lyft has recently announced a plan to electrify its entire fleet by 2030, which is expected to reduce its greenhouse gas emissions by 16 million tons (equivalent to removing about 3 million internal combustion engine vehicles from the roads).

These adopters cite sustainability and lowered emissions as a major driver, yet they also track the reduced (and historically volatile) cost of fuel, as well as decreased noise pollution. That’s a potentially heady mix of incentives, from social responsibility to economic efficiency.

Encouraging such a trend in the United States requires coordination among diverse stakeholders, including adopters, power utilities, policymakers and regulators, investors and the public. The good news is that support for environmental sustainability is broad and on the upswing.

Power utilities have the capabilities to support transportation electrification. These capabilities include resources and experience building new distribution, substation and transmission infrastructure, as well as implementing mechanisms to mitigate, to the extent possible, impacts of peak demands and manage load shapes (e.g., time-of-use rates, demand response). However, thorough and efficient forecasting, planning, engineering, procurement and construction will be required, given the magnitude of the loads that are expected to be served, and the lead times associated with upgrading existing infrastructure or building new infrastructure. For instance, building a new substation or transmission line typically requires several years, and for this reason it is planned years in advance. Therefore, new infrastructure to support transportation electrification must be identified in a timely manner, so it is ready when needed.

The more challenging aspect will likely be economic. The long-term benefit to society of transportation electrification is obvious, and electric utilities would benefit from rate base growth due to construction of new infrastructure and from increased volumetric sales. But on an individual basis, would the investments required to support fleet electrification have the necessary benefit-cost ratio to satisfy key stakeholders (e.g., regulators, customers, investors)?

In accommodating distributed energy resources, for example, utilities and regulators are grappling with how to fairly apportion the costs based on who benefits. In similar fashion, the needed investments for supporting transportation electrification may need to be apportioned among those who benefit. This can be a contentious area.

Also, although logic would dictate that fleet charging is likely to occur at night, during otherwise low demand and grid asset utilization, coincidental charging might create a second peak in each 24-hour cycle and impact asset lifecycle (e.g., average loading of key grid assets, such as transformers, might increase significantly). Additionally, different tariff structures such as time-of-use rates can involve complex economic issues. Again, how fleet electrification impacts specific, individual utilities and their regulatory construct remains to be determined.

On the macro scale, however, there is another extremely important reason why the United States should not only electrify its fleets but play a leading role in developing related technology: global competitiveness.

“A year ago, when [Washington] D.C. Metro officials unveiled 14 electric buses—a purchase that made the capital one of the largest electric-fleet operators in the United States—[Shenzhen, China] … was already in the middle of a full-blown electric revolution,” The Washington Post reported in June 2019. “Today, more than 16,000 buses and 12,000 taxis whir along Shenzhen’s palm-fringed boulevards.”

Almost all of those vehicles in Shenzhen are electrified and almost all are made in China. As are the 1,000 Chanje V8100 electric delivery vehicles ordered by FedEx in 2018, mentioned earlier. Wherever actual vehicle manufacturing takes place, however global the supply chain, countries that lead the innovation in various systems for these vehicles will experience economic and intellectual property benefits. It is worth noting that we all benefit from competition in innovation, because carbon emissions do not stop at invisible geographic borders.

The pandemic has given us a glimpse of cleaner skies and streets. We should “seize the day” and push forward on fleet electrification as a first step towards transportation electrification to create a sustainable future. A historic opportunity is at hand, should we choose to pursue it.

Dr. Julio Romero Agüero is vice president of Strategy & Business Innovation at Quanta Technology in Houston, Texas. Dr. Romero Agüero has 25 years of experience working with electric utilities and regulatory boards. He has developed solutions for numerous electric utilities in the United States, Canada, Latin America, the Caribbean and Asia. His areas of expertise include grid modernization, distribution systems planning, technology strategy, and integration of Distributed Energy Resources and emerging technologies. Dr. Romero Agüero is a Senior Member of IEEE, he has served as chair of the IEEE PES Distribution Subcommittee, chair of the IEEE PES Working Group on Distributed Resources Integration, editor of IEEE Transactions on Smart Grid, and editor of IEEE Transactions on Power Delivery. He is chair of the IEEE PES Innovative Smart Grid Technologies (ISGT) North America Conference and member of the IEEE PES Long Range Planning Committee.

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IEEE-USA is an organizational unit of the Institute of Electrical and Electronics Engineers, Inc. (IEEE), created in 1973 to support the career and public policy interests of IEEE’s U.S. members. IEEE-USA is primarily supported by an annual assessment paid by U.S. IEEE Members.

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