Streetwise Professor

October 2, 2021

Today’s 70s Acid Flashback: Energy Crisis Edition

Filed under: Commodities,Derivatives,Economics,Energy,History,Politics,Regulation — cpirrong @ 1:15 pm

Back oh-so-long ago, during the California electricity crisis and its aftermath, I would say that California wanted to deregulate its power market in the worst way, and succeeded. (Wanting to keep up my ESG score, I recycled this line to describe Gibbering Joe’s Afghanistan exit.)

The main design failure of California’s restructuring (a more accurate description than deregulation) of its power market was that it capped retail prices for the two largest utilities in the state (SoCal Edison and PG&E) while requiring them to acquire power at market-determined wholesale spot prices. (San Diego Gas and Electric had met criteria to allow it to enter into long term forward purchase contracts and as I recall was not subject to the same retail price cap.). Thus, SCE and PG&E were massively short wholesale (spot) power. When those prices spiked, due mainly to fundamental factors, the utilities hemorrhaged cash and hurtled towards bankruptcy. Their financial distress led to further dislocations in the California market (and the western US power markets generally).

The world is currently undergoing what is being called an “energy crisis,” focused on power markets, and their inputs, mainly natural gas and coal. There are two parts to this “crisis,” one fundamentally driven, the other driven by ill-conceived regulatory and political factors redolent of California circa 1999-2001.

The most pronounced indicator of the fundamental-driven stress is the price of liquified natural gas (LNG), which has reached dizzying heights.

That price spike is in early “shoulder” months, boys and girls. Lord knows what the peak demand months have in store.

And that’s the nub of the problem: storage.

Historically, natural gas has been a “spikey” commodity. The shale boom mitigated spikeness in US natural gas prices, but periodic price spikes are an inherent feature of storable commodities. The truly motivated can read about it in my book, but the CliffsNotes version is this. It is optimal for inventories to run out periodically: if inventories were never exhausted, some of the commodity would never be consumed, which makes no sense. So “stockouts” will occur periodically. When they do, it is impossible to accommodate demand increases or supply declines by drawing down on inventory. Instead, prices bear the entire burden of adjusting to a demand shock (for example). Thus, periodically stocks will be tight, and when they are, a demand increase causes prices to rise dramatically (because inventories can’t cushion the blow).

The cover illustration in my book, based on a purely theoretical model of a storable commodity market, illustrates the point. Note the periodic spikes.

That is, price spikes are inherent in storable commodities.

The magnitude of the price spikes is amplified by the nature of natural gas production and consumption. Both demand and supply are extremely inelastic. The inelasticity effects optimal storage decisions, but when natty inventory constraints bind, inelasticity means that price impacts of shocks are extreme.

This is why going short natural gas (or shorting the calendar spread especially in the winter) is referred to as a “widow maker” trade.

There are lots of widows out there today. In essence, a hard winter of 2020/2021 depleted stocks. The 2020 COVID demand collapse and subsequent price crash (JKM traded at $2.20/mmBTU in May 2020) cratered drilling, constraining current supply (as wells drilled then would have been producing now) making it difficult to build stocks. Warm summer weather in 2021 drained stocks and impeded stock build. Outages in Norwegian production, and a wind drought in the UK (which required greater utilization of gas generation) stoked demand. Stocks are now at historically low levels, setting the stage for even bigger spikes this winter.

The gas market–due to LNG–is now international, meaning that shocks in any region impact prices around the world. Asia (especially China) and Europe are now playing tug of war for gas, and prices are spiking in both places.

Since gas and coal are substitutes, the price spike in gas is resulting in a price spike in coal:

Oil can also be used to generate power, although this has become relatively rare in recent years. However, the spikes in gas and coal are making fuel switching to oil more attractive, and additional gas/coal price spikes in the winter will likely result in more use of oil in electricity generation, which will put upward pressure on oil prices too.

This is all fundamentals driven, and exactly what occurs periodically in storable commodities. There’s nothing really that can be done about it, policy wise. But that won’t stop governments from trying.

You’ve no doubt read of energy “shortages” in recent days and weeks. Well, low supplies and high prices are not a “shortage” per se. A true shortage is a failure for a market to clear, resulting in queueing for the good. That is, a shortage occurs when the price is kept to low, leading to a gap between the quantity demanded and the quantity supplied.

Think gasoline lines in the US in the 1970s.

That’s where regulation comes in. Various regulations, adopted for political economy reasons, create shortages and the other dysfunctions currently observed in world energy markets.

Take China. The authorities have implemented power rationing. The reason commonly given is a “coal shortage.” Yes, coal prices are high in China (and the world), but that doesn’t create a true shortage. What has? Power prices are capped. The big increase in input costs (both coal and LNG) mean that Chinese generators can’t sell profitably, so they restrict output, leading to a true shortage.

What this means is that the shadow price of power–the price that market participants would be willing to pay for an additional megawatt–is (a) above the regulated price, and (b) above the market clearing price. Consumption would be higher in the absence of the price cap.

High coal prices do not reflect a “shortage”, properly defined. Yes, they represent constrained supplies, but that is not a shortage.

And do not forget that China’s coal supply constraints (and high prices) are in large part a result of their brilliant central planners. China imposed quotas on coal production some years back. The reason was–wait for it–coal prices were too low. Now the government is winking at the quotas in order to encourage production–because prices are too high.

India is another country where the Californiaesque capped power price/uncapped input price problem is rearing its ugly head.

France is going to cap gas and power retail prices, but make suppliers whole (though how it will do so remains unstated as of now). Compensating suppliers (effectively having the government pay the difference between marginal cost and the capped price) will prevent true shortages, but will have the perverse effect of exacerbating the spikes in gas and coal prices because at the capped price consumers will not internalize the true scarcity of fuel, and will overconsume.

The UK is experiencing another echo of California. Several of its retail gas suppliers have imploded because they are required to sell at a capped price and chose to cover their sales commitments by purchasing wholesale spot. The price cap made no sense: competition among retail suppliers would have kept prices in line. Adding the price cap just put the competitive retailers at risk of bankruptcy. (Admittedly, such can occur when retail prices are not capped if retailers offer fixed prices to consumers and don’t hedge, as occurred in Texas this last winter. But price caps make that outcome more likely.)

The UK is also suffering a true shortage of gasoline–excuse me, petrol–a la the US in the 1970s. A true shortage, because there are lines:

Scarcity of truck drivers to distribute fuel is at the root of the problem. But that can’t lead to a true shortage–lower supplies and higher prices yes, but not a shortage with people waiting in line. So what gives?

Apparently there was an information cascade about impending shortages, which led to a panicked run for gas stations. This evidently started with a leak (probably politically motivated) of cabinet deliberations.

A sudden demand increase of this magnitude can lead to true shortages–queueing–if prices do not rise to clear the market. This raises the question of why petrol sellers didn’t increase prices. I’m not aware of formal caps, but I surmise that fear of allegations of “gouging” led retailers to choose to allow customers to pay the high price implicitly (through the time cost of sitting in line) rather than raise price to reflect the sudden (and perhaps contrived) scarcity.

For storable commodities like natural gas, coal, and refined petroleum products, price spikes can last for some time. That’s what we are experiencing today: it’s just one of those spikes like on the cover of my book that happen in commodity markets. Given that we are going into a peak demand season with constrained supplies, the prospect for a continuing spike–and indeed, a higher spike–is very real indeed.

Governments can’t change this fundamental reality. Market prices are sending a signal about underlying conditions. Governments don’t like the message the prices are sending, and will try to do something about it. Alas, their knee-jerk response–to shoot the messenger by capping prices–will make things worse, not better. But because governments can’t help themselves, look for many 1970s energy market flashbacks in the coming months.

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33 Comments »

  1. As far as I can see the petrol crisis in Britain is already correcting itself, with problems mainly confined to London and its surroundings. But because the media care only about London and SE England they are still fussing about it. The rest of us, who already subsidise public transport in London handsomely, think the buggers should stop whining and take the tube.

    There is one obvious way the country could increase its storage capacity for petrol: dozy dolts should drop the habit of driving around with almost no fuel in the tank.
    https://www.cambridge-news.co.uk/news/local-news/tesco-petrol-couple-break-down-21690743

    Comment by dearieme — October 3, 2021 @ 9:42 am

  2. Hello Professor,

    Have you been following the news of large tie-ups in the supply chains—weeks delays in ports, long trains delayed much blamed on labor shortages? Another sign of inflation to come—too much money chasing too few goods?

    Comment by The Pilot — October 3, 2021 @ 1:50 pm

  3. @The Pilot. Yes, i have. A post to come.

    Ironically, this is sort of a back to the future moment for me. My PhD thesis was about ocean shipping, including a chapter on container shipping. That’s given me some background to make what I hope are some illuminating observations.

    Comment by cpirrong — October 3, 2021 @ 4:32 pm

  4. Cynical thought for the day.

    At least California’s biggest utility, PG&E, learned from its mistakes of ~ 20 years ago, changed with the times, and found a new way of getting into bankruptcy this time around by (a) justifying rate hikes (nothing inherently wrong with that), (b) “controlling” expenses by neglecting maintenance on thousands of miles of decades old transmission lines, milking the cash cow for all it can get while not planning too much for the future (unwise but not uncommon at companies large and small that are making a lot of money), (c) paying their executives massive bonuses for their apparent fiscal success, (d) seeking bankruptcy protection when those transmission lines contributed to some of the worst fires in American history and saddled the company with billions in civil judgments and penalties, and (e) claiming with a straight face that it was all unexpected, implying that the catastrophic fire related liabilities could not have been limited to some degree by prior planning and infrastructure investment (even though the epic drought that has turned the entire state of CA into kindling has been noticeably building for 15+ years).

    Then again, a shoulder shrug claim of “Hey, what are you gonna do?” is common at any large entity that files for Chapter 11 bankruptcy, ruining shareholders, shortchanging creditors (often to a massive extent), and resulting in large staff reductions (just not among the senior people that put the company in the unsustainable position). The kicker is that unlike other companies in bankruptcy, PG&E had no real risk of disappearing via Chapter 7 (and making those executives have to look for new jobs) because consumers have no widespread viable alternative but to keep paying them for unreliable service.

    And now you can’t get natural gas in a new construction home in CA, so you have to use more electricity. Sigh.

    Comment by Joseph Bonner — October 4, 2021 @ 8:02 am

  5. Okay – so as I understand it, the argument is that storable commodities will experience price spikes because the optimal volume of storage is that which will *sometimes* be exhausted but not ‘overdrawn’ – the last unit is drawn right when the last customer is satisfied. We (collectively) under-invest in storage (presumably capacity to store and commodity production to be stored, or both), so periodically the last unit is drawn *before* the last customer is satisfied – and price caps (and other interference) makes the problem worse.

    Turning to non-storable commodities (electricity being everyone’s favourite), it seems that they are subject to price spikes *because* they are non-storable: when the grid is running at the maximum (either no more generation available, or the available generation is on the other side of a transmission constraint), then we have the same problem of demand exceeding supply and the last customer is left unsatisfied. Again, price caps (etc) make the problem worse.

    Is there any need to distinguish between storable and non-storable commodities? It seems that the general statement is that “all commodities suffer from price spikes.” While the argument is often made that storable commodities do not (since storage stocks buffer the shortfall), they still do because in aggregate we under-invest in storage – I suspect because there are limited ways to extract the storage value from the last customer, not least the political posturing that attacks ‘gouging’ and ‘profiteering.’

    Are there any commodities that do not experience price spikes?

    Comment by dcardno — October 4, 2021 @ 10:55 am

  6. Is it true that container ship back-ups and shortages of truck drivers, etc., are the result of covid-related entry bans and enforced unemployment of the “unvaccinated“(sic)?

    Comment by Pat Frank — October 4, 2021 @ 4:42 pm

  7. Prof. basically your argument is that the current spike is a run-of the mill spikedue to the the nature of the nat gas market (plus or minus the odd government intervention)
    What about the structural shifts that have occured and that are cited, in various places. They seem to be more long term, i.e. affecting the average price level of opex commodities:

    – lack of storage capacity (https://www.ft.com/content/760324ba-f9f3-4d3c-9f44-c49c731f2f33) due to previous underinvestment (driven by price caps you mention?)
    – structural reduction in supply due to underinvestment, but also due to a weak rebound in shale drilling where nat gas used to be a “waste” product.
    – stronger rebound in fossil fuel demand than anyone expected (that EV transformation does not seem to kill oil) eve before a full recovery of aviation demand
    – also the whole western world seems intent to replicate Germany’s disastrous “Energiewende” resulting in even less storage space (more and larger spikes?) and more underinvestment and at the same time increasing the need for more backup infrastructure,i.e. fossil fuel demand.
    – the EV transormation which, unless electricity is generated by nuclear, results in more demand for fossil fueals due to lower energy conversion..

    How do you view these arguments and how long, in your opinion, does it take to adress them (under the irrational assumption of havint the political will to adress them?

    Comment by Viennacapitalist — October 5, 2021 @ 2:05 am

  8. I’ve heard that China’s inability to generate electricity profitably is made worse by their refusal to buy cheaper Australian coal, preferring to get it elsewhere at higher cost for political reasons…

    @Vienna: “the EV transormation which, unless electricity is generated by nuclear, results in more demand for fossil fueals due to lower energy conversion”. This is a commonly repeated trope of the fossil fuel industry. EVs are ridiculously efficient, and there’s been lots of research indicating that (especially if the electricity comes a combined-heat-power plant), then an EV is far more efficient (even taking into account the embodied energy of the battery pack, and even if the energy source is mostly coal).

    Comment by HibernoFrog — October 5, 2021 @ 2:27 am

  9. @Pat Not in the UK. Our truck driver shortage is partly due to us kicking out all those European truck drivers and not having any serious plans to replace them.

    I did wonder why our Govt didn’t temporarily ramp up fuel duties to dampen demand, but then it might not have played well politically given they were partly behind the crisis.

    Comment by David Mercer — October 5, 2021 @ 4:28 am

  10. @ Hiberno. I am not engineer, but the argument that burning the oil directly in the tank, instead of using it to generate electricity (that’s the non-nuclear part) which then needs to be transported and stored to be ultimately move your car seems sound to me.
    On each of those intermediate steps (transport and storage) you loose tremendous amounts of energy – burning oil directly where it is needed seems to be more energy efficient…
    This is why every physicist, I have talked to, told me that solar panels in the Sahara to power Europe (everything lost to transport) as well as offshore Wind parks in the north sea in Germany are an utopian idea…
    But I am open to new inputs on that matter…

    Comment by Viennacapitalist — October 5, 2021 @ 6:38 am

  11. Vienna Cap:
    Solar panels in the Sahara probably doesn’t make sense, but burning hydrocarbons centrally and distributing the product as electrical energy might. Caution – I’m no engineer, either, but I work around this stuff a lot. An internal combustion auto engine might be 25%-30% efficient in turning chemical energy into mechanical energy, while an electric motor in a similar car might be 95% efficient in turning electrical energy into mechanical. Let’s assume the battery is 80% efficient on the round-trip from electrical -> chemical -> electrical (which isn’t too far off. The big gain is that a large power plant might have a heat rate of (maybe) 7,200 GJ/GWh – that’s 50% efficiency. In North America, we are probably not looking at transmission losses higher than 5%, since big thermal plants can be built close to the load; short distance = low loses. There are probably relative efficiencies in bringing fossil fuel to the centralized power plant, compared to an automobile gas tank – but I’ll ignore those, mainly because I have no idea what they are.
    From starting energy in the fuel the IC engine gives us:
    100% (fuel)
    *25 to 30% (mechanical conversion)
    = 30%± (available mechanical energy)
    From starting energy in the fuel the central generation / EV approach gives us:
    100% (fuel)
    * 50% (power station efficiency)
    * 95% (transmission / distribution losses)
    * 80% (battery losses)
    * 95% (mechanical conversion)
    = ~36% (available mechanical energy)

    The pint isn’t the exact comparison (since the numbers are all made up) but that the double-conversion isn’t necessarily a killer, due to the higher efficiency of the central station conversion. As Hiberno notes, central stations can be even more efficient if they are configured for CHP – but in part that means you have to be in a place that needs low-grade heat for a good chunk of the year; some do, some don’t.

    Comment by dcardno — October 5, 2021 @ 2:56 pm

  12. @Professor: What happened during the “Valentine’s Day Massacre” in Texas was something we learned about 40 years ago in my grad-level Power Transmission Engineering class at Georgia Tech — The “Texas Exception” — and it was only a matter of time when their grid would collapse.

    The way our national power grid is put together is we have around 20 or so “power pools” across the country, such as the well–run PJM (Pennsy–Jersey–Maryland) pool. These pools are tied together into two nationwide “grids” where power can be passed around as needed to cover scheduled or emergency generator outages, transmission line outages, etc… to maintain grid stability and robustness.

    However, Texas’ oversized ego decided to “go it alone” over 40 years ago (I don’t know when) and .NOT. connect into the nationwide grid for 90% of the state — Only the very west part around El Paso is connected, and they were unaffected, as when the cold weather hit and the wind turbines froze because they didn’t have the winterizing kits (to cut CapEx), they were able to “wheel in” power from the massive coal–fired stations around Four Corners — Something the rest of the Lone Star state couldn’t do… So they had a massive blackout.

    We had plenty of power here in the Southeast, between Duke Power, TVA, and The Southern Company (the second largest power generator in the US) — but no way to get the juice to them.

    Forty years ago, or even 20 years ago, Texas would have survived the deep freeze and kept the lights on; but now with 25% of their generating capacity consisting of “rainbows & unicorns,” they need to swallow their pride and connect the 90% of their state to the rest of the grid.

    Yours truly,
    Dan Schwartz,
    Atlanta

    Comment by Dan Schwartz — October 5, 2021 @ 8:00 pm

  13. @Dcardno, ViennaC: That’s about it, yeah, Dcardno’s summary is excellent. I’m mainly going by the usually very trustworthy Youtube channel Engineering Explained, who is an automotive engineer who has reviewed the literature: https://www.youtube.com/watch?v=6RhtiPefVzM and concludes that EVs are at least equal in CO2 (as a proxy for primary energy use) and in many cases are better. We should also not forget the energy used to extract and transport the fossil fuels, which has a noteworthy impact too (Ref this really well made video, but fair warning, the source is unlikely to be impartial: https://www.youtube.com/watch?v=mk-LnUYEXuM ).

    I think that using solar panels to do P2L (i.e. synthesize petrol and diesel from C02, water and energy) in the desert might be do-able if energy prices stay high: We transport oil from the desert all the time anyway, and solar is bar-none the cheapest source of energy (provided you don’t care about intermittency, which a P2L plant might not need to).

    Comment by HibernoFrog — October 6, 2021 @ 5:29 am

  14. You chaps may want to check out the Desertec project. Its now defunct but was sort-of a good idea, albeit with some major technical challenges. A project of this scale might have stood a chance if the Germans hadn’t been behind it. Still, it did serve a purpose in setting the renewables rabbit running in various north African leaders’ minds.

    @Hiberno: I doubt you’d go as far as synthesizing petrol or diesel from ‘green’ hydrogen, more likely smaller molecules like DME or ammonia to make use of the gas transportation infrastructure.

    Comment by David Mercer — October 6, 2021 @ 10:43 am

  15. David Mercer – I don’t think the existing gas pipeline infrastructure is useful for ammonia, is it? Since it is built to transport a gas under pressure, and not a liquid?

    Comment by dcardno — October 6, 2021 @ 6:22 pm

  16. @ dcardno, HibernoFrog
    Thanx for the input, it is up to the conversion ratio, obviously. It’s just that I had much higher battery losses and much higher mechanical conversion in mind – according to a colleague of mine who is a nuclear engineer and quite a good hobby car mechanic (good mixture of theory and practice).
    I remember now, he also mentioned the importance of energy loss due to transport as an underestimated factor. Electricity loss is a function of distance (therefore no Sahara) and our current grid network is based on centralized power distribution whereas to make EV’s viable decentralized networks (ubiquitous charging) would have to be built (smaller units, less economies of scale, new investment, more space for the new power stations, etc.) in order to make it viable from a transportation-loss perspective.
    Hiberno
    Will have look at the videos. I would not go into the CO2 costs of oil extraction to keep our analysis simple, not because it is not important. Obviously, to evaluate the alternatives that we would have to factor in production (AND disposal, wonder why nobody discusses about that.) of battery cells which is quite dirty no way you put it.

    Comment by viennacapitalist — October 7, 2021 @ 1:38 am

  17. I’ve read somewhere that electric cars are about 24% heavier than equivalent ICE cars.

    That extra weight has to be carried around all the time but somehow, I have never seen an estimate of the extra amount of energy that will be required to carry it. Is it included in your calculations of available mechanical energy?

    Comment by Monoi — October 7, 2021 @ 2:36 am

  18. @dcardno. I didn’t specify pipelines, did I? Those LNG ships fall under ‘infrastructure’ too.

    Comment by David Mercer — October 7, 2021 @ 5:19 am

  19. David Mercer – fair enough; I hadn’t thought of shipping ammonia instead of LNG (funny – I used to be in the ammonia business in a small way; I shouldn’t have a blind spot there).
    Vienna Capitalist – yes, electric transport is going to overtax the current grid (no pun intended), wherever it is rolled out (ditto).

    Comment by dcardno — October 7, 2021 @ 10:40 am

  20. Monoi – that’s an excellent point, and no, the higher conversion efficiency is not adjusted for the heavier vehicle.

    Comment by dcardno — October 8, 2021 @ 7:17 pm

  21. “* 50% (power station efficiency)
    * 95% (transmission / distribution losses)
    * 80% (battery losses)
    * 95% (mechanical conversion)”

    I may be showing my age but some of those those numbers look a bit optimistic to me.

    WKPD “A simple cycle gas turbine achieves energy conversion efficiencies from 20 to 35%. Typical coal-based power plants operating at steam pressures of 170 bar and 570 °C run at efficiency of 35 to 38%, with state-of-the-art fossil fuel plants at 46% efficiency.” It seems you’d probably have to build new power stations to get anywhere near 50% efficiency.

    In the UK “On the Transmission network, the percentage of network losses is lower than on the distribution network. Citizens Advice suggests that about 1.7% of the electricity transferred over the transmission network is lost, and a further 5-8% is lost over the distribution networks”.

    On ICE engines: WKPD again – “Modern gasoline engines have a maximum thermal efficiency of more than 50%, but road legal cars are only about 20% to 35%”. [I add a personal guess that a petrol/electric hybrid should manage a somewhat higher efficiency because the petrol engine can spend more of its time near peak efficiency.] And “Engines in large diesel trucks, buses, and newer diesel cars can achieve peak efficiencies around 45%.”

    So it seems that Diesel would outperform electric vehicles. Thinks – so that’s why there’s been a recent regulatory crackdown on diesel. The cunning bastards!

    Comment by dearieme — October 9, 2021 @ 9:28 am

  22. @dcardno: I must congratulate you on such an explicit, checkable calculation. I compare it with this mendacious effort from the US Dept of Energy (mendacious because the comparison is deliberately misleading):

    “EVs convert over 77% of the electrical energy from the grid to power at the wheels. Conventional gasoline vehicles only convert about 12%–30% of the energy stored in gasoline to power at the wheels.”

    Comment by dearieme — October 9, 2021 @ 9:45 am

  23. dearieme – thanks for additional data. Maybe I shouldn’t say “additional” but “some” – I was making it up as I went along, although the numbers are not a long way off. I did assume nice, large, (and new) combined-cycle central stations (and 505 efficiency is not a bad approximation), since if we are serious about electrifying transport we are going to have to increase our electrical capability by a significant amount – so there will be lots of new-build capacity about. In my jurisdiction, electrification of light transport (gasoline powered, so no big rigs) will need 40 to 50% more electrical energy than we currently produce. Adding heavy transport just makes the load growth that much higher. The current electric system took over a century to create: how long do you think it will take to augment it by roughly half – especially considering that when it was largely developed public consultation consisted of a notice telling people to get the hell out of the way. That’s not the way we build things any more, is it?

    Yes – that Dept of Energy calculation is deliberately misleading. For more of the same, I was looking at a solar power promoting association in our area lately. Their comparison was between plant-gate cost of PV solar (IIRC they say $50 to $70 per MWh) to the residential meter price of electricity. That’s great if you live at the plant gate (and don’t mind your electricity going off when it’s dark, but for the rest of us that’s no more use than knowing what a silicon ingot costs when we want a new iPhone. It also leaves aside that when we have tried to contract for grid-scale solar the developers don’t quote anything like $70/MWh.

    Comment by dcardno — October 9, 2021 @ 12:51 pm

  24. Arrgh
    not 505 efficiency / “50% efficiency”

    Comment by dcardno — October 9, 2021 @ 12:52 pm

  25. I’d have guessed that EVs are most attractive when they can top up using off-peak electricity – which would also reduce the immediate requirement for new power stations and new transmission lines. Just flog your existing kit harder.

    But if a lot of solar power stations are to be built in low latitude places that perhaps mean that the cars should be charged during the day – when they may well be moving!

    As for the convenience of charging: we have our parking space at the front of the house where it would be easy. The offspring, however, live in terraced houses or apartments where there is no obviously easy way to do it.

    I suspect that having an EV as the household’s second car might suit some prosperous families. As long as they follow GM’s advice and never park them within 50 feet of another vehicle, nor in an underground car park; nor should they charge them in a garage connected to a house. Ah well, teething problems, eh?

    Comment by dearieme — October 9, 2021 @ 1:37 pm

  26. Dearieme – yes, EVs make much more sense if they charge at night… but that implies residential charging – and that means the distribution network has to be upgraded. One of the problems is that the energy provider doesn’t know which house is going to buy an EV, or when – so all houses have to be capable, and soon (assuming we are talking about street-level parking). I’m not sure how curb-side charging would work – park and pay at the charger, perhaps? I work at a business that is encouraging EVs, so our parkades all have three or four charging stations (I guess that’s about 1% of the total spaces – maybe there are more that I just haven’t noticed). I’m not part of it since I don’t have an EV, but apparently there are some fairly heated e-mail discussions about who has been hogging the chargers, who has to move their (presumably now charged) car, who is next in line, and so on. I imagine curb-side charging would run into the same sort of issues, except at night.
    I can sort of see an EV as a second car, maybe.

    Comment by dcardno — October 9, 2021 @ 3:10 pm

  27. @HibernoFrog Who said anything about CO2? If we ignore that, EV’s offer a compelling propulsion system, especially for buses & trucks now that Li battery technology has rapidly advanced the last decade.

    To give you an idea how compelling electric propulsion is, SEPTA has been running trackless trollies (steerable electric buses with two pantographs) in Philadelphia for decades. [In fact, I’m proposing this for the MARTA #19 Clairmont Road and #39 Buford Hwy routes!]

    If you’re concerned that some retard like Greta Thunberg will bitch about CO2, we’re taking care of that with more nuclear power down here in Dixie, with Georgia Power’s Plant Vogtle reactors 3 & 4 coming online soon.

    Dan Schwartz
    Atlanta

    Comment by Dan Schwartz — October 10, 2021 @ 11:43 am

  28. Dan Schwartz – how will pantograph systems work with individual vehicles – my guess is that they won’t – and that is what has been under discussion. I am not sure how battery technology affects trolleys – the whole point is that you don’t carry (significant) batteries. Could you expand?

    Comment by dcardno, — October 10, 2021 @ 11:25 pm

  29. @Monoi: The extra weight of EVs is mostly mitigated by their higher use of regenerative braking (there’s a reason why Tesla owners have to get their brake calipers lubricated periodically). The extra weight will cause higher rolling resistance, but the lack of cooling drag reduces air resistance – I don’t know if these cancel out, but these are all only partial contributors – they’re not going to completely overturn the situation. Anyway, it’s easy enough to compare the energy efficiency of EVs and ICEs at the point of consumption, which would by definition take into account the weight – that leaves the more nebulous question of the grid supplying those EVs.

    @Dan: I might counter-argue that the economic argument in favour of EVs (where they meet the requirements of the use-case, obviously) has already been made by the market. However, as you’re the sort of person who goes around calling children retards, I might not bother.

    @David, Viennac, Dcardno: Isn’t ammonia a gas? Well, anyway, there’s a lot of talk about running ships on ammonia, so yes indeed, maybe producing and shipping ammonia is a better idea than transporting manufactured petrol/diesel. I’d prefer the latter though: I like my vroom-vroom noises…

    Comment by HibernoFrog — October 11, 2021 @ 2:11 am

  30. ” Isn’t ammonia a gas?” It depends.

    Comment by dearieme — October 11, 2021 @ 6:47 am

  31. Hiberno – Brain cramp. Ammonia is a gas at STP, but it’s so easy to liquefy (-35ish °C) that in my experience it is usually liquefied for transport or distribution.

    Comment by dcardno — October 11, 2021 @ 3:49 pm

  32. @dearieme. Isn’t that true of everything? 😉 Pressure, temperature. Solid. Liquid. Gas.

    Comment by cpirrong — October 12, 2021 @ 3:13 pm

  33. @HibernoFrog

    I’m in Atlanta, and the grid here in Dixie is probably the strongest in the world, as our pool includes Duke Power, TVA, and The Southern Company, which is heavily nuclear and hydro. In fact, Georgia Power’s Plant Vogtle units 3 & 4 will soon be coming online, adding another 2200 MW of clean nuclear power to our grid.

    Also, I’m a Georgia Tech EE grad focusing on Power Systems Engineering; and as most of our classes were taught by Georgia Power PhD’s we studied the grid here in the southeast. (Georgia Power is part of The Southern Company, which is the second–largest electrical generator in the US.)

    Basically, our transmission and subtransmission systems down here are robust enough to easily accommodate datacenters, which typically consume 50 MW, without even blinking.

    We have several MARTA bus routes—Notably the busy #39 Buford Hwy, which I frequent—which are mostly straight, and would benefit if run with trackless trollies, with battery backup at each end, when they need to go around corners at the subway stations.

    If you’ve never seen a trackless trolley, go to Philly, where SEPTA runs them on certain routes, such as on the Tasker St, Morris St, and Snyder Ave routes, which are mostly straight.

    Basically, a trackless trolley gives you the efficiency and economy of an electric trolley, without those pesky trolley tracks in the street. Wikipedia calls them “Trolleybus,” which may be a more accurate description.

    I’m actually talking to my engineering colleagues down at MARTA’s HQ at Lindbergh Center about installing a 2–wire overhead system on both Buford Hwy and Peachtree Industrial: Basically, it involves a precision GPS–based system which will lower the pantographs near the endpoints and switch to battery power so the twox2 overhead wires don’t need to go around messy 90° corners; and then raise them when the “trolleybus” goes on the long, straight sections.

    Dan Schwartz,
    Atlanta.

    Comment by Dan Schwartz — October 14, 2021 @ 10:26 am

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