August 2019 | Point of View

Reducing transportation energy use—opportunities to scale

The National Academies of Sciences, Engineering, and Medicine reports that 28% of energy used in the United States is for transportation, moving people and goods. Transport vehicles in this context include automobiles, motorcycles, trucks (light, medium, and heavy duty), buses, trains, aircraft, and water-going vessels. Of these vehicles, approximately 58% of the related energy use is from cars, light-duty trucks, and motorcycles, with the remaining shares being other trucks (23%), aircraft (8%), boats and ships (4%), and trains and buses (3%). Pipelines account for 4% of transportation energy use, transporting liquids and gases across the United States.

It is worth noting that greenhouse gas (GHG) emissions reported by the US Environmental Protection Agency (EPA) are greatest in the transportation sector (29%), followed by electricity (28%), industry (22%), commercial and residential (22%), and agriculture (9%), as illustrated in Figure 1 .2 This suggests, as many know, that any serious effort to reduce GHG emissions—as many states and municipalities and businesses and consumers have pledged—requires reducing energy use and, therefore, GHG emissions in the transportation sector.

Strategies for reducing GHG emissions within the transportation sector can include improving corporate average fuel economy standards (CAFE) for automobiles and trucks, reducing vehicle miles traveled (VMT), removing older inefficient vehicles from roads and replacing them with higher-efficiency vehicles, increasing use of public transportation, switching fuels used to power vehicles away from petroleum to cleaner fuel alternatives, and transitioning away from internal combustion engines.  

By some estimates, the total number of vehicle miles traveled in the United States is projected to grow by approximately 23% over the next two decades, increasing the demand for transportation fuels. However, given expected advances in transportation efficiency and changes in the types of vehicles purchased, demand for fuels used in transportation is projected to be less than 1%. This means gains in vehicle efficiency and type can be expected to offset any increase in energy used from the anticipated increase in VMT.

The Need 

The National Academies report cited earlier notes that 92% of all energy used in the transportation sector is from the combustion of gasoline and diesel fuel: “While powering engines, combustion of gasoline and diesel fuel emits carbon dioxide (CO2), as well as particulate matter, oxides of nitrogen (a prime component of “smog”), carbon monoxide, and unburned hydrocarbons. Those effects can be long-lived: when CO2 is released into the atmosphere, it functions as a heat-trapping greenhouse gas for as long as a century or more.” Simply stated, reducing combustion of fuels in the transportation sector is critical to states and municipalities and businesses and consumers interested in reducing GHG emissions as a strategy for combating climate change.

Automotive companies today are offering electric and hybrid electric vehicles as alternatives to internal combustion engine vehicles, including General Motors, Chrysler, Ford, Volkswagen, Tesla, Toyota, BMW, Nissan, and Hyundai, to name a few. Other alternatives to the internal combustion engine exist in small and niche applications, including hydrogen- and natural gas–powered vehicles, both reducing GHG emissions from what internal combustion engines would have otherwise emitted. 

The primary focus of automotive companies and public policy makers is a bet that hybrid electric vehicles transitioning over the coming decade to electric-only vehicles represents the best of existing technologies to reduce GHG emissions in transportation. Thirty-one states and the District of Columbia have incentive programs in place to support electric vehicle purchases and infrastructure development. Incentives take the form of rebates or subsidies for electric vehicle purchases or leases and charging infrastructure purchases, special rates and electricity rate structures for vehicle charging, use of high-occupancy vehicle lanes on intrastate highways, and tax credits for vehicle purchases. Some states offer such incentives for other alternative fuels like hydrogen as well, but such incentives are primarily for EVs.

Several commonly cited barriers to widespread adoption of EVs by consumers and businesses, include range-anxiety (battery depletion during trip), high initial cost premium above conventional vehicle purchase, lack of sufficient charging infrastructure, and skilled technicians for servicing EVs, among others. Not often talked about but increasingly likely to be a barrier to widespread adoption of EVs is the robustness and reliability of electric utility distribution system infrastructure to support charging stations strategically located on the grid.

As written in this column many times, utility regulators and utility planners need to ensure EV charging infrastructure can be supported. We see charging stations popping up at retail outlets, strip malls, parking lots, commercial buildings and industrial buildings, banks, grocery stores, and the like. The number of charging stations is but a few, because demand is not enough currently to support many charging stations at any given location. As demand increases and charging stations are added, distribution utilities must be able to meet the load requirements of many vehicles charging simultaneously at any given location.

With little history to draw upon for determining what this demand load profile might be, utilities are at a disadvantage for building distribution system infrastructure now to support such uncertain load growth. More than likely, new substations, feeders, and grid-edge resources will need to be added to support EV infrastructure as it gets developed and used. The grid infrastructure should not be a barrier to EV market penetration. We know enough now to start planning for widespread electrification of transportation and the need to modernize the electric grid. Particular emphasis should be given to charging infrastructure needs that support emergency services and evacuation routes, for good reason.

The Challenge 

The changes and pace of change in the utility industry are bumping up against regulatory barriers that, if not dealt with, might ultimately hinder widespread adoption of EVs and new grid-edge technologies and related grid-modernization investments. Regulation of electricity rates for different classes of customers and end-uses, asset ownership of EV infrastructure, and customer class cross-subsidization do not easily lend themselves to traditional “cost-of-service” regulation, particularly as it relates to implementing public policy.

The role of regulation and of regulated utilities in supporting grid-edge distributed energy resource technologies, including EV charging stations, needs to be resolved. Recognizing that vertically integrated utilities might face different regulatory challenges than utilities owning transmission and distribution infrastructure only, both utility business models need a fresh look from regulators to determine the most efficient and cost-effective way to reduce GHG emissions in the transportation sector. Electrification of transportation, and utility investment to support it, can quickly scale the industry and most readily put states and municipalities on a path to meet their GHG emission-reduction goals.  

DeCotis, Paul A. (Sept. 2019). “Reducing Transportation Energy Use—Opportunities to Scale.” Natural Gas & Electricity Journal. 36/2, ©2019 Wiley Periodicals, Inc., a Wiley company.

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