California Sales Ban of New Gasoline & Diesel Vehicles Jolts Half-Dead Business Model of Electric Utilities & Power Producers, Including in Other States

A light goes on after more than a decade of falling electricity demand. No business wants to operate in a declining industry.

By Wolf Richter for WOLF STREET.

You could practically hear the Champagne bottles pop during electric-utility industry Zoom meetings when California Governor Gavin Newsom issued the executive order to phase out the sale of new cars and light trucks with internal combustion engines by 2035 in the state – though sales of used ICE vehicles would continue beyond that date.

While the announcement was technology-neutral – “all new passenger vehicles to be zero-emission by 2035,” it said – the top contenders are battery-electric vehicles (EVs), with hydrogen-fuel-cell vehicles running in distant second place. EVs would create demand for electricity.

California’s electric utilities and power producers, and power producers in other states from which California buys electricity, have had a big problem since 2008: Despite 8% population growth in the state and 32% “real” GDP growth (adjusted for inflation), electricity sales to end-users peaked in 2008 and then zigzagged down, eventually by 5% to 255,224 gigagwatthours in 2018, the lowest since 2005, according to the latest annual data available from the EIA:

The drop in electricity demand was due to a long list of efficiency improvements, such as the switch from incandescent light bulbs to florescent lights and then to LED lights, more efficient lighting systems in cities and commercial areas, more efficient electrical equipment, such as air conditioners for businesses and households, etc. In addition, rooftop solar power production by households expanded over the years and ate into sales by utilities.

Maintaining the costly infrastructure is an expense that cuts earnings, and when demand declines, Wall Street hates you for reducing earnings by doing maintenance and instead wants you to increase earnings by cutting maintenance (with catastrophic consequences).

But expanding the infrastructure to accommodate growing demand is a capital investment funded by cheap debt from Wall Street. The investment and debt initially don’t impact earnings but are put on the balance sheet as assets and liabilities. The investment is depreciated in small increments over decades and the interest on the debt is expensed. In return, the investment generates revenue growth.

That has always been the business model of utilities: Borrow cheaply, invest in capacity additions, and gradually increase sales and earnings that allow you to pay gradually increasing dividends, and Wall Street loves you for it.

But that model is based on steadily rising electricity demand. And when demand began tanking in 2009, the model fell apart.

Idle capacity.

In addition to the long-term decline in demand for electricity – this is an issue in the US overall – the industry has the issue of enormous idle capacity in the middle of the night when electricity demand is low, compared to peak demand during hot afternoons.

The system is built to handle foreseeable peaks – such as 3 p.m., during a hot afternoon. This works until there’s a record heat wave when people are working from home, instead of in an office, and crank up the AC at home, while the nearly empty office buildings too crank up the AC, causing a historic spike in electricity demand, as we’ve had recently, which can jumble the equation for grid operators and power producers.

The irony is that the higher peaks are happening to the relentless drumbeat of overall declining electricity demand. But idle capacity is very expensive for utilities. And building enough idle capacity to meet never-before-seen peaks gets even more expensive.

Now there are hopes that EVs will help reduce this idle capacity when people charge up their EVs in their garages at night. This would provide a lot of revenues during a time of the night when the equipment would normally sit unused.

Charging stations.

Ideally, growth in electricity sales would come in two ways: from more consumers plugging in their EVs at home and running up their electricity bills (instead of their gasoline bills), and from an increasing number of charging stations that consumers increasingly frequent.

As of the last update from the EIA, California has 6,174 EV charging stations (with over 28,000 outlets) compared to 7,488 gas stations.

Charging stations are automated. There is no attendant, no cashier, no shop, no building. Just electrical equipment and parking. No tanker trucks have to be able to pull in to refill several underground tanks, as they do with gas stations, and the space needed is much smaller. There are no fuel spills and no leaking underground tanks, and no soil contamination that will doom the property value.

Charging stations are often near restaurants or some stores or a cafe where drivers can spend 30 minutes. Other drivers work or play video games in their cars.

Here in San Francisco, there is a charging station one block from our place, with several superchargers that can accommodate all EV models. When they built the facility a few years ago, PG&E put in an underground cable to a trunk line that can handle the electricity demand. The basic utility model: Borrow, make a capital investment, and collect revenues for decades to come. This is good business.

The nearest gas station is several blocks away, and since there is no competition and it’s in a touristy area, we lovingly call it “our rip-off station” and avoid it. The nearest competitive gas stations are a mile away. One after the other, gas stations have been shut down over the years, and the lots were fenced in and sat empty for years until eventually the contaminated soil was removed, and housing was built on top of it. That process of eliminating urban gas stations started years ago. Now it’s going to speed up.

Charging stations are a lot cheaper to build, and the utility will eagerly invest to provide the power, which then translates into decades of a growing revenue stream. That’s how a utility’s business model works.

Where’s the juice coming from?

In terms of power producers, the revenue opportunities spread out this way, according to the most recent annual data from the EIA (2018):

From other states: Nearly one-third of California’s electricity was purchased from power producers in other states, a good part of it renewable (hydropower, wind, and solar). In 2018, power from coal plants was down to 4% of total electricity demand in California and is expected to reach zero by 2026.

Selling electricity to California’s utilities is good business, and I assume the owners of the wind farms in West Texas – Texas being by far the largest wind power producer in the US – have figured this out too.

From California: A little over two-third of the electricity sold in California was produced in California. Nearly half of it came from renewables (hydropower, wind, solar, biomass, geothermal, etc.). Natural gas-fired power plants provided over 40%. Nuclear power was down to the two reactors at the Diablo Canyon power plant, to be retired in 2024. And coal-fired power generation is already finished in the state.

The problem for power producers and electric utilities has been the decade-long decline in demand. Now the hope is that EVs will change the equation – that eventually there will be enough EVs in the fleet to turn the curve around, to cause electricity demand to increase, and to cause idle capacity at night to be better utilized.

This process has been moving at a snail’s pace in recent years — as you can see in the above chart with the continued decline in electricity demand despite the rise in EV sales in California — and will be gradual going forward. Even if the sales ban on ICE vehicles in 2035 holds, there will still be a large number of ICE vehicles in the fleet by then. However slow this process may be, for electric utilities, it will be a breath of fresh air that may revitalize their half-dead business model.

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  215 comments for “California Sales Ban of New Gasoline & Diesel Vehicles Jolts Half-Dead Business Model of Electric Utilities & Power Producers, Including in Other States

  1. andy says:

    Power grid in Cali can barely handle current demand. Now imagine the amperage required to charge up millions of cars overnight. Single Tesla charge is 2-3 times the amount of electricity an average household consumes in a day. Still, nothing
    a Lord’s decree can”t fix.

    • Wolf Richter says:

      andy,

      READ THE ARTICLE!!!!!!!!!!!!!!!!!!!!!!!!!!

      Good lordy! Such nonsense. READ THE ARTICLE. You might actually learn something.

      • rhodium says:

        He does have a semi valid point. If all the cars become electric, that’s a pretty massive load on the grid. Of course it most likely won’t overload the grid when it’s already sized to handle large demand peaks, and at any given point usually has a lot of wasted capacity. Given the amount that people usually drive means they won’t need to do a full charge most of the time, charging can be spread out enough to easily not overload the grid. However, the electricity prices in the middle of the night may go up significantly, eliminating some of the current benefit of ev’s. On a heavily renewables based grid of the future this could actually tip things more in favor of hydrogen fuel cells in the end. Otherwise, you’ll be directly and indirectly paying for two sets of expensive batteries.

        • Joe Saba says:

          so Natural gas plants will take up ”load”
          can be fired up quickly
          oops how much pollution does power plant produce

      • Mike1 says:

        Not sure how you can argue California can handle demand when they, you know, can’t…
        It is all well and good to say things like “declining electricity demand” and ” historic spike in electricity demand” when it is also true that CA turns off the power when the freakin wind blows. There is demand for electricity when the wind blows.

        • Wolf Richter says:

          Mike1,

          You live in New Zealand. What do you know about California, other than what you read about it on Zero Hedge? Suddenly we’ve got all these California power experts here. Sheesh.

        • Mike1 says:

          Wolf I don’t live in NZ but congrats on reading the IP address info lol. I’m here for a few more weeks then I’ll be home.

          I own several businesses in CA these issues affect me deeply.

          Not trying to bust your balls but the electricity infrastructure in CA is f@#ked. Do you know what caused the Paradise fire? Genuinely heartbreaking stuff.

        • Wolf Richter says:

          Mike1,

          Let me tell you about the “wind” you mentioned: During fire season, they come down from the north and they’re hot and dry and get channeled at hill tops and can reach 100 mph and cause trees to topple and hit power lines or cause power lines to topple and wires to fall on vegetation and cause an instant conflagration. PG&E may turn off the power to those lines when this wind situation is threatening to occur. This is announced in advance.

          To say that this is a sign that there isn’t enough power generation capacity is just nuts. And that’s exactly what you said. That was the silliest thing I read here all day.

          It’s like saying Texas doesn’t have enough power generating capacity because the power goes out when a hurricane hits.

          If you cannot distinguish between power generating capacity and reacting to a natural disaster, you shouldn’t comment on an article like this. It comes across as the regular California-hater garbage.

      • Rcohn says:

        First , it’s debatable whether Newsom ‘s edict will hold up in the courts. Second if Newsom really wanted to address the CO2 issue , he needed to strike back at the greatest polluter by far ,China.He could just as easily issued an edict that the state of CAL will not buy certain goods from China by a much earlier date.
        I don’t know where you have been living but rolling blackouts have become too common in N. Cal. In fact these blackouts have created a whole new market for nat gas powered generators.
        What will replace the Diablo Creek nuclear plant in 2024. Small nuclear plants as advocated by Bill Gates ?
        NIMBY. Maybe in parts of SF currently occupied by soon to be vacant office towers?

      • Verum Locum says:

        Declining power demand also caused by industrial production leaving the state and the country. Lots of electricity needed to make an integrated chip or roll a 30-ton steel slab into sheets. Also your analysis ignores the reality of brown outs happening or being warned about in CA. In Northern California we were asked to reduce electricity usage just a few weeks ago. It seems to be a regular occurrence around here.

        • Wolf Richter says:

          Verum Locum,

          “Also your analysis ignores the reality of brown outs….”

          Just because you didn’t read it, doesn’t mean I didn’t write it. I explained why it occurred about halfway down in the article):

          The system is built to handle foreseeable peaks – such as 3 p.m., during a hot afternoon. This works until there’s a record heat wave when people are working from home, instead of in an office, and crank up the AC at home, while the nearly empty office buildings too crank up the AC, causing a historic spike in electricity demand, as we’ve had recently, which can jumble the equation for grid operators and power producers.

          The irony is that the higher peaks are happening to the relentless drumbeat of overall declining electricity demand. But idle capacity is very expensive for utilities. And building enough idle capacity to meet never-before-seen peaks gets even more expensive.

        • Verum L says:

          Wolf, I was replying to your post above. Obviously you forgot what you had written. Or it was poorly written.

    • Max Power says:

      You have a common misconception regarding electric vehicles and how they work in the real world…

      You’re forgetting that 90% percent of folks are not going to need to charge that Tesla’s entire battery every day. They only need to top off the 30-40 miles of typical daily usage. All you need for that actually is just to trickle charge the car overnight (which is an off-peak time for the utilities anyway) from a plain 110V household socket. That means slow and constant electricity usage throughout the night which is exactly the type of usage utilities love as it is constant and very predictable and allows them to run very efficient base-load power plants.

      • RepubAnon says:

        I only charge my electric car twice a week, at night and on weekends when demand is low. With a 200+ mile range, that’s all I need.

        As more homes get solar and battery backup, demand will flatten. This lowers the need for expensive standby generators. Plus, decentralized power is harder to disrupt. What’s not to like?

        • MCH says:

          It’s funny, power generation is slowly getting privatized for higher incomes, a combo of battery and solar almost makes me wonder if one could become completely independent of PG&E with sufficient batteries.

          I am curious how much of PG&E business will shift to maintaining infrastructure and how much more they will do power generation.

          Curious to see how much effort they will put into batteries if they really push for all renewables. It might make things dicey with uncertainty around wind during the course of each day. But as long as they have enough nat has, they should be ok.

        • George says:

          MCH- a combo of battery and solar almost makes me wonder if one could become completely independent of PG&E with sufficient batteries

          this is the entire idea behind battery storage / tesla power wall, etc. only disconnecting from their grid is not free and in some cases expensive to the point due diligence is required. Utilities have a history of fighting renewables when IMO they should have been embracing them from the start. Think of what the lease revenue on PV panels and power walls would have meant to them. Now they are playing catch up.

    • ultra says:

      Most people will charge their electric vehicles at night, when demand for electricity is lowest (the cost may be lower too). This will mitigate any problems with overload.

  2. Martok says:

    Wolf,

    This is a great article and the the 2035 EV mandate is commendable by the the Governor.

    I’m amazed by the wind, solar, geothermal that is prevalent in CA and the nation, the dependency on the fossil fuels industry is ridiculous due to pollution and “Climate Change”.

    CA has always led the way to safety and fuel efficiencies that the rest of the country slowly adopted, and Gov Newsom is so right with his mandates, and his comment about about those who doubt “Climate Change” to “come to CA to see it”

    These kinds of mandates and changes will open up millions of jobs that will spread across the US to give us a chance to reverse/halt “Climate Change” – so this planet can exist!

    • Dave says:

      I try to stay away from climate change as a topic, as the politics around it are toxic. I do strongly support a move away from fossil fuels as it will benefit us as a nation geopolitically.

      Imagine for a minute a world not dependent on middle east crude. What would happen to all the wars and conflict secondary to securing the predominant energy source in the middle east?

      I have read elsewhere that the greatest transfer of wealth in history has been the money flowing into the middle east for crude. Where there is great wealth or resources conflict is not far behind.

      I would absolutely LOVE it if the middle east was completely neutered as a source of conflict. Granted it will be a long while until crude is not vital to the world as a source of energy, but one can hope we make fast in roads to eliminating our dependence and telling the middle east to piss off.

      • rankinfile says:

        The wars in the middle east would not cease.Quite the contrary actually,think about the revenue loss to those countries.Jihad would be widespread without an alternative to oil revenue.

        I guess we could just feed them opiates,like we did to the population of West Virginia.

      • Happy1 says:

        Amen on the neutering of the middle east as a source of conflict. Fracking has done more to that end for the US than EVs ever will.

        • Fat Chewer. says:

          You’re a fracking psycho. Subtract the harm done by this pathetic excuse for an industry and it’s in the deep negative zone.

    • Wolf Richter says:

      Martok,

      I’m not a fan of the mandate. I would have preferred for consumers to determine demand on their own, and that is already happening. I posted this show that the transition to EVs will be smooth and will be a good thing for utilities and power producers and numerous entities funding and building out the infrastructure (and oil companies – think of all the gas stations here – are hating it).

      • Martok says:

        Wolf,

        From my perspective in the mid-west, I have seen great changes from the policies of CA that led the rest of the country to adopt with regards to automobiles for the good of all, – these policies moved eastward.

        Otherwise I seriously doubt anything would have happened with pollution, safety, and mileage requirements, so that is why this mandate to me is bold and good.

        Yes you pointed out how the infrastructure would be a good thing and I agree for utilities and power producers, and I was surprised of all the EV stations.

        I will restate that these type of initiatives are good to to fight “Climate Change” which is a harsh scientific reality that we see with the massive fires in CA, Siberia, Australia, – receding ice caps in the Arctic, South Poles, Greenland, etc. – hard core science overrides politics.

        The resulting job and infrastructure creation will be incredible.

        • Old School says:

          From what I read the California fires have to do with forestry management practices and little if any to do with global warming. Politicians hurt their credibility if they lie about something like that.

        • buddhahacker says:

          Yep, Old School is correct. Over 60% of the property in California is owned/managed by the National Park Service or the Forestry Service. The vast majority of the recent fires were started by lightning from a defunct hurricane and nearly all of them on NPS or Forestry Service land. Due to poor forestry management practices and not maintaining fire breaks and roads the fires got out of control. The same happened at Yellowstone years ago when a large portion of it burned down.

          None of this was due to “Climate Change” or “Global Warming”.

      • gnokgnoh says:

        Wolf, not entirely sure why you’re not a fan of the mandate, other than a preference for the “free market,” or “market forces.” But government has always weighted the scales. Heavily. Comparisons of government intervention include the construction by Eisenhower of our interstate highway system, before a single Levittown suburb was built. He made sprawl and car culture inevitable. Also, many inner city trolley systems were sold off both privately and publicly to fossil fuel companies that quickly dismantled many of them.

        Nevertheless, the cost of EVs is dropping rapidly, and their maintenance costs are a fraction of an ICE car, until you have to replace the batteries. Not sure how long batteries last. I wish localism and public transportation were part of CA’s mandate, and they may yet be. The affordability of driving and maintaining an ICE car has been so low for so long for many reasons, many of which have little to do with a free market. You highlight other reasons for that, not just the road system (e.g. financing of unprofitable fracking).

        • Old School says:

          A localized economy can work but you will have a lower material standard are of living for sure.

          In theory electric cars should have lower maintenance cost, but I am pretty sure it’s not reality yet from things I have read regarding Tesla.

      • MCH says:

        Wolf,

        Martok does have a point about the impact CA has had. There is no denying that CA has pushed for improved fuel efficiency standards, and that it has improved a lot of things in automotive and for the world.

        I don’t think one should rely on the “market” and “consumers” to decide things, the consumers are nothing more than the herd that needs to be shown the way in many cases, although they do decide on what they’ll adapt. That usually needs a visionary (Jobs, Edison) for things like smart phones and electricity. The other alternatives for this kind of changes are government mandates or external events like natural disasters, wars, etc.

        That said, the mandate here though does smack a little of overreach, not in terms of what CA could be driving the country to, but it’s overall ambition. And the degree of change it is trying to force. This smacks of grandstanding from political point of view.

        First point, there seems to be a drive to go all in on renewables, favoring mostly solar and wind. That seems fine on the surface, but one has to account for the fact that there are other alternatives such as nuclear that should not be discounted. Push that one too far, and you can really throw CA economy out of whack. And good luck removing oil from the economy.

        Second point, CA is pushing this through market power like all of its other mandates. The two things that it had going in its favor previously were:

        1) the changes they asked for were incremental, i.e. improve efficiency on ICE. Auto companies could go for that, because they were improving on existing technology.

        2) massive market power, CA is a large economy, it keeps bragging about the fact it’s the fifth largest economy in the world. Up through the last decade, that continued to be true, car makers had to listen. But if that market power ever starts to wane, then CA starts to lose something huge, ability to influence. Once that’s lost, it’s hard to get back.

        There is a line between pushing for incremental improvements and driving wholesale change to large parts of the economy. Think that line just got crossed with this mandate. And if CA flops on this one, then perception (the ones that matter in industry) will change, and that won’t be good for anything.

        • Fat Chewer. says:

          A mandate implies both consensus and consent. At least for the majority. Yes, he does have a mandate and good on him for acting upon it. Elderly gentlemen wanting to burn gas in an ICE are the minority. They can be safely ignored. At the very least, their propaganda is dated, it has no cut through with younger people. Who cares about ICE, when you can have an EV?

        • Martok says:

          MCH,

          Very good points, well thought out, especially this:

          “2) massive market power, CA is a large economy, it keeps bragging about the fact it’s the fifth largest economy in the world. Up through the last decade, that continued to be true, car makers had to listen.”

          Since CA is the 5th largest economy, it has so much influence, or arguably can push the rest of the country forward with standards, – to me it’s good leadership.

          Tech and so many other innovations have come out of CA, that have changed the world for the better, and conversations here typically include:

          Well I heard in CA they do “___________” and everyone stops and listens closely.

        • Lee says:

          ” Elderly gentlemen wanting to burn gas in an ICE are the minority. ”

          What planet are you on?

          How many ICE’s ar there on the road now and how many EV’s?

          How many years will it take for EV’s to even become 10% of the vehicles on the road?

        • MCH says:

          @ Martok

          Be careful with the Kool-Aid. CA is successful for the same reason so many of the tech boom unicorns are coming out of the valley. A concentration of money and talent (the latter because it’s a place to get filthy rich)

          CA has market power, it has been studiously built up, but it needs to be carefully leveraged. But right now, a combination of demographic trends and fiscal realities could potentially erode that market power.

          Sure, as long as SV can maintain the cash machine, we can keep this boom going, but if the equilibrium gets disturbed too much… well. Remember EVs targeted the rich first, and let’s face it, they aren’t exactly making money hand over fist, no matter how much Elon wax poetic about the future of EV.

          That comment of yours: “Well I heard in CA they do “have poor ” and everyone stops and listens closely.” That knife cuts both ways.

      • DawnsEarlyLight says:

        Wolf,

        Maybe this will increase the use of residential (individual) solar and wind produced electricity. Does California provide a path/incentive for the individual to decrease the use of grid supplied electricity?

      • Agelbert says:

        Hi Wolf. I read your posts and admire your ability to connect all the financial dots using irrefutable facts with honesty and intellectual courage. I also enjoy the wit and snark in your posts and videos. You are a breath of fresh air exposing hard truths that too many in the “greed is good” crowd don’t want to admit.

        You said, “… the transition to EVs will be smooth and will be a good thing for utilities and power producers and numerous entities funding and building out the infrastructure (and oil companies – think of all the gas stations here – are hating it)”.

        Well said!

        I agree this will help EVs become more widespread. I canot afford one but I would love to have one.

        As to the mandate, considering all the totally unjustified subsidies for the oil companies AND (invisible to we-the-people but very real) massive subsidies for internal combustion powered automobiles for the last 100 years or so, this 2035 mandate is small potatoes, though a welcome bit of balance that is long overdue, to put it mildly.

        What I am saying is that government policy, not the “free market” (I agree with Economist Dean Baker that their ain’t no such animal. – SEE his book, “Rigged”. https://deanbaker.net/images/stories/documents/Rigged.pdf), gave an energy source monopoly to the fossil fuel corporations who pollute the crap out of our air, sea and land, while using part of their “profits” (“earned” from socializing the pollution costs to we-the-people) to buy politicians and strangle Renewable Energy technologies through propaganda and skullduggery.

        If we wish to preserve a viable biosphere for human civilization, using hydrocarbons as the main energy source of our economy must end very soon, to put it mildly. Replacing hydrocarbons with Renewable Energy is not simply a profit issue; it is an existential one. We have an ethical and moral imperative to do so, no matter what it costs. So, if anything, we need a lot more mandates that pick Renewable Energy as the winner-take-all with a lot bigger teeth sooner, not later.

        You may disagree with that because those mandates would interfere with market choices. I maintain that it is the Fossil Fuel Corporations, thanks to their bought-and-paid-fors in government, that have sabotaged free choice for energy products by we-the-people for well over 50 years.

        To give you an idea of how the profit over people and planet greedballs are still dragging their feet to clean up their planet polluting act, you may be interested in reading about what is going on with shipping right now (see below).

        📢 Loud Calls For Global Shipping To Ditch Fossil Fuels And Meet Climate Goals
        in International Shipping News 27/09/2020
        SNIPPETS:
        Shipping emits over 1 billion tons of carbon a year, making it the sixth-largest emitter in the world after China, U.S., India, Russia and Japan. These emissions have been growing significantly year on year, and are expected to be 50% higher by 2050, possibly tipping the world beyond its carbon budget.

        The Zero Carbon report highlights several pathways for how global shipping could transition from a heavy dependency on fossil fuels to alternative fuels. This would transform an industry that is a major contributor of greenhouse gas emissions into a multi-trillion dollar energy stimulus for a new green economy around the world.
        Shipping has a double-whammy fossil fuels problem.

        First, a significant proportion of global shipping revenues comes from transporting fossil fuels, such as the transportation of coal, oil, gas and LNG (which is responsible for highly toxic methane leaks across the supply chain).

        Second, large ocean ships are almost exclusively powered by fossil fuels. To make matters worse, it is not just any fossil fuel, but the very worst ☠️ sludge at the end of the oil refining process. This is why many point to the global shipping industry as essentially a half a trillion dollar subsidy for 💰😈 large oil companies.

        So the 60,000 large ocean vessels are essentially large oil-fired power stations in the middle of the ocean, attached to a transportation device. 🥺😖🤬
        Full article:
        https://www.hellenicshippingnews.com/loud-calls-for-global-shipping-to-ditch-fossil-fuels-and-meet-climate-goals/

        “Facts do not cease to exist because they are ignored.” — Aldous Huxley

        We need hydrocarbons like a dog needs ticks. We put up with them when we had no choice. We have a choice now to stop using those toxic hydrocarbon energy products now. Government policy needs to STOP mandating subsides for Oil corporations and, instead, START mandating those subsidies for Renewable Energy technologies, exactly as it did for Oil Corporations for the last century. Otherwise, as the old saying goes: “There is no economy on a dead planet”.

        “We do not need a ‘new’ business model for energy because we never had one. What we need, if we wish to avoid extinction, is to plug the environmental and equity costs of energy production and use into our planning and thinking. ” — A.G. Gelbert

        “We can’t have a healthy business on a sick planet.”– Ashley Orgain, manager of mission advocacy and outreach for Seventh Generation, Burlington, Vermont

      • Cas127 says:

        “for consumers to determine demand on their own, and that is already happening.”

        Hmm…Wolf, do you have any stats as to what percent of existing CA auto base is qualifying EV?

        What percent of annual CA auto sales is qualifying EV?

        That is the thing about “technology-forcing” gvt regulation…it assumes the G knows what it is doing and is predicting the future…in detail…correctly.

        A *lot* of unexpected problems can crop up when going from 7% new sale EV penetration (all state tax subsidized) to 100%.

        The CA G thought it was inerrant with the bullet train and utility oversight too…

        • Wolf Richter says:

          Cas127,

          Market share of new vehicle sales of EVs is around 6% in California, up from near zero a few years ago.

          ICE vehicle sales in California peaked in 2016 and have been declining since then. EV sales have been growing. That’s how that works. That’s why all manufacturers invest billions in EVs because that’s where the growth is.

    • John Taylor says:

      2035 is a long way off. I can understand the politics of looking pro-environment today, but in 15 years the mandate will either be delayed, cancelled, or a moot point.
      Business has a large say in how things are run, so if 10-12 years from now they start to expect an outsized impact, it will change.

  3. Engin-ear says:

    Good points, give hope.

    Yet… (sorry) this topic is too large for one article.

    Idle electric capacities are born from the policy “serve the peak demand whatever it takes”. So idle capacities should stay unless we define electric circuits of different priorities.

    Wind and solar are uncontrollable (but yes, predictable) therefore these renewables are of no help for peak management.

    “California households consume electric service at an average rate of 534 kWh per month in the summer months, and 459 kWh per month in the winter months.” (California Public Utilities Commission).

    If I translate 534Kwh into electric Tesla miles, it would make 2-3,000 miles per household per month. Seems Okay… but it doubles power draw for the household.

    Finally, energy mix. Currently Gas (34%) and Nuclear (9%) make 43% of California energy mix.

    If one is too dirty and other is too dangerous, the replacement is still to find.

    I am not in California, but the energy situation is the same in every developed region of the world.

    • Wolf Richter says:

      Engin-ear,

      No, that’s not how the math works. You need to understand the concept of idle capacity.

      That “534 kWh per month” per average household in the summer means: during a quarter of that time (6-8 hours every night), the household uses very little, and half of the time (about 12 hours every day), the household uses only a moderate amount, and the majority of the 534 kWh are used during just a quarter of the time in the afternoon.

      But you charge up your EV at night, when your household uses very little juice. So during that time, NO CAPACITY ADDITIONS are needed.

      In terms of overloading the system: It’s the brief spikes — a few minutes are enough — during peak hours that can overload the system and take it down. Those brief spikes can be handled by batteries. And that distributed battery system needed for that is starting to be built because it’s the cheapest way to accommodate those brief spikes.

      When there is demand, and profits, there will be supply. The problem has been the decline in demand, and so a refusal to build up idle capacity. When demand materializes — and the profit opportunities with it — the electricity industry will jump on it, as they already have on the small scale needed today (supplying charging stations with power).

      • Yancey Ward says:

        But you charge up your EV at night, when your household uses very little juice.

        No, you charge up your EV when you get home, or you charge it on the road somewhere. Sure, this will be at night for some people, but how true will it really be as a whole?

        • Wolf Richter says:

          You can put the charger on a timer to benefit from the cheap electricity in the middle of the night. Many people do that. If you drive 30 miles a day, it doesn’t take a lot to top off the battery.

      • joe2 says:

        Wolf – are all your calculations life-cycle based including mining, manufacturing, maintenance, disposal, and materials inflation? For example costed through a few cycles of equipment replacement factoring in inflation and materials recycling and geo-political material availability issues.
        I’ve seen articles on problems with wind generator lifetimes, blade disposal, raw materials shortages, and mining and manufacturing waste disposal costs.

        • Wolf Richter says:

          joe2,

          Do you have ANY idea how much it costs to build a nuclear power plant?? Even building gas-fired or coal-fired power plants is expensive. And they all have limited life spans and then have to be decommissioned and disposed of. No power plant is a god-given free thing. But the huge advantage that renewables plants have is that the FUEL IS FREE for the life of the equipment.

        • Adam Smith says:

          Good point, I always wondered why people think driving a 2-ton compact car that costs 2x the price of a gasoline car makes economic or environmental sense. Free markets allocate resources in the most efficient manner through the pricing and profit methods.

        • joe2 says:

          Wolf – you did not answer my question – life cycle system cost estimate comparison. I can be persuaded with facts but not hyperbole. Yes fission plants are ridiculously expensive, prone to construction corruption, catastrophic damage, and the disposal problematical. I am not a fan of them either. But I have seen only one attempt to comprehensively estimate life cycle renewable generator, distribution, battery costs and required materials availability and the conclusion was it is infeasible.

          For one example wind turbine blades are not reaching their expected lifetimes and lasting only 20 years while coal plants last over 50 years.
          Now oil and coal are limited also, but without an honest comparison of numbers it is all just flailing in the dark. I would push for a Manhattan style effort on fusion. One article I read complained about the “enormous” $40B spent on the experimental tokamak reactor. But $40B is peanuts when you are talking about replacing all energy sources and the trillions thrown around for a vague green new deal. And deuterium fusion fuel is also free.

      • Engin-ear says:

        Wolf,

        You are very rightly pointing out that instant power draw (~17kW for Tesla fast charging) is not at all cumulative power consumption over a month for an average household (500kW), thank you, it is a very necessary correction indeed.

      • DawnsEarlyLight says:

        Wolf,

        Do the electric meters in California record hourly usage? It would be great to actually get credit for using electricity during lower cost hours, rather than having the utilityl calculate usage at one rate.

        • Socal Rhino says:

          Socal Edison tracks usage by time of day and charges at different rates for peak and non-peak. We only do laundry on weekends for that reason.

      • Rcohn says:

        How about those renters who do not have a garage and park their cars on the street?

        • Wolf Richter says:

          Friend of mine does that. He goes to the charging station when he needs to, and while the car is charging up (30 min), he pops open his laptop, drinks his coffee, and works. I think one of the big benefits of an EV is that you can charge it up at home, so for me, that would make an EV less appealing. But I don’t like going to the gas station either, so…

        • a guy from Toronto says:

          That is main reason why I didn’t consider EV car. Wolf mentioned that you could work from car, not all professions have that option. I’m a mechanical engineer but my company does not encourage that practise.

          The other argument, that people in US does not consider, is that ICE is more robust in terms of providing autonomy and independence from the network. You could store fuel in canisters and continue to use car even if supply is interrupted. I lived through war and weeks long blackouts. I know that this sounds like science fiction to a person living in CA, but my point is that one shoe doesn’t fit all.

          EV, solar panels are good idea and I support them, but if people are serious about reducing pollution and emissions they should look at their habits, like stop buying cheap plastic crap, clothes that are shipped from abroad just because we want to indulge our shopping impulses or flying to Mexico for a Batchelor’s party.

    • Anthony A. says:

      Engin-ear:

      We will always need natural gas for peaking power plant turbines. And we will always need natural gas to make plastics. A world without crude oil/natural gas brings you to living conditions 200 years ago.

      I agree to the continued use and growth of EV’s, but I don’t believe “fraccing” will be eliminated (oil & gas production). By the way, we have been “fraccing” oil wells since the 1920’s (or earlier). How else do you get hydrocarbons out of tight formations?

    • Drunk Gambler says:

      Can you just buy gasoline cars in AZ and NV instead and still register them in CA?
      EV is a nightmare for long distance travel.

      • Patrick says:

        CA has a crazy law that any car or motorcycle, bought in another state, must have at least 7500 miles on it or it cannot be registered in CA (unless you were the registered owner in another state and are moving to CA). Check out CA DMV for the details.

    • Max Power says:

      “California households consume electric service at an average rate of 534 kWh per month in the summer months, and 459 kWh per month in the winter months.” (California Public Utilities Commission).

      If I translate 534Kwh into electric Tesla miles, it would make 2-3,000 miles per household per month. Seems Okay… but it doubles power draw for the household.

      This logic makes no sense. Why are you translating total normal house usage to equivalent Tesla miles? The two have nothing to do with each other.

      3,000 miles a month is 36,000 miles a year is way more than what most people drive. On Average, US drivers drive 13,500 miles per year. You should translate that to kWh and that would be the additional necessary power, not an arbitrary doubling of house usage.

      I think it is also likely that in a post-pandemic world that that 13,500 figure might go down.

  4. David Hall says:

    I read a warning from three days ago of PG&E power shutdowns in N. California affecting tens of thousands due to high winds. If they do not shut down, downed power lines may spark more deadly fires.

    Others forecast rolling black outs as the state tries to transition to more renewables. A million homes have solar panels. Homeowners want to buy house batteries and diesel generators.

    Meanwhile China and India increased coal consumption last year.

    • Wolf Richter says:

      Ever seen the blackouts along the Gulf Coast during a hurricane, and the downed power lines and all that?? And when the power goes out, the gas stations go out, and the payment systems go out.

      • nick kelly says:

        I’m not saying this to be difficult WR but it’s simply not the case that power outages create huge insurmountable problems for the dispensing of gasoline.

        ‘New York also became the third state to require that gas stations maintain backup power. This summer, state lawmakers approved a bill requiring almost half the gas stations in New York City, on Long Island, and in other downstate communities to install emergency switches to wire up with nearby backup power generators. By next April, strategically located stations within a half-mile of highway exits or evacuation routes must be connected to a backup generator within 24 hours of a declared emergency.’

        The above was from 2013 after Sandy. Florida was first, before that in I think 2007.

        As of the 3rd of this month 10 % of Louisiana
        had lost power for a week after Laura.
        With development of bigger better batteries, a day or so without even a generator should be feasible. Back up for payment systems will also require law but not much electrical energy.

        After the Quebec Ice Storm power was lost for months and a friend had to move to survive. There is downside to putting all faith in the grid.

      • nodecentrepublicansleft says:

        Wolf – I remember the gas rationing during the OPEC crisis as a child and always wondered when the hell we would start taking advantage of the FREE ENERGY coming down from the sun every day (I live in FL).

        The massive corporate interests that have fought (and continue to) against Solar Power will not give up easily. Too much $$$ is at stake.

        Re: hurricanes, I was the liaison between a major power co. and City Managers in a few Orlando market counties during Hurricane Charley aftermath in 2004.

        Some folks didn’t get their power turned back on for 3 – 4 months. Without power, it won’t feel like your living in the 21st century, but the 19th.

    • Brant Lee says:

      Then the US should be filling the empty containers going back to China with coal. I’m serious. Mandate a one for one container policy. Coal, lumber, ore, corn, etc. Our government never had a vision besides make the rich richer.

      • nick kelly says:

        Neither coal or ore are never shipped in containers. It is shipped in bulk carriers built for it that can’t handle anything else. Like a tanker can’t ship containers or coal.

        At the price of coal it wouldn’t begin to cover the handling and container rental.

      • Rcohn says:

        And the current trade deficit is the largest ever. Or economic policies of the last 26 years will go down as the dumbest in the history of the world

  5. Chloe says:

    Finally, some good news!

  6. Thomas Roberts says:

    If work from home becomes permanent, that should be a nice lovely drop in demand for the grid suppliers. Also, all the excess stores and other buildings shutting down. If everyone works from home, there should also not be as much of a sudden peak in that 3-6pm period as people arrive home, because, they never left. I’m not sure if restaurants will do better or worse if work from home is the new norm, also, would many/most order takeout/delivery? That could effect the size of restaurants. There are alot of restaurants that are only ever barely filled (counting drive-thrus if they have them).

    Also, because, fracking in America loses money, I could see most states repealing anti-coal laws after the bust and many coal plants reopening. In the future, renewables/fusion could take it’s place, but, I see most states doing the cheapest quickest option at the moment fracking crashes. If fracking crashes, I literally don’t see how it’s physically possible that many coal plants aren’t reopened. Building all those renewables won’t happen instantly, and if the natural gas supply suddenly becomes smaller, there is only one choice. Fracked natural gas is just as dirty as better mined coal, if not worse.

    • Petunia says:

      If Indian talent is so amazing, how come it’s not reflected in the condition of their country? The infrastructure in India is far from good, but we should import them in the thousands to help us fix our problems? I’d rather get talent from places where people actually know how to use toilets.

      • Frederick says:

        Huge population so of course it’s poorer and more backward for the most part but the people who we are talking about is the very top of Indian society I have met some of them and they can be brilliant

      • Petunia says:

        Fredrick,

        I have met and worked with many also, they are nice people, but far from brilliant in my estimation.

  7. Mike T says:

    So no sale of gasoline passenger cars then won’t people just buy gasoline powered SUVs and pick up trucks instead?

  8. Bill from Australia says:

    Lee lots of good points BUT try to build in country Victoria, 2 plus km from the grid quotes $150000/200000 not uncommon plus a daily cost even if no electricity used, bit of a bind .

  9. Old School says:

    You have to have some regulation, but progressive governments tend to get too heavy handed and don’t use the word freedom much. I am glad we have 50 states to choose from so that we can live in one that matches our values.

    A politician always touts the benefit of his plan, but in economics nothing is done in a vacuum. Will this mandate be a net improvement to society, I doubt it.

    • Juanfo says:

      I live in a dense urban core a block away from a main transportation hub artery. This road is clogged all day every day. The average vehicle build date was last century. The air smells like the great Springfield tire fire. It hurts to breathe. Eyes sting red. Most kids have asthma. Old dead people autopsies reveal soot choked lungs. The laws of thermodynamics make sure energy is a zero sum game. Electric cars provide the advantage of removing the filthy air from the areas where most people live. It is more practical and efficient to maintain power plant chimney scrubbers than two thousand million catalytic converters.
      I admire the ruthless capitalist ism and savage free market but somewhere a line will have to be drawn where the benefit of the majority is more important than the individual.

      • Dano says:

        You point out something important. The age of the fleet.

        The current fleet continues to age as the poorer get even more poorer. There are few affordable new cars for those already tapped out on the ‘monthly payment plan’. So they drive old vehicles.

        Plus there are some like me simply no longer enamored of new car smell, and happy to pick up a $4500 89k mile 2005 model, with the knowledge that those dollars I spent leave me that much left over for other things. And trust me, there’s not a standard production car out there I can’t go drop cash on today. Including the expensive imports.

        But why should I? It’s all going to change anyway. So better to let others take the depreciation hit. And the poorer out there will continue to gladly pick up the hand me down vehicles until they no longer exist. You’ll only get them into electrics with either government mandates, incentives, or both.

        Change happens over time. Sometimes very slowly, sometimes more rapidly, rarely overnight. Fifteen years is still a long way out.

      • p coyle says:

        maybe just move somewhere with clean air instead of demanding the polluting of someone else’s home so you can be more comfortable? just spitballing here…

    • nodecentrepublicansleft says:

      Remember when the car companies claimed they couldn’t add Nader’s seat belts because they were too expensive to install?

      Without Progressives, children would still be in the coal mines, black people would be slaves, women couldn’t vote, the 40 hr work week/vacations/maternity leave wouldn’t exist, handicapped folks would use the back door, etc, etc, etc.

      And please don’t forget Social Security, the most successful public policy in US history, which lifts about 15,000,000 Senior Citizens out of poverty!

      https://www.cbpp.org/research/social-security/social-security-lifts-more-americans-above-poverty-than-any-other-program

      Yeah, those terrible disgusting Progressives…..ewwwwwwwww.

    • Fat Chewer. says:

      Freedom is an illusion, mate. You confuse the freedom to decide to go for a walk with the necessity of sustainable power generation. You don’t realise the deciding factors of your decision. If it’s raining, you more than likely will decide not to go for a walk. It’s beyond your control to stop the rain, so does that mean rain is a terrible tyrant? No. It just means that you ain’t going for a walk. No freedom there, but also no dictatorship. It’s just the way things are.

      • Josap says:

        I have an umberella.

        I live near a light rail station. There are 25+ stores/restaurants I can walk to.

        I don’t own a car.

  10. Frederick says:

    Does this mean ICE vehicles will be banned from entering the state or just banned from being registered by Californians

    • roddy6667 says:

      They will be their own country by then, and you will have to go through customs to get in. Or out. Maybe need a visa.

    • Wolf Richter says:

      Frederick,

      No, you can continue to buy, sell, and drive used ICE vehicles after 2035, and you can enter the state in an ICE vehicle, no problem, and there will still be millions of ICE vehicles in California at that time. The ban only covers the sale of new ICE vehicles.

      15 years is a long time. The actual details haven’t been worked out yet.

      • MCH says:

        “15 years is a long time. The actual details haven’t been worked out yet.”

        Kind of like high speed rail when that got rolling a decade ago. Heh heh. By the time it got worked out, the math was funny.

  11. Agnes says:

    Excellent article.

  12. Michael Engel says:

    1) CA is spaced out.
    2) SPX monthly , high above the clouds, after few maneuvers in space
    will land back on earth.

  13. jeffrey durrance says:

    A well known car youtuber thinks hydrogen fuel power will be the next fuel source. Ive seen a youtube video where a good ole boy used a jug of water with pos, neg wires from the battery (electrolysis) installed which converted the water into hydrogen fuel cell..no new vehicle, no more destruction of earth to find lithium, no regime changes to the SAmerican countries where most of it is found

    • Wolf Richter says:

      jeffrey durrance,

      Hahahaha, that’s the kind of hoax you would find on YouTube, wouldn’t it? Using electrolysis to separate the H from the O in H2O — we did that in middle school – has a problem: It takes MORE energy to break the H from the O than you get from the H after it’s separated. It’s a net negative. In other words, you’re putting more energy into it than you’re getting out of it. You can never power anything that way. You’ve been taken by hoax.

      That said, hydrogen fuel cells work great and they have worked for great for over 100 years. The problem is hydrogen, which is everywhere but expensive to split from the other atoms it attaches to.

      • p coyle says:

        if “investors” get involved, wolf, this whole breaking the H out of the H2O might work out for a few decades, despite the inherent flaw in the business model. they’re still fracking some places, for instance!

    • intosh says:

      I really hope that we are not putting all the eggs in one basket. Alternative tech must be explored. Battery-powered EV brings its own set of issues that will become more apparent once hundreds of millions of them are on the roads.

      • Wolf Richter says:

        Yes, every form of transportation has its own problems. Lots of them. All human activity has its problems. Every form of energy used for human activity has its own problems. There are no perfect solutions. But there are less-bad solutions.

        • intosh says:

          The perfect form of transportation is on foot. ;-)

          So if we all get our food within walking distance and we do everything else (entertainment, work) from home — which could be a sustained trend — we’d largely solved the problem (the very few vehicles on roads may pollute but Mother Earth could absord that).

          Self-driving shared vehicles (basically a more flexible form of public transport) may also be part of the solution. That would reduce/eliminate congestions and reduce the number of vehicles on the road. Drastically reducing the number of vehicles in circulation is a solution. It may in fact be a better solution than switching technology but keeping the same car culture and consumer habits.

        • polecat says:

          How bout Llamas .. less of an impact then larger animal power? Whole packs of em, tethered in front of say, your local Safeway … while you pick up the night’s meal of tubers, greens, and capybara … for those short to mid trips – with no electrons needed, just some tasty leaves – and good for the garden patch as well ..

          You’all might laugh, but we could have scenes like that in our future. Progress should not always be considered a one-way ride.

        • nodecentrepublicansleft says:

          I’m thinking jet-packs!

          I’m 51 years old and have been waiting for mine many moons.

          I promise to fly responsibly…

    • Anthony A. says:

      Was the guy’s name Trevor Milton?

    • Agnes says:

      Also, use the hydrogen quickly. It is tiny and leaks out of everything except very expensive, high-tec, layered, electrostatic containers. It also blows up easily.

  14. Paulo says:

    Unfortunately, for intermittent renewables to offset new demand for EV charging it will have to be done when the sun shines or the wind blows, somewhere. In other words, Cali will be buying new production as needed, from base load suppliers with excess capacity from renewables unless the stars line up just so.

    Which leads us to BC Hydro. I just hope the lawsuits of the past against Hydro 1 create contractual tight language and renewed good will as we probably have 3X capacity of our domestic needs and could easily supply new demand. But not under an America First regime.

    From Gerry McGuire:

    Rod Tidwell: Show me the money!
    Jerry Maguire: I’ll tell you why you don’t have your $ million. You play for the money. You play with your head, not your heart.

    regards

    • Wolf Richter says:

      Paulo,

      READ THE ARTICLE and understand what it says. Read every part of it. Understand the concept of idle capacity at night when most people charge their EVs, and understand the entire mechanism of investment in the electricity sector.

  15. Phillip says:

    There will come a time when a critical mass of gasoline stations go off line, such that it will become an increasingly greater pain in the *** to refuel your gasoline powered vehicle. When there are only a few gas stations and they are situated a very inconvenient 10 or 20 miles from where you live, then you will see a relatively sudden adoption of EV’s just for the convenience of fueling them. Couple that with the increasingly affordableness of ev’s over time and people may be surprised by how sudden ev adoption might accelerate. The last gas station in Vancouver proper shut down because the land it stood on was too valuable for building condos or apartments.

    • polecat says:

      Somewhere, vehicle affordability will have to factor in to this, otherwise, all those broke mokes out there I the plebelands will be relying on donkeys and push carts .. while their woke overlords breeze quietly away and beyond reach!

      • polecat says:

        ‘in’ not I

      • Wolf Richter says:

        polecat,

        The best-selling EV in China sells for less than $5,000, made by GM’s JV in China. If there is demand for bare-bones cheap vehicles, automakers will make them. But in the US, econo boxes do not sell. We’ve seen that with ICE vehicles. When it comes to vehicles, Americans like big and luxury.

        • Anthony A. says:

          The reason you can buy many small EV penalty boxes in China is because they don’t need to meet safety stands as stringent as U.S. ones. I’m all for an inexpensive EV, except that I want side, front and rear air bags, crumple zones, etc.

          The closest to a reasonably small EV here in the states is the Nissan Leaf. And that has sold pretty well, but it has a short range, high price and a battery that was not thermally controlled. One can find these used for less than $10K, but most folks are leary of used EV’s due to battery degradation.

        • Wolf Richter says:

          We used to sell the Ford Festiva in the 1990s. Great little cars, made by Kia. We priced them at $4,995 new. Practically no one bought them because everyone wanted big and luxurious. Selling econo boxes in the US is a lost cause. Been tried many times, failed each time. But if there were demand for them, it would happen.

          The Leaf is a nice car, not an econo box. Friend of mine had one. And it still doesn’t sell well. People want trucks and SUVs and compact SUVs. That’s where the volume is in the US.

        • polecat says:

          Wolf,
          I future wife’s father bought her a Chevey Chevet (remember those..) back in 1986 – pretty inexpensive, economical .. with, if memory serves .. a 3-banger Susuki engine! We wore that thing out, driving to the Moon and back! Then it was ‘the city on the hill’ and who needs solar panels on the White Haus anyway! ..
          My point is, is that in this devolving environment .. with multi-millions facing down the great sluice of destruction – courtesy of the .gov Dictates from on high – they face eminent destitution and/or penury .. where a roof, FOOD!, and utilities will be their primary concerns, above all.

          So, I see, for many, a $5,000 ride might as well be unobtanium where they are concerned.
          I just can’t see an easy, clean solution to down sizing .. because down-n-out is going to be the trajectory, for most except the, so far, affluent!

        • MCH says:

          Wolf,

          Are you pulling for Nikola and the Cybertruck here? I think those can do well. Wonder how the new Jag and BMW EVs are doing so far, definitely more luxurious.

          But a slightly different market those guys are targeting.

    • Prof. Emeritus says:

      Refueling straight from the tanker truck is doable with a bit of conversion to suit safety standards. You pick up your phone, download an app (much like you’d need one to charge your EV) and track down the closest tanker commuting between the refinery/storage and your area.

  16. Michael Engel says:

    1) More than two third of electricity produced in CA. Nearly half of that came from solar, wind…
    2) When u charge your V shape Tesla model X grille, the sun is not shining. V = I x R, for midnight coal & NG.
    3) CA coal will flip from (-)4% to +4% coal and (+)10% NG.
    4) CA electric arteries aneurysm : between 11AM and 4PM solar takeover, producing a large clog.
    5) During peak demand the resistance to other source of electric current is growing, they produce little. The flow of electricity from : coal, NG & import is restricted by the solar CLOT!!.
    6) Without coal, NG… Tesla gig battery cannot be charged.
    7) The redundancy is expensive. Under the flag of climate change,
    despite a 5% demand destruction since 2008, CA UT prices are UP, with fires, death & blackouts.
    8) The DOW Utility in Feb 2020 had a “change of character”. Since Mar
    the recovered only half way. It’s a sign of weakness.

    • wkevinw says:

      I have seen articles touting both outcomes, plenty of slack allowing for easy EV accommodation in CA, and the opposite, where everybody charging after work would be a disaster. I haven’t done the math myself, so don’t really know.

      Having lived there for a while and being in the petrochemical industry, I can say that if PG&E were allowed to expand as needed with NG as the fuel for their power they would most likely be able to meet demand. The population reduction in the state will make it easier (demand destruction by the quality of life issues). Also, if they let PG&E maintain their infrastructure for safety, environmental issues (e.g. clear flammable vegetation near their equipment), it seems doable.

      For places where “power” is needed for long hauls, aviation, construction, work trucks, liquid petroleum will still be needed.

  17. gorbachev says:

    Gas is convenient .Splash and dash. If oil cos had

    spent their money on cleaning up their mess instead

    of stock buybacks we would not be having this discussion

  18. Prof. Emeritus says:

    While I can’t comment on the electricity/power business part of the story, the 2020 CO2 target is already wreaking havoc in the European auto market. The problem is, that cheap and economic ICE cars (that the majority of Europeans bought) got eliminated, as manufacturers can’t afford to install CO2 reduction tech (hybrid drivetrain) in them. Starting prices are gradually moving from 10.000 € to more like 15.000 € – a 50% increase in the entry level category in the coming few years that many can’t afford. And then politicians wonder why some motorist pull up a yellow vest and go protesting burning down half of France.
    The same scenario in the country that famously has no developed mass transportation system and even the poor has to rely on running a motorcar? Impossible, unless someone jump starts the subprime industry and start selling farm workers and housekeepers 40k $ Tesla loans. Do you happen to know any reliable rating agency that could help us do that? No, of course not, I thought so.

    • Wolf Richter says:

      Prof. Emeritus,

      The best-selling EV in China costs less than $5,000, made by GM’s joint venture in China.

      Teslas are luxury vehicles. If people want a basic EV, they can be built if there is demand, as there is in China.

      Americans like “big” and “luxury,” and so they tend not to buy bare-bones vehicles. This is the problem with ICE vehicles too. There have been many ICE econo boxes that were great little cars, and Americans refused to buy them. And automakers stopped offering them.

      • td says:

        The masses rely heavily on used vehicles selling for prices they can manage, and also tend to keep vehicles far longer than in the days of my youth. There are unlikely to be $5000 new EV’s, but there is a market for EV’s that sold for $25000 originally and sell for lesser prices some years later.

        I’m also confident that part of the required reduction in greenhouse gases will be achieved by reducing the material part of the economy and injecting a corresponding dose of poverty into the bottom 50% of the proletariat. I would expect considerably fewer vehicles of any kind to be on the road in 2040.

      • Captain Rogaine says:

        No Wolf. We can’t even buy an electric bicycle for $5,000. A mid range Zero motorcycle is almost $20k.

        • Wolf Richter says:

          Captain Rogaine,

          “We can’t even buy an electric bicycle for $5,000.”

          Nonsense. You can buy an “electric bicycle” for less than $500 in the US, and they go up to about $1,500, and then there are some high-end models for more. Learn how to google stuff.

          An electric Harley costs around $29k, just like an electric Porsche costs over $100k. These are luxury products. Just like you can buy a bicycle without motor that costs over $10k, but that’s a luxury product too, not basic transportation.

  19. Joe Crews says:

    Government mandate to force people to adopt what they would not do on their own volition. Government knows best, citizens must fall in line.

  20. NoFreeLunch says:

    I would not own CA utilities now, as the government shifts blame to them for not being able to accomplish their impossible mandate. Everyone knows politics can overrule the laws of both economics and physics if companies will only do what they are told to do. I would not own utilities in neighboring states, as biased (bought) judges will order power delivered from them to CA as chaos ensues. Texas may have the right idea by physically not connecting the the grid in the rest of the country, so its capacity physically can’t be taken by some arbitrary order due to irresponsible policy decisions.

    • wkevinw says:

      PG&E has now been bankrupted twice by CA legislators and regulators. It’s a ridiculous situation. If they would just go back to the way it was regulated ~ 30-40 years ago, it would be fine.

      Now you have all these “deregulation” and environmental zealots that won’t let them run in any kind of reasonable way. Note that there isn’t really a way that a line industry/utility can possibly run without a significant amount of regulation. Again, it was done efficiently for decades already.

      I am not a big fan of PG&E because they have arrogantly gone along with a lot of this in the past, thinking they would always be helped/bailed out by the state. Obviously not.

  21. Tom Pfotzer says:

    A few datapoints that might be useful:

    a. I have seen corroborated reports that a Tesla in 2017 used about 1/3 of a kilowattHour of power to go one mile

    b. Americans drive somewhere between 10,000 and 20,000 miles per year, on average, depending upon what state they live in

    c. So a Tesla in 2017 used somewhere between 3,300 and 6,600 kWH of power annually. At $0.14 per kWH (where I live), that works out to somewhere between $500 and $1000 annually to power that auto.

    d. To power an auto that gets 25MPG over the same mileage range, assuming today’s gasoline prices ($2.10/gal where I am) would cost between $840 and 1,680.

    And some observations:

    1. The batteries in an electric car can be used as storage for the grid. A distributed battery may become a profit center for a household if that same battery can be used domestically (installed in the house or the car)

    2. If the household has solar or wind capacity and batteries, then there’s more potential for revenue-generating operations @ hh level

    3. Transmission line upgrades will be less necessary to the degree HHs have storage and generating capacity

    4. Work at home has the potential to vastly reduce our society’s aggregate energy consumption

    5. Most carbon pollution comes from fossil fuel usage, and most fossil fuel usage is for power generation or transport.

    6. EVs will gradually reduce the fossil fuels consumed for transport, but that power has to come from somewhere. If fossil fuels are used for electricity generation, then EVs have little net effect on pollution.

    7. If electricity generation continues to migrate from fossil to renewable, then there will be a great positive impact on CO2 pollution.

    8. If people work from home, and outfit their home to be energy efficient, the total amount of energy used by our society will be greatly reduced

    We have two big hurdles to jump: a) get good at power storage, and b) get good at managing ourselves so we don’t need to be managed by others in an office setting in order to be productive.

    • intosh says:

      ” If the household has solar or wind capacity and batteries, then there’s more potential for revenue-generating operations @ hh level”

      “Work at home has the potential to vastly reduce our society’s aggregate energy consumption”

      How does one generate profit from this when demand falls but supply raises?

      • El Katz says:

        If the average family in the U.S. can’t come up with $500 for an emergency expense, where will the money come from to buy solar and wind generation, storage batteries, plus an electric vehicle?

        • In Ca there are loan programs for solar which defer the costs to your property taxes, which in turn you may defer. Even conventional loan packages are revenue positive. The number of programs, and scams, regarding solar is endless. With FedNow there is another possible line of credit for consumers; Congressionally approved renewable energy upgrades? As long as the grid maintains sunshine states can export energy to climates where solar is not financially viable, or for every CA/TX/FL resident who goes renewable there is more power for people in the NE. Lower demand is a blessing really.

        • roddy6667 says:

          Credit. AKA debt.

        • Tom Pfotzerf says:

          This is a very good question which should be posed to the Central Financial Firehose Committee which currently runs our economy.

          They are casting about for ways to spend money into the economy, and do it in such a way as to raise HH income, provide new jobs and so forth.

          If a country is going to economic central planning (as we currently are), why not get something useful done?

        • nodecentrepublicansleft says:

          Easy! They same way you pay for college. Remember Mitt Romney had a great solution when he ran for President.

          When asked about the student debt problem, he said:

          “Just borrow $50,000 from your parents.”

      • Yancey Ward says:

        How does one generate profit from this when demand falls but supply raises?

        Don’t go making sense on this topic.

        • Tom Pfotzer says:

          If coal and gas were both phased out of electricity generation, supply would fall well below demand, even if work-at-home was widely adopted.

          Fossil fuels account for most of our current electricity generation capacity.

          If we substitute electricity for gasoline in transport, we get an immediate 50%+ increase in electricity demand.

          Therefore, I don’t think a lack of electricity demand is going to be a big problem if we continue to phase out fossil fuels.

        • Wolf Richter says:

          Yancey Ward,

          Falling demand is the issue RIGHT NOW. That’s why the electric utility industry is in trouble. EVs will ADD demand — that’s the whole point. Read the article!

    • Rhoro says:

      LIon batteries have a limited number of full charge/discharge cycles. If I owned an EV, I wouldn’t want to offer up my car’s battery for using up these cycles for the sake of the grid, unless I was paid to do so enough to replace that battery years earlier. Also, these EV batteries are an environment hazard when they are retired, and so far only a very small percentage of them are recycled in a safe and eco-friendly manner. Ergo, using EV batteries as backup to the grid sounds good, but remains problematic.

      • Tom Pfotzer says:

        LIon batteries, and other electricity storage options are indeed currently problematic for the reasons you’ve identified, plus several others, depending upon which storage method is under scrutiny.

        So I agree with your assessment, which is why I set out “energy storage” as a hurdle to be overcome.

        And it seems likely to be overcome. This is a generic problem facing every industrialized society, and there’s a great deal of status, money, etc. to be garnered by the individual(s) that crack the code.

        I am confident that it will get done. There are many ways to get through the wicket.

        • p coyle says:

          “And it seems likely to be overcome.”

          in theory, yes. for those that can afford it, almost certainly. in practice, especially the practice that the average joe/jane experiences, theory is sometimes different than practice, paraphrasing a certain sage…

    • NoFreeLunch says:

      “The batteries in an electric car can be used as storage for the grid.” That will mean I would start unplugging it when it is charged. Imagine you need your car for an emergency, but the grid drew the battery down while you weren’t noticing? Also, you only get so many charge cycles out of it, so I wouldn’t want to have to buy a new battery earlier because it was being used cycled by grid storage.

      • Shane says:

        NoFreeLunch:

        That’s kind of a shrill assessment. The reality is that any agreement between the EV owner and the utility would be exactly that: an agreement. If you didn’t want to participate, you wouldn’t have to, and if you do you likely will be able to set the terms of the agreement. Here’s some facts: a lithium battery bank drained to 20% of its capacity will probably last for the life of the car. If only to 50% state of charge, it is essentially a lifetime battery. An agreement with a utility will no doubt allow you to set limits on how much the utility is permitted to draw down your battery bank. Would you allow the utility to draw down 20% of your battery bank’s power if you were acceptably compensated for it? The decision is yours, but to say that you’d walk out and find your battery drained by the utility is not very realistic.

    • nodecentrepublicansleft says:

      I’ve been doing the 2nd part for 20+ years. I work harder at home, because I don’t want to ever have to go back into the office FT.

      Those hrs stuck in traffic jams, commuting, etc. add up. Even if you work just an hr away, that’s over 2 weeks a year you spend doing nothing but driving. 50 weeks x 5 days = 250 days x 2 hours driving = 500 hours!

      Clawing back 500 hrs/yr to WORK instead of commute?! Makes perfect sense. If you work hard and get results, minimal mgmt is needed.

  22. Drunk Gambler says:

    Will that Ex. Order survive?
    Can it be vetoed by State Senate or White House? Maybe by next Governor?

    • KGC says:

      California is solidly Democratic; Governor, Senate, & House. It has been for decades. There’s no chance that this is going to change in the next 15 years. The mandate may be “revised”, or possibly ignored, but it won’t get vetoed.

      I think there will be issues with the loss of fuel taxes, but since they seem to be really good at taxing everything else that’s not going to make too much impact.

      Climate change in CA has made it possible for people to live in places where they couldn’t 200 years ago, raise food in a desert, and basically allow the State to become exceptionally wealthy. To blame it for fires, etc, is dishonest when better land use planning was disregarded.

      • Real Old Timer says:

        Pretty much everywhere in CA was very inhabitable 200 years ago (perhaps except for the deep desert and very high Sierra), how has climate change made habitation possible? Raising food in the desert was made possible by clearing land and huge subsidized water projects not climate change?

        Do you mean better land use planning as in denying the ability to build near the urban-wildland interface where many of these fires are burning? That would be guvmint regulation that many object to.

        Lots of comments from climate change deniers as if it has nothing to do with fires. There are many contributing factors driving the fires including inadequate thinning and prescribed burning to reduce fuels in some areas, but these alone would not be sufficient to have had an impact on recent fires.

        Longer, hotter temperatures combined with wind are just chemistry that are in fact making fires worse than they have been. That is no more dishonest a statement than that land use planning was to blame for the most massive multiple years of fires we can remember on the west coast.

    • Wisdom Seeker says:

      This sort of decision should be a legislative one, not an executive one, and I believe in the past it was. Since when did the governor get so much power to decide what does/doesn’t get sold in-state?

      If the Governor of California has the power to mandate this sort of change solely through executive order, I do not want to live in California any longer. I expect to move out before 2035.

      If the executive is given this much power over individual and business financial choices, then I wouldn’t want to invest in the local state utilities either.

      P.S. The idea that climate change had any impact whatsoever on the local wildfires was absolutely ludicrous on its face. The temperatures, humidity levels and weather involved were within historical norms. What wasn’t normal was the available fuel supply and utter unwillingness of the state to mobilize more resources to stopping the fires when they could have. Given the obvious threat (and CO2 emissions!) from wildfires, the state should have a substantially larger “army reserve” of volunteer firefighters available to tackle these sorts of crisis scenarios. And yet I saw no one looking for help whatsoever. And don’t tell me that specialized training is required – most of the crews have minimal training, only need some experienced officers to run them.

  23. Inno says:

    Your main thesis of peak-shaving via demand shift is spot on. There is another force that will aid this from the supply-side, namely grid-tied battery storage. It is just starting, but will create a supply-side aid to the peak/avg ratio problem that any network faces (communication networks have the same problem). Further, in-place generation (solar, etc.) also lighten the distribution infrastructure relative to a centralized topology (big power plants with transmission/distribution network).

    I am not in favor of mandates, etc…but often one finds the emperor grabs a baton and gets in front of a parade started by industry. Same thing in carbon debate…we’ve been shifting away from carbon for hundreds of years (wood -> oil -> natgas -> hydrogen)…it hasn’t been due to politics, but chemistry and economics (energy density). Smart political leaders get in front of parades already started and assured…betting on their own ability is usually a losing game.

  24. Eventually all rural customers are going to have to go off the grid. What does that do to ICE restrictions? The misnomer that consumers can recharge in offhours doesn’t take this into account, and the power generated by solar is not deep enough to handle the load. The likely path is for more customers to buy renewable, then go off the grid because the utility raises maintenance costs. Leaving the grid would mean they cannot power their EVs. Anecdotally I know of someone who went off the grid. The power company told him he could not disconnect, so he just quit paying his bill. I gather he has an ICE automobile.

    • Dano says:

      Why would you think rural people would have to go off grid? If they have electric now, which something like 99.8% of them do, where do you think their power is going to go?

      Many of these rural areas around the nation are served by electric co-ops. These small co-ops exist solely to assist these dispersed areas.

      https://www.cooperative.com/nreca/Pages/default.aspx

      Even if CA had/had no co-ops, why would PGE or whoever cut them off?

      At one point this country put an emphasis on bringing power to rural areas thru the Rural Electrification Agency. Made possible by the Rural Electrification Act.

      Given rural areas are often where the crops grow, and growers still have clout in CA and many other states, I see nothing in your statement that makes sense.

      Haven driven vast swaths if CA by motorcycle with a 210 mile fuel tank range, I can assure you that either charging stations will replace gas stations along routes, or those in the most furthest outreaches will main ICE vehicles for when some longer range us needed. And as clueless as CA governance may be, until there is something highly suitable, they’re not going to eliminate the king of vehicles needed for ‘production’ such as semi’s & box trucks.

      • The grid will end for rural people due to wildfire litigation, and utility business models which are separating out maintenance costs. The insurance companies won’t underwrite rural home owners or utility companies. Ca is okay with that, while renewables have better backup systems, to manage home demand. They cut you off with the caveat, you can buy this solution, and they may even provide programs. There is no real incentive for government to bail out rural voters, these are anti-government folks. Might be the way the entire country goes.

        • Lisa_Hooker says:

          Wildfires are not a big thing in the US Appalachians and may other areas. Not everyone is intelligent enough to live surrounded by highly inflammable trees. (See also, eucalyptus.)

  25. Seneca’s Cliff says:

    sell your stock in day skiing resorts folks. Driving to the mountain uphill from the city with a fully loaded car with racks on the roof in cold weather , then parking all day in low temps and then driving all the way back to the city in an EV will be a gamble that will make the odds in Vegas look good. Because of their remoteness most ski resorts are not likely to get big enough electrical service to power more than a handful of chargers. But then again ,changes in weather patterns have probably doomed most of these places anyway.

    • Wolf Richter says:

      Seneca’s Cliff,

      When was the last time you drove to a ski area in California? Remote? Hahahaha… it’s a city up there anywhere near the ski areas. Like suburbs. Houses and condos everywhere. Infrastructure everywhere. Traffic and congestion everywhere.

      There are currently 35 public charging stations in the Tahoe City area. Just looked it up. That may be more than gas stations. Plus every house has electricity. So when you do your vacation rental, you might want to inquire with the Airbnb host if you can plug your vehicle into the outlet in the garage.

      And there are tons of charging stations all the way along the way from the coast to the mountains. That stopped being a problem a while ago.

      As I pointed out in the article, there are nearly as many charging station in CA, as there are gas stations. So you can take that off your worry list.

      • Seneca’s Cliff says:

        I guess my Oregon ski upbringing shows. Nearly all the ski resorts in the Pacific NW are located on National forest land. They operate under very strict leases granted by the forest service. That is why all but lowest elevation ones don’t have slope side condos. Most only have unimproved gravel parking lots. Last time I was there Mt Bachelor was not even allowed a large enough electrical service to run its lifts and had to run most of them on Diesel engines.

      • Lisa_Hooker says:

        The positive thing about EV charging is the opportunity to read a lot more. Almost a lost art for much of our youth.

  26. Robert says:

    Sounds like this new ICE ban will be a boon to car dealerships in surrounding states that sell ICE cars.

    This is a well intentioned law that ignores the underlying realities of our society. Where are all these electric vehicles that California expects its residents to drive? Isn’t it really mandating that we all buy Teslas?

    A much more rational law would have been to mandate hybrid vehicles for 2035 then transition to fully electric once the technology develops.

    The problem isn’t California air, it’s China’s air. Go to http://www.accuweather.com and look at the air quality for any major city in China. The whole country is one big chemical waste dump.

    Oh, and what’s going to replace gas taxes to fund the roads?

    • Anthony A. says:

      Simple, surcharges on miles driven which will be monitored by the CA DMV (and others). Remember, these new EV’s are equipped with software that is monitoring your every move. And be careful, no late night back seat hanky-panky with your girlfriend while at the drive in movie! LOL

      • Robert says:

        @Anthony A

        That’s a very scary, dystopian scenario. Based on that info alone (if it comes to pass in my Northeastern state), I will be lining up to buy my ICE vehicle and never transition to full electric.

        One more reason for people to leave California. Nevada, Arizona and the surrounding states will suck the life out of California. Too many people in the state anyway, and it is a sad reflection of what it was twenty years ago.

        I suggest decoupling from China as a real alternative to limiting carbon emissions.

    • nodecentrepublicansleft says:

      Wait a second. Are you saying that having environmental regulations and laws that provide US citizens with clean air (and maybe even clean water) is a good idea?

      We need to get you over to Mitch McConnell’s office so he can get Trump to stop rolling back all those environmental regulations.

      I always thought short term profits for huge corps was more important then clean air and water, but I’m willing to listen to you.

  27. ft says:

    Wolf, interesting and informative article. Thank you for shedding some light on this latest round in the game of “Gavin Says”.

  28. Pete Koziar says:

    Here’s an interesting article on EV charging (by a manufacturer of EV charging stations):

    https://insideevs.com/news/343162/how-many-amps-does-your-home-charging-station-really-need/

    I didn’t realize that EVs can charge in a little over an hour. I imagine, however, that as more people start loading down the grid, there could be more spread-out options, or assigned “recharge times” with preferential rates.

    • Wolf Richter says:

      Utilities have long priced electricity based on demand, with cheap electricity when there is no demand. This pricing mechanism can be, and is being, used to get consumers who have that flexibility to charge their EVs (or do other stuff) when there is the least demand. It’s a form of load balancing and saves money for everyone.

      • Lisa_Hooker says:

        Correction. With high-priced electricity when there is high demand. There’s nothing cheap about utility billing, the only cheap areas are maintenance and investment.

      • Lisa_Hooker says:

        A further thought. Currently fuel for ICE vehicles is intensely competitive with a wide variety of suppliers and vendors. What competition is there in electricity pricing when there is a single distribution network available at point of sale? Electricity pricing is filtered through local distribution monopolies.

  29. Ed C says:

    California grabs a big chunk of the output of Arizona’s Palo Verde nuclear generation. Seems like nuclear power would be the green candidate to supply the additional power generation needed for all of Cali’s EV’s. Liberal politicians (and voters) hate and fear nuclear power plants. NIMBY they call it. So does California expect other states to build nuclear power plants or do they think wind and solar to provide all the new generation?

    • Tony22 says:

      Not at these prices.

      https://www.reuters.com/article/us-california-power-outages-idUSKCN25D1WJ

      “Power prices for Monday averaged a record $350.50 per megawatt hour (MWh) at the Palo Verde hub in Arizona and a near two-year high of $270.75 at SP-15 in the southern part of California, according to Refinitiv data going back to 2010.
      The Intercontinental Exchange said prices for Tuesday averaged $1,400.50/MWh at Palo Verde and $595.09 at SP-15.”

      Nuclear power; taxpayer subsidized, hideously expansive, uninsurable for liability, terrorist targets, nation destroying, i.e. Chernobyl, wasteland producing boondogles–Japan.
      No thanks, We’d rather have solor on the roof and batteries in the basement.

      • Ed C says:

        You say that like it’s a bad thing. I like seeing California pay high prices for electrical power since they refuse to invest in their own infrastructure (NIMBY and all that). Those prices sure don’t seem to suggest a lack of demand. Very hot summer produced that demand. I don’t expect summers to be any cooler going forward.

      • Lisa_Hooker says:

        The best part is the half-life of toxic spent fuel rods probably exceeding the existence of civilization.

    • Wolf Richter says:

      Nuclear power is THE most expensive form of power production, when you consider the costs from funding, construction, etc., including dealing with nuclear waste, all the way through decommissioning and disposing of the radioactive building materials and equipment, which is horribly expensive. That doesn’t even include the catastrophic costs involved when reactors melt down (Fukushima most recently).

      BTW, California doesn’t “grab” power — it “buys” power, just like it buys corn from Iowa, cars from Detroit, wind power from Texas, steel bolts from Ohio (ah yes, the ones that cracked in the new Bay Bridge)… Just like other businesses in other states buy stuff California produces. Buying and selling stuff is just business.

      • Ed C says:

        Thorium / Uranium pellet nuclear power generation promises cheaper and safer nuclear power but you’ve already made up your mind that nuclear is bad. Where do you propose that the new power comes from, assuming that Green is a requirement? Coal is out, oil fired is out, even natural gas produces CO2. I’ll wait.

      • Ed C says:

        California “grabs” power in the sense that it refuses to invest in its own power generation infrastructure. Other than hydropower it’s not like some states are inherently blessed with the ability to ‘grow’ electrical power. It comes down to the regulation and business environment of a state — i.e. pure politics.

        • Wolf Richter says:

          Ed C,

          So you live in Arizona. There are no motor vehicles manufactured in Arizona because Arizona “refuses to invest” in motor vehicle manufacturing. And so Arizona “grabs” motor vehicles from other states, such as Teslas from California, Tundras from Texas, etc. Is that your logic?

          Electricity is a product like any other: it’s produced, traded, and used.

      • Max Power says:

        Yeah, nuclear is expensive but with fossil fuels there are extensive carbon emissions which are not counted in their “cost” although the damage they create is large. Therefore it is not an apples-to-apples comparison.

        • Tony22 says:

          The mining of uranium, its processing, waste disposal, transport, building nuclear power plants, waste disposal and plant decommisioning uses massive quantities of diesel and fossil fuel.
          Did you forget those numbers?

      • Lisa_Hooker says:

        It is hard to find someone to buy your nuclear waste.

  30. MonkeyBusiness says:

    Well won’t be an issue for most people since Uber and its drivers will take the hit no? I mean why have a car if you have a fleet of robo taxis always on your beck and call ? ;)

    I have a feeling this will go the way of bringing your own shopping bag during the Coronavirus.

    • Anthony A. says:

      Wait, I thought Musk’s fleet of Model 3’s that were sold to consumers were going to double as “robot” taxies that would be able to serve whomever calls one?

  31. Tom S. says:

    It is interesting, and I do agree, that it is feasible to power the BEVs with renewable energy from the grid in California. The real issues are with the EVs themselves. The BEV pricepoint is high relative to similar size ICEs, BEVs lose utility in demanding applications, they aren’t favored among rural buyers, and there’s a bit of a supply issue with those pesky lithium batteries. On top of that, there is no American OEM who can sell a car or sedan for a profit. They’re all money losers made solely to keep the gas mileage mix favorable for the currently suspended CAFE standards. I don’t think Tesla can sell a car or sedan for a profit either, but the government is willing to help them out with carbon credits and subsidized demand. Economy of scale isn’t materializing for Tesla, or any of the other EV makers, and it will require a once in a generation type of innovation to do so. The money makers for the big 3 are big trucks and SUVS, which need big batteries, so you’re talking about even more $$$ (or debt) for vehicles that already cost ~$50-100k. Where the battery technology is today is essentially the same as when the first Tesla rolled off the line, just different flavors of the same thing. So without a paradigm shifting battery innovation I don’t see this mandate being palatable to the middle or lower class in 2035, although the idea certainly continues to make headlines for Newsom. Of course, with 0% interest into perpetuity and throw in a little UBI, everyone will be rich enough to buy the most expensive car on the market, right?

    • Wolf Richter says:

      Tom S.

      Your knowledge is outdated. The best-selling EV in China costs less than $5,000, built by GM’s joint venture in China. EVs are a lot cheaper to build than ICE vehicles. The only expensive part is the battery, and prices are coming down hard. All automakers are now investing billions of dollars to build EVs and batteries. And they’re coming on the market now. Don’t take your cost figures from the cowboys at Tesla.

      • Tom S. says:

        That $5000 car is more of a golf cart than anything. Americans still buying 300,000 trucks a month.

        • Anthony A. says:

          The big issue with the Chinese $5000 EV’s is that they are not designed and equipped to meet U.S. safety standards (air bags, crumple zones, side door reinforcing, bumper mass, etc.). No way would they be allowed to be sold here, unless redesigned and loaded with the safety features necessary to pass testing.

      • MonkeyBusiness says:

        To be fair Wolf, with our current trade war, the US might go with building batteries at home and that means higher prices.

        Same with chips. The Chinese are no doubt staring at higher prices temporarily since we are also starting to limit exports to China. But once they can make their own semiconductors, we might as well just throw a white flag up.

  32. gnokgnoh says:

    MB, Uber wants to be that fleet of robo taxis. That’s exactly what they’re betting on. They’re not making a profit off of taxis with human drivers. The other twist to the story is that we only use our cars about 14% of the time. If they succeed, self-driving EVs as a rideshare/taxi system is coming and will substantially reduce private car ownership and theoretically decrease the number of cars on the road. The reduction in cars does not entirely make sense, unless a single-occupancy vehicle is the size of a small Le Car.

    • MonkeyBusiness says:

      This is like saying that UBI will solve all our problems. In actuality they are trading one set of problems with a different set of problems.

    • Lisa_Hooker says:

      I live 23 miles out of town. How much extra will Uber charge me to come and get me? 100 miles?

  33. Clarke Acton says:

    I recently looked at PG&E’s site and the data on California sources. Wolf what I saw matches the info below in that 1/3 is listed as “Other”. I assumed that the 1/3 other was coal or natural gas which they did not want to put in that category. Your data shows that its coming from other states. Even if states sell to California and say that its renewable energy I call B! Any way to verify that the 1/3 that CA buys from out of state is 96% renewable? I think that’s its safe to say in a conversation that 50% of the power for a CA residents Tesla comes from Coal and natural gas

    “From other states: Nearly one-third of California’s electricity was purchased from power producers in other states, a good part of it renewable (hydropower, wind, and solar). In 2018, power from coal plants was down to 4% of total electricity demand in California and is expected to reach zero by 2026.”

    • Wolf Richter says:

      Clarke Acton,

      1. “I assumed that the 1/3 other was coal or natural gas which they did not want to put in that category.” You can assume whatever you want, even that the earth is flat. I gave you the EIA figures so you don’t have to “assume.”

      2. Coal is dying a natural death across the US. It’s too expensive, it cannot compete with natural gas, and now it cannot even compete with wind. The only reason why it’s still being used at all is because there are still a lot of coal power plants out there. But dozens are retired every year, and no one is building new coal power plants anymore. The share of coal across the US is something like 25%, down from 55% 25 years ago. In California, it was 4% in 2018, it’s now less than that, and will soon be 0%.

      3. You need to understand how the grid works. I can buy power from a specific power producer maybe hundreds of miles away, and pay that power producer. This could be a solar power plant. The power plant produces the electrons that I’m buying and sends them into the grid where they get mingled with other electrons, and what I get is electrons. But I paid a specific power plant to generate a certain quantity of electrons. And this happens millions of times a day, automatically, among all market participants.

      • Lisa_Hooker says:

        Solar and wind electricity is greenish, while fossil fuel generated electricity is a dirty yellowish red. Visually easy to tell apart at a distance. Hope that helps. Or, maybe not.

  34. exiter says:

    Interesting indeed, Wolf.

    Recall the 2 San Onofre nuke plants went permanently offline in 2012. That’s over 16,000 Gigawatt watt-hours per year of lost electricity production, due to new faulty and unrepairable steam-generators installed in 2009 and 2010.

    An enormous Edison + Mitsubishi screw-up that taxpayers are having to pay for.

    What a coincidence that electricity usage in California was already dropping just before the 2 nuke generating plants failed (per to your graph).

    Anyone feel free to correct my calc.:
    2 X 1.1gw-h/yr X 365 X 24 + >16,000 gw-h/yr

  35. Randall Hooker says:

    One financial twist in EV implementation is that States fund highway projects, ferries (in my state of WA) and road/bridge repairs primarily through gasoline taxes.
    The tax structures related to transportation will have to shift elsewhere or be added to the cost of driving an EV.
    This is not a trivial concern.
    Indeed, this aspect of funding could threaten energy tax credits to EV manufacturers and, where they exist, to buyers.

    • Wolf Richter says:

      Yes, this is an issue. The DMV is already charging an EV fee when you register it. This pays for part of the gasoline taxes lost.

      • Lisa_Hooker says:

        Is that a DMV EV fee charged every year when the license plate is renewed? A one-time fee for ownership registration would be pretty useless. So EV license plates are more expensive?

  36. Tom Lippe says:

    Wolf,

    You show almost even charging stations to gas stations, but are we talking charging units and gas pumps?

    A single charging station serve ~2-3 customers an hour.

    A single gas pump can serve ~20 an hour.

    • Wolf Richter says:

      6,174 EV charging stations with over 28,000 outlets.

      7,488 gas stations with I don’t know how many pumps.

      But wait… you cannot fill up your ICE vehicle in your garage overnight. Many EV owners do exactly that, and only use public charging stations when they have to.

      And when lines are forming at charging stations because there is so much demand, greedy capitalist investors will install more charging stations to ruthlessly take advantage of the demand 🤣

  37. ewmayer says:

    This is one of the reasons I love Wolf’s site – when I first heard of Newsom’s decree I figured it was a typical political IBGYBG [I’ll-be-gone-you’ll-be-gone] empty promise, but turns out there is actually a really good business case for it, one not impacted by PG&E’s manifest failure to reliably handle peak loads, because most EV charging takes place at night, the part of the day where the utilities would love to see more demand in order to smooth out their daily power-demand curves.

    Of course, whether there will be many Californians left by 2035 after the likely mass exodus of folks fed up with the combination of insane housing costs and ever-increasing risk of being burned out of their homes is a pertinent question. :)

  38. Lee says:

    Gee – my post disappeared – Guess I will too for a while.

    • Wolf Richter says:

      Lee,

      I understand you’ve been cooped up at home too long, lockdown and all, and that you need an outlet. And I let you for a while since you’ve been around here forever. But I got tired of reading these long political tirades, mostly about Australia, and the evil left, about also about US politics, and what not. This is not a political site. Read my commenting guidelines, where it says this:

      “WOLF STREET is a business, finance, and economics site, not a political site. Readers from across the political spectrum are invited and should feel comfortable. So when writing a comment, for those moments, we check our political views at the door, so to speak. It’s OK to mention politicians and policy issues. It’s not OK to descend into partisan bickering.”
      https://wolfstreet.com/2017/10/07/finally-my-guidelines-for-commenting/

      • Lisa_Hooker says:

        Gosh how I love a benevolent despot! The only functional form of governance. Keep at it Wolf, you’re irreplaceable.

  39. yort says:

    The real bottleneck at this point in time is the battery tech that is stuck with Lithium at the moment. Thus why Tesla “PPL” investment went from $8 to $54 (now $25) this week, lithium mines are being bought out right now across the globe with all the “Free cash”, thanks Feds. Also note that Tesla’s lithium source is from “ore”, not salf evaporation so not sure that is real energy efficient, etc yet have not review any analysis. Anyway, EV is the wave of the future until we figure out how to crack (and store) Hydrogen more cost effectively, yet the battery tech is reliant on rare Earth elements, and China controls (actually owns) at least half the world’s lithium suppy. It may be difficult for CA to force consumers to buy a pure EV product that many remain more expensive than a hybrid for many years into the future (due to requiring more expensive rare Earth elements), thus there will be a plateau at some point that takes an unspecified period of time to get past due to elemental limitations. Perhaps I’m a fool investing in literal dinosaur companies like XOM/CVX from this point to possibly 50% lower, yet it is not going to be a quick transition to EV by any means. I myself wish it could have already happened as we sure took our time as supposedly a crude electric car was developed back as far as 1828 according to energy.gov…we kind of screw ourselves to be honest. CA plan is just a feel good statement, nobody knows what is going to be possible even 10 years from now, let alone 30. That said, CA leads the rest of the USA so it is good they push the limits out to fantasy land as we all need some extreme goals right now, as climate change, no matter what the helz is causing it, is going to be a near technologically impossible process to reverse by 2050 if we don’t attempt and “force” some crazy ideas now and see what works over the next few decades. Attempting something is probably better than doing nothing, so my hats off to Crazy CA, as we need crazy right now. That said, nobody’s going to takez mez steakz…Ha!

  40. Rcohn says:

    Just a question
    If gasoline is eliminated as a few source it will no longer be profitable to refine crude oil.
    How will we make asphalt and plastics?

    • Wolf Richter says:

      Petroleum is also heavily used by the petrochemical industry — plastics, fertilizer, etc. Jet fuel is unlikely to be replaced soon. So there will still be plenty of demand for petroleum and petroleum products. But some of those shifts do have consequences.

  41. nick kelly says:

    No doubt EV’s are here to stay but ‘mandating’ i.e. proclaiming law 15 years from now when the proclaimer won’t be in office…if alive.

    EV and ICE each have advantages but there is one area where ECs can’t close the gap in the forseeable future: the energy density of gasoline or diesel. Just think: a guy carrying one lousy gallon of gas weighing SIX pounds ( ex. weight of can) can power his car for 35 miles after a 30 second transfer. And one tanker can deliver enough power to a small community for a weeks.
    Barring miniature nuke batteries, there will be a need for energy this dense for a long time.

  42. DV says:

    Last time California set zero-emission goal was back in 1990.

  43. Phillip says:

    I find it interesting that so many commentators list their perceived handicaps to ev adoption based on current technology. There are two things that the ev space is doing: 1) innovating at a very fast rate 2) building a huge amount of capacity right now. The ice industry has virtually given up on innovation compared to the ev space and are decreasing their capacity. Soon there may only be two ice choices made in North America: big trucks and big SUV’s. Capitalism is solving the perceived problems with ev’s: falling price for batteries, lack of choice and perceived lack of charging infrastructure. Soon there will be as many choices in ev’s as in ice vehicles, and probably more, since small ice cars are getting hard to find.

    • VFatalis says:

      Well of course EVs handicaps are perceived on current technology. Can’t recall how often I’ve read some article about a new tech that is about to change everything. Yet between sweet promises based on a successful experiment in a lab and true market reality, there’s quite a lot of room for disappointment.
      We’re still using Lion batteries which were invented 30+ years ago. While those have improved significantly in the early years, we have nothing but marginal efficiency gains nowadays.
      So yeah, theoretically we might be innovating at a fast rate, but this doesn’t exactly translates well on a practical level. The law of diminishing returns applies everywhere.

  44. Bodie says:

    Opine for your favorite transportation ride and its energy source, but missing from the argument: neither EV’s or ICE reduce traffic congestion, parking issues, cost of ownership or the need to build and maintain infrastructure to support either one. Add to that growing populations will increase traffic congestion. But hey at least you’re sitting in your vehicle of choice, which for most people has a loan on it. I am hopeful for EV technology as well as diversity in energy production and distribution and the ancillary products and economic activity that would come from those technologies, but sitting in traffic in an EV with a loan on it is not an advancement nor is it beneficial to humanity or increases productivity or raise societies standard of living. I have been to India many times on business and have been driven in those $5K EV scooters- fun yes-practical maybe- are Americans going to putt around in them with a cage of chickens attached and four kids aboard?

  45. Erle says:

    With all of the EVs, where will the road taxes come from?

    • Wolf Richter says:

      Extra EV fees at the DMV.

      • Lisa_Hooker says:

        Illinois attempted to add an annual $1000 fee for EVs. Rationally they reduced it, for now, to a $100 annual surcharge. The only states currently charging a fee proportional to miles driven are Utah and Oregon. The gasoline tax I pay is proportional to my road use. I drive very little. With a fixed EV license fee regardless of mileage I find subsidizing other drivers unpalatable.

  46. rural says:

    A bit of feedback from someone living in a remote rural area in Ca.

    We DO get an incredible amount of air pollution from China and other parts of Asia. There is very little traffic where I live for hundreds of miles and virtually no industry. Even before the fires start, even in spring and early summer, we have smog, and on many days you can watch brownish clouds coming into Ca from across the ocean. The air was much cleaner in NYC than here on the rural west coast when I visited there for a couple weeks a few years ago. This isn’t a subjective observation- I do some photography with a longer lens and the lens has predictable amplification effects with more particulates. It is easy to quantify it by observing sharpness levels.

    It would make more sense for the world’s pollution levels for more of our manufacturing to be done in our own country- we at least have more pollution controls.

    I suspect one of the major reasons electricity usage is down in California is because the growing of indoor marijuana is no longer profitable on a small time level by families anymore. Electricity costs alone are up to 30 cents a kilowatt in my area for high usage. 7-10 years ago we would lose electricity frequently as the load on the system was too much. Transformers on the poles would explode frequently and it would take up to 2 days to replace them. I actually saw the electrical lines in my neighborhood on private poles start on fire. Twice. Luckily it was raining.. Indoor growing was very very common in the far north, in the Sierras and East of LA. Everywhere, really, in rural areas. & I mean everywhere. The electrical system could barely handle it. Good luck getting better lines in rural areas without very high price increases. BTW, the replacement of small time marijuana growers by large corporations is having a direct effect on many local economies. I don’t think there is any data for that.

    It will also take a looong time for electrical charging stations to be consistently placed in rural areas. I know of one area where the only gas station for 20 miles still uses pumps from the 50’s. Or maybe the 40’s.

    I’m all for less pollution, but I think we really need to spend on research and come up with some source of energy that causes less pollution, rather than trade for large municipalities as distributors that still use fuels that cause almost as much pollution and waste as gas.

  47. Matt says:

    Assuming 10M EVs on the road in CA by 2035 (19% growth rate) and the average EV using 80kW per week to drive 300 miles (15k miles per year), would add ~10 MW load to the system if charging was done in the evenings (~5 MW if evenly spread through 24 hours). Currently, the capacity is 43 MW with demand peaking around 38 MW at 6 PM and bottoming out around 21 MW at 4 AM. Renewables production peak of 11 MW occurs at 3 PM and declines rapidly to 2 MW by 8 PM, reducing capacity to 34 MW. Also, Diablo Canyon and 3 natural gas plants are being retired , reducing baseload capacity by 4 MW (off hours capacity would then be 30 MW). In short, the supply and demand curves will be hard to match up under either an “off hours only” or 24 hour charging scenario. IF the mandate is implemented, expect charge “metering” (rationing) of some kind, especially during peak demand periods.

    • Wolf Richter says:

      Nonsense. Read what will replace the generating capacity of Diablo Canyon. There are all kinds of other power plants being planned and coming on line. Selling power is a business. Where there is demand, there will be supply. You guys keep purposefully ignoring the other side. Gets tiring to read after a while.

      The problem is that in California, electricity demand has been SHRINKING for over a decade.

      • Matt says:

        Which of the numbers is nonsense? If it is correct that “Where there is demand, there will be supply” then why did the Cal ISO recently threaten rolling blackouts a few weeks ago?

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