What is the real cost of electricity?

Recently Robert Rapier compared the pricing of various forms of energy.

He noted "I have included the cost of electricity, although it is important to note that the efficiency of electric motors is higher than for internal combustion engines."

Why did he think that was important, and what does that mean for the real cost of electricity?

Robert was talking about the dramatically greater efficiency of electric motors when they power a vehicle, when compared to internal combustion engines. Let's start with the best engineered electric vehicle on the road, the Chevy Volt¹.

On the one hand, the 1st-generation Volt gets at least 40 all-electric miles on both the EPA city and highway cycles, and does it using an effective battery capacity of 8 KWHs (50% of the nominal 16 KWHs). That gives us .2 KWH/mile, battery to wheel. On the other hand, GM's engineers tell us that doesn't include the charge-discharge losses, which are usually 7-10% for li-ion, or AC-DC conversion losses: the wall-to-wheels power is .25 KWH/mile.

Efficiency is likely to improve with later generations - especially aerodynamics (the most important factor with an electric drivetrain, where regenerative braking greatly reduces acceleration/braking losses, and thus greatly reduces the importance of weight), but also peripheral loads. The importance of aerodynamics can be seen with the ultra-streamlined Aptera, which is expected to use only .07 KWH per mile. On the other hand, efficiency improvements could easily go to larger vehicle size (though not to acceleration: one of the nice things about electric motors is that they get more efficient as they get larger, unlike infernal combustion engines).

Electricity costs $.10 per kilowatt-hour, at retail and on average, without taxes. Now, one advantage of electric vehicles is their ability to charge at night at lower rates, on average less than $.06/KWH. A rough average of $.08/KWH gives us 2 cents per mile to run an EV.

Gasoline costs about $1.75 currently, without taxes. A very efficient compact conventional car might get 35 MPG, which gives us 5 cents per mile. So, in Robert's framework, electricity costs only 40% as much as gasoline, when actually used to drive a vehicle.

Of course, real-world drivers pay taxes, and on average the conventional vehicles they drive aren't very efficient. Add 10% taxes for electricity, use $2.75 for pump prices, and 21 MPG vehicle for comparison, and we get 2.2 cents per mile for an EV, and 13 cents/mile for a gas-powered car: electricity costs less than 20% as much per mile!

We shouldn't forget that using electricity directly for home heating is also a waste of power: a heat pump (either air or ground based) will take advantage of the much higher quality of electricity BTU's, and slash the cost of power for home heating by 60-70%.


¹ Tesla deserves credit for a very good car, and for jump starting a movement to EVs. But, we can compare their ramp-up delays (design delays, manufacturing problems, transmission problems, etc, etc), to GM's flawless execution (a 3 year time-frame, which is very, very short in the car world, with not even a week's slippage in the schedule); their battery has an older chemistry with a much shorter lifespan; and much of their design and supply chain is out-sourced, which leaves them vulnerable to the kind of disruption they recently announced - they're likely to not be able to sell cars for about a year during the transition from their current models to the next!.