Claims have been made that Electric Vehicles can largely replace oil fuelled vehicles. These claims overlook critical factors that indicate that Electric Vehicles are a partial solution at best to Australia’s liquid fuel predicament.
Energy is the economy. In my last article I described Australia’s liquid fuel predicament and summarised the potential for alternate fuels/propulsion systems to replace oil as being too little too late. Professor Mark Diesendorf from the University of New South Wales commented that Electric Vehicles (EVs) could substitute for most Internal Combustion Engine (ICE) powered vehicles and most of Australia’s oil use within two decades. Whilst highly desirable in addressing both climate change and liquid fuel dependency, such an outcome is improbable, leading to the conclusion that EVs are at best a partial solution to addressing Australia’s liquid fuel predicament.
In a thoughtful 2018 paper Professor Diesendorf argued the case that the barriers to a 100% renewable electricity (RElec) system are primarily political and institutional rather technological and economic. He concluded that a 100 percent RElec system can provide all future energy use, including for transportation and heat. Unfortunately, the analysis leading to this conclusion omits critical factors that suggest that attaining such an outcome will not be possible.
The first omission is a consideration of net energy. Net energy is the difference between the energy invested in harnessing an energy source (e.g. for the manufacture, installation and operation of a solar panel) to the energy returned from that energy source (e.g. the electricity produced from the solar panel). A more useful way of expressing net energy is as a ratio, known as the Energy Return on Energy Invested (EROEI), which allows a comparison between energy sources. The world as we know it has been built, including all renewable energy technologies, from fossil fuels with comparatively high EROEI values. Renewable energy sources generally have much lower EROEI values. This is not surprising given that we are attempting to replace highly concentrated sources of energy (fossil fuels) with mostly diffuse sources (solar and wind). At global scale, an aggressive adoption of RElec would require an increase in energy production of 35 percent (relative to a fossil fuel powered economy) to counter for the low EROEI of renewables. Whilst the penetration of RElec/EVs remains low the net energy effect is largely masked but will become a very real limitation at high penetration rates. A limitation which recent studies suggest would lead to a protracted economic contraction before the transition to renewable energy was complete.
Building EV fleets and the associated RElec infrastructure will require an enormous quantity of mineral resources. Several academic studies have investigated whether there will be sufficient mineral resources to support the transition to RElec/EVs and the results are not promising. Modelling suggests that the demand for 12 minerals (including tin, silver, zinc and manganese) required to building a 100 percent RElec infrastructure by 2060 would exceed current global reserves. A similar situation exists for EV batteries, with cobalt, nickel and lithium requirements for a 100 percent transition to EVs exceeding current reserves.
Whilst further exploration and technological developments may supply the required additional mineral reserves, they are unlikely to reverse the trend of declining ore grades for many important minerals. Declining ore grades require larger volumes of ore to be processed resulting in increased energy consumption per unit of mineral produced as well as placing additional demand on the environment, increasing water requirements and social costs. As an example, the energy consumption for Chilean copper has increased at five times the rate of copper production.
What do these factors imply for the future of EVs? Currently EVs make up only 0.4 percent of the global vehicle fleet but sales are expected to grow rapidly, aided by several jurisdictions who are planning to phase out ICE vehicles. Prices are expected to become more affordable with improved battery technology and economies of scale with a predicted nine-fold increase in lithium battery demand over the next decade. At some point however, given the aforementioned constraints and a projected shortfall of lithium come the mid-2020s the price of EVs could well stabilise, if not increase. EVs could very well become a victim of the ‘Law of Receding Horizons’ where the high cost of material and energy inputs pushes economic viability further into the future.
Economic viability of EVs is further threatened by current economic conditions. With the majority of EVs currently available in Australia costing $60,000 or more (compared to the average new car price of $28,000), a trend of declining car sales for several years pre-COVID, high debt levels and uncertainty about the future; purchasing an EV is unlikely to be a priority for many Australians for the foreseeable future. Additionally most EV manufacturers are a long way from making a profit. A scenario where the price that EV manufacturers require for profitability remains much higher than the price that the majority of car owners are willing (or able) to pay, over the long term, appears both plausible and likely.
The totality of these factors; declining net energy from renewables, likely inadequacy of mineral resources, increasing energy requirements for mineral production as well as current and likely future economic conditions, suggest that at best, EVs will be a minor solution to Australia’s liquid fuel predicament. Energy Consultancy Wood Mackenzie has suggested that global EV penetration rates may only reach 15 percent over the medium term. Furthermore the environmental benefits of EVs maybe overstated, with only 20 percent lower greenhouse gas emissions on a whole life cycle basis compared to ICE fuelled vehicles with double the water and land toxicity.
With EVs, and other alternate fuels, likely to offset only a modest proportion of the energy supply lost to declining oil production we face quite a dilemma. To plan for and adapt to this dilemma requires a robust assessment of the realistic potential for EVs to replace ICE vehicles combined with realistic scenarios for future oil production. This sort of analysis is completely missing from Australian governments at all levels, even though the likelihood of Australia facing a sustained liquid fuel deficiency within the next five to ten years is frighteningly real.
A liquid fuel constrained future will be disruptive. It cannot be anything but with a barrel of oil containing the energy equivalent of 4.5 years of human labour. The depth and nature of the resulting disruption is however something that can be influenced. EVs can and will play a part, albeit limited, in a mitigation strategy. Far more important however will be redesigning our economy to function using less liquid fuel. With alternative fuels and propulsion systems being too little and too late, conservation rather than technology based ‘solutions’ will be the most important mitigation strategy in adapting to a liquid fuel constrained future.