If electric vehicles are in widespread use on a global scale in the next 20-30 years, it may seem as if this would put significant stress on the energy grid. However, in this video clip from "The High Energy Show" on Motley Fool Live, recorded on April 5, Fool.com contributors Travis Hoium, Tyler Crowe, and Jason Hall explain a far different scenario where less energy would be used by EVs.
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Travis Hoium: This is the data right now from 2021, the electricity production in the U.S. was 4,116 terawatt-hours of electricity. This is math I did, so not projections from anybody else. But if you take, this is from Fred, the number of miles driven in the U.S. is about 3.23 trillion over the last year, as of January, miles per kilowatt-hour for a Model S is about 3.8 and you get an increase of about 842 terawatt-hours of demand in electricity if everyone is driving an electric vehicle.
Now, take into account that this transition is something that we've been talking about for a long time is going to take 20, 30, 40 years. This scale of increase is big if we needed to do it tomorrow. My feeling is that if this takes 20 or 30 years, that's pretty manageable. But I don't know if you guys have thoughts on that.
Tyler Crowe: It's very much in line with what some other groups are saying. The National Renewable Energy Lab put some data out on this roughly in line with what they're saying by 2050, we're going to have to grow electricity generation by about 1.6% annually. Which again, it doesn't sound like much.
It puts us more or less, I wouldn't call it a historical trend because we've actually been trending down on growth because as things become more efficient over time, so we would actually start to see a little bit of an uptake. But it's 1.6% annually. It's a very manageable amount as we're bringing new things online. Especially now that we've retired most of the coal-generation fleet and we can now just start to ramp things up and we've replaced a large portion of that.
Hoium: For context historically, over the last century, the U.S. has increased electricity demand by about 2% per year. This is on par with what you would expect from that. The other couple of things I think were notable. I was trying to put this number into context. This is total energy consumed in the U.S. according to EIA and this pulls everything together. There are 28,633 terawatt-hours, so significantly more than the amount of electricity that's produced.
But a couple of pieces of context that I wanted to put in here is the efficiency of the way that we're consuming energy today. When you put gasoline in your car and drive around, you're only actually using about 20% of the energy, up to 30, I think it's the max if you have a very efficient vehicle, but around 20% of the energy that you put into your car, you're actually turning into propulsion to move around.
Jason Hall: The rest is heat and noise.
Hoium: The rest is heat and noise. In a thermal power plant, so if you have natural gas power plant or coal, that efficiency is far higher or sometimes exceeding 50% by a pretty good margin. So when we talk about electrifying things, you're actually oftentimes reducing the amount of energy you're consuming overall from a BTU perspective.
So I think that's just another thing to put in context when you put some of these numbers up is that even if we're driving the exact same amount, if we're all driving electric vehicles versus internal combustion engines, we would actually be using less energy overall. That's always a little bit hard to wrap your head around but just wanted to bring that to the fore.