June 6, 2020 – How Investors Are Banking on the West’s Water Scarcity. Western Colorado Water Purchases Stir Up Worries About The Future Of Farming By HEATHER SACKETT, ASPEN JOURNALISM AND LUKE RUNYON, KUNC
For five years, Zay Lopez tended vegetables, hayfields and cornfields, chickens and a small flock of sheep here on the western edge of Colorado’s Grand Valley—farming made possible by water from the Colorado River.
Lopez has a passion for agriculture, and for a while, he carved out a niche with his business, The Produce Peddler, trucking veggies seven hours away to a farmers market in Pinedale, Wyoming.
For five years, Zay Lopez tended vegetables, hayfields and cornfields, chickens and a small flock of sheep here on the western edge of Colorado’s Grand Valley—farming made possible by water from the Colorado River.
Lopez has a passion for agriculture, and for a while, he carved out a niche with his business, The Produce Peddler, trucking veggies seven hours away to a farmers market in Pinedale, Wyoming.
Lopez also moonlights as a realtor, with his finger on the pulse of the local real estate market. A few years ago, he noticed a strange new phenomenon. Much of the irrigated agricultural land sold in the valley—such as parcels just down the road from his farm—wasn’t being bought by another farmer. Instead, his new neighbor was Water Asset Management, a New York City-based hedge fund with deep pockets.
When Lopez and his wife Leah grew tired of trying to make ends meet, they decided to pack up and move to southern Colorado to grow hemp. They, too, sold their 26-acre farm to WAM.
“It was hard to make the mortgage payment plus all of our other payments, and I didn’t see—with our current model of what we were doing—how we could get out of that hole,” he said. “Selling the farm wasn’t really a choice. We had to do it.”
Lopez’s recent sale is the continuation of a trend that has made some in the agricultural communities west of Grand Junction nervous; has created a buzz among water managers; and has led state lawmakers to pass a bill looking at strengthening Colorado’s anti-water-speculation law.
WAM is buying irrigated land as an investment in the future potential value of the water. Although the company isn’t doing anything illegal, its actions have rekindled deep-seated and long-held fears about water in the West—that it could hasten the death of agricultural communities’ way of life and create an unregulated market for water that would drive up prices and drive out family farms.
Because of these sensitive issues, many people in the Grand Valley are reluctant to talk about WAM and what it is doing. Meetings have erupted in anger, some who have sold have become social pariahs, and top water officials from the valley’s canal companies refuse to talk to reporters on the record. For a while, a local rancher was actively updating a “wall of shame” website for people involved in Grand Valley water deals.
“They are the same concerns that have existed since the 1930s,” said Anne Castle, a senior fellow at the University of Colorado’s Getches-Wilkinson Center. “The east slope municipal diverters or an investment firm—it doesn’t matter who it is—are going to be able to offer more money for water than you could derive from farming or ranching. The concern is that if that becomes a trend, then the whole economy of the Western Slope changes and the agriculture economy will be very different and smaller than it is now.”
The Walton Family Foundation provides partial funding for Castle’s work and funding to KUNC. A member of the Walton family currently provides funding to Aspen Journalism via the Catena Foundation.
Water Asset Management
Since 2017, WAM has spent $16.6 million buying up 2,222 acres of irrigated agricultural land in the communities of Fruita, Loma and Mack, west of Grand Junction. The company is now the largest landowner in the Grand Valley Water Users Association, the nonprofit canal company that delivers water to many Grand Valley irrigators.
WAM now owns 1,659 acres in the GVWUA delivery area, which according to its website has 23,341 irrigated acres. That means the hedge fund owns about 7% of the land irrigated by the Government Highline Canal.
WAM, whose headquarters is on Madison Avenue in Manhattan, says it “seeks to be a leader in managing global water investments that solve water quality and availability issues,” according to its website. WAM is run by co-founder and principal Disque Deane Jr., while Matthew Ketellapper has been doing much of the “boots on the ground” work in the Grand Valley as the company’s Colorado asset manager.
Deane has been involved in water markets in the West for years, buying water and land tied to water rights. He doesn’t give many interviews, but according to a 2016 ProPublica article, “debt, death and divorce” has become his sort of motto, because those circumstances drive people to sell.
WAM are cash buyers—a rare offer in this rural area. In many cases, WAM makes improvements to irrigation infrastructure, such as adding center pivots and lining ditches, and leases the land back to farmers to keep it in agricultural production.
Grand Valley’s farmland is expansive, with views stretching west to Utah, north to the Book Cliffs and south to Colorado National Monument. It is also exceedingly dry. The area where Lopez’s former farm is located was once a community of homesteaders known as New Liberty, who eked out a living by dryland farming before the construction of irrigation infrastructure, a notion at which Lopez marvels.
Not much would grow here without the region’s two main irrigation canals, which draw water from the Colorado River: Government Highline Canal and Grand Valley Irrigation Canal. The bigger of the two, the 55-mile-long Government Highline, snakes through the northern part of the valley and is managed by GVWUA. One hundred and fifty miles of ditches known as laterals bring water from the main canal to individual farms.
In mid-March, before the water began flowing in the canals and bringing the annual green return of irrigated agriculture to this valley, the air was thick with smoke as farmers burned their ditches and the earth was dusty, brown and parched.
What leaves people scratching their heads is this: How does a New York City investment firm plan to make money from marginal desert land in western Colorado?
“Everyone is very cautious about what these guys from New York are doing out here buying up our ground,” Lopez said. “I mean, honestly, it’s still kind of a mystery what their overall vision is.”
Demand Management
The key to WAM’s overall vision may lie in demand management, a state program still in the investigation and feasibility stage.
At the heart of such a program envisioned by state officials—and designed to be “temporary, voluntary and compensated”—is the concept of paying irrigators to use less water by fallowing fields. By doing so, there will be more water in the Colorado River flowing downstream to be stored in Lake Powell in an effort to bolster reservoir levels and help Colorado meet its Colorado River Compact obligations.
The future of the demand management feasibility investigation is unclear because the state on May 1 cut its budget by $750,000 due to the Covid-19-caused state financial crisis.
The thing many water managers and users in Colorado fear most is what’s known as a compact call. Under the terms of the 1922 Colorado River Compact, the Upper Basin states (Colorado, Utah, Wyoming and New Mexico) are required to deliver 75 million acre-feet of water over 10 years to the Lower Basin states (California, Nevada and Arizona). If the Upper Basin can’t deliver because of drought, climate change or any other reason, it could lead to a compact call, triggering involuntary cutbacks and an interstate legal quagmire that could drag on for decades.
A new demand management program would allow Colorado to send water to a 500,000-acre-foot pool in Lake Powell that would act as a modest insurance policy to help protect the Upper Basin against a compact call.
The Grand Valley, which takes its name from the “Grand River,” the historical name for the Colorado River, is well-positioned for a demand management program. Water left in the river at this location is almost certain to reach Lake Powell because there are few major diversions between here and the giant reservoir.
And entities in the Grand Valley have rights to a lot of water. With 1912 adjudication dates, Grand Valley irrigation districts are some of the most-senior water rights on the Colorado River and can call about 2,200 cubic feet per second down through the river system.
There is some precedent that a demand management program would work in the Grand Valley, as some irrigators here have participated in two different experimental pay-to-fallow programs undertaken by the Upper Colorado River Commission and the GVWUA. These types of programs have intense interest from many sectors, including municipalities, which often see transferring water from agriculture as a viable way to increase their supplies, as well as from environmental organizations that would like to see more water stay in the river.
Returns on Water
Since 2017, WAM has made investments in Grand Valley agriculture, choosing to make purchases of parcels in batches every few months. But in the past six months, the hedge fund has taken one step that signals what could be a renewed effort to sway Western water rules in its favor.
WAM recently brought onto its team a heavy hitter in the world of Colorado River politicking: Denver-based attorney James Eklund.
Eklund is the former director of the state’s top water policy agency, the Colorado Water Conservation Board, and served as the state’s representative to the Upper Colorado River Commission, another powerful policymaking agency on the river. He was one of the architects of the Drought Contingency Plan, the document that made the case for a demand management program throughout the Upper Basin. Soon after he left these public posts, he began representing WAM as counsel.
Eklund, who comes from a Western Slope ranching family, says WAM’s strategy is to buy irrigated land and then pump money into cutting-edge technology and practices, thereby increasing irrigation efficiency and crop yield. The leftover water could be, in exchange for payment, sent downstream under a demand management program.
“I definitely think that if there’s a program that pays farmers, (WAM is) interested in it — and for good reason,” Eklund said. “They want to make sure their investment is generating the types of returns that their investors expect.”
That strategy doesn’t sit well with Andy Mueller, general manager of the Colorado River Water Conservation District. His organization’s mission is to protect water interests on the Western Slope, which often means protecting agricultural interests. He worries that WAM’s land buys are being done with the intent to separate the water from the land and that the private equity fund does not have the community’s best interest at heart.
“I think a charitable view would be that they are engaging in the acquisition of private property in a capitalistic society, and they have the right to do that,” Mueller said. “And that might be as charitable as I could get with them.”
So far, WAM has been keeping the land in agricultural production, much the same as it had been with previous owners. According to Colorado water law, to retain its agricultural water rights, the company must continue to put the water to “beneficial use,” or, in other words, utilize the water to keep growing crops.
And Mueller’s fear of separating water from land isn’t currently possible under the rules of GVWUA, where three-quarters of the land purchased by WAM sits. Under that organization’s rules, the water cannot be sold separately from the land; you must own the land to get the associated water.
Without access to GVWUA records, it is difficult, if not impossible, to figure out exactly how much water WAM has the rights to. Class 1 land irrigated by GVWUA comes with 4 acre-feet of water per acre each irrigation season.
There is not a way to tell from publicly available property records how much of the land WAM has purchased is irrigated Class 1 land. But if all the land WAM has purchased is Class 1, then it would have at least 6,636 acre-feet of water.
Eklund said the amount of water held by WAM is akin to financial information, which the hedge fund, per its policy, won’t disclose. GVWUA director Mark Harris and the organization’s counsel, Kirsten Kurath have both repeatedly declined to be interviewed on the record for this story. However, Kurath, said in an email that GVWUA is aware of and monitoring activities within its district.
Another lingering, hard-to-answer question is how much WAM’s water is worth. Under the System Conservation Pilot Program, run by the Upper Colorado River Commission, Grand Valley farmers were paid $200 for every acre-foot of water they left in the river. Using this number as a benchmark, WAM’s 6,636 acre-feet of water could currently be worth more than $1.3 million. But that price the program paid to farmers was to lease it for only one year, which could bring the true value of the transferred water to tens of millions of dollars, experts say. How much it could be worth in a hotter, drier future is unknown.
“A lot of the crops we grow are not very profitable, so I think they are projecting, hey, this water is going to be more valuable than even the crops they are growing with it,” Lopez said.
Preventing Speculation
WAM’s land buys have not escaped the attention of Colorado lawmakers, who say what the company is doing is legally dubious. State Sen. Kerry Donovan is a rancher who represents District 5, a stretch of rural mountains, agricultural valleys and ski towns on the Western Slope.
In the 2020 legislative session, before the coronavirus pandemic slowed legislative activity, she sponsored Senate Bill 48, which Gov. Jared Polis recently signed into law. The new legislation directs Colorado’s Department of Natural Resources to convene a workgroup to explore ways to strengthen the state’s anti-speculation law.
“I also hope (this bill) sends a message to people that might be looking to Colorado to make a quick buck that we’re not interested in that type of behavior in our state,” Donovan said. “If you’re just coming up here to buy up water to turn into a profit in the years to come for your clients, like, ‘No, thank you.'”
Colorado’s current anti-speculation doctrine is based on case law that says those seeking a water right must have a vested interest in the lands to be served by the water and must have a specific plan to put the water to beneficial use.
“(WAM’s) goal is to buy assets, to make money—and as much money as they can,” Donovan said. “I don’t want that type of player in the prior appropriation system, just full stop.”
WAM attorney Eklund says the investment firm’s directors are not speculators; they are farmers.
“The characterization of any farming or ranching operation that is putting water to a beneficial use as a speculator, that’s just plain-and-simple wrong,” he said. “In light of Colorado water law, this is not accurate as a description that they’re speculating here.”
Eklund sees a bigger role for WAM and other similar players in a potential future water market. He would like to see Colorado fill up that insurance pool in Lake Powell as quickly as possible and said WAM can help the state do that.
“(WAM is) looking at how they can move water down to Lake Powell to avert a crisis,” Eklund said. “And they’re trying to make sure that we’re becoming more resilient in the agricultural economy in the Grand Valley by strategically planning for how that water gets into the account in Lake Powell.”
A Shift?
The type of land purchase that WAM usually pursues has recently shifted. All of the Grand Valley land that the company bought up until this year had been irrigated with water from the Government Highline Canal, where the right to water depends on how much irrigated acreage someone has and where water is tied to the land.
But WAM’s most recent purchase in January was a $6 million deal on 541 acres in Fruita and irrigated by the Grand Valley Irrigation Company Canal, the other big player in Grand Valley agriculture. In its delivery system, shares of water can be bought and sold, and the amount of water is not tied to the land. It marks a departure from the company’s previous purchases, even as Eklund maintains it’s not a change in WAM’s strategy.
“I would say it’s very significant,” Mueller said. “Land that is irrigated under a private water right like the GVIC, that becomes more challenging and more threatening from a permanent-dry-up perspective.”
But even as suspicion and skepticism run high, some Grand Valley farmers, including Lopez, say WAM has been a good neighbor so far.
“Absolutely, they are committed to the future of agriculture in the Grand Valley. They are fronting a lot of money to do these irrigation projects and leasing the ground back to the farmers who had farmed it already,” Lopez said. “Now, is that just to look good to the community and their investors? I have no idea.”
This story is part of a series on water investment in the West, produced by KUNC in Colorado, Aspen Journalism, KJZZ in Arizona and the Nevada Independent.
Aspen Journalism is a local, nonprofit and investigative news organization that covers water and river issues.
KUNC’s Colorado River reporting project is supported by a grant from the Walton Family Foundation. KUNC is solely responsible for its editorial content.
See Also:
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New Study Projects Severe Water Shortages in the Colorado River Basin
New Study Shows Global Warming Intensifying Extreme Rainstorms Over North America
The current warming trajectory could bring 100-year rainstorms as often as every 2.5 years by 2100, driving calls for improved infrastructure and planning.
BY BOB BERWYN, INSIDECLIMATE NEWS
JUN 2, 2020
New research showing how global warming intensifies extreme rainfall at the regional level could help communities better prepare for storms that in the decades ahead threaten to swamp cities and farms.
The likelihood of intense storms is rising rapidly in North America, and the study, published Monday in the Proceedings of the National Academy of Sciences, projects big increases in such deluges.
“The longer you have the warming, the stronger the signal gets, and the more you can separate it from random natural variability,” said co-author Megan Kirchmeier-Young, a climate scientist with Environment Canada.
Previous research showed that global warming increases the frequency of extreme rainstorms across the Northern Hemisphere, and the new study was able to find that fingerprint for extreme rain in North America.
“We’re finding that extreme precipitation has increased over North America, and we’re finding that’s consistent with what the models are showing about the influence of human-caused warming,” she said. “We have very high confidence of extreme precipitation in the future.”
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At the current level of warming caused by greenhouse gases—about 1.8 degrees Fahrenheit above the pre-industrial average—extreme rainstorms that in the past happened once every 20 years will occur every five years, according to the study. If the current rate of warming continues, Earth will heat up 5.4 degrees by 2100. Then, 20, 50 and 100-year extreme rainstorms could happen every 1.5 to 2.5 years, the researchers concluded.
“The changes in the return periods really stood out,” she said. “That is a key contributor to flash flooding events and it will mean that flash flooding is going to be an increasing concern as well.”
Better Science, Better Forecasts
The 2013 floods in Boulder, Colorado that killed nine people and caused more than $2 billion in property damage are a good example of how such climate studies can help improve flood forecasts, said Kevin Trenberth, a climate scientist with the National Center for Atmospheric Research in Boulder, Colorado.
“That was an exceptional event and the rain was like tropical rain. The radars greatly underestimated the magnitude as a result,” said Trenberth who returned to his home in Boulder during the floods with a broken foot, only to have to climb on his roof to direct the gushing water away from his house.
A subsequent study found that the rain resulted from an unusual atmospheric brew over Colorado. Mountain thunderstorms mingled with a juicy atmospheric river from the tropics, dropping up to 17 inches of rain in a few days, nearly as much as Boulder’s annual average total. Human-caused climate change “increased the magnitude of heavy northeast Colorado rainfall for the wet week in September 2013 by 30%,” the study found.
A separate study concluded that global warming actually decreased the likelihood of the 2013 floods. The conflicting results hint at the complexities of climate research, but, since then, the influence of human-caused climate change on extreme weather has become more clear.
The risks will continue to increase as the atmosphere warms, said David R. Easterling, a climate extremes researcher and director of the U.S. National Climate Assessment. “The detection has been there for a while on a lot of extreme events,” said Easterling, who was not involved in the new study. “We’re going to see increases in extreme events, and we need to be prepared.”
Easterling said most current infrastructure, such as dams and bridges, was designed based on rainfall values from the mid- to late-20th century and was not built to withstand the more frequent extreme rains identified by the new research.
“There are going to be much more damaging floods that are going to wash out a lot of the infrastructure,” he said. “You’ll see more floods and bigger floods and major impacts to our civil engineering infrastructure.”
According to the Environmental Protection Agency’s website, data from the National Oceanic and Atmospheric Administration indicates that the percentage of total precipitation coming from intense single day events has increased significantly since about 1980, with nine of the top 10 years for extreme one-day precipitation events occurring since 1990. The EPA’s precipitation indicator website also shows similar changes at the global scale.
Warmer Air, More Moisture and Shifting Storm Tracks
One way to visualize the planet’s climate system is as a heat-driven pump that tries to balance the planet’s energy by circulating it around the globe and cycling it from oceans, to land, to the atmosphere. Global warming puts more heat into the pump and that energy is manifested elsewhere in the system. For instance, for every 1.8 degrees Fahrenheit of warming, the atmosphere holds 7 percent more moisture that can fall as extreme rain, hail or snow.
But global warming can increase rainfall by much more than 7 percent in individual events. In Hurricane Harvey, for example, the estimated boost in rainfall was about 30 percent, said Trenberth.
“The outcome depends on the kind of storm. If the rainfall is in or near the center of the storm, as for a hurricane, then the extra oomph from the latent heat release intensifies the storm and makes it bigger and longer lasting,” he said. “This can also happen for an individual thunderstorm.” He was not involved in the new study.
For storms outside the tropics, the most rain happens away from the center, which doesn’t necessarily make the rain more intense, but can affect the way the storms move and develop, he added.
“This is the atmospheric river phenomenon and requires the weather situation to remain stuck for a bit, as a river of moisture from the subtropics, like the pineapple express, pours into a region,” he said. A 2019 study showed that atmospheric rivers cause most of the flood damage in the Western United States already, and global warming is projected to intensify those events.
In addition to simply having more moisture in the atmosphere, global warming may also drive more extreme rainfall by shifting global weather patterns, said climate scientist Peter Pfleiderer, with Climate Analytics in Berlin.
In a 2019 study published in the journal Nature Climate Change, Pfleiderer and other scientists looked at how global warming changes weather patterns in ways that make heat waves, droughts or rainstorms longer or more intense. With global temperature increases of 2.7 to 3.6 degrees Fahrenheit (the range to which the Paris climate agreement hopes to limit warming), periods of heavy rain would increase 26 percent—the most of all the weather phenomena studied—the research found.
Friederike Otto, acting Director of the Environmental Change Institute at Oxford, said new research showing how global warming affects extreme rain regionally complements studies that identify the effect on individual events.
As a co-investigator with World Weather Attribution, Otto has been involved in a series of recent studies looking at how global warming affects droughts, heat waves and extreme rain. The strongest signal, as she expected, was with heat waves, but she expects rain events “far outside the observations so far.”
“One thing I only started to realize in the last year, is how important attribution is for making projections,” she said. Climate attribution studies show how the warming of the planet makes some extremes more likely, and intensifies other weather events. Linking measurements of what actually happens with model predictions “gives you more confidence that the changes are because of climate change,” she said.
Escalating Impacts Require Adaptation and Resilience
Floods caused by extreme rain are among the costliest climate-related disasters. A NOAA compilation of billion-dollar disasters lists a long string of deadly catastrophes caused, at least in part, by extreme rain. These include the January 2020 floods in New York, Michigan and Wisconsin, where significant damage along the shoreline of Lake Michigan was compounded by extremely high water levels in the lake, as well as a lack of seasonal ice cover.
In 2019, extreme and persistent spring rainfall in the Midwest led to one of the costliest inland flooding events on record. Floodwaters inundated millions of acres of farms, along with numerous cities and towns and Offut Air Force Base in Nebraska—the third U.S. military base to be damaged by a billion-dollar disaster in a six-month period. In all, that wave of flooding caused $10.9 billion in damage, NOAA estimated.
Earlier this month, persistent heavy rains contributed to the failure of a dam in Michigan, and Easterling said heavy rains were also implicated in the 2017 Oroville Dam failure that cost $1.1 billion and forced the evacuation of 180,000 people. The flooding caused by record rainfall from Hurricane Harvey in 2017 was a big part of the $125 billion worth of damage caused by the storm.
Extreme rain can also have an impact on a smaller scale. In mountainous areas, heavy precipitation over even a small area can be disastrous. In the Rocky Mountains, such cloudbursts have caused toxic floods of acidic water from abandoned mines, and in the European Alps, scientists say extreme rains are unleashing larger and more destructive rockfalls and landslides.
“We are going to get more intense, extreme precipitation, this is one of the things we are sure about,” said Hannah Cloke, a University of Reading natural hazards researcher and hydrologist specializing in flood forecasting.
The United Kingdom has been hit repeatedly by extreme rain in recent years, including Storm Desmond in 2015, which was linked with global warming and caused at least $550 million in damage, flooding nearly 10,000 homes and businesses. Cloke said the recent flooding has apparently even shaped her daughter’s world view. For a recent school assignment, the nine-year-old used plastic bottles to build a floating house reminiscent of the movie Waterworld.
“Most of the design standards for storm infrastructure are not high enough for the predictions, or even what we’re seeing right now,” she said. “We have to get away from the idea that you can just carry on business as usual. We have to adjust our expectations of what could happen. We need to get people out of harm’s way and be realistic about where we live.”
Cloke said the certainty of increased extreme rainfall means that communities have to adapt by creating or restoring natural areas that can soak up the rains in the uplands, and cities need to be redesigned with green roofs and other measures to prevent flood waters from piling up and destroying property. More and more, flood experts are thinking in terms of socio-hydrology, she said.
“You can’t just look at the water, at the heavier rain, and how fast it’s running down the rivers,” she said. “It’s about how humans and water interact at all levels, and how politics controls where the water is. It’s about who is at risk of flooding and whether those people have any agency to reduce the risk.”
New research like the PNAS study that shows the regional fingerprint of global warming on extreme rainfall can help reduce the risk, she said, because it enables better short-term forecasts.
“We have a lot of the right science in place but we still can’t predict the exact locations and amounts,” she said. “We don’t quite understand the development of the water cycle and we often underestimate rainfall for those reasons. But we shouldn’t be surprised that these rains are happening. We’re going to see entire cities at a standstill.”
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Falling Battery Price Transforms Economics of Green Energy
Paul Caine | January 2, 2020 6:05 pm
A dramatic fall in the price of lithium-ion batteries over the past decade is transforming the economics of renewable energy as well as the affordability of electric vehicles.
Since 2010 the cost of a lithium-ion battery per kilowatt hour (kWh) has fallen almost 90%, from $1,183 in 2010 to just $156 in 2019.
Given a typical electric car might have a 30 kWh battery, it means that battery in 2010 would have cost over $35,000. Now, the cost of that same battery would be less than $5,000.
“The target is $100 per kilowatt hour,” said George Crabtree, senior scientist and distinguished fellow at Argonne National Laboratory in Lemont where he leads research efforts to produce better batteries. “A lot of people predict that when the price hits $100 per kilowatt hour that’s the moment that electric cars will be competitive economically with gasoline cars.”
Crabtree, who is also a professor of physics at the University of Illinois at Chicago, said that two things have been driving down battery costs. First, the technology within the battery has improved. And second, manufacturers have figured out how to build batteries more efficiently.
“Every year the manufacturers got cleverer about cutting a few more corners and saving a little more money,” said Crabtree. “It’s really the mass market which brought the price down.”
He said that for cars like taxis that might clock up as many as 70,000 miles per year, electric vehicles are already more economical than their gas counterparts.
“Fifteen or 20 years ago when the Prius came out, suddenly all the taxis in Chicago became Priuses because it was cheaper, it just made sense,” said Crabtree.
He predicts that within the next five years the cost of batteries will have reached that $100 kWh price, meaning electric vehicles should be no more expensive than a typical non-electric car.
“I think 2025 is when that will happen,” said Crabtree. “When even for personal cars the cost parity is hit (electric vehicles) will take off. The economics will drive it and we won’t have to say the words ‘climate change’ – we will just do it because it is cheaper.”
But electric vehicles are only as clean as the power used to charge them.
(Pixabay)
“This is critical,” said Crabtree. “In places where the grid is coal-fired, if you are charging your EV with coal-fired electricity you are basically putting out the same amount of carbon emissions except they come from the power plant, they don’t come from the car. So it’s critical to charge with renewable energy – that means wind and solar typically or at least in northern Illinois emissions free would be nuclear.”
But while the falling cost of batteries is bringing down the price of electric vehicles, it could also revolutionize the power grid because cheaper batteries allow for efficient storage of energy from renewable sources. Currently it’s not uncommon to drive past a wind farm on a windy day and see none of the wind turbines moving because there is not an efficient way to store that energy. The same is true of solar power. But that could all change if cheap batteries make it economical to store that power.
In addition, storing power in vast battery banks could help utilities by providing a reserve source of energy to be tapped at times of peak demand. And by enabling power to be generated and stored locally, batteries could make the grid itself more resilient against extreme weather events and even terrorist attacks. Instead of power being generated at one power station that could be crippled by, say, a cyberattack, in the future a community’s power needs could be met by so called “microgrids” – where power is generated locally from wind or solar sources and then stored in batteries.
“The EV revolution will do a lot to eliminate carbon emissions. The grid will do even more,” said Crabtee. “At present if you look at the price of say wind and solar versus fossil alternatives in Nevada and Arizona – which are both very sunny – you can combine solar with a battery for storage and sell the electricity for less than 3 cents per kilowatt hour. That’s lower than anything else in those states. Prices are falling and they are continuing to fall. I think we can look for the day when it will just be a no-brainer that if you are going to install new generation it would be wind or solar but paired with a battery.”
TAGS: ENERGYARGONNE NATIONAL LABORATORYGEORGE CRABTREE
