Gretchen Reese (00:06):

Hey there. Welcome to Fleet FYIs, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen and every week you'll hear from me and some of the industry's finest in candid conversations that will shed some light on not only two decades worth of data insights, but some of the industry's hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle. But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us, but I've got a quick favor to ask you. Once you've finished today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it.

Gretchen Reese (00:51):

Give us a rating, five stars I hope or tell us (laughs) what you liked or leave us a comment or a question about what you've heard in today's episode. But if we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later episode. If that sounds good to you, let's get back to the show.

Gretchen Reese (01:17):

Hello everyone, and welcome back to another episode of the Fleet FYIs podcast. I love a seasonal transition. I'm just going to start the show (laughs) off today and say that. Que the classic Midwestern weather chat. I know I say that every single show, but it's true. I love transitional seasons. The weather goes a little cooler, mornings go slow and foggy evenings are cozier, and I can finally turn on my fireplace without judgment that is (laughs). I should really emphasize that piece there big time. But getting back to the point of this episode, colder weather brings more energy use. I mean, that's true for pretty much most families or most really anybody. Um, especially if you live in a cold region like I do. And whilst the higher energy use due to colder seasons, isn't exactly the topic of this show, higher energy use in general, but especially due to the higher purchase and use rates of electric vehicles is.

Gretchen Reese (02:16):

Hopefully this gave you all a lovely insight as to my train of thought for this one, a little bit sporadic, a little bit all over the place, but that's okay (laughs). At least that's what I tell myself. But to get back on track, let's talk about the internal combustion engine. To start off with, the internal combustion engine, as most of you know, and the use of fossil fuels, undoubtedly transformed the way that humans have lived. It's primarily because of inexpensive accessible electricity and fuel run transportation that our society has been able to achieve the level of innovation that it has today. It's a pretty big deal. Still, as I'm sure you all know by now, there's a growing concern about climate change that is forcing us to rethink our energy consumption and generation methods going forward.

Gretchen Reese (02:59):

And together with the transition to electric vehicles, comes the need for clean, renewable energy sources, which is pretty much what we're talking about in this show today. It's projected that renewable energy will be the largest electricity source by 2050 as the world completely moves to phase out fossil fuels. Now, perhaps there may still be some CNG, LNG, hydrogen based fuel circulating. I, I don't know, I can't answer that right now, but I think it's an interesting aspect of this movement we'll call it. With more fleets looking to take on EVs. I think it's going to be... Well, actually I know it's going to be essential to also consider how these EVs are being powered and whether it's a clean and sustainable practice. If you haven't read our article currently that we have out on the Utilimarc site on green refineries, that actually aims to answer a bit of this question, talking about the composition of the grid itself and you know, whether power is clean or if it's "Dirty," but we'll get into that a little bit later in this show.

Gretchen Reese (04:02):

And the thing that I really want to stress here is that the economic and environmental benefits of going electric are no longer a question, at least in my opinion. And granted though it is humble, I think a lot of people tend to share that. I'm aware that not every vehicle class or type or even industry can electrify. Um, you know, that's very clear to me, it always has been, and it always will be, but it's also very clear how a major shift away from internal combustion engine vehicles can be imperative in the battle against climate change. However, the primary question in this movement has pivoted from if the, if EVs will be able to help, um, to actually, how will we power so many?

Gretchen Reese (04:46):

So along with the lack of sufficient charging stations across the country to support a major increase in EV use, um, there's other countries, for example, like the UK, uh, that I want to say this statistic is that you'll never be, um, more than 30 miles, or... I think it's miles, I don't think it's kilometers, but anyways, I digress more than 30 miles away from a charging point. We can't currently (laughs)say that here yet, but you know, the real question is it's, you know, can, can the electric grid support the demand? I think that has to be considered and further explored because, you know, it's one thing to install charging infrastructure, right? It's another thing to ensure that the electric grid can support it. And according to the US Energy Information Administration, otherwise known as the EIA, which I'll probably refer to them later as, an average American household uses about 29 kilowatt hours per day to power their homes.

Gretchen Reese (05:41):

This is roughly about the same amount of electricity that would be needed to power an EV for about 100 miles. So as you can see there (laughs), you know, it's, it's a pretty big jump, right? And it's projected that with the increasing demand for EVs year over year, energy consumption would go up across the country, nearly 40% by 2050, which again is a very big number. So to support this transition, I personally think, and I mean, it's, it's true, states will have to reevaluate their current capacities and consider whether grid expansion, increasing power production, or the introduction of more extensive sustainable power sources are purchasing electric, uh, power from other states could be viable solutions.

Gretchen Reese (06:34):

But let's dive into the history of the electric grid, shall we? What began as just a single power plant in lower Manhattan connected to a handful of homes and businesses is now comprised of over 7,700 power plants, 3,300 utilities and over 2.7 millions of miles of distribution lines, powering 100s of millions of private homes and businesses across the country. In regard to how this energy is generated, the EIA states that 60% comes from the burning of fossil fuels, 20% from nuclear power and another 20% from renewable resources, rough estimation, but you get the idea. In 2020 3.8 trillion kilowatt hours of electricity was consumed in the United States alone, which is 13 times greater than the total amount consumed in 1950 when this began. Of this amount, 38.9% and 34.8% of the electricity sales are attributed to residential and commercial sectors, respectively with a mere 0.2% going to transportation.

Gretchen Reese (07:38):

I know I'm throwing a lot of numbers at you right now, but (laughs) bear with me for this one. So in the residential sector to break this down, heating and cooling consumed the most energy by a pretty decent margin. I mean, you all know this, right? With the weather being so extreme, it's easy for heating and cooling to strain electrical systems that were built decades ago when more extreme conditions weren't a consideration. I mean, we all know this, the summers are ungodly hot, especially this one up in Minnesota, where we've been experiencing droughts, like you wouldn't believe and an over abundance (laughs) of 90 degree plus days. But then also the winters can be very, very chilly, especially for areas that might not be experiencing that on a regular basis. We'll take case in point Texas over the last year. Coming out of the 2010s, which are recognized as one of the hottest decades on record grid operators have seen firsthand how urgently the electric grid needs revamping. Summer heat waves again, and polar vortexes... I don't even want to think about those at this point (laughs).

Gretchen Reese (08:38):

Those are so cold in the winter have become more commonplace, damaging above ground power lines, exacerbating limited electricity supply and ultimately causing power blackouts. But that actually leads me into my next point, which is talking about why fleets are going green in the first place. So to get back to the root of this, fleet managers are feeling pressure from all sides to ditch their internal combustion engine vehicles and employee greener technology. That's not new. I mean, that's been around for a while, but especially as climate targets have become more of a forefront part of this conversation I think the pressure has multiplied and been amplified so much in recent years, you know, especially with it taking some of the biggest space in national news and actually international for that point. The world itself is in a race against time... I know, dramatic, right (laughs)? To make reparations for global warming. And with transportation being the biggest contributor to said pollution, um, output fleet managers hold a lot of responsibility in making a change.

Gretchen Reese (09:43):

We recently surveyed about 200 of our biggest customers regarding their plans and motivations for switching to electric vehicles. Um, this one I actually found to be quite fascinating. And I think you actually might like to view the results, you know, just if you're interested, um, if you'd like to take a look at them, they're available on our website, which is www.utilamarc.com. Just type in, "Electric vehicle survey," and you'll find it straight away. But unsurprisingly to me, the top answers were reduction of CO2 emissions or, you know, elimination of greenhouse gases, or I should say reduction because completely eliminating them is a very lofty goal as well as fuel savings. Again, like I said, it's not surprising. Those tend to be the highest, you know, the highest rated reduction of anything, right?

Gretchen Reese (10:30):

You know, no one likes spending on fuel and no one likes to know that they're putting out more CO2 emissions than they're eliminating. But the thing is this shows how the benefit of going green is twofold. Companies can do their part in reducing harmful greenhouse gas emissions while still also cutting fossil fuel consumption and saving a substantial amount of money. It seems like a win-win to me, right? But additionally, with heightened focus on climate change, especially in this last year, you know, when everyone just has time to sit around and watch more of the news these days, politicians have been pushing business leaders to act with urgency, urgency, urgency, urgency (laughs). And to facilitate the, the transition numerous grants and incentives and tax breaks are being offered for companies and individual consumers who adopt electric vehicles with the hope that significant change will be made in the upcoming decades, which that could very well happen.

Gretchen Reese (11:34):

So it's said that electric vehicles are shaping the future of electricity demands. That's probably not a far jump to make (laughs), but how are they doing that? Though the demand for EVs is certainly increasing every year. I mean, if you listen to, um, one of the recent podcasts that we did with one of the folks from Geotab and guys know how big of a fan I am of that team, um, Charlotte Argue was my guest for this particular episode. I want to say off the top of my head, it was talking about why electric vehicles are the future, or perhaps it was why planning for EVs is not just good for, you know, operations, but it's also smart policy. She was talking about the demand increasing in Canada, as well as, you know, parts of the US but you know, not just that, but all over the world, right?

Gretchen Reese (12:20):

So there's, it's interesting because there will be no major need for increased grid capacity anytime soon, which I feel like that sounds a little bit contradicting to what I've been saying. I will put it into a bit of perspective. In the long run, new power plants and upgraded networks will facilitate nationwide EVs adoption. However, EV adoption isn't high enough yet to need to do a total grid overhaul right now, yesterday, tomorrow you get the idea. So if the US was to fully rely on EVs again, you know, what if scenario, electricity demand would probably grow about as much as 55% in some states, which requires significant investment in infrastructure. I mean, anyone could tell you that, but for now, however, you know, most analysts are in agreement here that the current grid has the capacity to power millions of new EVs with the help of some meticulous planning to ensure there is no shortages or unreliab-unreliability for, you know, any other electric needs.

Gretchen Reese (13:20):

So that's good news and a look up there. But as every state has varying grid capacities and different patterns of consumption during different times of the year, you know, like we were talking about with the seasonal variation, grid operators will have to carefully manage energy consumption. That's just truth of the matter there. Considerations, like I said, will include seasonal changes in electricity use, you have the peak and off peak usage times throughout the day, and whether purchasing electricity from other states could be an alternative solution. With the increase of electricity consumption due to EVs, it's also important to question how this electricity is being generated and to see if it could be cleaner. The urgency again, keyword there, urgency, urgency, urgency (laughs), in adopting electric vehicles goes together with the need for renewable energy, such as solar power, wind power hydro-power. And if the country itself transitions to electric vehicles, ensuring that the electricity is produced in a clean way is just as important in the bigger picture.

Gretchen Reese (14:20):

But again, you know, that's going to have to require substantial analysis and further exploration for anyone to be able to answer that question, even me. And, you know, again, this is looking at the types of vehicle classes and the types of fleets that are actually able to electrify because not every single one can. And I don't want the key message of this podcast to be taking away that, "You have to electrify to be a sustainable." No, no, no, no, no, that is not true. I know a lot of people will say that, but it's absolutely true. You can completely be more sustainable just from actually looking at your, your current data and being able to identify waste reduction opportunities. And that's actually one of the biggest things that we tend to recommend to our customers anyways. But more on that (laughs)... More on that a little bit later. I guess my point is, is that sustainability, isn't just for one group of people.

Gretchen Reese (15:13):

It's not just for people that are interested in electric, and it's also not just for (laughs) the people that are interested in renewable energy. I mean, I've said this a million times probably. Well, maybe not a million, that's a bit of an exaggeration, but I'm not going to stop saying this piece, sustainability at its core. And here comes the word nerd back out again. I mean, anyone that knows me from my team, I call myself the resident word nerd because I love definitions, new word every day, increasing my vocabulary. That's usually my goal. But back to, back to my point. The root of the word sustainable or sustainability or sustain is basically just to be able to keep your organization, your fleet, your operations, thriving, and being able to, you know, again, sustain time to come.

Gretchen Reese (15:59):

So if you're trying to prolong your fleet, prolong your organization, to be able to withstand, you know, changing times changing economies, you need to be able to, you know, adapt to these new changes. And that is truly what sustainability is at its core. So again, could be electric, could be renewable fuel, could be CNG, could be LNG, so many options. So I'm not absolutely alienating anyone that can't electrify. It's just something to think about for now. But to get back to the question at hand, the true question at hand, "Can the electric grid handle the strain?" If electric vehicles are shaping the future of our electricity consumption and future demands, it's reasonable to question whether the current electric grid can handle the strain of increased EVs or not.

Gretchen Reese (16:59):

We touched on it a little bit, you know, like I said, you know, the increase of apparently millions of EVs wouldn't do much to shake the strength of our current electric grid system, but it's not just one factor, which a lot of times is looking at charging EVs that can overload the electric grid. Rather it's a multitude of facets that can sometimes be avoided by simply delving further into planning, um, a better strategy. For example, let's take a look at optimal charging times. One main concern with EV use is when individuals or fleets will be charging their vehicles. Electricity use is significantly higher in late afternoons and if consumers are charging their vehicles during the same time, it can quickly lead to grid overload.

Gretchen Reese (17:41):

If vehicles were to be charged during optimal off peak hours, uh, many states such as Texas would have more than enough capacity to be able to handle the demand. Other states such as California, however, you know, they might not be able to handle the strain on their electric grid no matter the time of day, just because of population density and you know, when people are using energy, most. Like I said, late afternoon, early evening, people are watching TV, people are cooking. I mean, you know, it's, it's daily life. It's when you tend to use the most energy during your day. You know, when you're working, in the morning when you first get up and also right before you go to bed, it's kind of your natural routine.

Gretchen Reese (18:16):

The second piece of this is infrastructure planning. In the cases of states who do not have sufficient surplus in capacity or can't charge, uh, solely during off-peak times million or even billion dollar investments into infrastructure will be necessary. New power plants will have to be built along with adding the necessary transmission lines and transformers to carry the electricity where it's actually needed. The grid might also have to be expanded to support EV charging stations. I mean, there's a lot that goes into this. And like I said, I don't have all the answers here, but there's a lot to think about there. And lastly, the vulnerability to weather. Now, I know we've spoken a bit about this, primarily in terms of energy consumption, energy use. I mean, I live in a cold state, I talk about that a lot. I tend to moan about that a lot actually, when it is very cold because I, for one, don't love it when it hits below 30 degrees because it is frigid.

Gretchen Reese (19:11):

But if we're talking about vulnerability to weather, it's not just hot and cold that we're looking at. Natural disasters like hurricanes or thunderstorms, tornadoes, you get the picture. In states where weather conditions are worsening and reaching new extremes every year, electric grids are already facing a ton of challenges. For example, in the fall, wildfires ran rampant through Northern and Southern California causing utility managers to carry out preemptive power outages in order to lessen the risk of power lines sparking more wildfires. And, you know, while the power outage was meant to save lives and avoid disaster, the daily need for electricity, doesn't stop. And life goes on even with the wildfires that are running rampant. One solution is actually that's being considered is vehicle to grid technology that allows fully charged batteries and parked EVs to be used as a backup resource for energy in times of need.

Gretchen Reese (20:02):

For example, the new Ford F-150 lightning that is fully electric, that comes with a battery that is large enough to power your house should you need it. This is not an advertisement for Ford, but it's, it fits really well into the discussion here because you know, it's, it's an interesting thing to consider. Some family use generators, other people may be able to use their EBs, who knows? But my point is, is that, you know, power outages can occur for a multitude of reasons. It's not just because of a line down or whatnot, it could be to avoid disaster too. But overall, the future of electric lies in adequate planning, at least so they say. Ultimately, the electrification of vehicles and supporting the transition will come down to careful planning from grid operators, federal, and state investment into infrastructure, and a gradual switch to clean energy sources.

Gretchen Reese (20:52):

The process itself will require major collaboration on all fronts and creative solutions for the potential problems that I've been talking about for this entire show. You know, electrification, it's not going to be a one and done operation, although it's interesting because this is the last time. And one of my favorite people in the fleet industry, Mr. Dave Meisel, you guys have heard him on this show before. We've actually recorded a mini series with him previously to which if you hadn't listened to that, I highly recommend you check it out. It kind of ties in hand in hand here, right? So if you have listened to it already, he'll tell you it's not a one and done operation, but the last time that the industry experienced this much of an overhaul was when we went from a cart and horse to the Ford Model T. And we haven't had this much overhaul in such a short amount of time.

Gretchen Reese (21:41):

And because it's happening so quickly, it's causing a lot of, a lot of uneasiness, a lot of uncertainty, but it's going to take several decades before the right infrastructure is in place to support it. I mean, that's clear as day. Whether it's several decades, I should say, or perhaps even, you know, a decade or two, the sooner leaders and managers begin talking and acting the sooner society will be able to reap the benefits of a healthier environment and considerable fuel savings. So, you know, there's a lot to be said for it. And there's a lot to be said against it, but I think this (laughs)... One thing I'm learning about electrification, the more episodes in the more we write about this, and the more we talk about this is that it's still kind of up in the air. You know, we, we have an idea of where it's going, but there's, there's nothing set in stone yet because it's still a rapidly changing industry.

Gretchen Reese (22:41):

Along the same lines of trying to figure out, you know, what is rapidly changing? What if we tried to power the grid with solar power? Is that something we'd even be able to do completely? I think it's been clearly established that electric vehicles are an overall. If we look at this big picture, 'cause like I said, it's not the only alternative to internal combustion engines, but they are overall a more sustainable alternative to ice vehicles. As Elon Musk once famously said... At least I think it was Elon Musk here, I could be wrong with that one. But he did say, he took a team of either it was engineers or analysts or whomever it was. Um, and he said, "If I locked you in an airtight room, would you rather the vehicle that would be running in that room be electric or would you rather be an internal combustion engine? Airtight, no air is getting in or out, which would you prefer?"

Gretchen Reese (23:35):

Seems pretty (laughs), pretty straight straightforward to me if he asked me. But the point is EVs there zero emissions guarantee is pretty attractive and promising for a healthier planet. But what people don't often realize is that these vehicles do in fact produce emissions indirectly, such as during the production of said vehicles and electric charging. What they don't produce are the local tailpipe emissions as traditional internal combustion engine vehicles do, which when you see companies like GM, uh, Ford, GMC, all of these companies that are promising to be tailpipe emission free by XYZ date, that's what they're talking about. So bearing this in mind, the conversation now becomes a question of whether electricity generation is as green as it could be. If a state adopts an impressive number of EVs, but as powering them on a "Dirty grid," like we were talking about before that relies mostly on coal, the net benefit is significantly smaller.

Gretchen Reese (24:33):

We did a piece, that was actually, I thought it was pretty interesting. It was talking about the overall sustainability of driving an EV depending on the region you're in. I think in the US right now, it's anywhere between 40% and 60% more sustainable. However, in regions like Costa Rica, where the grid is primarily... I actually think it's mostly renewable resources. It's surrounds the 90 to 95% more sustainable option to driving an internal combustion engine, purely depending on grid, makeup and grid infrastructure. Fascinating in my mind. But according to the US Energy Information Administration, again, the EIA as a refresher for grid makeup, about 60% of the country's electricity comes from fossil fuels, 20% from nuclear power and 20% from renewable sources like wind, solar and hydro. More power plants, again are needed in the upcoming decades to support the increased need for electricity consumption.

Gretchen Reese (25:29):

So investment into renewable energy, especially the infrastructure behind it should take a pretty high priority, especially if we're looking at ways to try and decarbonize our grid because the overarching goal should be a switch to electric transport powered by decarbonized, renewable energy. It's not going to happen straight away though. I mean just the switch to decarbonized, renewable energy, it's not reliable enough to be able to assume there won't be outages straight away. I mean, that's, that's why we're still using the coal powered and the nuclear powered grids. I mean, it's not, like I said, it's not going to go away completely. However, there there's options to supplement it with renewable energy. Solar has grown rapidly in the past decade reaching about 97 gigawatts of capacity by 2020, which is roughly enough to power 18 million homes, which is pretty impressive. Though only 11% of the renewable energy consumed in the US is solar, the figure overall is expected to more than double by 2050.

Gretchen Reese (26:29):

Again, looking up there that's really great. It becomes a really attractive resource because it doesn't produce air pollutants. I mean, you're installing these solar panels on the top of your homes or in fields or wherever they may be. And you're just relying on the sun to shine on them, to be able to power your homes or infrastructure or your grid. Overall, the generation of solar energy typically has little to no effect on the environment. And on the other hand, solar energy comes with a little bit of limitations in that regard, too. Sunlight can be kind of inconsistent depending on location, time of day and year, and weather making the use of solar panels less cost-effective in some places which can be a little bit frustrating, but the trade-off is you have that greener production of an energy source. Solar panels also, I mean, you guys know this right? They need to cover as much surface area as possible to collect a workable amount of sunlight.

Gretchen Reese (27:21):

So lack of space could be a limitation for generating solar energy, especially perhaps if you're a consumer living in a city where your only ability to be able to generate solar energy is a small rooftop. I mean, that's a challenge in itself. But will fleets be able to power their charging stations in the sun? That's a good question. Fleet managers across the country are considering solar energy as a viable option for powering their EVs and reducing pressure on the electric grid. Many EVs on the market today feature a solar panel roof in fact, to work in addition to traditional charging stations or as an extra charging component in addition to the regenerative braking technology in hybrid vehicles, which is kind of fantastic if you ask me. Some local government fleets are also taking matters into their own hands and creating their own power supplies, otherwise known as micro grids. For example, Jersey City has created its own self sustainable municipal micro grid to support the city's fleet of EV garbage trucks, which is kind of cool along with some other government EVs that are currently already in use.

Gretchen Reese (28:22):

And the micro grid itself was created independently of the larger electrical network with the intention of being able to cover the fleet through any type of power outage or deficiency or, and to reduce greenhouse gas emissions to zero. Pretty fantastic. Again, like I said (laughs), but similarly, the City of Orlando in Florida is expanding their current solar array and purchasing a cargo container sized battery, which massive, but this system was paid for by the Orlando Utilities Commission and will power Orlando's 32 electric vehicles with any extra energy generated flowing right into the city's grid to help the everyday consumer out. I think personally, this plan shows the endless opportunities that renewable energy can provide as well as, um, you know, the city being able to power government fleets with clean energy while transferring any excess into the city supply.

Gretchen Reese (29:13):

It's a great tactic and a great way to invest in infrastructure that will help out vehicle fleets as well as helping out the everyday consumer. All things considered, solar power along with other renewable energy sources, it'll play a huge and critical role in EV success in the road to zero emissions. I had to throw in a driving pun there it was, I was waiting for it guys (laughs). I was waiting for it. It needed to happen at least at one point in this episode. But back on topic here, like EV implementation, a major switch to solar power will not happen overnight, absolutely not. And as government and leaders continue to push for investment into solid infrastructure, more communities across the country will be able to rely on a clean electrical grid. At least that's the goal, but who am I to say?

Gretchen Reese (29:58):

I'd love to hear your thoughts on this topic. Do you think that electric vehicles and the recent uptick in purchasing usage and charging needs will be able to be supported by the electric grid in its current state? Or do you think we'll have to rely on sorting out your renewable energy sources faster than currently anticipated? Let me know what you think. Send me an email, tag me on LinkedIn or use the #Utilimarcfleet.FYI's. I'm looking forward to hearing what you have to say. I know this can be kind of a controversial topic. I mean, I know everyone's not a fan of EVs and I don't mean to sound like I am completely 100% in support of them because I know they come with their drawbacks and their own challenges. But I like to bring to you guys, especially our listeners here, the ability to hear all of the benefits and all of the potential cons for every resource available in this new surge for EVs and moving to more renewable energy options or renewable and more sustainable options for fleets.

Gretchen Reese (31:10):

So that being said, I will see you next week for the next episode in our global sustainability series. I hope you're looking forward to it as much as I am. Until the next time, I'll be in your headphones. That's it from me this week. Ciao. Hey, there, I think this is the time that I should cue the virtual high five, because you've just finished listening to another episode of the Fleet FYIs podcast. If you're already wanting more content, head over to Utilimarc.com, which is Utilimarc with a C, U-T-I-L-I-M-A-R-C.com for the show notes and extra insights coming straight from our analysts to you. That's all for me this week. So until next time, I'll catch you later.