Month: April 2022

Enlarge / The chassis and battery pack of a Volkswagen AG (VW) ID.5 electric sports utility vehicle (eSUV) on the assembly line during a media tour of the automaker’s electric automobile factory in Zwickau, Germany. (credit: Bloomberg | Getty Images)

The car industry’s multibillion-dollar bet on electric vehicles was built on a single premise: that batteries would carry on getting cheaper.

In 2019, Volkswagen executives even brandished charts predicting a steady decline in battery costs as they laid out their ambition to consign the combustion engine to history.

For years the industry was proved right: battery costs fell from $1,000 per KWH for the first models more than a decade ago to about $130 in 2021, paving the way to making them affordable for middle-income families.

Enlarge / Winterizing every wind turbine in Texas makes economic sense. So why wasn’t it done? (credit: Ted Horowitz / Getty Images)

Just over a year ago, a cold front moved into Texas and stayed there. As demand for electricity soared, various generating sources fell off line, leading to extensive grid failures that left customers without power for days. Nearly every form of power generation suffered from failures, as did the system supplying generators with natural gas. The total cost in terms of lost business and lives is estimated at roughly $130 billion.

Initial analyses provided some suggestions on how Texas could restructure its grid to provide better protection against future events like this. But a new study has asked a related question. Texas has economic incentives that should induce commercial generators to install winterization equipment on their own. Why weren’t those incentives enough to get generating companies to install cold-weather hardware?

The new analysis finds that the financial incentives for winterization carry a high degree of risk. And the total incentives for winterization are far lower than Texas paid for the failure to winterize.