Category Archives: tool

America’s Missing Electricity Generation Capacity

How much more electricity generation capacity needs to be added to the U.S. power grid to fuel a complete conversion electric cars?

Last week, we took on the personal finance question of whether a petroleum or electric-powered vehicle is the better buy, but we didn't stop to consider where that electricity comes from. The following chart shows the mix of sources that Americans used to power the U.S. economy with 4,109 terawatt-hours (TWh), or 4,109 billion kilowatt-hours (kWh), in 2020.

2020 U.S. Electricity Generation by Type

The most important thing to recognize about this chart is that only an exceptionally small fraction of all that power generated actually goes to charge up electric-powered vehicles. Nearly all of that generated electricity is used instead for other purposes, which means that if Americans are to fully switch over to electric vehicles, the country needs to significantly boost its electric generation capacity to provide the juice they will need to run.

So how many cars are we talking about? For a visual frame of reference, the next chart shows how tiny the share of electric vehicles was in 2020. (For simplicity, we've grouped all electric vehicles into the Automobiles category).

From here, we just need to know that the average electric vehicle consumes 34.6 kilowatt-hours (kWh) of electricity to travel 100 miles, and we can run some back-of-the-envelope numbers to find out how much more electricity generation capacity will be needed to avoid things that would lower the quality of life for Americans or harm the economy, like rolling blackouts.

We built a tool to do the math. If you're accessing this tool on a site that republishes our RSS news feed, please click through to our site to access a working version.

Electric Car and Power Generation Data
Input Data	Values
Number of Electric Vehicles Being Added to U.S. Roads
Average Electricity Consumed per 100 miles Driven [kWh]
Average Annual Miles Driven per Vehicle
Power Generation Capacity Factor

America's Missing Electricity Generation Capacity
Calculated Results	Values
Additional Electricity Generation Needed [TWh]

For our default data, we find that the U.S. power grid will need to expand its capacity by 583.0 TWh per year to accommodate the power needs of 104,124,090 electric vehicles. Today, that additional needed electricity generation capacity is missing from the United States' power grid.

This result assumes the new electricity generation capacity comes from nuclear energy, which according to the U.S. Energy Information Administration, is the most reliable source of electricity. Of course, there are other ways to generate electricity, for which you can substitute the EIA's indicated capacity factors for those other sources in our tool.

U.S. Capacity Factor by Energy Source - 2021

As you'll find, your choice of how that electricity is generated has a huge impact on how much more electricity generation capacity will be needed just to power electric vehicles.

References

Daly, Lyle. How Many Cars Are in the U.S.? Car Ownership Statistics 2022. Motley Fool. [Online Article]. 18 May 2022.

International Energy Agency (IEA). Electric Vehicles. [Online Report]. November 2021. Accessed 10 September 2022.

U.S. Department of Energy Office of Nuclear Energy. What Is Generation Capacity? [Online Article]. 1 May 2020.

Wallach, Omri. Road to Decarbonization: The United States Electricity Mix. Visual Capitalist. [Online Article]. 31 August 2021.

Is a Gasoline or Electric Powered Car the Better Buy?

Earlier this summer, Senator Debbie Stabenow (D-Michigan) made news as she bragged high gasoline prices don't matter to her because she drives an electric car, a Chevrolet Bolt EUV, which allows her to drive past gas stations without having to pay for petrol. Here's video of her statement:

While high gasoline prices may not matter to the senator, they may matter to you if you're considering following her example and buying an electric-powered vehicle. Do they provide a bigger bang for the buck for their owners than a petroleum-fueled vehicle?

To find out, we need to compare gasoline and electric powered vehicles that are as similar as possible to one another. Unfortunately, we cannot do that with the Chevy Bolt because there isn't a gasoline-powered version of that vehicle. But we can do that with a Mini Cooper Hardback 2-Door, which comes in gasoline-fueled and electric-powered versions.

We've entered the data for both these vehicles as the default entries in the following tool. If you're accessing this article on a site that republishes our RSS newsfeed, please click through to our site to access a working version to find out how different their costs of ownership, or the vehicles whose data you might enter instead, may be over three years.

Gasoline-Fueled vs Electric-Powered Vehicle Data
Input Data	Gasoline	Electric
Vehicle Purchase Price
Government Tax Credit/Subsidy (if Available)
Maintenance Costs (Over 3 Years)
Depreciation Costs (Over 3 Years)
Energy Consumption (Fuel Gallons or kWh) per 100 miles
Average Cost of Fuel (per Gallon) or Electricity (per kWh)
Mileage Data
Input Data		Values
Average Annual Distance Driven (miles)

Estimated Cost of Ownership Over Three Years
Calculated Results	Gasoline	Electric
Total Energy Cost
Total Out of Pocket Ownership Cost
Is a Gasoline or Electric Car the Better Buy?

Most of the default data in the tool comes from a Car and Driver article from 2020, which we've updated with early September 2022's average gasoline cost and electricity cost data, both of which you can update as needed with more current gasoline and electricity costs that apply in your region.

The vehicle cost data comes from Edmunds, which we extracted during 2022's Labor Day Holiday weekend. We should note that the electric version of the Mini Cooper Hardtop 2-Door appears to have increased by $4,115 since the federal EV tax credit of $7,500 was enacted as part of the Inflation Reduction Act. The manufacturer's suggested retail price of the gasoline fueled version of the vehicle was unchanged. Other manufacturers have similarly hiked their electric vehicle prices in the weeks since the government subsidy for electric vehicles was passed.

For the default data loaded in the tool, we find the gasoline powered version of the Mini Cooper Hardtop 2-Door is the better buy. Playing with the tool, we found an average gasoline price of $6.37 per gallon with the electricity cost unchanged would be needed to make the electric vehicle a less costly choice over three years of ownership. But, as they say, your mileage may differ - take the tool for your own test drive!

Are You Waking Up on the Right Side of the Bed?

Did you wake up on the right side of the bed this morning?

By that, we're really asking whether you got up early enough after having enough sleep before you go off to accomplish all the stuff you intend to today. Getting up on the "right side" of the bed means you did, while getting up on the "wrong side" of the bed means you did not.

We're asking that question today because British mathematician Dr. Anne-Marie Imafidon has constructed a mathematical relationship to determine which of those sides of the bed you woke up on. You can imagine our palpable excitement when we discovered the following video in which she discusses her formula:

After watching the video to decipher her math, we have to agree with Ralphie from Christmas Story:

And yet, we wondered if she might be onto something. So we built a tool to do her math. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Factors Affecting Whether You Wake Up on the Right Side of the Bed or Not
Input Data	Values
Minutes Spent Eating Breakfast
Minutes Spent Exercising
Minutes Spent Showering
Minutes Spent on Other "Getting Ready" Activities
Hours Spent Sleeping
Hours Your Wake-Up Time Was Away from 7:12 AM

Did You Wake Up on the Right or Wrong Side of the Bed?
Calculated Results	Values
Which side of the bed did you wake up on?

The default data in the tool was provided by WFXB's Carolina AM's Greg and Audra, where the tool's results differs from Audra's because she went off into the weeds in doing her calculations.

Then again, that might be expected for someone who woke up on the wrong side of the bed! (For the record, we find she woke up on the right side!) Regardless, change the values as you need to represent your own personal scenario, and the tool will determine which side of the bed you got up on!

Words for Describing Probabilities

When you try to describe how likely something that will happen in the future is to someone, how do they interpret what you mean?

For instance, if you say something will a "slam dunk", will they interpret that as having 100% odds of happening? Or will they assign a lower chance to whatever that is occurring?

What if you're the person on the receiving end of the probabilitistic statement? Would you say something you're told has a "real possibility" of occurring is more or less likely to happen than if the same person told you something had a "serious possibility" of occurring?

Words mean things, and when it comes to describing probabilities, they come with their own probability distributions. That's the finding of Andrew Mauboussin and Michael J. Mauboussin from their 2018 paper, If You Say Something Is “Likely,” How Likely Do People Think It Is?, in which they presented the results of their study into that topic. Better yet, they provided the following chart to illustrate the probability distributions the participants in their study helped them develop for various common words and phrases that American English speakers use in everyday language.

Here's how the Mauboussins describe their findings:

The wide variation of likelihood people attach to certain words immediately jumps out. While some are construed quite narrowly, others are broadly interpreted. Most — but not all — people think “always” means “100% of the time,” for example, but the probability range that most attribute to an event with a “real possibility” of happening spans about 20% to 80%. In general, we found that the word “possible” and its variations have wide ranges and invite confusion.

The cool thing about this chart is that if you are searching for words to describe the likelihood of something that will happen in the future, you now have a useful guide to help you convey the odds you're trying to communicate.

More often than not, with a high probability of getting your intended message across.

The Deflation of the COVID/Biden Stimulus Bubble

The S&P 500 (Index: SPX) closed at a peak of 4,796.56 on 3 January 2022. In the six and half months since, the index has dropped by as much as 23.4% as measured by its daily closing values.

That sharp decline has reached a point where we can say the asset bubble the Federal Reserve began inflating in March 2020 and which President Biden's American Rescue Plan Act stimulus blew up even bigger through December 2021 is reaching a significant milestone. Based on the available data through 22 June 2022, the average monthly index value for the index is on track to intersect the projected trajectory the S&P 500 was on with respect to its trailing year dividends per share prior to the arrival of the coronavirus pandemic.

That means the COVID/Biden Stimulus Bubble, shown in red on the following chart tracking the relationship between the average monthly value of the S&P 500 and the index' trailing twelve month dividends per share, has almost fully deflated with respect to that last relative period of order over the last six months. Here's the chart:

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, December 1991-June 2022 (through 22 June 2022)

The following tool, updated from the version we introduced last month with a projection of June 2022's projected dividend data, reveals what the level of the S&P 500 would be if that period of order has continued to the present. If you're accessing this article on a site that republishes our RSS news feed, you may need to click through to our site to access a working version of the tool.

Alternate S&P 500 Valuation Criteria
Input Data	Values
Relative Period of Order
Trailing Year Dividends per Share

Projected S&P 500 Index Value
Estimated Results	Values
Index Value Corresponding to Selected Period of Order

Using the default selection of the most recent period of order that lasted from December 2018 through February 2020, we find that with June 2022's estimated $63.51 trailing year dividends per share, the corresponding value of the S&P 500 would be $3,863. Or rather, had that relative period of order continued to the present, that's what the math suggests would be a reasonable monthly average for the S&P 500 to go along with this amount of dividends per share.

But that period of order hasn't existed since February 2020. In the current chaotic state of the market, stock prices can and have ranged well above and below this mean trend line. Until a new relative period of order is established, there is as yet no new mean to which stock prices could revert.

We'll close by presenting a version of the first chart showing its vertical and horizontal axes using logarithmic scale to provide sense of the relative magnitude of the stock market events shown on the chart.

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, Logarithmic Scale, December 1991-June 2022 (through 22 June 2022)

At this point, both the Dot-Com Bubble (April 1997-June 2003) and the 2008 Crash represent bigger stock market events than the COVID/Biden Stimulus Bubble. We'll find out soon enough how much more momentum there still is in the deflation phase of the current bubble event to see how much bigger this disruptive event for the market might become.

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