Ken Silverstein EnergyBiz Insider Editor-in-Chief

The evolution can only be good for consumers and the environment. Today's hybrids are recharged by an electric motor that converts power from the gas engine to electric power. Tomorrow's hybrids may well be of the plug-in variety whereby consumers charge their cars at night in an electrical outlet and derive most of their power from the transmission grid -- not the gas pump. If the idea comes to fruition, then consumers will experience not just convenience but also cleaner air and cheaper transportation costs.

Palo Alto-based Electric Power Research Institute, which is working on development of the plug-in hybrid along with Daimler-Chrysler, says that the price to run such vehicles is 75-cents a gas-equivalent gallon. That's compared to about $2.50 for a gallon of gas now. It also says a previous study it conducted found that consumers would rather juice up at home than at the gas station -- and some won't mind paying the 25 percent premium over a traditional gasoline-powered car.

"Hybrids are a positive step," says Mark Duvall, manager of technology development for electric transportation at EPRI. "Plug-ins are an efficiency improvement. This version introduces alternative fuels: electricity, which is one of the best alternative fuels. Plug-in hybrids use the same components as today's hybrids and could be mass produced by 2010, which would be quite rapid."

Researchers at EPRI say that the type of battery available today allows a car to travel about 20 miles before it would need gasoline. That will improve with new research and mass production, especially as battery technology becomes lighter and more compact. That allows more energy to be stored. The current batteries are expensive -- adding as much as $5,000 to the overall cost -- but EPRI and other advocates of the technology maintain these prices will come down. The prediction: Plug-ins will last a total of 100,000 to 150,000 miles, allowing these cars to pay for themselves during the life of the car, if not much earlier.

To speed up returns, the U.S. government currently gives buyers of hybrids a $2,000 tax credit. Beyond that, many states give additional tax incentives to hybrid owners. And certain states such as California and seven in the Northeast are seeking to cut greenhouse gas emissions by cars 30 percent within 11 years. Given high gas prices along with the technological gains and political pressures, EPRI's Duvall says that "hybrid vehicles' life cycle costs are becoming lower than traditional cars."

Expanding Markets

At present, hybrids make up less than one percent of the total number of cars on all U.S. roads. But their prospects look good. In this country, hybrid registrations at state motor vehicle offices indicate an 81 percent increase from 2003 to 2004. Specifically and according to R. L. Polk & Co. that tracks such things, there were nearly 46,000 hybrids registered in 2003 and more than 83,000 registered in 2004. Their numbers are expected to continue increasing. Altogether, there are about 10 different hybrid models that are being made in 2005. Within five years, such cars are expected to comprise as many as 20 percent of auto sales.

Consider Austin Energy: It is leading a national campaign to promote the plug-in hybrid technology that involves cities, utilities and non-profits. According to Deputy General Manager Roger Duncan, the endeavor has been bearing fruit in Austin and the muni therefore thinks it will work elsewhere around the country. Cities such as Baltimore, Denver, Dallas, Los Angeles and Seattle are taking part, too.

In the case of Austin Energy, it will put up $1 million in total rebates to any entity that "commits" to buy these vehicles. Already, there are soft orders - that are not legally binding -- from both private and public entities totaling 600 vehicles. An Austin-based pest control company has said it will buy 150 light duty trucks while Capital Metro in Austin says it will purchase 160 vans, and validate its decisions through the formal purchasing process.

How can any buyer justify the cost differential? Duncan says that the major carmakers such as Toyota are predicting that the cost of hybrids generally will come down. At the same time, the utility does not see the price of gas getting any cheaper for the foreseeable future. "In the coming years, it won't be the cost of gas it will be how available the gas is," says Duncan. "If there is an unlimited supply of cheap oil then we are wrong."

To be sure, there are no guarantees. General Motors, which failed at its attempt to produce an all-electric car, is tepid about hybrids but is expected to produce a modified version of one. It says that the batteries needed to do the job are too expensive for what drivers get. Instead, its emphasis is on fuel cell cars and ensuring that it has the needed foundation to be a market leader in that field.

Despite GM's problems with electric-powered cars, users of them were enthusiastic. The odds are better now, says EPRI, because today's hybrids have about 30 percent better fuel efficiency and can cut carbon emissions by up to 30 percent. EPRI adds that it would cost about $200 to drive 5,000 all-electric miles compared to about $800 for a conventional automobile, at today's gas prices.

"I think hybrids have enormous promise," says Alfred Marcus, professor of strategic management at the University of Minnesota in Minneapolis. "Unlike hydrogen-based cars, this hybrid technology is not an enormous technological stretch. If the U.S. had a goal that 50 percent of all vehicles on the road in 10 years would be some form of hybrid, gasoline consumption could go down by a quarter."

Hybrid vehicles are making lots of headway thanks to the commitment of car companies and others such as EPRI. And while a lot of carmakers were caught off guard by the sudden rise in gas prices, they are now gearing up for sustained high prices and are betting on the hybrid. It's the free market's response to high gas prices and harmful air emissions. If the trend continues, the price of such cars will fall while the technology to run them will improve. Toward that end, the gasoline-electric hybrid may be the next phase in the growth of this promising industry.

For far more extensive news on the energy/power visit:  http://www.energycentral.com .

Copyright © 1996-2005 by CyberTech, Inc. All rights reserved.