Plug-Ins to Arrive

Plug-Ins to Arrive

April 13, 2009

Ken Silverstein
EnergyBiz Insider
Editor-in-Chief

The plug-in hybrid car will accelerate. But it must first cross over some critical bumps. While engineers are preparing such vehicles to meet strict standards, they remain prohibitively expensive and relatively untested.

The automotive business is evolving, but it still relies on the internal combustion engine that drinks gasoline. Certain elements of the industry, however, are intent on making petroleum-based cars a thing of the past and to deliver cars that are environmentally friendly. The sector has henceforth given birth to the plug-in, which will run mostly on electricity and which charges from most any outlet.

"We like to talk about replacing petroleum," says Tony Posawatz, line director for General Motor's Chevy Volt that is expected out in late 2010. "While the car holds lots of promise, it does have challenges. If we can grow the volume, we can increase infrastructure and improve the value chain," which, in turn, will attract suppliers and help reduce prices by thousands of dollars, adds Posawatz, speaking at a teleconference.

Admittedly, the cars are expensive at $70,000 to $100,000 apiece and the reliability of the battery technology is still an unknown. Researchers are now focused on producing long-lasting and cost-effective batteries. The technology is progressing at a notable rate, as the battery packs unveiled a decade ago were far weightier and bulkier than those around today. At the same time, modern batteries are said to have just as much power as a six-cylinder, gas-enabled vehicle.

The U.S. Department of Energy has a three-year, $25 billion program to help speed things along. On top of that, the recently enacted stimulus bill will not just give generous tax breaks to anyone who buys such cars but it will also pump in another $2 billion to advance battery technologies -- something to which the major American car makers say will become one of their core competencies. In fact, eight major auto companies worldwide have said they are now making either all-electric or hybrid vehicles.

President Obama has challenged the car industry to put one million plug-in hybrids on the road by 2015. But is this realistic from both the automotive sector's point of view as well as that of the utility industry?

The first models will all appear around 2011. As for the Chevy Volt, it will be a plug-in hybrid that is powered by a stack of lithium batteries. The car will able to run 40 miles between juice-ups at which point a built-in generator would kick in and enable the car to run on traditional gasoline. The difference between this version of the electric car and the failed model from a generation ago is that the older one did not have a back-up fuel supply and therefore could only go short distances.

Long Distance Ahead

The market case for plug-in hybrids can be made. Environmental constraints will only get tighter as developing countries demand more oil to grow their economies. But that will then put increasing pressure on utilities, which are already squeezed in certain regions of the country. To electrify automobiles, the underlying infrastructure must be widely available and user-friendly.

The utility sector says that it can rise to the occasion. Every vehicle, it contends, will be able to use any charging station. The cars, meanwhile, will be able to communicate with the smart grid so that drivers will know the cheapest times to fill up. That would then bode well for wind energy development, the industry says, because the hardest winds often blow during off-peak hours.

"Utilities can serve the load and do it in the near term," says Mark Duvall, director of electric transportation for Palo Alto-based EPRI, which is the utility industry's research and development arm. "We have an obligation to serve. It will mean that the evolving smart grid and the cars can talk to each other. It will mean that customers get universal access to public infrastructure. And by rapidly leveraging utility resources, it will lead to highly sophisticated vehicles so as to create maximum value."

According to a joint study between EPRI and the Natural Resources Defense Council, 10 million plug-in hybrids on the road would cut greenhouse gas emissions by 450 million metric tons by 2050 while reducing petroleum consumption by three million to four million barrels a day by that time. And power companies can handle the increased demand, EPRI says, noting that if such hybrids gained a 60-percent share then that would use seven to eight percent of the grid-supplied electricity in 2050.

To be sure, the pathway to success will be riddled with potholes. It's a big deal to set out to displace the internal combustion engine. It's no less challenging to try and offset such gasoline replacements as ethanol. The fear among investors and stakeholders alike is that the all-electric vehicle will get sidetracked before it ever gets started.

To that end, civic and public interest groups say that the technology needs a core group of champions who can lead the effort. According to Bob Hayden, clean transportation advisor to the city of San Francisco, municipalities must work alongside the utilities and the regulators to ensure that the permitting and installation of public charging ports gets done in a fast, easy and inexpensive way. It's all to accommodate those who need to "refuel" during the day or who don't have access to carports with electric outlets.

"Grassroots support is important for this transformation," adds GM's Posawatz. "We have a number of stakeholders involved. Public utility commissions, companies and other thought leaders have to come together."

Absent volatile gas prices, tougher environmental regulations and the financial distress facing the American auto industry, the will to bring the plug-in hybrid to market would be lacking. But such pressures are now driving the desire to succeed. The concept is assuredly moving forward although it still has quite a distance to go.

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