The Drive Behind Plug-Ins

The Drive Behind Plug-Ins

November 04, 2009

Ken Silverstein
EnergyBiz Insider
Editor-in-Chief

With energy and environmental issues atop the national agenda, America may fundamentally change the way it drives. And the utility sector says that it can deliver.

At issue is the plug-in hybrid that can run for about 40 miles on electricity before a traditional internal combustion engine fueled by gasoline would kick in. And while the automakers are working hard to meet their expected 2011 deadline to commercialize such vehicles, the utility sector must also fulfill its obligations -- to help develop the infrastructure by which cars can recharge their batteries and to employ clean-burning fuels in the process.

"It's important that the customer experience with plug-in electric vehicles be a good one," says Ted Craver, who is chief executive Edison International and a co-chair of the Edison Electric Institute's transportation task force. "As the market for plug-in vehicles develops and matures, electric utilities will need to work closely with state and local officials, public and private entities, automakers and other stakeholders to make sure the charging infrastructure is ready."

President Obama has challenged the auto industry to put one million plug-in hybrids on the road by 2015. The goals, in large measure, are to ease the dependence on foreign oil while at the same time, create jobs and improve environmental conditions.

The utility group says that it is committed to building out such an infrastructure to ensure that commerce and transport would not suffer from such a revolution. Likewise, it says that it stands prepared to create customer service bureaus as well as provide comprehensive outreach to customers. The industry furthermore says that it will work closely with all policymakers to encourage market penetration with its first push aimed at all company fleets, including its own.

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 charge up.

"Our industry acutely recognizes that now is the time to redouble our ongoing efforts to lay the groundwork for making plug-in electric transportation in this country a reality, not just a vision," says Anthony Earley, Jr., chief executive of DTE Energy and chairman of the Edison Electric Institute. "We, as an industry, are eager to collaborate with the auto industry and others to bring plug-in electric vehicles to market."

Not So Fast

While the utility industry is gung-ho to rev up, others are wary. A recent study by the U.S. National Research Council cautioned that if the electricity to fuel futuristic cars would come predominately from coal, the results would be undesirable.

The essence of its message is that the hidden health and agricultural affects from energy-related pollution is prohibitive. Those costs total $120 billion annually. Coal, it says, accounts for $62 billion of that while the transport sector makes up $56 billion. Natural gas, by comparison, adds up to $740 million a year. Emissions costs from the operation and construction of electric cars are between 15 cents and 20 cents per mile traveled, it notes, while those from traditional gasoline-powered vehicles can as high $5 a mile.

"Major initiatives to further reduce other emissions, improve energy efficiency, or shift to a cleaner electricity-generating mix could substantially reduce external effects' damages, including those from grid-dependent hybrid and electric vehicles," says a report issued by the scientists. Such alternatives include wind, solar, natural gas and nuclear energy.

As part of the federal stimulus plan, the U.S. Department of Energy is allocating about $100 million to create corridors in heavily traveled areas where electric cars could be tested. Phoenix to Tucson is one place. San Diego to Los Angeles is another. And a third will be from Eugene, Ore. to Vancouver, B.C. where the government hopes to have 1,000 electric cars on the road.

While the early models of all-electric cars will run about $40,000 and have all the amenities of typical vehicles, creating an infrastructure and educating consumers won't be easy. Utilities say that such innovations could be recharged at night from the same outlets that are now in garages. Or, they could be refueled while at work or through local retailers that want to capture audiences for long periods. In any event, the cost to juice up would be at least half the price of gasoline.

"If the country is serious about increasing the number of fuel-efficient vehicles on the road in the near future, the fleets of America, with their rapid turnover of vehicles, represent the best opportunity in the shortest timeframe," says Kim Hill, director of the Sustainable Transportation and Communities at the Center for Automotive Research.

All-electric cars are gaining momentum -- an opportunity for utilities to increase their stakes at the expense of unpopular oil imports. And while they have big dreams, those companies really need more tenacity. To make an impression, they must not only make an unparalleled effort to transform the country's transportation habits but they must also rely on clean energy forms to achieve their aims.