Electric power expert talks about the changing business model of utilities

In this age of smart grids and electrified transportation, the role of electric utilities is going through widespread change. Two news stories on major utilities this month offer a look at the new landscape. Pacific Gas & Electric (PG&E) submitted a proposal to the California Public Utilities Commission asking for permission to build 25,000 new charging stations for electric vehicles in its Northern California territory. Duke Energy has made a $225 million investment in REC Solaelectric power generation at nightr for a majority stake in the commercial solar company.

What’s behind these moves? Green Auto Market spoke with utility expert Dr. Peter Fox-Penner, author of Smart Power: Climate Change, the Smart Grid, and the Future of Electric Utilities, for more perspectives on these issues. Dr. Fox-Penner, principal of The Brattle Group, has also served as a senior official in the U.S. Department of Energy and the White House Office of Science and Technology Policy.

Economic conditions are changing for utilities with much of it based on two market factors, Fox-Penner said. While electricity prices went up in recent years, utility bills are stabilizing. Supporting energy efficiency (and producing less electricity) is becoming common now for utilities as well. Investing in new segments such as charging stations and solar power would also offer additional revenue streams and profit centers for utilities. All of this means that utilities are looking at new channels for growth – and not all of it will be as tightly regulated by public utility commissions, he said.

Areas of growth for utilities include offering more energy efficiency services, demand response services, and development of smart grids, Fox-Penner said. “Grid resilience” is now a buzzword in the industry, he said, with demand response offering users more stability in pricing during periods of peak demand; or at other times when reliability of the grid is threatened – with Hurricane Sandy offering an example of how volatile conditions can become.

Smart grid systems allow end users to have more control of energy use in their homes and commercial properties. That can come through new technologies like measurement sensors, computing, micro-generation, and geothermal heat pumps, Fox-Penner said. Converting over to the smart grid will take quite a few years, he said. The Eastern US has quite a lot of decades-old copper wire that does need to be replaced. There are also several aging distribution systems in the US that will take decades to replace, he said.

Generating electricity through renewable energy sources like solar, wind, and hydro, is a big part of the environment shaping the future of utilities. California and other states have ambitious targets in place. Renewables do benefit from having access to energy storage through electric vehicle batteries and stationary storage units to address intermittent conditions – but they’re not necessary for renewables to succeed. “Certain standards can be met even without battery storage by integrating traditional energy with renewables,” Fox-Penner said. “Europe is doing it without much battery storage.”

Concern over climate change is helping renewable energy see growth, he said. “There’s been enormous growth in wind power, and coal has trended downward,” Fox-Penner said.  Not long ago, coal powered 55% of US electricity and lately it’s hovered around 45%. Natural gas is the other fastest growing source of power with wind.

Solar still doesn’t make up much of the total supply, but it is “growing at a healthy clip,” he said. Nuclear makes up about 20% of electricity produced in the US with that coming from aging plants. We could see nuclear go away in the next 10-to-20 years, Fox-Penner said.

Will carbon taxes ever be enacted in Washington?

Carbon taxWhether or not Congress and the president will enact a carbon tax occasionally becomes a topic of heated debate with strong arguments made on both sides. Lawrence Summers has stirred the pot lately writing commentaries making the case for enacting carbon taxes. Summers, a Harvard professor and past university president, and treasury secretary from 1999 to 2001 and previous economic adviser to President Obama, says that cheap fossil fuels exacerbate energy overuse. Carbon taxes would help curb that problem and reduce emissions. “Carbon emissions exacerbate the global climate change problem. In many cases they contribute to local pollution problems which immediately harm human health,” Summers wrote in the Washington Post.

The basic idea behind enacting carbon taxes is to raise the price of fossil fuels high enough in the US that it becomes much more expensive. It would be similar to Europe’s high motor fuel prices; that gives incentives to consumers to use less fuel and produce less carbon during transportation. Carbon taxes would also regulate other sectors with high carbon emissions such as energy power plants. Summers says that the issue becomes compelling when oil prices drop dramatically, as we’re seeing now, giving incentive to over-consuming motor fuel and other fossil fuels.

Variations on carbon taxes do exist in the US now through the federal Renewable Fuel Standard (RFS) and California’s cap-and-trade system. Oil importers and refineries pay for and trade Renewable Identification Numbers through the RFS. California’s cap-and-trade market sets a firm limit (or cap) on greenhouse gas emissions (GHG) from the oil industry, utilities, and other carbon producers. Compliance costs are minimized by trading carbon credits on the market, and through reducing their own carbon emissions by changing over to clean, renewable energy.

President Barack Obama has been calling on the world to follow the US and China alliance in reducing GHG – a point made last fall while speaking before the United Nations Climate Summit. The US has not supported the summit’s plan to set a global price on carbon, signed by 74 countries and more than 1,000 businesses and investors. That comes from a lack of support in Washington for carbon taxes now that the majority of both the House and Senate have changed hands – and which had failed to gain any real support in Washington in recent years when Democrats led both branches of Congress. As for now, California has a cap-and-trade system in agreement with the Canadian province of Quebec; other states are considering it. The Obama administration is going the route of enforcing Clean Air Act rules and forming an overseas alliance with China to deal with the carbon reduction challenge.

Steve Cohen, executive director at Columbia University’s Earth Institute, says that it’s time to “abandon the delusion of a carbon tax.” While it makes for interesting cocktail party chitchat and impassioned blogging, it’s not going to gain enough political support with so much at stake. “No political leader responsible for ensuring the material well-being of his or her people in the modern global economy is going to willingly raise the price of something so central to that economy as the price of energy,” according to Cohen. He sees the solution coming from setting up incentives and government-funded research to make renewable energy technologies more advanced and cost efficient. That would mean renewables would become cheaper, more reliable, and more convenient than fossil fuels. The debate would be over.

As for now, the best US trend we’re seeing is corporations and governments choosing to reduce their own carbon/GHG emissions voluntarily. That usually starts out in adopting energy efficiency, waste management, and renewable energy – such as powering a building through solar panels. We’re starting to see fleets become more engaged in those policies – reducing their emissions and fuel consumption through alternative fuel and advanced technology vehicles. Making the business case is a bit challenging with gas prices dropping down so far and acquisition costs for these clean vehicles many times much higher than traditional vehicles. Hats off to those fleets taking on the challenge.

Energy storage holds huge potential for makers and owners of electric vehicles

energy storageFor those of you following the cleantech business, you’ve probably noticed an emerging market segment in the past year: energy storage. There’s a lot of demand for clean energy to be produced – along with ways to store that energy for when it’s needed through an economically feasible business model. Electric automakers have gotten into that market – and we’re likely to see electric vehicles added to energy storage potential.

California Gov. Jerry Brown called for 50% of California’s electricity to come from renewables by 2030 in his “State of the State” address last week. That’s up from former California Gov. Arnold Schwarzenegger’s 20% and his own previous 33% mandate for renewable energy. Utilities in the state – and in several others in the US – have been investing in energy storage to address renewable energy mandates and to better manage their grids. Energy storage has become “a powerful and appealing alternative to upgrading grid infrastructure to solve these challenges,” according to Navigant Research.

Demand and price can swing up and down over a 24-hour period, causing uproar from residential and commercial property owners – and from state regulatory agencies. Utilities are exploring batteries for energy storage as a way to bring stability to peak periods and to move forward on renewable energy mandates.

Solar power companies are getting into the game. In its new study, “The Future of Solar-Plus-Storage in the U.S,” GTM Research reports that four of the nation’s top 10 residential solar installers currently offer “solar plus” energy storage. These four companies, including top installer SolarCity and fifth-ranked NRG Home Solar, installed 38% of all US solar energy in the first three quarters of 2014.

If you look at the first chart in this article, you’ll see three automakers identified as part of the energy storage market: Tesla Motors; Chinese automaker BYD; and the company that used to be known as CODA Automotive that is out of the electric vehicle business, post-bankruptcy, and is now CODA Energy – an energy storage systems company. These automakers have also sold their EV battery technology to other automakers and to clientele in other industries.

There’s a good deal of speculation out there that electric vehicles (EVs) could be viable energy storage containers. That could come from a fleet with 150 EVs parked on its corporate campus for long stretches of time; on average, those EVs might be in motion only one quarter of a 24-hour cycle, bringing huge opportunities for power storage. That could be a revenue stream for company, and a support system for renewable energy and grid stabilization.

Other examples of available parked EVs could come from transit station parking lots, retail stores, and apartment/condo complexes. Lithium and NextGen batteries are still expensive and underutilized – energy storage has great potential for key stakeholders out there.

Honda green star at LA Auto Show; sneaking a ride in Via Motors plug-in hybrid

Honda Accord green car of year awardHonda enjoyed its presence at the LA Auto Show, gaining lots of media attention for its new hydrogen-powered concept car and for winning the Green Car of the Year award. The 2014 Honda Accord took the green award for its high fuel economy ratings and performance features. All three variations were honored – the gasoline, hybrid, and plug-in hybrid versions. The Accord beat out four other finalists – the Audi A6 TDI, the BMW 328d, the Mazda3, and Toyota Corolla. Last year, another mid-sized US-based automaker car took the Green Car of the Year award for a model with gasoline, hybrid, and plug-in hybrid variants – the Ford Fusion.

Fuel cell vehicles grabbed much media attention at the LA Auto Show. Hyundai showed off a fuel cell version of its Tucson sport-utility vehicle. Hyundai plans to sell 1,000 of these fuel cell vehicles next year in California for a monthly lease price of $499 with $2,999 down. Honda plans to roll out another fuel cell vehicle (in addition to its FCX Clarity) in the US in 2015. Honda unveiled its FCEV, its next-generation fuel cell vehicle.

During the same time that the LA Auto Show was launched, the Tokyo Motor Show was taking place. Toyota showed its FCV (fuel cell vehicle) concept sedan in Tokyo. Toyota said that it’s a “practical concept” of the fuel cell vehicle it plans to launch in 2015; the car will use hydrogen to generate electricity that can travel about 300 miles after a refueling. The concept car can hold four passengers and be refueled in minutes.

Those participating in the Green & Advanced Technology Ride & Drive at the LA Auto Show enjoyed driving the Chevrolet Spark EV, the Fiat 500e, and the Jeep Grand Cherokee with its new 3.0L EcoDiesel V6 clean diesel engine. The award winning 2014 Honda Accord Hybrid was also on hand for a drive around the LA convention center. It’s a bit pricier ($30K to $35K) than arch-competitor Toyota Prius, but it does have a bit more interior space and comfort, and its new dashboard has been designed for simplicity and style.

While Via Motors did not open up its E-REV ride and drive to the media, I was able to sneak a ride in its plug-in hybrid, extended range variation of the Chevrolet Express van; and took a peak at its plug-in version of the Chevrolet Silverado pickup. Both models – the VTRUX cargo van and VTRUX extended cab pickup – offer impressive plug-in ports with an AC inverter and power outlets for both 120 volt and 240 volt charges; the unit also offers a J1772 charging port.

During a press announcement, Via Motors company stakeholder Bob Lutz bragged about the VTRUX’ capabilities including being able to gain a few miles of extra range from solar panels now placed on the truck’s flatbed; and the ability to tap into the VTRUX’ battery pack for backup electricity during a power outage. Lutz was joined onstage by Via’s new CEO, John Weber, former president and CEO of Remy International, a key supplier to Via and to General Motors. Weber says that Via is meeting its fleet orders and will add consumer sales in 2014.

Connected Car Expo was held for the first time ever right before the LA Auto Show started up, and featured expert panelists on telematics, advanced technologies, and a growing alliance between automakers and technology giants. Autonomous cars were discussed by panelists that included Jeff Klei, North American president of major supplier Continental AG, and Ron Medford, Google’s director of safety for self-driving cars. Google has played a major role in testing out driverless cars, but doesn’t have a timetable for when it will release its own autonomous vehicles.

Out on the ground floor of the South Hall, you could see Hyundai’s “Survive the Zombie Apocalypse.” While it may have been placed there for the LA Auto Show, it was right next to the Connected Car Expo display booths and sort of stole the show. Connected Car Expo had some interesting exhibits, but the zombie display did grab most of my attention. It showed altered versions of two of its popular models, with these being renamed the Hyundai Santa Fe ZSM and Veloster Turbo ZSM (ZSM stands for Zombie Survival Machine).  These anti-zombie packages are sure to be more expensive than the MSRP starting price versions – but you do get all kinds of perks to fight off the undead – such as knife-blade wheels, dual chainsaws, a doom whistle, and a machine gun.

Hyundai’s display was started by Robert Kirmman, creator of “The Walking Dead” comic series (that inspired the hit TV series), designing a Zombie Survival Machine around a Veloster earlier this year. The Santa Fe ZSM design was built by Galpin Auto Sports and was unveiled at the New York Comic Con last month.

Federal automaker bailouts and loans going through transitional phase

DOE green transportation loansFor those who’ve attacked federal funding for automakers and suppliers in the past five or so years, the controversy does appear to be winding down. It looks like the Great Recession post-bankruptcy era may be wrapping up soon for both General Motors Co. and the Chrysler Group. Tesla Motors has paid off its federal loans and the Fisker Automotive debacle appears to be wrapping up.

The US Treasury Dept. expects to sell its remaining 31.1 million of GM common shares by the end of this year, depending on market conditions. That would take the cap off salaries for top executives, which GM has said hampered recruiting. Chrysler Group may avoid an initial public offering with Fiat paying off the United Auto Worker’s health-care trust’s share of the US automaker.

Those watching the Chrysler negotiations are saying a valuation of $10 billion is being considered for market value, which would mean that the UAW’s health-care trust would own about $4.15 billion in share value with its 41.5% stake. It’s less than what analysts had expected Fiat would have to pay for Chrysler Group. The trust has been pushing for an IPO on its share of the US automaker, and Fiat and Chrysler CEO Sergio Marchionne would like to avoid the stock offering and take the remaining stake in Chrysler.

General Motors investors are said to be focused on the possibility of stock buybacks or a dividend on common shares. This comes in the wake of the US Treasury outlining its plans to sell the rest of its GM stake by year end, analysts said.

Sales have been strong for GM and Chrysler this year, and both Detroit automakers had a significant presence at the LA Auto Show. GM unveiled its new Chevrolet Colorado compact pickup truck. Those participating in the Green & Advanced Technology Ride & Drive enjoyed driving the Chevrolet Spark EV, the Fiat 500e, and the Jeep Grand Cherokee with its new 3.0L EcoDiesel V6 clean diesel engine. Chrysler is still behind its competitors in the alternative fuel vehicle arena, but that seems to be more a result of its being handed off from its Daimler owners, going through bankruptcy, and then having its new identity being structured by Fiat executives and Chrysler’s new leadership.

Tesla-Mania: Eric Cartman cusses out Tesla Model S; Millennials can bring electric scooters to America

Cartman at gunpoint in Model SWhile it has taken awhile for the creative team at “South Park” to slap around the Model S, the plug-in car did get a few moments on screen. Tesla Motors joins the ranks of Scientology and the Toyota Prius in getting lampooned. In an episode inspired by a variation of the George Zimmerman court verdict (called “World War Zimmerman”), extremely angry young man Eric Cartman stops a Model S and its driver at gunpoint. He yells at her: “We’ve got about ten minutes before this entire country is up in flames! If you wanna live, you’d better step on the gas! Oh wait, is this a Tesla? Sh*t! Well press on the prissy pedal! We’re gonna die!”  
In more serious Tesla news….. Tesla was the top seller of zero-emission vehicle (ZEV) credits in California from Oct. 1 2012 to Sept. 30, 2013 (and Toyota led hybrid credit trades). Tesla transferred 1,311.52 ZEV credits during that time, according to a California Air Resources Board filing. The number two company was Suzuki and was far behind Tesla; Suzuki discontinued US auto sales in 2012 but was able to transfer credits accumulated in the past. Companies that acquired ZEV credits to meet their requirements included Chrysler, GM, Honda, Jaguar Land Rover, Subaru, and Volkswagen (though it’s not reported if they acquired their credits through Tesla or another automakers). California requires automakers to sell electric or other non-polluting vehicles in proportion to their market share in the state.
Tesla CEO Elon Musk spent $989,000 at a London auction on a Lotus Esprit used in The Spy Who Loved Me by the James Bond character. Bond drove the car off a pier in the movie as it transformed into a submarine by merely pressing a button. Musk had fun with it, telling the USA Today he loved watching it as a kid in South Africa. He was disappointed to find out you can’t press the button and make it happen, but plans to upgrade it with a Tesla electric powertrain so that it can transform for real.

Millennials can bring electric scooters to America
Check out this video interview Terry Duncan, chief of consumer engagement at Mahindra GenZe, a US startup that has backing from India’s Mahindra. GenZe is rolling out an electric scooter in early 2014 targeted toward Millennials in the US. The product and audience was chosen based on two premises – urbanization is happening in the world’s major cities and transportation is being heavily impacted; Millennials in their late teens to early 30s are the right market to start with, since they’re not buying cars as much as previous generations, are moving to cities, and want functional, practical transportation alternatives. In another video, you’ll hear him discuss the design decisions made on the bike; while these types of vehicles have huge sales numbers in countries like China, they need to be extremely pragmatic and, let’s say, cool, to make it in the US.

Top News of the Week:

  1. A group of Chinese investors based on Hong Kong and led by Richard Li are investing in Fisker Automotive for an unreported amount. This should finish the US Dept. of Energy’s loan to Fisker – most all of the $192 million loan needs to be paid back and the investor deal will probably only meet some of it, which the US government has been ready to accept. A small chunk of the payback will come through former GM vice chairman Bob Lutz. VL Automotive, a small Detroit company that has Lutz’ backing, will be converting 25 unsold Karmas from plug-in hybrid power to Corvette power. VL had to settle a dispute with an Asian investor that had prevented them from accessing codes operating the car’s infotainment system. Lutz says these converted Karmas will come out in 2014 for something close to $200,000.
  2. Clean­Fuel USA has installed 85 retail propane auto­gas fuel­ing sta­tions across 13 states. This was funded by a $12 mil­lion grant from the US Depart­ment of Energy’s Amer­i­can Recov­ery and Rein­vest­ment Act. Texas State Tech­ni­cal Col­lege – TSTC – served as the lead grantee. The major­ity of the 85 sta­tions are located near heav­ily traf­ficked road­ways, exist­ing fuel­ing sta­tions, major air­ports and home improve­ment stores, Clean­Fuel said.
  3. Don’t believe in climate change? What about lung cancer? The International Agency for Research on Cancer, based in Lyon, France, has released a study that formally declares air pollution is causing lung cancer. The research arm of the World Health Organization focused on diesel cars and trucks in operation around the world as a major source of the problem.
  4. ChargePoint is offering a lease-to-purchase program for businesses and cities to install its charging system. The systems usually cost between $6,000 to $12,000 to buy and can cost about $3 to $6 a day over five-to-seven years to pay off under the finance program.
  5. GM will be offering a bi-fuel version of the Chevrolet Impala that will be able to travel up to 500 miles on gasoline and natural gas.
  6. General Electric Co. is converting heavy-duty trucking fleets from diesel to natural gas. GE has partnered with Clean Energy Fuels Corp. and truck fleet operators can apply for loans and leases through GE Capital to make the conversions.
  7. Plug-ins missed the Green Car of the Year award nominee list. The winner will be announced next month at the LA Auto Show form the following list: Audi A6 TDI, BMW 328d, Honda Accord (though the plug-in hybrid was included with the hybrid and ICE versions of the Accord), Mazda3, and Toyota Corolla.
  8. Experts speaking at the annual ITS World Congress in Tokyo expressed concerns over issues that do tend to come up with self-driving cars – technical challenges, lack of industry standards, vague and minimal regulations, implementation costs, and liability issues. Toyota is being a little more optimistic, expecting that elderly drivers could likely make up a strong market segment for self-driving cars.
  9. A study by UK-based Kantar Media says that the BMW i3 saw huge media gains in the third quarter after its debut last month at the Frankfurt auto show. It was No. 2 in online news coverage from No. 60 during the second quarter. It came in 8th place in both Tweets and blog mentions during the third quarter versus being in low 100s rankings for both segments in the previous quarter.

40 years after OPEC oil embargo – and the problem hasn’t been solved yet

OPEC oil embargoOctober 17th saw the 40th anniversary of the oil embargo by the Organization of the Petroleum Exporting Countries (OPEC) – a six month embargo that cut the supply of oil to the US and skyrocketed gasoline prices. The days of 25 cents per gallon gasoline were over and the coming years would see desperate attempts to solve the problem. The 1973 embargo started right after the Yom Kippur war was launched, and was spurred by US support for Israel; the second gasoline crisis in 1979, again driving up pump prices and forcing drivers to wait in long lines to fill their tanks, was triggered by another Middle East crisis – the takeover of the US embassy in Iran.

For Keith Crain, editor-in-chief of Automotive News, it was the end of innocence – when automakers had been competing to provide the biggest and best cars to drivers and mileage didn’t really matter at all. The OPEC oil embargo changed all of that; General Motors president Ed Cole vowed to raise the automakers corporate average fuel economy (CAFE) by 50% from 12 mpg to 18 mpg within a decade. The US Congress thought it was very good idea and raised the bar even higher – CAFE was to be 27.5 mpg by the 1985 model year, though that did not happen. For Peter Ward, then with the California Energy Commission, the 1973 oil embargo was the watershed, defining moment illustrating the power of the oil cartel on global economics and clarifying the necessity for alternative fuels.

There were other watershed moments taking place after the initial OPEC embargo….

  • “Non-OPEC” oil field drilling started to break dependence on OPEC supply, led by drilling in the North Sea and Alaska.
  • The Keystone XL pipeline fight had a predecessor with Alaska’s Prudhoe Bay oil field. It had been stopped by environmentalists in the late 1960s, but Congress approved the pipeline that would eventually add up two million barrels a day to the US supply.
  • Alternatives to oil took off – nuclear power and coal became important in electric power stations. Solar energy saw a startup phase that didn’t take hold until very recently.
  • Import cars stated being taken seriously in the Detroit 3-dominated US market. Japanese small cars provided the fuel economy, and owners started expecting their cars to be more reliable and long lasting from their experience with these cars.
  • In 2008, the US (and the rest of the world) once again experienced the power of oil on the economy. Oil and transportation fuel prices skyrocketed in August 2008; within a month, the Lehman Brothers debacle spurred the Great Recession, and the dramatic oil price increase from the previous month was thought to be instrumental in the recession’s tipping point being passed in September.

As then-president George W. Bush said a few years ago during his State of the Union address, “We’re addicted to oil.” Recovery from oil addiction is being played out now in the federal fuel economy standards; growth in plug-in, hybrid and alternative fuel vehicle launches; development of the alternative fuel and charging infrastructure; California’s (and states following California’s guidelines) zero emission vehicle targets; and demand for green, alternative fuel vehicles from consumers, fleets, municipalities and government agencies, and transportation companies. There’s a still a long ways to go, but oil supply disruption and skyrocketing pump prices continue to be a very motivating force.

EPA Appears to be changing its mind on biofuels and E15 mandate

E15It looks like E10 could very well remain the blended ethanol-to-gasoline ratio instead of 15%, or E15, according to a leaked proposal last week from the US Environmental Protection Agency (EPA). If that’s the case, courts are likely to see more case filings coming from biofuels industry associations focused on the EPA backing away from 2014 targets. The oil industry had already filed two suits over 2013 targets. The EPA document referred to the E10 blend wall as an “important reality” and comes from more acceptance that the federal 2007 Renewable Fuel Standard biofuels mandate appears to be unreachable. If it gets approved, the EPA proposal would cut the biofuel mandate in 2014 to 15.21 billion gallons from 18.15 billion gallons. The EPA only has a draft proposal and has not made a final decision on it, according to administrator Gina McCarthy. EPA also considered a corn-based ethanol rate of 12.36 billion gallons and 13.18 billion gallons.
Days prior to the leak, two US oil industry groups had sued the EPA over its 2013 biofuels target. Ethanol groups were ready to sue over any changes to the 2014 rule. The Renewable Fuels Association said it would sue over any attempts to roll back the targets – if the EPA does issue its revised 2014 target, biofuels groups appear ready to file lawsuits.
The clash comes down to industries fighting over falling profits – biofuels companies are depending on increasing output and delivering ethanol to gas stations, and oil companies and refineries are fighting the increased cost of adding more ethanol to gasoline. The oil industry is also upset with the soaring cost of ethanol credits built into the Renewable Fuel Standard. While the EPA has ruled that gasoline blended with E15 is safe to use in vehicles made after the 2001 model year, many automakers are refusing to allow their vehicle warranties to cover the use of fuel over E10. Gas station owners don’t want to invest in another storage tank and pumps to provide E15.

Why I disagree with Forbes article on Pickens and Clean Energy pulling a scam
Forbes staff writer Christopher Helman says the launch of Clean Energy Fuel’s “Redeem” renewable natural gas is a bit of a scam. Read his article “The Clever Gimmicks Behind T. Boone Pickens’ New ‘Green’ Fuel” for details. The commentary states that while the company is gathering landfill gas from dump operators across the country and two of its own, it’s just a marketing gimmick that comes out of selling carbon credits like the one being implemented by the California Air Resources Board. Helman wrote that the natural gas is,” simply injected into the nation’s natural gas pipeline grid, where it’s intermingled with all the other conventional gas flowing down the pipes to plants that turn it into CNG…. The ultra-green nature of Redeem is really just an accounting gimmick. The more gas that Clean Energy’s traders can procure from landfills (as well as methane-rich wastewater plants and dairies) across the country, the more CNG it can slap with the Redeem label. But on the molecular level, it’s exactly the same stuff.”
Well here’s my take on it:  For anyone interested in buying Redeem, such as a fleet with stringent sustainability targets, there would probably be interest. It costs the same as natural gas. It would have the same GHG/carbon reduction benefit as natural gas – around 20% to 25% less than diesel. Natural gas has another benefit in air pollution reduction – 90% less NOx in natural gas compared to gasoline/diesel. There would also be the part about tapping into landfill for the natural gas. If you were a corporate or government fleet, you could say you’re contributing to reducing our landfill problem and using clean fuel.  Plus, you get credits from California Air Resources Board. Helman also makes a comment about it costing 50 cents less than gasoline and diesel. If that’s per gallon equivalent, he was way off – natural gas is sold for only about one third the cost, or around $1.25 or more per gallon – much more than 50 cents in savings.
Another interesting point was seeing a statement by Energy Vision, an energy advocacy group in Washington that tends to hold the natural gas vehicle industry accountable….By capturing and refining the biogases generated from a number of large landfills across the country, one of which is the Sauk Trail Hills landfill in Michigan, which is owned and operated by Republic Services, Clean Energy will provide approximately 15 million gallons of ultra-low-carbon “Redeem” (RNG) this year alone, a volume far greater than most (including the EPA) estimated was possible nationally, let alone in California. Energy Vision commends the pioneering efforts of Clean Energy/Clean Energy Renewable Fuels in making the path to fully-sustainable renewable natural gas a reality.

Green transportation news roundup:

  • Another Tesla Model S competitive model releases details…. The 2014 Cadillac ELR is priced at $75,995 including destination charges. It’s more than twice the price of the Chevrolet Volt and uses the same powertrain, but GM is expected to produce it in smaller numbers and hopes that increases its value to buyers.
  • As Ecotality leaves the charging infrastructure following its bankruptcy filing, competitor and fellow DOE-grant recipient ChargePoint is offering owners of Ecotality Blink charging stations a trade-in credit for switching over – for those switching to a dual-port CT4000 station ($2,200 credit) or a single-port station ($1,200).
  • The U.S. Department of Energy on Friday started an auction on its loan to Fisker Automotive that was made back in 2010. The DOE is still owed $168 million from the $192 million loan, though any sale is expected to be at a discount.
  • Intertek, which certifies electric vehicle supply equipment, has acquired ETEC Labs, a leader in advanced transportation testing, including alternative energy vehicle analysis, research, and demonstration projects.
  • Honda is going after Toyota’s domination of the hybrid market by rolling out a hybrid version of the Fit (joining its ICE and EV versions). The automaker began selling the hybrid Fit last month in Japan where it’s competing directly with the Toyota Aqua, which is known as the Prius C in the US market.
  • Toyota is dropping the base prices of the 2014 Prius Plug-In to $29,990, a $2,010 reduction from the current price.
  • Ford Motor Co. and the University of Michigan, Ann Arbor, are opening up an $8 million battery research lab. Researchers will be developing and testing new chemistries for automotive applications, and making breakthroughs for electric vehicles and hybrids that will go to market as quickly as possible.
  • Toyota thinks it can cut hydrogen fuel cell vehicle costs in half by 2020 – closer to the production cost of a plug-in hybrid and cheaper than the MSRP for an electric vehicle. It’s still going to be expensive when it launches its first fuel cell vehicle in 2015 – somewhere between $50,000 and $100,000 as its sales price. That came down from Toyota’s cost of $1 million per unit in 2007 to build 100 Highlander fuel cell demonstration vehicles.
    1. Los Angeles-based MPG Car Rental is now offering the Toyota Model S to renters for $499.99 per day. MPG Car Rental prominently displays other vehicles in its green-only lineup including the BMW i3, Volkswagen Jetta TDI, Chevy Volt, Honda Insight, Toyota Camry Hybrid, Toyota Prius, Toyota Highlander Hybrid, and Chevy Tahoe Hybrid.

    New book follows the money trail shaping renewable energy – Plus, a very surprising prediction of stance Obama will take on Keystone XL pipeline
    “Do you get the feeling that the energy industry and the Congress that it owns are deliberately lying to you? If so, you are 100% correct,” according to an announcement that 2GreenEnergy.com Editor Craig Shields just had his third book published, Renewable Energy: Following the Money. The book features another set of interviews; the effects that economics and financial power have on the course of the energy industry are explored by high-ranking officers in the US military, lobbyists, scientists, economists, environmentalists, journalists, and heads of NGOs. I applaud Shields’ hard work and wide ranging perspectives on renewable energy and clean transportation. I admire how much he’s kept his word on staying in the trenches on where all of this is going as a business – whether that be through attending key conferences or interviewing experts of all genres for his books and blog. This new book digs into what I would describe as what “Deep Throat” ex-FBI official W. Mark Felt kept telling reporter Bob Woodward about the Watergate scandal: “Follow the money trail.”
    Shields also wrote a surprising blog post on the Keystone XL pipeline and President Obama’s decision on whether to back or reject supporting the pipeline from Alberta to Texas. Here’s a few reasons why he thinks it’s going in that direction….

    Smart transportation explored in market report and Toronto conference
    Navigant Research issued a report on “smart transportation” covering global smart city projects around the world. This came out soon after the annual Meeting of the Minds took place in Toronto last month. Meeting of the Minds has been bringing together urban sustainability and connected technology stakeholders since 2007. Navigant Research thinks the global smart city technology market will grow from $6.1 billion in revenue last year to $20.2 billion by 2020. New projects include investment in smart grid, urban mobility, water management, and government service applications for smart cities. Forecasters see urbanization as a major trend around the world impacting transportation in significant ways.

    More skepticism about alternative technology vehicles from industry bible
    What an Automotive News video had to say about tough sales challenge cars like Tesla Model S, Chevy Volt and Toyota Prius have on market…. Stop start, micro-hybrids, and regenerative braking are taking away the strength of plug-ins and hybrids.

    Solazyme just took top spot for the third year in a row on Biofuels Digest’ “50 Hottest Companies in Bioenergy” for 2013-14. Propel Fuels (provider of biofuels and other alternative fuels refueling stations) made the list for the first time at No. 29. Solazyme produces renewable oil and bioproducts from a range of plant-based sugars. The company is providing algae diesel with Propel Fuels. Cellulosic biofuel producer KiOR made No. 3 on the top 50 list. The annual rankings recognize innovation and achievement in biobased chemicals and materials development; it’s based 50% on votes from an invited panel and the other 50% from readers – more than 100,000 individual company ratings were received from panelists and voters.

    Big Picture: Tesla Motors dealing with battery fire, September sales figures

    Tesla Model S fireHave you seen the YouTube video that went viral a few days ago – where passengers driving down a street in Kent, Wash., view a Tesla Model S on fire? The car struck metal debris on Oct .1 in the town near Seattle – said to be a “curved section” that fell off a semi-trailer. First responders said that the fire occurred in the electric vehicle’s lithium-ion battery. “The geometry of the object caused a powerful lever action as it went under the car, punching upward and impaling the Model S with a peak force on the order of 25 tons,” Tesla CEO Elon Musk wrote in a statement. “Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse.” The driver was safe and only had good things to say about the car. Tesla’s booming stock price dropped 10% over two days but looks like it could be coming back. It will most likely turn out to be similar to what Chevrolet went through with the NHTSA report on the Volt lithium battery catching fire in a test; or to Nissan going through the wringer last year over the Leaf’s battery life receding in extreme heat conditions in Arizona. The Volt and Leaf are doing just fine, and the Model S will probably come through in sales and reputation if handled the right way by Tesla Motors.

    In other Tesla news, the automaker is moving forward to direct sales in Virginia. The Virginia Department of Motor Vehicles and the Virginia Automobile Dealers Association reached an agreement late last week to allow the automaker to apply for a single dealership license. Tesla withdrew a lawsuit and now needs to get approval from the Virginia Motor Vehicle Dealer Board, the state regulatory agency that oversees dealers in the state, before it can begin selling vehicles in Virginia. Tesla Motors has taken another step toward expanding its fast charger options for Model S drivers. For $1,000, you’ll soon be able to get a CHAdeMO fast-charger adapter. While the 50 kilowatt CHAdeMO stations aren’t nearly as fast of the 120 kW Tesla Superchargers, there are a lot more of them out there on the roads – primarily in the Pacific Northwest region.

    Correction: California funding of 100 hydrogen fueling stations
    As reported by a Green Auto Market reader close to the story…. The coverage of California’s governor approving bills last week incorrectly reported funding for 100 hydrogen fueling stations in the state. It wasn’t $20 million in one lump sum – it needs to be described as “either $20 million per year or a potential total of $220 million during the life of the extended program (until 2023).” My reporting assumed that hydrogen stations would cost $200,000 each but it’s actually costing a bit more than that amount. So, if you catch incorrect reporting, please let me know. If you completely disagree with what I wrote, please let me know. It could inspire and fuel another commentary from me.

    September sales figures didn’t break records, but the metal was still moving
    Electric Drive Transportation Association just released electric vehicle sales numbers for September 2013. About 8,127 plug-in vehicles were sold last month – 4,477 plug-in hybrids and 3,650 battery electric vehicles. The numbers weren’t as high as August’s record sales, but they do show a 40% jump over September 2012. Cumulative 2013 sales for plug-ins were 117% higher than they were by this time in 2012. There were 33,576 hybrids sold last month, which correlates with the overall downward sales trend in new vehicle sales in the US market. Long term, it looked better – total sales for hybrids in 2013 were 21% higher than they were in the first nine months of 2012.

    New book follows the money trail shaping renewable energy
    “Do you get the feeling that the energy industry and the Congress that it owns are deliberately lying to you? If so, you are 100% correct,” according to an announcement that 2GreenEnergy.com Editor Craig Shields just had his third book published, Renewable Energy: Following the Money. The book features another set of interviews; the effects that economics and financial power have on the course of the energy industry are explored by high-ranking officers in the US military, lobbyists, scientists, economists, environmentalists, journalists, and heads of NGOs. I applaud Shields’ hard work and wide ranging perspectives on renewable energy and clean transportation. I admire how much he’s kept his word on staying in the trenches on where all of this is going as a business – whether that be through attending key conferences or interviewing experts of all genres for his books and blog. This new book digs into what I would describe as what “Deep Throat” ex-FBI official W. Mark Felt kept telling reporter Bob Woodward about the Watergate scandal: “Follow the money trail.”

    CARB streamlines propane and NGV upfits, but Peter Ward calls for it to go further
    The Cal­i­for­nia Air Resources Board (CARB) has stream­lined the process for propane auto­gas and nat­ural gas vehi­cle upfits through approv­ing changes to its rules. This brings the process closer to require­ments of the US Envi­ron­men­tal Pro­tec­tion Agency. Peter Ward of Alter­na­tive Fuels Advo­cates would like to see the process go fur­ther, where adjust­ments to the require­ments could be made with­out hav­ing to go to the Board each time. It’s the first substantial revision to the CARB rules in 18 years. Ward would like to see continued cooperation and mutual interest continued between CARB and the industry. “Keep the regulations nimble,” he said.

    Highlights from Plug-In 2013 in San Diego

    • Debate continued by panelists on how public charging should be funded. Some say it should be essentially free to the public – paid for by retailers wanting to offer consumers incentives for showing up and staying a while. Some charger makers and others argue that most of the charging is happening at home and the EV drivers should just have to swipe their credit card to charge somewhere else. However, one-time processing fees could be a problem for acceptance of these systems by consumers. Then there’s the problem of too many people charging during peak hours when utilities are limited in how much energy should be flowing to charging stations. It’s likely there are not enough EVs out there yet for it to be a problem, but the worry continues.
    • Via Motors has a contract to build and deliver $20 million worth of plug-in hybrid pickups and vans to over 50 participating fleets. The fleets will also be sending real-time data to the US Department of Energy to study for improvements in fuel economy and emissions.
    • ABB launched the Terra 53 for North America. This 50 kW DC fast charging station meets both SAE Combo and CHAdeMO standards for battery electric vehicles, all in one station.
    • A coalition of US and German automakers unveiled a public combo charger at the Fashion Valley Mall in San Diego—in an eVgo Freedom Station. It uses the CCS plug and combines a J-1772 Level 2, 240-volt charge point with direct current (DC) fast charging.
    • Eaton released its Dual AC Level 2 charging stations for simultaneous charging of two EVS. The stations can charge electric vehicle batteries up to three times faster than traditional charging systems to offer a cost-effective solution.

    And in other news during a busy week…..

    • Clean Energy Fuels released  its “Redeem” renewable natural gas fuel. The company says it is the first one to commercially distribute a renewable natural gas vehicle fuel made from waste streams such as landfills, large dairies and sewage plants directly to fleets around the country and at 35 public Clean Energy stations throughout California. Clean Energy says it’s 90% cleaner than diesel and comes from biogenic methane, or biogas – methane generated by decomposition of organic waste. The target is to produce and distribute 15 million gallons of Redeem in its first year.
    • General Electric Co, Whirlpool Corp, Eaton Corp and others are developing more affordable natural gas vehicle home refueling systems. For about a tenth of the price of current models, plus installation, they aim to sell the new units to the millions of homes across America that are already hooked up to natural gas pipelines. Energy providers in Georgia, California and Utah are working on distributing new refueling units in the next two years. Honda has also expressed interest in the new technology.
    • UK-based hydrogen fueling company ITM Power has a 4.45 million (pounds) project that will integrate its hydrogen energy storage and vehicle refueling system on the Island of Wight. It’s called EcoIsland Hydrogen Vehicle Refueller, which is supported by the UK’s innovation agency, the Technology Strategy Board.
    • General Motors is expanding its collaboration with the U.S. Army’s Tank Automotive Research, Development and Engineering Center (TARDEC) to develop hydrogen fuel-cell technology. It ties in with GM’s new fuel-cell development facility in Pontiac, Mich., which is about 20 miles from TARDEC’s new fuel-cell research lab in Warren, Mich. The two entities will focus on testing the durability and performance of fuel-cell materials. In related news, Daimler and GM will be investing in two other fuel cell projects aimed at advancing the vehicle technologies and building out the fueling infrastructure. Daimler is putting about $500 million into a network of hydrogen stations in Germany over the next 10 years.
    • The Toyota RAV4 electric version took the top ranking away from last year’s winner, the 2013 Lexus GS 450h in the Automobile Club of Southern California’s 2013 Green Car Guide. Results come from the organization’s Automotive Research Center, which has been a leading vehicular emissions test lab since the late 1960s. Testers look at how hybrid, alternative fuel, electric, fuel efficient, and extremely low emitting gasoline-powered vehicles on the market are performing following a number of patterns vehicles are typically experiencing.
    • Kia will release the 2015 Soul EV, the first electric car from a Korean automaker to be sold in the US beyond concept cars displayed at auto shows.
    • The US Environmental Protection Agency wants to make right with consumers to avoid future fuel economy rating meltdowns like the ones we’ve seen lately. EPA will be giving more information about its audits and data submitted by automakers. Results from 20 recent fuel-economy audits will be released soon to the public to start the changeover.

    Vinod Khosla isn’t backing away from biofuels as a smart investment

    Vinod KhoslaAlternative energies are having an extremely tough time of it lately – from alternative fuel vehicle fueling and charging infrastructure to development of renewable energies – public and private funding has been drying up for many projects. Biofuels have been going through the wringer – much of it tied into the struggle over corn ethanol being used as E10 in gasoline and potentially as E15 if it survives the political battle. Much of the controversy is also tied into the federal Renewable Fuel Standard, which many analysts think is quite unrealistic for bringing advanced biofuels into transportation at a large scale level of production. A few of the public companies have lost their market value as disappointed investors have pulled out and put their money into something else like smartphones and mobile applications.

    Then there’s Vinod Khosla, one of the leading venture capitalists out there these days. Khosla hasn’t backed away from biofuels and is dropping down more cash on cellulosic biofuel producer KiOR Inc., He committed personally to fund up to $25 million in cash to KiOR, in addition to the $25 million that would come from his firm Khosla Ventures.

    KiOR just announced that it will be doubling production at its Columbus, Miss., cellulosic fuels facility through setting up a second plant incorporating its own commercially proven technology. The company estimates that the development project will cost it $225 million; it will take 18 months to complete after breaking ground and the company is raising equity and debt capital to fund the construction project.

    Khosla and other investors have seen biofuel companies take a deep dive on the market. Amyris Inc., Gevo Inc., and KiOR experienced collapse since their initial public offerings. Operational and technical delays have caused investors to pull away. It’s possible the Khosla could be part of bringing KiOR back and his company has made sizable investments in Amyris and Gevo.

    Khosla believes biofuels could play a vital role in America’s economic prosperity and security. “The biofuels industry, if properly funded, is also capable of creating more jobs, with unsubsidized economics, than traditional fossil oil technology and putting every mill town in America with a shut down paper mill back in business as a thriving community,” Khosla wrote in the KiOR statement.

    The US Dept. of Agriculture has played a key role in supporting biofuels and has now placed a new offering on the table. Farmers and rural businesses in 22 states are being offered incentives to help reduce energy consumption and increase the use of renewable technologies; a number of biofuels- and biomass-related projects are part of the federal program. The Rural Energy for America Program (REAP) program provides a grant for up to 25% of eligible project cost plus additional funding in the form of a loan guarantee.

    Some of the available grants include those supporting flexible fuel pumps in California; E85 and biodiesel blender dispensers in Iowa; equipment to efficiently manufacture biodiesel and a biomass burner in Indiana; and two separate biomass boilers in New York.