Driving the electric revolution

By Saul Zambrano

If there’s a single sound that sums up the American dream, there is a strong case to be made that it is the roar of the internal combustion engine. It conjures up the sense of freedom only felt when blasting towards an endless horizon in a growling pickup or shark-finned convertible. It’s a powerful image and the lure of the open road has been immortalized countless times in popular culture, spawning the road movie as a legitimate cinematic genre and inspiring musicians from Chuck Berry to Bruce Springsteen.

Nowadays though, the average driving experience bears little resemblance to that portrayed in the Smokey and the Bandit films or songs like Born To Run. Rather than hurtling through America with the wind in his hair, today's driver is more likely snarled in traffic, going nowhere fast. From a potent symbol of personal freedom, for many the car is slowly morphing into a prison. Compounding this is the growing realization that our love affair with the automobile comes at a cost, whether it is excessive dependence on foreign oil or the undeniable environmental impact caused by exhaust emissions from the millions of vehicles clogging the nation's freeways.

These realities are central to the rebirth of the electric car. Following an abortive attempt to encourage drivers to go electric back in the 1990s, plug in vehicles are currently experiencing a resurgence. Nissan's Leaf will be available to American consumers within the next few months and already has some 20,000 pre-orders, enough to sell out its entire initial production run. That may not seem like a huge number compared to sales of conventional gas-fueled cars, but the fact that so many people are prepared to spend around $30,000 dollars on such a vehicle is clear indicator that interest in electric is on the rise.

Naturally, if Americans are going to forsake the gas pump for the power outlet, there are going to be implications for utilities. There are around 250 million cars on the road in the US. While no one is expecting the entire nation to switch to plug in overnight, if even a small fraction of that number go electric it will place a massive strain on already strained generation and transmission infrastructure.

One utility tackling this issue head on is California's Pacific Gas & Electric. With the stated ambition of servicing 45,000 electric vehicles by 2020, PG&E has placed itself in the driving seat for what could be the 21^st century's most important race. One of those steering the utility on its route to a greener motoring future is Saul Zambrano, PG&E's Director of Clean Air Transportation. When we catch up with him to talk about the scale of the challenge, he is steadfast in that belief that organizations like PG&E will be instrumental if electric vehicles are going to succeed. "You know the famous saying, that it takes a village? What we discovered with this initiative is that, in this case, it takes a utility," he says. "We've created a market readiness team to specifically focus all aspects of our operations to welcome the introduction of these vehicles into our service territory. When you build these types of teams you basically have to do education outreach. You have to look at your service planning practices and you have to look at your rates, so that you don't create any dis-incentives relative to charging tariffs for these vehicles. It's quite an involved effort but within North America, California, generally considers itself ground zero for the introduction of these vehicles. You look at all of the investor-owned utilities and the municipal utilities, they've effectively created market readiness teams within the utilities to support electric vehicle introduction."

Zambrano is encouraged in his efforts by what he sees as a genuine consumer interest in EVs, an interest that is fueled by improvements in technology and evolving social attitudes. "A lot of things have changed," he confirms. "People are focused on sustainability. People are focused on energy security and the automobile manufacturers are bringing a stable of cars to market that consumers can either buy or lease and what we do know is the initial introduction of these vehicles are going be supply constrained. So the choke point is going be at the OEM of these vehicles.

"The other thing is that the technology itself has matured quite dramatically from the 1990s. The production capacity of the lithium ion packs that go into these vehicles has exploded.  The capacity was always there in Asia but the stimulus funding that came out of the federal government effectively created manufacturing capacity within North America. That amount of investment and development is just driving the cost curve much down much faster than anyone anticipated."

As well as manufacturing capacity, actual battery efficacy is also improving. "This time it's lithium ion which is fundamentally a better chemistry," Zambrano continues. "The battery management pack software has really moved quantum leaps forward. The other thing is the maturity of the internet really creates these network-centric information models on how people can and will charge."

But perhaps most significant development is the fact that the auto business seems to be genuinely behind the move towards electric. While the stalled attempt to push EVs in the 1990s was a largely top-down affair, driven more by federal mandates than real market forces. Today, the situation looks far more organic. "The car manufacturers are driving this to a larger extent than they were the first iteration," Zambrano says. "When you look at the car manufacturers who have models coming to market or have announced development plans you've got GM, Nissan, BMW, Honda. Around 30 or 40 companies have EVs planned or in production. When you compare that to the first go-round it's a much more market-driven mandate than a policy-driven mandate."

While the early signs seem positive, the biggest challenge for the electric car at this critical juncture will be overcoming old preconceptions and securing a solid consumer base. The customer experience of the thousands of early-adopters will be absolutely critical in this effort. Just as with all innovative technologies, it is the reaction of the first wave of users that sets the tone for the rest of the market. Fail to win over the geeks who queue up to buy your shiny new product on day of release and it's unlikely you'll be winning over Joe Six-Pack any time soon. One area of the customer experience under particularly close scrutiny is the performance of car batteries. Zambrano contends that durability is no longer a genuine cause for concern. He points to the fact that GM and Nissan are both offering eight year, 100,000 mile battery warranties on their new EVs, while utility Southern California Edison are still running a fleet of electric Toyota RAV4s from the 1990s on their original batteries. Instead, it is the pervasive issue of range anxiety which is of far greater concern to most consumers.

"I think one of the key leaps of faith that consumers are going to have to make or understand is the fact that most people drive a total os less than 40 miles a day," says Zambrano. "These new EVs have ranges of around 100 miles, so drivers can charge at home and have enough capacity to get to work and back and even further." Those drivers who have a longer commute aren't excluded from the electric revolution, as hybrid models cater for more long-distance jaunts. "Vehicles like the GM Volt have backup gasoline engines to drive the electric motor," Zambrano continues. "Once the battery gets depleted after 40 miles, that engine kicks in to drive the electric engine, giving it a range of over 300 miles. People are going to make different decisions based on their lifestyles and on which platform works for them, but both are effectively plug-in electric vehicles."

Power struggle?

So what are the key considerations for the utility when it comes to the uptake of more plug-in vehicles? "What we do know is that we want to these vehicles to charge intelligently," Zambrano replies. "From 11pm to 6am, we have a tremendous amount of generation capacity with which we'll be able to support them. We don't have concerns about generation capacity to support these vehicles. The other reason we want them to charge intelligently off-peak is because it minimizes the impacts to our distribution grid, and more importantly because it's cheaper for us to provide power off-peak. One of the ways for consumers to pay down the up-front investment of these batteries is you have to have a cost-competitive price per gallon equivalent."

Based on PG&E's calculations, it can provide power to electric vehicles at the equivalent cost of about one dollar per gallon. With gas prices hovering around three dollars per gallon, this represents a significant saving, but it is only possible thanks to PG&E's investment in smart grid technologies. "Ensuring that our customers have competitive cost economics of fueling is incredibly important," Zambrano says. "We have one of the largest deployments of smart grids in the world.  We know how to leverage it technically, to send the charging signals to smart chargers. From our perspective, we think that's critical for adoption. That's where we view our contribution to the adoption of this technology; ensuring that we have programs that support customers at the tariff level and relative to smart charging. All that works seamlessly within all the internal operations of the utility."

It helps that the utility has been working closely with EV manufacturers in ensuring that capacity exists to power vehicles once they hit the streets. A great deal of advance planning has been done to know exactly where these cars will be going, allowing PG&E to be certain that they will be able to juice them up. "We're coordinating with the vehicle makers so that we can coordinate with our service planning organizations and ensure that the issue of grid reliability for those hot spots is addressed," Zambrano explains. "I think one of the underlying themes behind this is that this is a collaborative process amongst all the stakeholder.  And the stakeholders involve the automobile OEMs, the utilities, the regulators, the policy groups that are driving things either at the federal or the state level."

Something that has become clear as a result of this collaboration is that early EV adoption is going to be geographically concentrated. This information has been invaluable to PG&E in knowing exactly where it needs to harden its grid to cope with the spike in demand.

As befitting a vehicular revolution that is motivated by concern for the environment, renewable energy is expected to play a major role in powering the next generation of electric vehicles, though it wont be happening straight away. "Once there's enough of these vehicles in our service territory, and we got them charging off-peak, one of the strategies that we're looking at is integrating wind generation," Zambrano says. Wind is the obvious choice for EVs because of one simple fact. "Generally speaking, wind blows hardest at night," Zambrano continues. "You've got to look at renewables in terms of when they are generating electricity. Solar is generating electricity during the day but people are at work and there are a lot of intermittency issues. Wind offers the perfect alignment because people are asleep when it is blowing the hardest which makes integrating that particular generation into the charging of these vehicles much easier."

No discussion of electric powered vehicles would be complete without a discussion of gas prices. While it remains affordable to fill up a traditional internal combustion engine car with fuel, can EVs ever gain a significant amount of traction? "If I can provide electricity that's a dollar a gallon gas equivalent it's a very attractive proposition at the consumer level, even if gas costs $3.00 a gallon," Zambrano says. "The higher the price of gas, the quicker the adoption of these vehicles." Whatever happens over the coming decades, it is unlikely that the price of oil is going to go any direction apart from up. What's bad news for some could be quite the opposite for proponents of the switch towards electric.

Ultimately though, Zambrano believes it is demographic shifts that will provide EVs with the most significant momentum. Increasing urbanization makes cleaner vehicles more suited to shorter journeys increasingly attractive. In addition, a whole new generation of customers are coming into the market who have very different priorities from the ones who preceded them. "My nieces and my nephews are excited about these cars," he says. "There's an environmental ethos that's developing in the younger generation. We can't look at it through our eyes any more. We've got to be cognizant of the fact that there are people who make purchasing decisions based on this ethos."

Whatever happens, Zambrano is clearly happy that he and PG&E are involved in what promises to be a very interesting perid of history for the motor vehicle. "The best thing about the generational effect, is that it takes place relatively quickly," he says.  "It happens in 10 or 20 years. We're quite excited about the fact that we can support the adoption of this technology and help people to adopt these vehicles."

Return to sender

Zambrano discusses the potential of vehicle to grid.

We've done a lot of work on vehicle to grid. We actually partnered with Google who did the technical proof of vehicle to grid. There are a couple things that need to happen before vehicle to grid becomes a viable prioritization. One, the cars have to get out into the market in mass. That priority follows how many cars are actually out there. If there are only a thousand cars out there in year one, then it's not very attractive relative to ancillary services. The other thing is that the utilities and the automobile OEM companies still have to figure out what the car manufacturer's liability on warranty is relative to these vehicles versus a utility application.

The problem is that they've got to get these cars out and into the marketplace and figure out how they perform and then they've got to crunch all the actuarial data to understand what is the value from a warranty perspective of a single discharge, because that's what you're asking at the battery level is; "Let me take an additional discharge cycle from the battery life and feed it back into the grid in order to support the grid in whatever fashion from an ancillary market perspective."

In addition to that there are certain ways that the American grid was that means there have to be some of that safety issue worked out as well. We're taking these car batteries and using them as backup power and folks want to send that power to the grid to help generate a neighborhood. But if that neighborhood's down and we have line workers there and those line workers don't know that the equipment is going be energized, it could be a problem.  Right now many places on the grid wouldn't accept that charge in a power outage situation.

It's kind of a one-way setup right now in that emergency situation so we'll definitely have some engineering and technical challenges to overcome. That's not to say that vehicle to grid is not something that we're definitely looking at and evaluating. We want to make sure that it's part of the future scheme of things. We've just got to figure out the appropriate applications.

Shifting gear

A look at the prospects for the electric vehicle market

Frost & Sullivan's 360 Degree Perspective of the Global Electric Vehicle Market, published in April 2010, raises some interesting issues for the development of EVs as we move through the 21^st century. Anjan Kumar is the analyst firm's Team Leader, Automotive & Transportation and one of the report's authors. He is clear that certain trends are making the prospect of widespread EV adoption more likely. "Battery manufacturers are much more confident," he says. "They have developed safer batteries and are increasing their range to the 100 to 115 mile distance. There has been considerable evolution in this area over the last 10 years."

Additionally, vehicle emission rules have become much more stringent over recent years, a trend that is likely to continue. Governments across the world are setting targets for the reduction of greenhouse gases, with potential penalties being imposed if these targets are not met. This is a climate that naturally favors cleaner alternatives to traditional gas-powered vehicles.

But perhaps the largest driver for EVs could be wider demographic megatrends that will reshape the way people live and work over the coming decades. "The rise of megaregions, mega-areas and megacities is particularly significant," explains Kumar. There is going to be a growing concentration of people inside cities. We have seen urbanisation happen from the early 1900s to the present day. What we are going to see now is de-urbanisation. Wealthy people will live in the city centre, while the middle classes will be situated in the suburbs. We could see a third band outside the ring roads where the less affluent people and manufacturing type industries would be found. We could see homes and workplaces being situated close together, which will obviously have an impact on the types of transport that are used. Neighborhoods will be encapsulated so that residents will be able to find everything they need at a very close distance. This kind of scenario would work well for the growth of electric vehicles."

But before EV manufacturers start popping the champagne corks, there remain significant hurdles still to be overcome. Despite recent advances in the technology, consumer attitudes have a way to go before there is widespread acceptance that they are a viable alternative to the internal combustion engine. This situation is not helped by the lack of electric charging infrastructure, whereas you'll pass a gas station every few miles. While states and governments are pushing adoption by offering grants and consumer incentives for buying electric, we will probably be waiting a while until the whirr of electric motors replaces the growl of the petrol engine as the dominant sound on America's streets. "According to our forecasts, by 2015 only one to three percent of vehicles - around 400,000 to 500,000 - sold in the US will be electric," Kumar confirms. "By 2020 we're looking at five to seven percent. In order for EVs to have a 10 percent share it will take at least until 2025."

A charged history

America's relationship with electric vehicles goes back further than you might think

1835 - Thomas Davenport builds a small electric locomotive, the first practical EV

1859 - Gaston Planté invents the rechargeable lead-acid battery, leading to the development of vehicle batteries in 1881

1891 - William Morrison builds America's first successful electric car

1897 - The Pope Manufacturing Company becomes first large-scale US EV maker

1900 - Roughly 28 percent of cars produced in America are powered by electricity

1908 - Ford introduces the mass-produced and gas-powered Model-T, the beginning of the end for EVs

1920s - EVs cease to be a viable commercial proposition due to demand for longer distance, more powerful vehicles and the availability of gas

1972 - Victor Wouk builds first real hybrid vehicle

1974 - Vanguard-Sebring's CitiCar debuts

1976 - The Electric and Hybrid Vehicle Research, Development and Demonstration Act is passed by Congress

1996 - GM introduces the EV1, a lease-only full-electric vehicle. By the time the car was cancelled in 2002, 1117 had been produced

2001 - Toyota's Prius, the first commercial hybrid car, is released worldwide

2009 - The American Recovery and Reinvestment Act allocates almost $2.5 billion for development of electric vehicle technologies and infrastructure