Navigant Research Blog

Monorails Race Ahead of Hyperloop

— August 29, 2013

While the ambitious Hyperloop is merely theoretical for now, several other projects for lifting travelers out of traffic jams are taking shape.  Less ambitious than Elon Musk’s grand plan for hurtling humans at high speeds between San Francisco and Los Angeles, a blueprint for connecting Boulder and Longmont, Colorado would employ above-the-fray magnetic levitation pods.

Private venture SkyTran claims to have raised $250 million for the 15-mile monorail, which would link rustic Longmont with the growing tech hub of Boulder.  SkyTran says it will finance and run the people mover as a private enterprise, at a fraction of the cost of light rail, and could have it up and running by 2016.  But even if the Colorado Department of Transportation greenlights the project, commuters might balk at the full fare ($15 round trip) for the short city jaunt.

SkyTran, which presented the plan to officials in Boulder on August 22, envisions launching similar projects in Mountain View, California, plus Tel Aviv, and several other cities.

Studied to Death

Easing traffic congestion with non-polluting monorails can make sense if the trip is short and straight along a route that connects popular endpoints.  SkyTran claims that it can fully power the monorail with solar panels, and that the system will produce hydrogen with the surplus of electricity.

India has several projects in varying stages of development, while a project in Indonesia looks to reduce traffic going to the airport.

Monorails are far from a sure thing, though.  A line in Sydney, Australia is being torn down due to lack of ridership, and Seattle infamously spent more than $100 million in tax dollars to study a monorail before deciding to do nothing.  Colorado has also considered a monorail to connect downtown Denver with the ski resort town of Vail (a mountainous 150-mile trek along the infamously congested Interstate 70), but voters smartly said no to spending $50 million to study the proposal.

It’s a good sign that many alternatives to building more lanes and highways – such as monorails, light rail, bike lanes, and bus rapid transit – are gaining traction.  Many won’t be successful, but it beats repeatedly following the same failed logic for reducing traffic.


Facing Climate Change and Adapting

— August 29, 2013

Hopefully we’re better at adapting to climate change than we are at preventing it.

An analysis conducted by Environmental Business International (EBI) put the market for climate change adaptation services at $700 million in the United States and $2 billion globally — growing at 12%-20% through 2020.  Focusing on urban settings, the EBI report splits the climate change adaptation industry into three segments: climate risk assessment and analysis, climate adaptation planning, and adaptation design, engineering, and construction.

The EBI report is primarily focused on water-related industries, such as wastewater treatment, ports, and sea walls, while ignoring many of the power-related opportunities that a broader definition would include.  It therefore significantly understates the overall opportunity.  Outside of urban settings, the United Nations (UN) has already created a Green Climate Fund to implement adaptation projects in the developing world (including mitigation), with a target of disbursing up to $100 billion per year by 2020.  Since this would only be one funding mechanism, the adaptation services industry could be one of the largest industries in the world.  Projects totaling $180 million have been funded to date through the UN mechanism alone.  For comparison, Navigant Research valued the major cleantech electricity generation industries at $200 billion in 2012.

Many businesses are well-positioned to capitalize on the coming avalanche of adaptation dollars spent on creating more resilient communities in the United States and overseas.  A number of companies, ranging from GE to CH2M HILL, are already directly or indirectly providing adaptation services.  Cleantech, research and consulting firms, social enterprises, and non-profits similarly stand to gain from large contracts within the United States and overseas.

Taking It to the Streets

“Adaptation” is an imprecise term.  At the highest level, it refers to adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, intended to moderate harm or exploit beneficial opportunities.  A resilient energy system balances people and demand in the presence of internal and external developments, including climate change.  There is a strong degree of overlap between climate change mitigation and adaptation activities, as illustrated in the figure below:

(Source: CCAP)

An analysis by Oxfam, The New Adaptation Marketplace, did not assign a market value, but identified seven categories of services provided companies in the adaptation sector: disaster preparedness, water management, agriculture, climate information and consulting services, energy, coastal and natural resource management, and insurance

Cities have taken the lead in implementing climate change adaptation strategies.  The non-profit International Council for Local Environmental Initiatives (ICLEI) is a leading association of cities and local governments dedicated to sustainable development that highlights the adaptation efforts of 20 U.S. cities that are building more resilient communities.  These efforts include conducting adaptation assessments, enacting energy efficiency programs, increasing tree canopy, and other measures.

In the Pacific Northwest, where I reside, cities are taking meaningful steps to adapt to climate change today.  Many activities and strategies outlined in Portland’s Climate Action Plan qualify as both mitigation and adaptation, but other cities in Oregon are also taking action on adaptation.  For example, the city of Eugene is implementing a Community Climate and Energy Action Plan that includes increasing water conservation, increasing investment in the urban forest, removing essential services from the 100-year  flood zone, increasing energy efficiency to reduce demand for hydroelectricity (which is expected to decline with climate change), and conducting a food security assessment.

“Adaptation” and “resilience” are replacing “sustainability” as the buzzwords du jour – but that doesn’t make them any less real in terms of their impact on society and economic activity.


In Korea, Wireless Charging Takes the Bus

— August 29, 2013

Wireless charging is a technology that attracts more public attention than its actual use would seem to warrant.  This week saw breathless reports that the Droid 5 might include wireless charging capability and GM plans to put a wireless charging mat into its 2014 models for mobile devices.  In the electric vehicle (EV) market, Bosch introduced the first aftermarket wireless charger for EVs in the United States during July, the Plugless charging system.

In some ways, EV wireless charging seems superfluous.  We already have good charging technology: the plug and cord.  It works, it’s safe, it’s easy to use, and it’s affordable.  It seems counterintuitive to replace that with more expensive technology when you’ve got a market already limited by high prices for the cars themselves – unless that extra cost gives you some significantly higher utility.  As we have discussed earlier, developers argue that wireless charging can be a market enabler for EVs – by upending the range versus charging time dilemma.  EVs would be charged frequently, throughout the day, allowing OEMs to downsize the battery without sacrificing performance.  Once the initial investment in wireless capability has been made, adding new charge pads would be cheaper than adding more charging boxes.  But, as noted in the Navigant Research report Wireless Charging Systems for Electric Vehicles, it will likely take many years for the plug-in EV (PEV) market to make this shift.

A new demonstration project in Korea presents another angle in the wireless charging argument.  The Korea Advanced Institute of Science and Technology (KAIST) is running two electric buses equipped for wireless charging … while operating.  KAIST engineers built a 7.5-mile charging mat on a 15-mile transit route at a cost of $4 million.  The two buses reportedly have batteries that are just one-third the size of a regular electric car battery.

In this case, the argument is that wireless charging can extend the effective range of battery buses while lowering the cost of the buses, since they use smaller batteries.  Range and cost are serious limitations for battery buses, more so than in the passenger car market.  As forecast in Navigant Research’s report, Electric Drive Buses, battery buses will constitute well under 1% of transit bus sales for the next several years, with sales in the thousands from 2014 on.  Key reasons for this are the higher price, lower passenger capacity, and reduced range, all of which limit the utility of battery buses for transit operators.

Annual Battery Electric Bus Sales by Region, World Markets: 2012-2018 Lisa's blog C7.5

(Source: Navigant Research)

In effect, the KAIST wireless system would be like having a light rail or trolley line, only without the overhead lines that many consider an eyesore.  The drawback is that the wireless charging equipped bus is tied to an exact route.  The transit operator loses the flexibility that a battery bus can provide, compared to a trolley or light rail system.  For the near term, the best application may be on well-established transit routes that are not likely to shift over time – for example, routes in urban centers where cities want to reduce emissions and noise, such as downtown malls.  The technology may eventually be incorporated in the planning process for new roadways, allowing widespread deployment of the wireless charging that would give transit operators more flexibility in designing routes.  But this seems a long way off.  In the meantime, KAIST says it will add 10 more buses to the route in 2015, if this first trial is a success.


Shai Agassi’s EV Lessons for Big Auto

— August 28, 2013

Shai Agassi, founder of the now defunct Better Place, has published two articles on LinkedIn offering advice to the mainstream automotive market on beating Tesla in the battery electric vehicle (BEV) market.  In his first article, Agassi takes a bit of a jab at General Motors, which has set up a team to study Tesla’s success, ultimately offering four key lessons that the “Big Auto” manufacturers should be learning from Tesla:

An electric car is an object of desire.

This assertion is fairly easy to agree with, although, having driven a Mitsubishi I-MiEV and Think City, I think it’s safer to say that an electric car CAN be an object of desire, just as I’m sure Nissan believes its Leaf offers “more of a car for less cost than comparable gasoline cars.”

An electric car is a modern appliance.

Frankly, I bristle at the thought of a vehicle targeting “appliance” as a status, even if we are specifically referring to its ability to be upgraded.  Having driven transportation appliances (a 1983 Dodge Aires K, anyone?), no “object of desire,” regardless of its upgradability, should be targeting appliance status.  At any rate, Agassi points to the car as more similar to a smartphone than a refrigerator, claiming that EVs will see both hardware and software updates (though by “hardware” he appears to mean only the battery).  But comparing a BEV to a cell phone is a double-edged sword: sure, they’re upgradeable, but ask anyone in line this fall for the new IPhone 5 S (or C or 6 or whatever they may call it) what they are replacing and you probably won’t find many (any?) first-generation iPhones.  The first-generation iPhone came out in 2007 with 2G speed.  A new battery and software update won’t make it comparable to the next iPhone.  In other words, a 10-year-old Model S may age well from the curbside, but even with a new battery and software updates, it will still be a 10-year-old car, with worn seats, dinged doors, older processors, and an aging road feel.

An electric car is Moore’s Law on wheels.

In his second article, Agassi argues that because of this Moore’s Law effect on the battery costs, the batteries should not be included in the cost of the car.  Although Moore’s Law is not really an apt comparison (I can’t figure out how a 8% price decrease per year is comparable to doubling computing power every 2 years), Agassi claims that batteries are more like gasoline and shouldn’t be part of the price.  This leads directly into his final point:

An electric car drives – and sells  differently.

This may be his most important point.  EVs require changes to consumer behavior, plus a sales force that understands the challenges in making comparisons to gasoline vehicles both in equipment and costs.  This is truly a different selling proposition than most dealers are used to, and the deck is stacked against EVs because the goal of dealers is to move the metal.  I agree with Agassi that the path of least resistance for traditional dealers is to push potential buyers to what they know (particularly as gasoline prices fall).  Unfortunately, as Tesla has learned, the legislative landscape isn’t as accepting of direct sales as Agassi would have one believe.  Additionally, manufacturers have dropped niche brands over the years at great expense, so it’s hard to picture the business case within Big Auto for building a new niche brand around a handful of products to sell directly to consumers.

Telsa has been on a roll with the Model S.  It’s an amazing vehicle that is clearly causing consternation in Detroit (and Tokyo and Stuttgart, for that matter).  But Agassi should recognize that Tesla’s success should not be confused with success for the entire segment.  I have confidence that Big Auto can build an object of desire, upgrade it, and figure out the economics to make it attractive.  What Agassi understates is that Tesla has done a very good job of identifying a niche that was open to new vehicle brand and product.  Big Auto will need to do the same.



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