Navigant Research Blog

Hidden Batteries Show EV Promise

— October 23, 2013

Automakers have pursued a number of strategies to develop electric vehicles (EVs) that are affordable and have ranges competitive with conventional internal combustion engines.  The challenge is that EV batteries account for a significant chunk of the vehicle’s total weight, space, and cost.  As more energy storage (in terms of kilowatt-hours, or kWh) is added to the vehicle’s battery to extend range, more weight is added to the vehicle, thereby decreasing its range.  At some point, diminishing returns set in: the amount of miles per kWh begins to decrease with each kWh addition.  Since the battery is the most expensive part of the EV, the key is to find the point at which the mile per kWh figure is optimized so that the vehicle can be competitively priced.

Many automakers have invested in battery companies to develop batteries that are more energy-dense per kilogram (kWh/kg).  Others, like BMW, have pursued vehicle lightweighting by using expensive, low-weight materials like carbon fiber for various vehicle parts (such as body panels).  The decreased weight of the overall vehicle allows the battery pack to be larger, thus increasing the range.  The cutting-edge technological development lies at the intersection of these two strategies – using structural vehicle body parts for energy storage.

Structural Batteries

Swedish automaker Volvo revealed such a strategy in mid-October.  The company replaced what is typically a steel trunk lid and crossmember over the engine bay of a Volvo S80 with parts made from nanobattery- and supercapacitor-infused carbon fiber.  Both parts are lighter in weight and torsionally stronger than their steel counterparts.  They’re also, of course, significantly more expensive.  Factoring in reductions to standalone battery costs could prove this technology’s business case in the future, especially as carbon fiber becomes more commonplace in vehicles.

The concept is not all that different from building-integrated photovoltaics (BIPV), which utilizes PV materials and panels in building structures rather than on top of building structures.  The theory is that the PV materials are more expensive than the materials they replace, but less expensive than the cost of those materials and a separate PV system.  Additionally, more building space can be utilized for PV generation.  In its report, Building Integrated Photovoltaics, Navigant Research forecasts that BIPV will soon become one of the fastest-growing segments of the solar industry.

Mind the Door

The major difference between the two concepts is the fact that vehicles are more prone to damage than buildings.  Utilizing common exterior body parts as expensive energy storage units provides additional anxiety to vehicle owners and emergency first responders concerning major accidents and/or simply getting a door slammed into the vehicle at the local supermarket parking lot.  But cutting-edge technologies tend to morph as they approach commercialization.  It’s likely that integrated batteries will find their way into other alternative drive vehicles, such as stop-start vehicles (SSVs) and hybrid electric vehicles (HEVs), and into structural parts that aren’t exposed.


Smoke Alarms Go High-Tech

— October 23, 2013

From the start, Nest Labs was never going to stop at thermostats.  With the recent introduction of the Nest Protect smoke and carbon monoxide (CO) alarm, the market for another lowly home device is about to get disrupted.

The Nest Protect will retail for $129 and is available now on pre-order, with deliveries expected in early November.  What you get for $129 is a connected device with several high-tech features:

  • Six built-in sensors: Smoke, CO, heat, light, activity, and ultrasonic
  • Two wireless radios: Wi-Fi and a ZigBee-type connection (802.15.4 at 2.4 GHz)
  • A human voice (English or Spanish) in addition to the alarm
  • The ability to use hand gestures to silence an alarm when an emergency is not apparent (e.g., smoke from a candle)
  • A passive light that glows brighter when someone passes by in the middle of the night (good for hallways and can be set not to come on in bedrooms)

By comparison, the average price for a smoke alarm is about $25, including a few models with CO sensing.  But the Protect has more sensing capabilities and enables a greater level of connectivity than typical alarms.  For instance, a Nest Protect alarm in the kitchen might detect burning food on the stove and notify a Protect device in a back bedroom.  Once the danger passes, the Protect system notifies all the connected devices that everything is fine.  And if CO is detected and sets off a Nest Protect alarm, then a connected Nest thermostat will automatically shut off gas to a furnace, which can be a source of a dangerous CO leak.

Less Annoying

The Nest Protect is the brainchild of Tony Fadell, cofounder and CEO of Nest, and his fellow engineers.  As he told TechCrunch, Fadell and his team members all had stories about how irritating traditional smoke detectors can be.  He recalled staring at “this strange product on my ceiling that just annoyed me … a product that is supposed to keep you safe, except that it is annoying.”  Out of this collective annoyance, Fadell and his engineers came up with a device they see as a much better alarm – one that people can embrace in the same way many Nest thermostat owners favor that device.

People may scoff at Nest for producing high-end gadgets.  Not me.  Yes, Fadell and team set a high and more expensive bar, but what innovative products don’t do that at the beginning?  The first automobiles were well beyond most people’s budgets.  The first cell phones cost nearly $4,000.  The first laser printers sold for around $3,500.  Sure, Nest makes expensive gadgets, but it is also innovating and pushing product categories in new directions.  In time, prices are likely to fall as the best ideas become more common and economies of scale in manufacturing take hold.  Price matters, of course, but innovation that improves our lives and reduces annoyance (I hate replacing good batteries in my smoke alarms every 6 months when we reset our clocks) is a benefit.  I’ll wager the Protect alarm will trigger a similar response from early adopters that the Nest Learning Thermostat has generated.  Competitors will respond, too, and that will make for a more vigorous market.

I also suspect Nest engineers have at least a few more home devices and systems they want to improve.  One can imagine upgraded security systems, smarter electrical outlets, advanced faucets (the ones in hotels and airports have sensors already), and even toilets.  If Nest continues to push the boundaries, can a comprehensive Nest Home be far behind?


The Water-Power Nexus

— October 22, 2013

“Energy and water are related, and they are also the looming crises of the century,” said Dr. Michael Webber, the Josey Centennial Fellow in Energy Resources at the University of Texas, at Itron’s annual Utility Week conference in Orlando.  Cooling power plants alone account for half of the daily water withdrawals in the United States, and the use of energy to heat, clean, and move water means that we use 12% of our energy consumption dollars on water.

The intersection of energy and water brings associated costs, Webber pointed out, that are often hidden.  In the deadly heat wave in France in 2003, water was too warm to cool nuclear power plants, which had to dial down production just as demand for cooling peaked.  Nearly 15,000 people died from heat-related causes in France during the heat wave.

H2O-CO2 Tension

Webber, whose new book on energy technology and policy will be published in 2014, delivered the opening keynote address at Utility Week, where some 700 executives from gas, water, and electric utilities gathered to discuss the role of technology in the utility of the future.

Noting that water treatment and pumping consumes more energy than lighting, Webber said, “We aren’t spending nearly as much on water technology as we are on lighting.  Most people don’t realize how dependent electricity is upon water.”

And the problem is growing.  “Policy choices are making energy more water-intensive and water more energy-intensive … There is tension between CO2 and water in power generation … Solar thermal and nuclear are very water intensive.  Policymakers are talking about carbon limits, but they’re not talking about water limits.”

New metering technology can improve consumption patterns and enable consumers, Webber pointed out, but it needs to be combined with price alerts to be truly effective.  Consumers have long had access to miles per gallon data when buying cars.  However, only when gas prices spiked above $4 per gallon did the Prius displace the Ford F-150 as the No. 1 selling car in America.

From Electrons to Lumens

Webber’s thesis is that utilities must become service providers.  “Xerox used to sell copiers, and their goal was to sell you a new copier every few years.  Now they sell document services, and they own the copiers.  They are incentivized to make those copiers last as long and operate as efficiently as possible.”  A utility could sell electric lighting services, or lumens rather than electricity.  Or it could sell heated water rather than the electricity to heat the water.  According to Webber, “This is the future of the utility.”

Considering that between one-half and a trillion dollars will be needed to upgrade water infrastructure in the United States over the next decade (see the Navigant Research webinar, “Intelligent Water Networks”), the situation is urgent.  As Webber said, “Water conservation and energy conservation are synonymous.  Conservation isn’t the ultimate answer, but it buys us time to get better technology and policy in place.”

“Be Resourceful” was the theme at the Orlando conference, which included six track topics:  Advanced Data Collection & Communications, Advanced Metering & Measurement, Analytics & Applications, Consumer Engagement, Data Management & IT, and Smart Grid.  The critical role that new technology will play for the utility of the future was evident throughout the 3-day event, and numerous real-world case studies were provided by utility speakers.


Questions in Shale Gas Export Boom

— October 18, 2013

Boosting U.S. producers’ plans to export shale gas to the energy-thirsty nations of Asia, the U.S. Department of Energy (DOE) last month approved a plan by Dominion Resources to build a natural gas terminal at Cove Point, on the Chesapeake Bay in Maryland, to export up to .77 billion cubic feet a day (bcfd) to Japan and India.  Estimated to cost $3.8 billion to build, the facility could start shipping gas in 2017, the company said.

Cove Point is the fourth U.S. facility to receive federal approval to export liquefied natural gas (LNG) to countries that do not have a free-trade agreement (FTA) with the United States.  According to the Oil & Gas Journal, there are 19 other non-FTA export applications under review at the DOE.

The approval “is good news on many fronts,” Dominion CEO Thomas Farrell said in a statement, “including the thousands of jobs that will be created, the boost in government revenues that will result, and the support it provides to allied nations.”

Good For Everyone

Indeed, the natural gas industry sees the coming boom in exports to Asia as a windfall that will shore up the U.S. trade deficit, fuel a long economic boom, usher in a new era of energy independence and prosperity, and, who knows, maybe even end the conflict in the Middle East.  Earlier this month, the Energy Information Administration (EIA) announced that it expects the United States to be the world’s leading exporter of petroleum products, including oil and natural gas, in 2013, surpassing Saudi Arabia and Russia.

While that’s good news for the U.S. energy sector and for the U.S. economy in general, the brilliant scenarios being painted by natural gas proponents obscure some less comfortable realities.  For one thing, the Asian premium –  the elevated price paid by countries in Asia Pacific, particularly Japan and South Korea, the world’s two largest LNG importers – is unlikely to last.  “We do not want to pay the so-called ‘Asian premium,’ and the shale gas revolution will play an important role in narrowing that gap,” Jang Seok-hyo, CEO of Korea Gas Corp., told a Washington Post reporter at the 22nd World Energy Congress last week, in Daegu, South Korea.

Technology advances are likely to reduce the cost of liquefying and transporting natural gas, and as more gas gets shipped overseas, eventually, a globalized market of the sort that exists today for crude oil will emerge, normalizing prices across regions and eliminating the sharp cost advantage enjoyed today by U.S. producers.  Being “the Saudi Arabia of natural gas” is great, but you can’t expect importers to pay a 400% markup forever.

China Rising

At the same time, the elephant in the Asian gas market, China, is set to become a major producer of natural gas itself.  According to the EIA, China is second only to the United States in technically recoverable natural gas, and while much of that gas is trapped in remote geological formations even trickier to tap than the U.S. shale fields, the Chinese government is clearly determined to recover it.  In August, officials at PetroChina, the state oil and gas company, said they will accelerate domestic production of natural gas, largely by tapping abundant shale reserves in the interior.  In the first 6 months of this year natural gas production rose by 8.1% over the same period in 2012, and PetroChina President Wang Dongjin said unconventional gas production will reach 2.7 bcfd by 2015, according to Platts.  Aided by foreign oil majors, China could even become a net exporter of LNG.  Chevron is expected to begin production from the massive Chuandongbei field, in Sichuan Province, next year, and expects to produce some 3 trillion cubic feet there duringthe next 20 years.

China’s natural gas industry is still likely to trail U.S. production.  But profits from the expected gas-export boom probably shouldn’t be booked just yet.


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