Navigant Research Blog

Gas-Sipping Nissan Makes Argument for Driving Electric

— February 27, 2018

Built for the Japanese market, a Nissan car with a gasoline engine is unwittingly making one of the best arguments for driving electric. The Nissan Note e-Power, which uses an electric motor to drive the wheels 100% of the time, has received high praise from consumers for its “exhilarating acceleration.”

According to Automotive News, 65% of Japanese customers paid for the premium feature of an electric drivetrain, which also yields a fuel economy rating of 77 mpg based on the Japanese test cycle. Based on the highly positive response, Nissan will bring the e-Power electric drive system to the US in the near future, potentially showing up first in the luxury Infiniti brand.

The e-Power system is effectively a range extender, with similarities to the BMW i3 or Chevrolet Volt architecture, using a small three-cylinder, 1.2 L gasoline engine as a generator to charge a 1.5 kWh battery that powers the 80 kW electric motor. The electric drivetrain of the Note is not as robust as the battery-electric LEAF (40 kWh battery and 110 kW motor), but it is well ahead of the Nissan Rogue hybrid (0.8 kWh/30 kW). The Note is more akin to operating like a hybrid diesel locomotive than a plug-in EV.

Nissan e-Power System Architecture

(Source: Nissan)

Smooth acceleration and immediately available high torque are among the hallmarks of electric driving performance, which lead to an experience that is “…emotional and fun to drive,” according to Philippe Klein, Nissan’s chief planning officer. EV drivers are happily familiar with these performance benefits, which have also led to industry-leading customer satisfaction scores for Tesla and high marks for many EVs.

Yet in the same issue of Automotive News, Editor Keith Crain wrote an opinion piece questioning the viability of electric cars. Automakers’ plans to release massive numbers of EV models “…must be based on research that none of us have seen up to now. Just look at the number of EVs that have been sold to date and you wonder who is going to buy all these newly powered cars, trucks, and SUVs,” wrote Crain.

Although there are many factors that are holding back sales of EVs (e.g., limited model availability, reduced driving range, access to charging infrastructure), according to consumer surveys from Navigant Research and others apathy about the driving experience is clearly not one.

Charging Ahead

Nissan is electrifying most of the Infiniti lineup starting in 2021, as are several other automakers—such as Volvo with the Polestar brand—to both meet government regulations and address the growing audience for zero emissions vehicles.

Using a gas engine as a range extender is not a novelty, but doing so in a car with such a small battery as Nissan has is. The original Chevrolet Volt was supposed to only use the electric motor to drive the wheels, but when the first production vehicles debuted, it could also be partially powered by the gas engine. BMW’s i3 plug-in has a two-cylinder gas engine range-extending option, and the plug-in hybrid Karma Revero was recently lauded as the luxury green car of the year. Both vehicles exclusively drive the wheels with the electric motors, albeit using much higher capacity batteries.

Though it doesn’t have a plug to charge the batteries, if Nissan is successful with e-Power in the US, it would lead to greater awareness and interest in electric locomotion. And if other automakers follow suit, a whole new audience could become hooked on driving electric and someday give up the gas engine for good.


Postcard from Australia: Audrey Zibelman Interview

— February 27, 2018

As noted in a previous blog, the hiring of Audrey Zibelman, former head of the New York Public Service Commission, as the new CEO of the Australian National Energy Market (AEMO) helped shine a spotlight on innovation occurring down under.

A recent report suggests Australian network operators will pay prosumers $2.5 billion annually for grid services by 2050—if customers stay connected to power grids and policy recommendations are implemented in an integrated fashion.

The following is my interview with Zibelman; look for a new report from Navigant Research on integrated DER in Australia this spring.

Can you compare the status of the market for DER innovation in Australia and New York?

“Australia can lead the world in the innovative integration of distributed energy resources (DER). New York, while having a DER strategy in place as part of the Reforming the Energy Vision initiative, has a different objective to its DER vision—at least in the short to medium term. New York developed its strategy based on market incentives to encourage the uptake of DER. Australia, like California and Hawaii, already has a large proportion of DER, mostly in the form of rooftop PV, so using innovative technologies, concepts, and business models are critical to maintaining secure and reliable power while also empowering consumers.

Australia is at the stage where its had excess rooftop PV generation meet up to 48%, 30%, and 20% of demand in South Australia, the Wholesale Electricity Market (WEM) in Western Australia, and Queensland, respectively, during some periods. This is unprecedented. All three locations provide immediate opportunities to demonstrate DER capabilities. This is something AEMO is planning to take an active role in leading.”

Why should global vendors active in DER management care about Australia?

“There is no shortage of opportunities. AEMO is focused on the effective and efficient integration of DER, and innovative vendors play a key role in this.”

Are there unique challenges in specific regions of Australia?

“We need to have the ability to coordinate DER in aggregate (not just PV) to address system needs. There will be opportunities for businesses to exploit greater periods of negative or near-negative pricing. The WEM in southwestern Australia has the added challenge of being islanded. Queensland has a lot of microgrid opportunities, which are still relatively new in formation.”

Is integration of retail and wholesale markets picking up momentum?

“From a wholesale perspective, we believe resources need to be valued based on their service to the market. We have been public in our view on the need for more flexible, dispatchable resources, and these resources need to be priced accordingly.”

What do you see as the necessary next steps?

“We need effective coordination of DER. We also need to assess efficacy of emergency mechanisms (such as under- and over-frequency load shedding schemes) in systems with high DER. Effective coordination of DER should see a reduction in network fees as DER can offset the need for network augmentation.”

Are there lessons learned from Australia’s remote microgrids that are transferable to where consumers are interconnected to a utility grid?

“We are always keen to learn from what others are doing, and we have been in discussion with Horizon Power about its work. The important thing to remember is that grids are unique—their size, constituents etc. So, we need to be mindful that solutions in one grid won’t necessarily be transferable to another. This is particularly true of utility scale grids. However, microgrids can be of benefit for technical demonstration, and provide useful learning that can be applied to utility scale solutions.”


FERC’s New Storage Order Signals Focus on Flexibility and Resource Diversity to Improve Resiliency

— February 27, 2018

After over 1 year of speculation and uncertainty, one of the most significant regulatory developments in the energy storage industry was announced last week by the US Federal Energy Regulatory Commission (FERC). In Order 841, FERC aims to remove barriers to the participation of energy storage resources in capacity, energy, and ancillary service markets operated by the country’s regional transmission organizations (RTOs) and independent system operators (ISOs).

With this order, FERC has affirmed its agreement with much of the industry that improving the resiliency of the power grid will come from maximizing its ability to rapidly respond to changing conditions utilizing a diverse range of flexible and increasingly distributed resources. Order 841 directs RTOs and ISOs to devise new tariffs and market structures for energy storage participation.

Five Key Requirements of the Order and Likely Implications

  • Storage must be “eligible to provide all capacity, energy, and ancillary services that it is technically capable of providing.” This requirement makes clear that FERC will require technology agnostic markets without restrictions on what systems can provide which services.
  • Storage “can be dispatched and can set wholesale market clearing prices as both a wholesale seller and wholesale buyer consistent with rules that govern the conditions under which resource can set wholesale prices.” Again, FERC clarifies that equal treatment for storage alongside other technologies must occur.
  • Market structures must “account for the physical and operational characteristics of electric storage resources through bidding parameters and other means.” FERC sets the stage for storage to be considered as a unique resource that may require restrictions or market mechanisms to address its limited duration and operating parameters.
  • The “sale of electric energy from the RTO or ISO market to an electric storage resource that the resource then resells back to those markets must be at the wholesale locational marginal price” clarifies a long-standing issue in the industry. When charging for discharge, energy storage systems will not be required to purchase energy when charging at retail rates, and the value of storage will be determined based on local power market prices. The issue of how energy storage system auxiliary power is charged will remain up to the RTO/ISOs, which could affect storage with high thermal cooling loads.
  • The minimum size threshold for the market participation of an energy storage system is 100 kW, which is a major win for distributed energy storage systems that now have clarity to provide services at the wholesale level. The minimum size threshold does not distinguish between front-of-the-meter/customer-sited, or behind-the-meter storage. While behind-the-meter energy storage needs to have capacity injection rights to be compliant with the order, the minimum size threshold appears to be a positive development for distributed energy storage on both sides of the meter.

Who Has the Final Say?

The country’s ISOs and RTOs now have 9 months to file new tariffs, and another year to fully implement the new rules. However, some specifics are left to the interpretation of each system operator, such as pricing for services, and the scheduling requirements for storage systems looking to provide ancillary services alongside other services. Perhaps the most significant effect of this ruling is the FERC’s recognition of the tremendous value that energy storage can provide to the grid to improve resiliency, efficiency, and serve as a driver of innovation in the industry. As the new ruling is implemented, a key effect will be providing greater clarity on the opportunities for new projects to generate revenue through various, well-defined grid services and associated revenue streams.


Premium Auto Brands Lead the Way to 200+ Mile BEVs

— February 22, 2018

In the race to create long-range battery EVs (BEVs), premium brands are taking the lead. Navigant Research projects over 6 million BEV sales globally by 2026. Because range anxiety is a leading deterrent of consumers looking to purchase an EV, increasing the range of BEVs will be crucial to expanding the market.

Over the past few years, several premium brands have announced they would bring to market BEVs with capabilities of at least 200 miles, with many pushing that number to over 300 miles of range. Apart from Tesla’s Model S and Model X, no premium automaker has released these long-range BEVs. However, 2018 is anticipated to be the year we start to see these new models come to market.

Premium Automaker Electric Promises

The following timeline showcases the increase in announced/expected premium brand long-range BEVs:

Announced Premium Brand 200 + Mile Range BEVs

(Source: Navigant Research)

Audi and Jaguar will likely continue Tesla’s long-range trend in 2018 with the crossover style Jaguar i-Pace and Audi’s SUV e-tron Quattro. The i-Pace is expected to have a range of 220 miles, while the e-tron Quattro will have around 300 miles of range. Audi is also expected to release another all-electric SUV by 2019, along with Aston Martin’s RapidE, Mercedes Benz’s Concept EQ, Porsche’s Mission E, and the Fisker EMotion. Looking to 2020 and beyond, BMW, Tesla, Infinti, and Volvo are all anticipated to release long-range BEVs—in Tesla’s case, the revamped Roadster with 600 miles of range (and a hefty price tag).

Premium brand commitments to electrification comes in more than just the form of single vehicle announcements. Volvo, Aston Martin, and Jaguar Land Rover have announced plans to go all electric or hybrid over the next decade, with Volvo promising this lineup by 2019. In 2017, Porsche installed its first 350 kW charging station at its Berlin office. The ultrafast charger is being developed for the Mission E to allow customers to recharge quickly.

Affordable, Long-Range Vehicles Not Far Behind

More details of these long-range vehicles will be unveiled closer to the release dates, but it is already clear that premium automakers are committing to an electric future. As with many consumer markets, premium and luxury automakers are often early adopters of trends and technologies that are later picked up by economy brands.

While these premium brand long-range BEVs will have a hold of the market for the time being, economy brands like Ford and Hyundai are announcing their own long-range BEVs, which will likely have a substantially lower price tag. Some premium brands, like Tesla, have begun offering less expensive electric models to meet this demand for non-luxury long-range BEVs and to compete in both market segments. If automakers stick to their electric promises and all begin producing EVs, we will continue to reduce emissions from the transportation sector and move toward a greener, cleaner future.


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