Navigant Research Blog

Crowd Data Drives New Mobility Technology

— May 4, 2015

City planners and traffic management agencies are avid consumers of data, which is critical to both planning and managing transportation services. Traditionally, government agencies relied primarily on data from loop detectors installed in streets and highway. These sensors tell transportation officials how many cars pass by the sensors, allowing them to understand the volume of traffic on the roadways they manage. This then feeds into infrastructure plans, as cities understand where the heaviest demand is and where the pinch points are in the roadways.

This data is also used to report when traffic has stopped in the roadway, which is used for traveler information systems. What these sensors cannot tell you is where the traffic came from, where it ended up, or even how fast it’s traveling. And these sensors are not cheap. It’s a significant investment to install them in existing roadways, and even building then into new roadways is costly, given that the sensors must be highly robust and maintained throughout the year in challenging conditions.

Listen to the Crowd

Crowdsourced data, gathered from GPS navigation devices, cellphone records, or mobile apps, is becoming an increasingly viable way for cities and transportation agencies to acquire data without expensive infrastructure projects. And these crowdsourced data sources can supply new data points that help cities get a much more complete view of mobility, like pedestrian and bicycle traffic and parking usage.

Traffic data company INRIX has been incorporating data from a variety of sources to supplement its own vehicle probe data for years. The company aggregates data from GPS navigators and mobile phones in vehicles to provide a more complete picture of the traffic landscape in real time. AirSage utilizes cellular phone data for its traffic data offerings. Through partnerships with Sprint and Verizon, AirSage receives anonymized real-time data from cellular phone activity which the company provides to transportation planners and transit planners. AirSage provides origin and destination data, as well as speeds.

Cellular based traveler data also enables traffic managers and planners to see the movement of pedestrians and cyclists, as well as motorized vehicles Still, there are limitations: namely, that AirSage cannot tell what type of motor vehicle it is tracking.

We Know Where You’ve Been

But the most interesting new crowdsourcing data potential is from companies that aren’t even in the data aggregation business. Just as Google and Facebook have found data to be their most valuable assets,  app providers like Uber and Strava, are discovering the potential value in the data they amass.

Earlier this year, Uber announced it would offer its data to cities, with the Boston the first recipient. Uber is offering this as a free service, likely in part as an effort to present a kinder, gentler image after a recent spate of negative press. Uber has also partnered with the Starwood Preferred Guest program. Program members can receive reward points for using Uber; customers who opt-in to Uber’s Starwood point program agree to giveStarwood access to their Uber activity.

This sort of data exchange has huge revenue potential for Uber, as it’s easy to imagine how many businesses would be interested in tracking the travel habits of Uber users. trava, a company that allows runners and cyclists to log and share data on their athletic activity has also found a way to turn its data into revenue. The Oregon Department of Transportation (DOT) is buying Strava’s data to better understand the routes used by cyclists. This is another way for cities and states to fill out their picture of mobility and provide better services for their residents.  The potential for crowdsourced data is huge, and we expect to see more partnerships like these develop as transportation planners begin to grasp the full potential of crowdsourced data. You can also expect renewed privacy concerns, especially when the data comes from users who are not fully aware that they are opting in to share their data when they download an app.

 

No Clear Path to Highway Funding Solution

— May 4, 2015

The gap between the investment needed for U.S. transportation infrastructure and the available taxpayer funding continues to grow. And neither Congress nor the White House has not gotten significantly closer to solving this problem.  A new report from the University of Michigan’s Transportation Research Institute (UMTRI), released just 2 months before the latest temporary Congressional funding patch for transportation is set to expire, provides further evidence that the federal funding transportation pool will continue to shrink unless Congress takes action.

Navigant Research has been writing about the problem of the Shrinking Gas Tax Fund for many years. Created by Congress in the 1950s, the fund was set up to pay for transportation from direct taxes, rather than from the general Treasury. The current tax rate of 18.4 cents per gallon was set in 1993, 22 years ago. Congress and the White House are loath to propose raising the gas tax, which has long been the third rail in American politics. Today, unfortunately, the drop in gasoline consumption combined with the shrinking purchasing power of 18.4 cents per gallon has made the unthinkable closer to becoming reality.

Tabled

Mainstream business groups have proposed raising the gas tax, and the Republican leader of the Senate Transportation Committee, John Thune, said that raising the gas tax would be on the table for the current Congress. The head of the Senate Environment and Public Works Committee, climate change denier James Inhofe, agreed with that statement.

As of the end of March, though, there was still no clear legislative pathway to raising the gas tax.  The UMTRI report should set off alarm bells in Washington about the future of the Highway Trust Fund. The report points out that U.S. gasoline consumption has been dropping steadily since well before the 2008 recession. From 2004 to 2013, fuel consumption by light duty vehicles in the United States dropped by 11%. The report’s author, Michael Sivak, also noted that the U.S. passenger car population has decreased since 2008, which could be considered an artifact of the economic downturn, or a foretaste of millennials’ mobility habits.

Millennium Shift

This data confirms reports about the shift in attitudes about car ownership among millennials that have been widely reported, albeit mostly anecdotally. A 2013 U.S. PIRG report found that there is a permanent change in expectations about how to get around–with driving seen as just one of many options that millennials regularly use.  And increasingly stringent fuel economy standards are likely to further reduce total gasoline consumption.

Unfortunately, the White House’s proposal for the new transportation bill does not include a gas tax increase, so it will be left to Congress to determine whether the time is finally right to increase the rate–or find a new mechanism to pay for the maintenance and improvement of U.S. transportation infrastructure.

 

Fuel Cell Makers Seek an American Foothold

— March 18, 2015

In the United States, the topic of fuel cells is very often greeted with skepticism. One prominent fuel cell skeptic, Tesla founder Elon Musk, recently called fuel cell cars a silly idea.

So it’s interesting to compare that to the respect still given to fuel cell technology in Japan, where the 2015 FC Expo recently took place. The FC Expo is one of the largest fuel cell conferences in the world and attracts attendees from around the world. But the audience is predominantly from the Asia Pacific region, and the level of interest in the potential of fuel cells is dramatically different than in the United States. Japan and South Korea, in particular, are two of the biggest markets for fuel cell deployments to date.

Japan’s ENE FARM program has supported the deployment of 100,000 fuel cell combined heat and power systems in Japanese homes. At the Expo, companies like Toshiba, Panasonic, and Aisin Seiki spoke about their commitment to the Japanese residential fuel cell program, which aims to sell over 1 million fuel cell CHP units in Japan by 2020. South Korea’s POSCO Energy has developed the 59 MW Gyeonggi Green Energy fuel cell park and built a 200 MW capacity manufacturing plant for the molten carbonate fuel cell that utilizes FuelCell Energy’s technology.

New Beachheads

What’s most interesting is that these Japanese and South Korean companies are focused on expanding to new markets—in particular to the United States. Ironically, though skepticism toward fuel cells persists in the United States, the American market remains one of the most attractive in the world. That’s why South Korean companies have been buying up North American fuel cell companies, and their technology, over the past few years.

LG became a majority investor in Rolls Royce’s fuel cell business in 2012. In 2014, Doosan bought ClearEdge’s assets, and POSCO has continued to strengthen its relationship with FuelCell Energy. These companies bring significant resources and a long term outlook to the fuel cell sector, using their U.S.-based fuel cell businesses as a beachhead into the U.S. market.

Got a Match?

The U.S. market has many characteristics that make it a good market for fuel cells. The shale gas boom is driving interest in electricity generation that can take advantage of plentiful supplies of natural gas. High value markets, such as data centers, are growing in number and in energy demand, and companies like Apple and Microsoft are exploring using fuel cells to bring down those costs. Energy services companies are exploring ways to meet the growing demand for distributed energy resources (DER) , and are using new financing instruments to support  deployment of DER. Incentives and programs to promote fuel cells in states like California and New York are helping to bring down the costs of today’s fuel cells to where the cost of the power approaches grid parity.

It’s not certain, though, that the fuel cell market in the United States will grow beyond early niche markets. Fuel cell companies need to drive down costs and utilize financing schemes like power purchase agreements to reduce the risk to end users. What the fuel cell industry needs is a matchmaker who can bring together the companies working to develop a successful fuel cell market with the right energy company or financing partners in the United States so they can work together to expand the market for fuel cells in this country.

 

Finding a Pathway to Profit for EV Charging

— February 24, 2015

The question of whether it’s possible to make a profit from a public charging station continues to hang over the electric vehicle (EV) charging industry. The challenges are threefold:

  • The costs of the EV charger and installation, which remain fairly high.
  • The utilization rate; i.e., how many plug-in electric vehicles (PEVs) are actually using the chargers each day.
  • The question of what PEV drivers are willing to pay for the charging.

Level 2 charging is still the most widespread type of installation deployed in public charging, and a back-of-the-envelope payback model shows that it is possible to receive a reasonable return on investment (ROI) for a Level 2 charger with high utilization and the right price point. A networked Level 2 charger with two plugs typically costs around $5,000–$6,500. Installation costs vary significantly, but can easily double the upfront investment by the site host. Operating costs are actually quite low. The electricity used is not a major cost factor, even at a relatively high cost of $0.13 per kWh (as in California, for instance). Typically, the site host will pay monthly services fees to a network operator. In some cases, it will share revenue with the operator, as well.

Just in Case

It’s important to note that there are only so many hours in the day that a public charger is going to be both accessible and likely to be used. If a dual public charger can reach utilization of around 10 charging sessions per day, and charge $2 per session, the host could make back the initial investment in 5 to 6 years.

This picture is a little rosier than the reality today, simply because the current rate of usage of public chargers is nowhere near 10 charging sessions daily. Nevertheless, this simple ROI model demonstrates that there is a pathway to profit for offering public charging services. However, there is a real question as to how many drivers will be willing to pay $2 for around 20 miles of charge, which is what a typical battery electric vehicle (BEV) driver may get from a single charging session. Given that this should cost them less than a dollar when they charge at home, it’s not clear that Level 2 public charging will ever be much more than a just-in-case opportunity for drivers. This will be even more accurate as we see affordable, longer range BEVs come on the market, since the need to top up during the day will be lessened.

Keeping It Free

These economics are one reason why many businesses will continue to offer public charging as a free service, figuring that there’s more benefit from using the chargers to attract customers, and keep them shopping longer, than to collect charging fees. It’s also why public charging manufacturers are offering leasing or no money down, no interest financing to keep the upfront cost from being so daunting.

According to Navigant Research’s new report, Electric Vehicle Charging Services, global revenue from EV charging services is expected to grow from $81.1 million annually in 2014 to $2.9 billion by 2023.

Annual Revenue from EVSE Charging Services by Region, World Markets: 2014-2023

 EV Charging Services chart

(Source: Navigant Research)

EV charging is a promising new, multibillion-dollar business sector. These forecasts include revenue from DC charging, which is likely to be a more lucrative segment than Level 2. But our scenario also assumes that some public charging will remain as a free perk, rather than as a direct revenue generator, given the questions that linger about drivers’ willingness to pay for top-up Level 2 charging.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Grid Practice, Smart Transportation Practice, Smart Transportation Program, Utility Innovations

By Author


{"userID":"","pageName":"Lisa Jerram","path":"\/author\/lisajerram","date":"5\/25\/2015"}