Navigant Research Blog

Innovative Energy Storage Technologies Gain Ground

— October 18, 2014

According to the Navigant Research Energy Storage Tracker 3Q14, the 2007 to 2013 period has seen the commercialization of a number of key technologies in energy storage, including several advanced battery chemistries, flywheels, and power-to-gas.

The Energy Storage Tracker is a database of energy storage projects that tracks announcements and deployments of energy storage across a range of technologies in an effort to identify industry trends.  The chart below shows the deployed power capacity for six advanced storage technologies in utility-scale applications.  There was a peak in installed capacity across most of these technologies in 2011 and 2012 in response to stimulus funding under the American Recovery and Reinvestment Act.  The purpose of this funding was to jumpstart the energy storage market, and while 2013 was a slow year for most battery technologies, preliminary 2014 data (not shown) indicates improved numbers over 2013 levels.  In contrast to advanced batteries, flywheels and power-to-gas saw an uptick in deployed capacity from 2012 to 2013.

Utility-Scale Energy Storage Power Capacity by Technology, World Markets: 2007-2013

(Source: Navigant Research)

Playing Catch-Up

Although no single technology is a clear winner in the global stationary energy storage market, lithium ion (Li-ion) has arguably established itself as a key frontrunner going forward.  Over the past 13 years, sodium sulfur (NaS) batteries, manufactured solely by Japanese power infrastructure giant NGK, have established themselves as the clear leader in terms of installed power capacity in the stationary energy storage space, with 243.7 MW from 2007 to 2013.  However, publicly announced deployments are typically large orders in the tens of MWs, which results in peaks and troughs in NGK’s market activity.

Li-ion sits in second during the same time period, with 231.9 MW aggregated over all its subchemistries.  In 2013, Li-ion had the highest number of MW installed and managed to keep output steady with 2012.  Of this 231.9 MW, lithium iron phosphate (manufactured by A123 Systems, now NEC Energy Solutions and BYD) accounts for at least 114.8 MW, lithium titanate (manufactured by Altairnano and Toshiba) accounts for at least 10.6 MW, and lithium manganese spinel (manufactured by Samsung SDI and LG Chem) accounts for at least 16 MW.

Peaks and Valleys

Other technologies that have seen significant deployments from 2007 to 2013 include advanced lead-acid batteries (71.4 MW), the vast majority provided by Xtreme Power (now a part of Younicos).   More than 58 MW worth of advanced flow batteries were deployed, primarily by ZBB and Premium Power, during the same time period.  In addition, 50.9 MW worth of flywheels were deployed, with 45 MW of that capacity coming from Beacon Power (though 4 MW of Beacon’s installations have since been decommissioned).   Lastly, 11.1 MW of power-to-gas storage capacity was deployed between 2007 and 2013, primarily by ETOGAS and Hydrogenics.

In the early period of commercialization, it’s not unexpected to see strong years and weak years for technology deployment.  Li-ion is maturing and is showing signs of being a fully commercial technology, similar to NaS batteries.  Advanced lead-acid, flywheels, and flow batteries will continue to grow, but in some cases will be limited due to the small number of suppliers in the market.  Power-to-gas is in the very early stages of commercialization, and will likely see growth and decline in deployed capacity in the demonstration stages before commercializing, similar to Li-ion.

 

Shakeout Looms in Fledgling E-Truck Market

— October 17, 2014

Despite significant government and private-sector investment over the past 10 years, the global market for hybrid, plug-in hybrid, and pure electric trucks has been slow to grow.  Although it’s challenging to get fleets to provide numbers on how many of these trucks  they are running – many companies view it as competitive information –the Navigant Research report, Transportation Forecast: Medium and Heavy Duty Vehicles, estimates that, in 2014, hybrid and plug-in technologies constituted well under 1% of medium and heavy duty (MHD) trucks fleets in North America and Western Europe.  This lack of progress matters, because MHD trucks account for 32.6% of U.S. fuel consumption.  Electrification could significantly reduce this rate of fuel guzzling.  Yet, as my colleague John Gartner noted in a recent blog, there is a real lack of PEV options in the trucking world.

Investment in these technologies has borne fruit, however, and will help the electric drive truck market grow.  Deployments have helped fleets determine the applications for which hybrid or plug-in trucks will work best, both in the sense of being able to meet the demands of the duty cycle, but also providing the greatest fuel savings benefit.  The range of MHD truck applications into which hybrid and plug-in technology can be integrated is broad, with widely varying performance requirements.

Filling the Gaps

First are vocational applications, including delivery and distribution trucks, such as refrigerated vehicles and service vehicles, especially those used by the utility and telecommunications sectors.  And within these segments, there is a multitude of usage patterns.  Delivery trucks may be long haulers, traveling at steady, high speeds; used for suburban delivery, operating with both high and low speeds; or used for delivery exclusively within an urban center, with stop-and-go driving and very low mileage.

All of these variances mean that there is no single technology that will meet all the needs of the trucking sector.  Thus, this sector will be highly segmented, with each technology option fitting into certain niches.  While hybrids have no range limitations, it can be challenging to achieve payback of the price premium unless the vehicle operates with some stop-and-go driving and accrues significant mileage – probably a minimum of 20,000 miles annually.  By contrast, while the range of a pure battery electric truck has proven too short for most applications, these trucks are ideal for deliveries within an urban center.  This application is likely to see more interest in the Western European market in particular, as cities are increasingly looking to limit vehicle access to the city center.

Winnowing Ahead

So, as the British say, it’s horses for courses for the trucking industry.  This will pose a challenge for the sector given the very high percentage of small firms supplying this market.  These are companies that may struggle to stay afloat in a market with low volumes in its early stages.

But pressure on truck OEMs and fleets to reduce the environmental impacts of their vehicles – a major theme of the Automotive Megatrends conference held by Automotive World in Brussels in September – is likely to increase.  A small company with a proven technology will find increased interest from fleets to trial new vehicles and perhaps interest from the major vehicle manufacturers in securing access to their technology through investment or acquisition.

 

Automation Gives Manufacturers an Energy Boost

— October 17, 2014

According to the U.S. Manufacturing Purchasing Managers’ Index, a measure developed by financial research firm Markit, manufacturing activity in the United States in September reached its highest point in more than 4 years.  Factory employment, though still well below pre-2008 levels, reached its highest level since March 2012.

U.S. manufacturers are getting a boost from low energy costs, driven primarily by the bonanza of low-cost natural gas (and, to a lesser extent, by distributed renewables, often onsite at plants).  But what’s going on inside U.S. plants is equally important.  Increased energy efficiency, enabled by a revolution in process automation technology, is also helping U.S. manufacturers compete with manufacturers that enjoy low-cost labor in developing countries, particularly China.

Excess No Longer Success

Since peaking around 1999, the primary energy use in the U.S. manufacturing sector has declined steadily, according to the American Council for an Energy-Efficient Economy, from about 35 quadrillion BTUs annually to less than 31 quads.  Energy intensity – the BTUs used per dollar value of shipments – has declined even more dramatically.

The shift is coming as a shock to old-line factory managers unused to calculating energy as a key metric of efficiency and productivity.  “No one ever got fired for purchasing a pump or a machine that’s too big for the job,” said Fred Discenzo, manager of R&D at Rockwell Automation, at a recent energy management conference in Akron, Ohio.  In manufacturing, “excess capacity has always been the safe option.”

Rockwell is among an emerging segment of technology vendors that is trying to change that, through what it calls “the connected enterprise.”  What that means is connecting the factory floor to the C-suite with far greater visibility and immediacy than before.  Another name for this change might be “extreme granularity.”  In the near future, energy use will be measured not at the factory or line or machine level, but at the individual process level, per unit of production: how much energy did it take to make this widget or valve or bag of ice, and where in the process can that energy use be optimized?

The Next Revolution

Advances in factory-floor networks, wireless sensors, virtualization, and monitoring equipment are enabling these improvements in manufacturing efficiency, energy conservation, and quality control.  These twinned revolutions – cleaner, cheaper, more distributed energy coming into the plant and sophisticated automation technology reducing energy intensity inside the plant – will result in changes that have far-reaching implications for the manufacturing sector, and for the economy.  “The new era of manufacturing will be marked by highly agile, networked enterprises that use information and analytics as skillfully as they employ talent and machinery to deliver products and services to diverse global markets,” concluded a 2012 McKinsey study entitled Manufacturing the Future.

At 32% of total energy consumption, industry uses more energy than any other sector of the U.S. economy.  Manufacturers that adapt to the new realities of energy, by changing the ways in which they source and use electricity, will be more competitive on the global stage – and could help usher in the new economic upswing that politicians and analysts have been dreaming of for years.

 

Trucks Largely Overlooked in Emissions Targets

— October 15, 2014

In the transportation sector, trucks are a bit like offensive lineman in football: the heftier bodies do the hardest work, but they don’t get the same amount of attention as the smaller and more nimble players.  But trucks will need greater recognition for their impact on fuel consumption if goals for signification emissions reductions are to be reached.

Most of the discussion (and efforts) around improving fuel economy and reducing greenhouse gas (GHG) emissions is centered on light duty (LD) cars and the Environmental Protection Agency’s (EPA’s) ambitious Corporate Average Fuel Economy (CAFE) requirement, while neglecting the first rules for medium and heavy duty (M/HD) truck emissions reductions that the EPA implemented in 2011.  M/HD trucks and buses are expected to represent 32.6% of the total fuel consumption in the United States, according to Navigant Research’s report, Transportation Forecast: Global Fuel Consumption. Considering that light trucks (including minivans and SUVs) represent 51% of LD vehicles sold in the United States (according to Automotive News), trucks are the clear majority in the opportunity to reduce emissions.

Energy Consumption in Transportation by Vehicle Type, United States: 2014-2020

John truckblog chart

(Source: Navigant Research)

The alternative fuel truck options on the market (including electrified, natural gas, and propane vehicles) are insignificant in comparison to the numerous alternative car choices.  According to Navigant Research’s report, Transportation Forecast: Medium and Heavy Duty Vehicles, alternative vehicles (which also include buses) are expected to represent just 3.3% of all new large vehicle sales in 2014.

PEV Gap

Because of the surge in fuel production and the low price, natural gas vehicle development and sales have the greatest momentum among alternative fuel trucks.  Global truck and bus manufacturer MAN will be adding compressed natural gas (CNG) trucks to its offerings, while GM is adding a CNG bi-fuel option for its 2015 Silverado and Sierra pickup trucks.  Westport recently launched an enhanced spark-ignited (ESI) natural gas system that the company claims offers a 10% improvement in power and torque over a baseline diesel engine.  For the conversions market, Skygo Fuel Systems now offers a bi-fuel system that continuously blends natural gas and diesel based on performance requirements.

Natural gas has the advantage over full electrification in the truck market, as it can provide similar driving range to diesel without being weighed down by batteries, and the bi-fuel option provides a safeguard if a natural gas refueling station isn’t conveniently accessible.

A significant draw for electrification of utility vehicles is the ability to provide exportable power. Pacific Gas and Electric, which is one of the largest truck fleet operators in the United States, has partnered with EDI to develop a Class 5 utility truck that can be used to provide temporary power when an outage occurs.  Electric power takeoff (ePTO) trucks can operate equipment throughout the day without having to run the diesel engine, which can result in much greater reductions in fuel savings than using battery power when the vehicles are in motion.

The gaping hole in the truck lineup is in the lack of hybrid and plug-in pickup trucks. Truck manufacturers such as Ford are focused on lightweighting via aluminum rather than electrifying the drive train.  Nissan created a pickup version of its LEAF battery electric vehicle (BEV) but has no intention of commercializing it.

 

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