Navigant Research Blog

2014 Will Be a Memorable Year for Cleantech

— January 13, 2014

Is January 13 too early to call 2014 a year to remember?

We have recently published our fifth annual white paper, Smart Utilities: 10 Trends to Watch in 2014 and Beyond.  The free white paper, more than past editions, details the massive transformations facing utilities and their business models.  Things are just so different now!

Navigant Research offers another peek into the future with our webinar, The Year Ahead in Cleantech, on Tuesday, January 14 at 2 p.m. Eastern Standard Time.  I have dramatically titled the Smart Utilities section of the webinar, Everything You Know is Wrong.  Perhaps that’s overly dramatic, but so much is changing, it’s not far off.  Key trends that will be discussed include:

  • Distributed generation begins to rock utilities’ world: Utility business model are likely to change, perhaps dramatically, as they suffer the one-two punch of reduced energy revenue and increased payouts to distributed generators
  • Solar power generation’s impact on distribution grids will be enormous: Some governments have aggressively supported residential solar generation while others have not -  What happens in either case?
  • New grid-balancing technologies that deal with distributed inputs can make granular, automated decisions that enable utilities to run grids more efficiently while remaining within mandated voltage ranges
  • Energy efficiency may happen in our lifetimes: We have detected signs of life in the home energy market during 2013, with some encouraging pilot programs that may foretell new life for HEM, the forever stepchild of cleantech
  • Utilities are changing their view of the smart grid: We observed some interesting behavior changes during 2013, among both utilities and the vendors that sell to them
  • Smart grid applications continue their rise: Navigant Research has recently completed an examination of Smart Grid IT, and this seminar will discuss some of the leading applications

These topics and more are examined in the white paper.  Many of these issues are by no means resolved, nor is there any clear path to resolution.  But the time to start thinking about these issues, and how they will affect your business, is now.

For more, join us for The Year Ahead in Cleantech, which will also feature discussions on Smart Transportation and Smart Energy.  Click here to register.


Is the BMW i3 Really in Trouble in California Already?

— January 9, 2014

An article from, an advice and news website for equity investors, has declared that just as the i3 is launching, a “critical BMW selling point has been removed, resulting in a huge victory for Tesla as well as BMW’s other competitors.”  The BMW i3 comes in two variations: a battery electric version and a range extended version (called the i3 REx).  The reporter, Anton Wahlman, observes that the BMW i3 REx will not qualify for a white carpool lane sticker in California.  That’s perceived by Wahlman to be a huge disadvantage for BMW.  Is it really?

First, a little primer on California carpool lane stickers is needed here.  There are two carpool lane stickers available in California.  White HOV access stickers are reserved for vehicles that meet federal Inherently Low Emissions Vehicle (ILEV) standards and green HOV access stickers are reserved for qualifying Advanced Technology Partial Zero Emission Vehicles (AT PZEVs).  The California Air Resources Board (CARB) maintains a list of vehicles that qualify for these designations.  (As an aside, the still well-recognized yellow HOV access stickers adorning the back of many a Toyota Prius in California have now sunset and are no longer available.)

Wahlman reports that BMW was working “with California’s regulatory bureaucrats to create a new class of car” that would qualify the i3 REx for a white sticker.  However, in conversations with CARB, I’ve learned that this is not necessarily the case.  The Street is likely referring to the regulatory category Range Extended Battery Electric Vehicle (BEVx) that was added in January 2012.  Regardless of whether in regulatory vernacular the vehicle is a BEVx or not, in order to qualify for a white sticker the vehicle has to qualify for the federal ILEV certification.  CARB told me that BMW has worked with them over the last couple years on several different iterations of the i3 REx prior to launch and it wasn’t clear whether the vehicle would qualify for the ILEV certification.  However, the bottom line is that, in its current form, the REx does not qualify for the ILEV certification and, therefore, does not qualify for the white sticker (the i3 without the range extender, however, does qualify for the white sticker because it is all electric without emissions).

Wahlman does correctly point out that there is a limit of 40,000 green stickers available, and the CARB website indicates that “as of November 8, 2013, 24,452 ‘green’ stickers have been issued.”  When these will run out is a pretty good question, though at the pace that Chevrolet Volts and Prius Plug-ins (both of which qualify for green stickers) have been selling in California, it’s a safe bet that they won’t be available this time next year.

So, is the BMW i3 dead on arrival in California, as The Street would have one believe?  Far from it.  First of all, the question really comes down to this: What will be the take rate of the i3 REx versus the i3 all electric version?  Wahlman claims that the i3 REx is “likely what most prospective BMW i3 customers wanted,” but I’m not sure how he came to that conclusion.  In fact, I suspect the all-electric version will outsell the REx in California, regardless of HOV access – in part, because the performance of REx hasn’t been getting the same rave reviews as the all-electric version, but also because it’s almost $4,000 higher in price.

Then, there is the question of whether this is coup for Tesla.  Competitively speaking, the i3 with the range extender is still almost $25,000 less than a Model S, and the two cars have significantly different body styles.  Are they competitors?  To some degree, yes, because the EV market is still small.  But in the increasingly mature market, they are likely competing in the same way a BMW 328 Grand Turismo competes with a Mercedes E-Class.  The small i3 hatchback will be a fit for some lifestyles (and wallets), while others will need the larger Model S.  While BMW may have been hoping for white stickers for the i3 REx, this hardly qualifies as a major setback for BMW – and it’s probably something they knew was coming.


ExxonMobil’s Energy Outlook Gives Reasons for Hope

— January 9, 2014

ExxonMobil released its annual Outlook for Energy on December 12, 2013.  The Outlook is breathtaking in its detail, but one sentence in the press release caught my eye:

“Energy used for power generation will continue to be the largest component of global demand and is expected to grow by more than 50 percent by 2040 as improved living standards that come with urbanization and rising incomes lead to increased household and industrial electricity consumption through wider penetration of electronics, appliances and other modern conveniences.”

First, it caught my eye as one who writes for a living: here at Navigant Research, we avoid really long sentences such as the above 56-word leviathan.

More seriously, ExxonMobil forecasts that electricity usage will increase by 90% between 2010 and 2040, and that power generation will remain the leading component of energy demand.  The Outlook suggests that much of this demand will come from the increasing electrification of developing economies and the resulting surge in energy demand within those economies.  For the quality-of-life improvements these increases portend in developing economies, I am thankful.

Other Factors

ExxonMobil also forecasts that, “In the power generation sector, policies to stem GHG emissions will likely raise electricity costs for consumers, slowing demand growth.  Power producers will also seek to utilize more efficient electricity-generating technologies, and shift from coal toward lower-emission fuel sources like natural gas, nuclear and renewables.”

While ExxonMobil’s Outlook focuses on electricity generation, there are other influences upon energy demand that must be considered:

  • Demand-side management (DSM) programs, such as demand response (DR) and time-of-use (TOU) pricing, can influence consumers to shift consumption to off-peak periods, when renewable energy resources may exceed demand.
  • Then again, some energy demand is nearly inelastic.  We Texans don’t like higher energy bills any more than anyone else, but we like boiling hot homes during the summer even less.  We really wish the winds out in the Panhandle would blow in the middle of the summer afternoon, instead of 3 a.m. on a cold winter’s morning.
  • Conservation voltage reduction – the subject of an upcoming report from Navigant Research– can reduce energy requirements with no customer action.  Automated control of capacitor banks or voltage regulators enables utilities to run their distribution grids at slightly lower voltages, reducing energy consumption by up to 4% with zero effect upon service to customers.
  • Advances in transmission and distribution (as covered in Navigant Research’s report, High-Voltage Direct Current Transmission Systems) can reduce reactive loss for energy transmission, delivering more of the generated energy to consumers.  This becomes critical as renewable energy sources are exploited far from the load centers (i.e., cities).

Reasons for Optimism

These are all topics that we cover at Navigant Research and will continue to cover during 2014.  In one sense, the smart grid is all about getting more out of the same amount of energy.  More power from the same power, if you will.

I am nearly certain that ExxonMobil’s prognosticators will have considered all these issues in their forecasts.  Still, it bears repeating that there are lots of reasons to feel optimistic about our energy future.  To the degree that improved technology makes life better in developing economies, that’s one more reason to be optimistic.


Popularity Soaring, Uber Faces a Backlash

— January 8, 2014

Web-based car service company Uber is facing another backlash – not the first in the startup’s life.  For a company that offers what seems like a fairly uncontroversial service – convenient on-demand urban transport ‑ it has attracted a lot of controversy.

At the most basic level, Uber is simply a way to maximize existing transportation resources.  The company realized that current car services and taxi drivers had significant downtime when they were actually willing to work.  And city dwellers can attest that there are many times they want a taxicab but can’t find a free one.  This means resources are sitting idle at the same time there is unmet demand.  Very inefficient.  Uber solves this problem elegantly, with a smartphone app and algorithms to match up drivers with riders as quickly as possible.

Not So Fast

However, Uber’s path to growth is not proving to be so simple.  It has faced significant pushback from a number of quarters.  Initially, and not surprisingly, opposition came from conventional taxi services and the cities that heavily regulate them.  To avoid certain taxi regulations, Uber has to wriggle itself into a very oddly shaped box.  It strives to appear as a livery service, which are less regulated than taxis.  But a service that sends a car to pick up a customer in just a few minutes and then charges by the hour and mileage sounds a lot like a taxi company.  The company initially specialized in offering the black “executive sedans” associated with livery companies.  Yet, Uber doesn’t own any of these town cars – or even employ the drivers.  It contracts with local car services and drivers, supplying them with the app that matches drivers with customers.  This has allowed Uber to claim it is not a transportation service and thus avoid certain regulations and insurance requirements.

The response from many cities has not been to work with Uber, but to treat it as a scofflaw.  As Tesla found with auto dealers, a powerful interest group closely entrenched in local politics makes a challenging competitor.  Uber has plowed ahead with its expansion plans, continuing to fight on many fronts.  The company won its battle to offer its service in Washington, D.C., but is still facing multiple other challenges.  For example, it is appealing a California Public Utilities Commission ruling that it is indeed a transportation company.  In cities where Uber has won, it has rallied users to provide public support for the service.

Unfortunately, many of those customers are now irate.  The latest backlash comes from some Uber users who have complained about the premium that the company charges during periods of high demand, like weekend nights in Manhattan.  Some customers have gone public after paying several hundred dollars for a short ride.  While this probably won’t turn most customers away, it does make Uber look a lot more like a service for the wealthy.  That will make it harder for Uber to gain broad public support in its struggles with government agencies and it may embolden politicians and regulators to go after a high-end car service for a select few.


Blog Articles

Most Recent

By Date


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

By Author