Navigant Research Blog

Getting the Most MPG

— October 23, 2012

In February 2012, a disgruntled customer won a small claims suit against Honda, claiming that the Civic Hybrid she bought never achieved the advertised 50 mile per gallon (mpg), which was the figure Honda claimed from the statutory EPA tests it is required to run.  The ruling was overruled in May by the Los Angeles County Superior Court, but spurred a number of additional claims in courts around the country.  The case emphasized the need for vehicle manufacturers to manage their customer expectations.

The EPA-mandated test was developed as a way for customers to compare vehicle economy by establishing a standard, supposedly typical, drive cycle for all vehicles.  If the cycle does not match your route and the way you drive, though, you won’t achieve the advertised number.   It was never intended to be a figure that all drivers would achieve.  (This factor is discussed in our recent report, Stop-Start Vehicles; under the EPA testing conditions, eliminating idling does not show any benefit for vehicles equipped with this system.)

Ford discovered this problem with hybrids after the launch of the first hybrid Escape in 2004.  The average driver thought that the technology would magically deliver better fuel economy regardless of how they drove.  So Ford quickly put together an event called the Escape Hybrid Experience to try to educate the owners.  Fortunately these were mainly early adopters who were keen to sign up, and the event was repeated at many locations all across the United States.

The key tactic in driving a hybrid is to make maximum use of the regenerative brakes, and avoid rapid acceleration as much as possible.  Gentle braking captures kinetic energy and stores it in the battery; heavy braking converts that energy to waste heat in the discs just as in a conventional vehicle.  Hybrids typically don’t do well at high speed, when the extra weight of the batteries and electric motor requires more energy to keep moving.  Driven gently, in stop-start traffic conditions, they deliver much higher mpg.

The MPG Marathon

Of course, driving in the recommended manner for hybrids will improve fuel economy for conventional vehicles too.  This was proved recently at an event in the United Kingdom, called the MPG Marathon, sponsored by ALD Automotive and Shell, among others.  In this annual test of driving skill and vehicle efficiency, drivers have to complete a course of 370 miles in normal traffic over 2 days, meeting timing restrictions that mean you cannot win by driving at 10 mph the whole way.  Vehicles must be in current production on the day of the event, and there are various vehicle categories for judging.

While best overall mpg is the goal of the event, the organizers also track the percentage improvement over the official mpg rating from the U.K. government standard test.  The overall winner this year was the Ford Fiesta ECOnetic, a small car with a 1.6-liter diesel engine, which achieved 108.8 mpg on a vehicle rated at 85.6 mpg under the official combined cycle test.  (U.K. gallons are larger than American gallons, but the economy is still impressive.)  Citroën’s Nemo won the van category, with 77.5 mpg.  Full results are on the competition website, but most manufacturers use the event to publicize their vehicles even if they don’t win: Toyota, Peugeot, Ford, Citroën, etc.

The conclusion here is that it’s not just the technology but how you use it that gets results.  And if you learn the correct technique and try hard, you can beat the official figures, and you don’t have to sue the manufacturer.


Dangerous Myth of ‘Energy Independence’ Persists

— October 19, 2012

A new report commissioned by clean-energy VC firm Claremont Creek Ventures gives a hopeful version of the future of energy in the United States.  The U.S. can achieve full energy independence by 2025, the report (carried out by graduate students at the University of Michigan’s Erb Institute for Global Sustainable Enterprise) claims.

“With the right mix of technology, smart policy, and the collective intelligence of talented people – the same principles that got the United States to the moon in the 1960s – we can secure our energy future,” said Nat Goldhaber, managing director of Claremont Creek Ventures.

Getting to the moon was probably cheaper.  As shown in the chart below, this blessed state would be achieved mostly by replacing crude oil imports with natural gas, Canadian supplies of “tight” oil (i.e., shale oil), and the replacement of 10% of the internal combustion engine vehicles on the road today with electric vehicles.

(Source: Claremont Creek Ventures)

That last projection is most unlikely, according to the latest Pike Research report on Plug-in Electric Vehicles.  By 2020, we forecast, sales of all electric vehicles, including hybrids, plug-in hybrids, and battery electric vehicles, will be just over 400,000, or 2% of total light duty vehicle sales.  It will likely take another decade or more for EVs to reach 10% penetration.

As for replacing nearly 5 quads (a “quad” is a unit of energy equal to a quadrillion BTU) worth of crude products with Canadian shale oil, that brushes aside a barrel full of questions around politics and sustainability.  The real question here, though is: Do we really want to be energy independent?

Typically the term “energy independence” is used to mean “totally self-reliant for all domestic consumption of energy; free of imports.”  In both economic and sustainability terms, that is not the ideal state.  What America needs is not energy independence but energy diversity and security.

In purely economic terms, islanding ourselves from the global energy markets would mean we would almost certainly pay more for energy – the price of natural gas is artificially low in this country right now not only because we have abundant new domestic supplies of shale gas, but also because of the price difference between natural gas from fields in Gulf Coast and Rocky Mountain states, and gas from Europe.  Unlike the market for crude oil, the natural gas market is not fully globalized yet, mostly because of the difficulty and expense of compressing or liquefying NG for transport.  This state of affairs is temporary, and that’s a good thing: rational, transparent market structures benefit everyone in the long term, and being the low-cost source of energy is not a recipe for long-term prosperity.  As for crude oil, the price – in political capital, in dollars, in environmental sustainability, and in the opportunity cost of not developing alternative resources – of importing oil from low-cost overseas producers is likely to remain lower than the true price of extracting dirty shale oil and shipping it by pipeline south to Oklahoma and the Gulf Coast.

When people say “energy independence,” what they often mean is “stopping imports from the Persian Gulf.”  It’s important to remember that, as the graph below shows, imports from Saudi Arabia, at about 1.2 million barrels a day (mbbl/d), accounted for less than 14% of U.S. crude oil imports in 2011.  The other top five importers to the United States are Canada (at 2.2 mbbl/d, by far our largest source of crude), Mexico, Venezuela, and Nigeria.

(Source: EIA)

There are reasons of morality, economics, and statecraft to reduce imports from all of those countries, with the possible exception of Canada.  But, speaking plainly, we will pay a financial price for doing so.  And so far, neither politicians nor the American public have shown a willingness to pay that price.

“Even though it may feel good to say that we’re on track to be a net exporter of energy, it has not had the benefits we were promised,” wrote Andrew Holland, a senior fellow at the nonpartisan American Security Project, earlier this year on the release of the Project’s annual white paper, “America’s Energy Choices.” “Our consumers are still stuck paying the global price for oil – set by the whims of speculators and the most recent threat of war in Iran. Our energy supply is still insecure, economically unstable, and environmentallyunsustainable.”

All of those qualities – security, economic stability, and sustainability – are way more important than mere “energy independence.”


As A123 Fails, Overcapacity Remains in Battery Market

— October 17, 2012

For those in the cleantech industry, the news that lithium ion battery manufacturer A123 has declared bankruptcy was disappointing, but hardly surprising.  A123 has been in a tailspin for the last 9 months or so.  Innovation in battery technology and the growth of the plug-in electric vehicle (PEV) market literally couldn’t come fast enough for A123.

In essence, A123’s narrow customer base and its failure to grab one of the few available high-volume battery contracts in the transportation market, combined with an expensive recall, drove it to bankruptcy.  The company’s largest program, Fisker’s Karma battery, has proven to be a money loser for A123 because of manufacturing defects that resulted in a recall, which cost the company $55 million (the total Fisker contract generated about $42 million in revenue for A123 in 2011).  A123 produced batteries for a handful of other automotive manufacturers, including BMW hybrids and Smith Electric Vehicles, but these were both very small contracts, and Smith has some financial issues of their own.

The battery market has an overcapacity of production for current demand, particularly in transportation.  The total estimated transportation market is expected to consume just under 1 megawatt-hour (MWh) of battery capacity in North America this year, and nearly 3 MWh globally.  The stationary energy storage market is expected to reach 33.6 MW.  A123’s battery cell production capacity in the United States is 360 MWh.  A123’s largest domestic competitors, Johnson Controls (JCI) and LG Chem, both have capacity that is similar in size or slightly larger.  These plants are all dramatically underutilized.

In a proposed deal, JCI would purchase A123’s automotive business, including the manufacturing facilities.  On the face of it, this makes sense because JCI is a large automotive supplier working to develop prismatic Li-ion cells, which A123 has already launched.  Additionally, A123’s newest product, the Nanophosphate EXT Li-ion, is specifically targeted at the stop-start vehicle market, an area of strength for JCI’s advanced lead-acid products.  This move would give JCI a jump on their prismatic development.  However, it does not solve the underlying problem – too much capacity chasing, too little demand.  How JCI will fill this new combined capacity is not immediately clear.  I suspect JCI’s interest in A123’s transportation products is mostly driven by the acquisition of technology, clients, and perhaps some of A123’s cell component manufacturing.  In my opinion, JCI would likely need to do some consolidation of its own, including closing one of the two Li-ion plants it would own.


The Fuel Cell Seminar 2012 – A Personal Agenda

— October 17, 2012

This year’s Fuel Cell Seminar, to be held at the Mohegan Sun in Connecticut on November 5-8, will be interesting.  And not just for the adventure of trying to get to the Mohegan Sun from the United Kingdom.  The fuel cell industry is starting to kick into a real growth curve, with an 83% compound annual growth rate (CAGR) between 2009 and the end of 2011 in units shipped.  This translates into a cumulative 242 megawatts (MW) of all types of fuel cells shipped over the same period.  This also means we are now on the tipping point from a tiny niche market to a potential commercial industry.  But right now that tipping point is more of a precipice, with a skinny rope bridge across the chasm to the mass market.

How thick that rope bridge is depends on the companies themselves, and on events such as the Seminar that help us assess the likelihood of a successful crossing.  As the Seminar has many parallel tracks, it’s important to plan in advance which ones to attend.  Apart from the plenary sessions, which just about everyone goes to, the presentation titles that stick out are the ones that imply more than a company marketing pitch.  U.S. national lab presentations are usually very data-heavy, thanks to multi-year funding from the U.S. Department of Energy (DOE), but realistic? That’s another question.

My personal highlight list from the seminar program and abstracts includes:

“Application of High Efficiency Electrolysis to Provide Grid Stabilization for High Penetration of Renewable Power Sources”: Problem and potential solution in one title.  Yes please.

“Microbial Fuel Cells with Anti-Fouling Conductive Cathode Supports for Stationary Underwater Power Sources”: Underwater stationary fuel cells! With a title like that, who could miss it?

“Cost-Effective and Durable Membrane Electrode Assembly for Automotive Applications”: The supply chain is critical.

“High Pressure Hydrogen from Renewable Energy Sources: Production and Use”: Hot, hot topic

“Portable Power – Where We Are and Where We Are Going”: It will be interesting to see if the DOE has the same data and impressions as we do on the portable power market.

I’ll provide post-Seminar highlights in a blog after the event.  So for everyone trying to find the Mohegan Sun, good luck and safe travels.  See you there – and, by the way, my presentation is in the Stationary Fuel Cell Track, but it covers all applications.


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