Navigant Research Blog

Canada Takes EV Charging Station Plunge

— December 14, 2012

Canada has lagged behind the United States as a plug-in vehicle (PEV) market, both in terms of PEV availability and sales.  However, as reported in the Pike Research Electric Vehicle Geographic Forecasts report, all Canadian provinces are expected to have some PEV availability by 2013, and the country will experience a growth spurt in PEV sales over the next few years.  Pike Research projects that most sales of PEVs will occur in Canada’s largest cities, with Toronto, Montreal, and Vancouver anticipated to have the highest concentration of PEVs.  (Tesla made a splash by recently opening its first Canadian dealership in Yorkdale, Toronto.)

In anticipation of increased PEV sales, Quebec, Ontario, and British Columbia are each funding deployments of electric vehicle charging stations:

Quebec’s Circuit Electrique is the first to get EV charging equipment out and ready, with this program sponsored by Hydro Quebec.  The Circuit Electrique will feature a network of 120 public charging stations; as of December 2012, over 100 were in operation.  Drivers pay just $2.50 per charge, no matter how long the car stays, although the program’s operators anticipate that PEVs will not park at the stations for too long, something that has been a problem with some public charging spots in the United States.  Drivers access the units with a prepaid card.  The charging stations use Aerovironment hardware.  For now, the stations are concentrated in greater Montreal and Quebec City.

Earlier this year, the British Columbia government launched an extremely ambitious program to support deployment of 600 public EV charging stations by April 2013.  The province will provide a rebate of up to C$4,000 (US$4,036) for570 Level 2 chargers and a C$25,000 (US$25,230) rebate for up to 30 DC chargers.  The stations must be available for public or fleet use and networked.   The province expects to collect data from station usage, much as the DOE has from the Ecotality and Coulomb chargers funded by U.S. stimulus money.  Installation is to be completed by March 31, 2013.

The Ontario government is providing C$80 million (US$81 million) for public EV charging deployment.   The government is awarding funding based on an RFP process.   In addition, the non-profit Plug’nDrive Ontario has partnered with Hydro Quebec to support EVSE buildout across the two provinces.

In some ways, Canada is now going through the same phase of the EV charging equipment market that the U.S. did a few years ago, when the DOE launched its initial EV charging programs.  While this helps ensure the availability of public charging to support the emerging PEV market, it also has a distorting effect on the EV charging market, as manufacturers end up focusing on the government-fed demand, thus delaying the task of finding a true business case for public charging.  The United States is exiting this phase now, and equipment manufacturers are being hit with the cold reality that companies are much less likely to deploy a station for public use when they have to pay full price.  Companies in Canada should take heed and make sure they look beyond this temporary market bump.


AAA Weighs in on E15 Controversy

— December 14, 2012

In the United States, gasoline is a mix of 10% ethanol and petroleum fuel.  Since 2009, the Environmental Protection Agency has been considering a change to the ruling that would permit fuel stations to sell a mix of E15 (15% ethanol).  This switch is opposed by automakers, who are concerned with engine longevity issues when using E15.  In 2010, I wrote, “Some ethanol groups are starting to push for immediate approval of E12 (12% ethanol) as the tests continue.  As a result, I would not be surprised to hear, come November [2010], the EPA will delay a decision again until 2011 without any action on E12.”  Well, the approval of E15 didn’t end up coming until April 2, 2012 for 2001 and later model year vehicles, and as expected there was no movement on E12.

But the controversy didn’t come to a close on April 2, as many might have hoped.  Since that time, E15 adoption has been very low.  Now, AAA, the auto and travel association, has issued a warning that E15 could “damage millions of vehicles and void car warranties.” This warning can be expected to have an impact on the sale of E15, since AAA claims to have over 50 million members.  That number represents almost a quarter of the 209.6 million licensed drivers in the United States, giving AAA a big voice in the debate.

What does this mean for E15?  It seems likely that AAA’s foray into the arguments will likely scare off some stations that were considering making the investment to offer E15.  Making things worse, blender pumps, which would be the most affordable method for delivering E15 to the market, are required to sell a minimum of 4 gallons of fuel to prevent damage to small engines, such as lawnmowers.  Blender pumps blend gasoline and ethanol at the 10% proportion at the time of refueling, so new storage tanks would not be required, but since fuel remains in the hose some E15 would get into small engines and potentially cause damage.

The cost of E15 is below gasoline (about $3.28/gallon this past summer), but it also has 5% less energy than gasoline (about 2% less than E10) and therefore could ultimately cost consumers more as a result of reduced fuel economy.  One might surmise that since it might cost more, the fuel isn’t widely available, many stations don’t want to carry it, automakers warn it can’t be used in their vehicles, people have to buy a minimum amount in many cases, and now AAA is all but telling its members not use it, that the EPA would reconsider.  Don’t count on it.  Lawsuits from the automakers were thrown out this summer and the EPA has shown no signs of revisiting the topic.  One thing I think we can count on is more E15 controversy to come.


Utilities Face Public-Private Network Divide

— December 11, 2012

In mid-October, San Diego Gas and Electric (SDG&E) regulatory filings indicated that the company has changed plans to deploy a foundational private WiMAX network as part of its ongoing smart grid deployment, opting instead for a mix of various public and private network systems.  This move is noteworthy because SDG&E is a leader in adopting a comprehensive, integrated, smart grid communications strategy.  Its abandonment of WiMAX raises questions about the future of private 4G network technology for smart grid.  Pike Research has been bullish on the future of standards-based private wireless for smart grids, so naturally we’re asking ourselves the same questions.

Utilities have a longstanding preference for private wireless over public cellular (though this is often overstated as vocal proponents of private wireless usually also have pervasive public cellular deployments, especially for advanced metering infrastructure (AMI) backhaul).   However, for critical applications (such as distribution and substation automation), private networks are still considered more reliable and resilient in the face of disruptions, and in some areas, the regulatory preference for returns on deployed assets tilts the field toward private networks.  Private 4G technologies such as WiMAX offer a standards-based private solution with strong performance and are expected to displace the plethora of proprietary solutions available.  SDG&E, CenterPoint Energy, and Oklahoma Gas and Electric (OG&E), as well as many smaller utilities in Canada, were and are heading in this direction.

Smart Grid Communications Node Shipments (Excluding Smart Meters), As % of Total, North America: 2012-2020

(Source: Pike Research)

However, as SDG&E discovered, reserving guaranteed spectrum for such private networks is challenging.  SDG&E had earlier been a showcase customer of Arcadian Networks, which built a product offering around dedicated spectrum that covers most of the United States.  However, Arcadian failed to attract enough customers to convince its investors that such networks were the best use of their spectrum, and ultimately failed.  This is less of an issue in Canada, where WiMAX-suitable spectrum has been reserved for utility use, leading to greater usage.

Against some of these challenges, public cellular companies have more aggressively supported some of the bandwidth and service guarantees required by utilities, enabled by new capabilities delivered by their own 4G networks.  Public telecom carriers have been riding a wave of greater acceptance by utilities for AMI applications (both to the meter and for backhaul), but not all of these are considered mission-critical, at least from the perspective of immediate availability during an outage crisis.

Where will this lead? At Pike Research, we still see a strong trend toward adoption of open standards for public and private, wired and wireless network technologies, and the benefits of integrating these in a unified communications architecture rather than in separate application silos is too great to ignore.  The ongoing post-mortems of recent major storms, such as Hurricane Sandy, should help guide in the private versu public network resiliency debate, if utilities are willing to share their experiences.  We still see a strong future for private 4G wireless technologies but also strong growth of public 4G networks (40% CAGR, 2011-2020, for unit shipments into distribution automation and AMI backhaul applications in North America).   We’ve never said that there will be “one network to rule them all,” much to the chagrin of some network equipment vendors.  Diversity will remain the key defining attribute of grid communications networks long into the future.


Diesel Hybrids Arrive at Last

— December 11, 2012

More expensive than their gasoline counterparts,  diesel engines deliver significantly better fuel economy and are vouched for by taxi drivers the world over.   Some 15 years ago, Toyota and Honda introduced the world to the hybrid drive car, adding an electric motor and a large battery, making stop-start driving more efficient by storing and reusing kinetic energy.

With both technologies established, it was then logical to think about combining the two to make an even more efficient drivetrain, but the double premium (both diesel and hybrid drives are more expensive than conventional gasoline models) made OEMs think that the incremental cost was too much for the market even though the long-term benefits would be very attractive.   Finally, PSA in France decided at the end of 2011 that the time was right and launched its Hybrid4 system, first in the Peugeot 3008, followed by the new Citroën DS5, and then in the Peugeot 508.  In this system, the diesel engine drives the front wheels while the electric motor drives the rear wheels.  A choice of four different modes allows the driver to choose when to use the technology: to be clean, frugal, 4WD, or sporty.  More importantly, the official emissions figure of 91 g/km of CO2 and 80 mpg (Peugeot 3008 Hybrid4 Active model) makes the vehicle attractive to both individual and company car buyers in many European countries, thanks to taxation policies that emphasize fuel efficiency.

PSA’s Hybrid4 technology uses a 1.1 kWh NiMH battery pack that gives an electric-only range of about 2.5 miles.  The premium for hybrid drive on the 3008 is £4,200 ($6,700), or about 18% extra.   The Peugeot 508 with Hybrid4 drive retails at £31,450 ($50,100), which represents a premium of about £7,000 ($11,150) over the non-hybrid version.

The only other production announcement has come from Volvo, which takes things up a notch by including a much bigger battery and the ability to recharge it without the engine.  With a Li-ion battery pack rated at 11.2 kWh, the upcoming V60 diesel hybrid will be capable of about 30 electric-only miles.  On average, the V60 Hybrid official fuel economy is 148.6 mpg and it emits 49 g/km of CO2.

The Price Premium

It’s interesting to note that Volvo chose to use a similar architecture to the PSA design, with the diesel engine driving the front wheels and the electric motor driving the rear.  Again, the driver gets to choose driving mode, in this case from Pure, Hybrid, and Power.  There’s also a ‘Save’ button that prevents the electric drive from being used and saves battery power in advance of entering a low emission zone where all-electric mode is best.

Volvo made its announcement just as PSA was bringing its diesel hybrid to the market, and there has been some fanfare about the first-year production run of 1,000 units being sold out, so it must be worth the £47,000 ($74,900) price tag to the European early adopters.  That is £12,780 ($20,400) more than the R-Lux version of the V60 with the same diesel engine, an increment of about 37%.  These numbers are softened in some markets where rebates and government incentives apply; for example in the United Kingdom, PHEV and EV buyers get a £5,000 ($8,000) rebate from the government.

So the diesel hybrid is finally with us and showing solid, if not spectacular, sales performance in its first year of production.  Both companies have chosen a design that appeals to buyers thinking about an electric vehicle but concerned that it will not meet all their needs and would only be practical as a second vehicle.

The popularity of the diesel engine in Europe will work in favor of this new flavor of hybrid, especially with its tax advantages and significant economy improvements.  Accounting for the total cost of ownership, eliminating congestion charges, and low or zero annual registration costs, it probably will be a cost-effective alternative to a similarly-priced conventional vehicle.  Also, OEMs know that most people decide to buy a new car based on their financial calculations, and then justify the purchase to other people in terms of saving the planet.  The diesel hybrid can do both without sacrificing performance or functionality.


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