Navigant Research Blog

Fuel Cell Vehicles and EVs: More Alike Than Not

— May 23, 2011

For the last few decades, the interest level in (and DOE funding for) FCVs and EVs has had somewhat of an inverse correlation, with one rising while the other falls. Most conversations and development efforts have focused on one vehicle architecture or the other, not both. But taking a view from above, these two platforms are more alike in form and function than they are different.

15 years ago (during the Clinton administration) EV development and interest was progressing more rapidly. Then after California backed off on requiring zero emission vehicles and the George W. Bush administration took over, Fuel Cells were prioritized. EVs and the rest of the plug-in vehicle family are getting more attention today, though FCVs continue to fight for respect. But the worlds are converging and the automotive industry would likely benefit if the research and advocacy groups dropped their swords and worked in parallel.

Mercedes-Benz, with its E-Cell and F-Cell programs, is among the OEMs that appear to be centralizing efforts in making FCVs and PEVs as complementary platforms that can extensively share technology. The architectures are alike in that all battery electric vehicles and FCVs solely use electricity to provide propulsion. While EVs solely use batteries to provide power for locomotion, FCVs use fuel cells in conjunction with batteries (or ultracapacitors) for propulsion power and energy storage. Both vehicles do not directly generate emissions, and many of the secondary vehicle systems use the same or similar electronic components.

A look at a BEV and FCV in development by Mercedes-Benz shows that these vehicles are really apples from the same family tree:

The fuel cells biggest advantage today is that it has nearly double the driving range, and the fuel cell/battery combination delivers more power and greater acceleration than the batteries alone. BEVs today are being sold commercially in greater numbers and also have the advantage of a growing public charging infrastructure that far surpasses the hydrogen refueling infrastructure (at least beyond Southern California).

As my erudite colleague has pointed out, combining the technologies into a range extended FCV makes sense on many levels and our conversations with OEMs indicate that they are kicking the tires on the idea. Mercedes-Benz (with its BlueZero platform), GM, and Ford all see benefits in creating flexible platforms where drivetrain architectures can be mixed and matched like Garanimals. When only electricity is used for propulsion, components such as electric motors et. al. can be leveraged most effectively.


Moving Towards Closed-Loop Data Center Management

— May 20, 2011

Two discussions in recent weeks have provided some interesting insights into the evolution of energy efficient data center technologies. First I spent some time talking to Emerson Network Power about its latest range of modular data center solutions. Modular is one the buzzwords of today’s data center market and steadily taking on whatever meaning the marketing department wants it to, but Emerson Network Power’s offerings are interesting in several ways.

SmartRow is a row-based integrated data center infrastructure aimed at small data center and remote sites. SmartMod is a modular integrated infrastructure with its own rapid deployment enclosure, which can be dropped in to add capacity to an existing data center or act as a stand-alone data center. SmartAisle provides row-based building blocks for the fast deployment of more tailored and flexible extensions to existing data center and for deploying high-density computing zones. All three solutions offer similar benefits in terms of the integration of cooling, power, and IT infrastructure as well as monitoring and maintenance features but differ in terms of the configuration flexibility and entry price points and are targeted at different segments of the market.

As an example, SmartMod includes racks and power distribution, UPS and cooling infrastructure (and integrated fire suppression) as well as monitoring and management tools. It can support between 30-400 kW of data center capacity and up to 28 racks. It is IT server-neutral and provides a standardized solution in terms of power and cooling operations but also offers options for N, N+1 or N+2 configurations for redundancy. Emerson Network Power claims that SmartMod can be deployed in three to four months rather than over a year for a new data center space.

Quick deployment and reduced costs are the obvious selling points for these solutions but they are also interesting because in they offer packaged intelligence. Because it is an integrated solution, Emerson Network Power is able to optimize the system and include additional monitoring tools. It says that these offerings typically achieve PUE ratios of 1.3, which with all the caveats that must accompany such measures, is still a pretty good indicator of what can be achieved from an integrated view point. Many data center managers will still prefer to go down the bespoke route but a modular approach allows them to increase the flexibility and decrease the costs of meeting growing demand. Interestingly, while Emerson Network Power claims that SmartMod can provide a modest capital expenditure saving – with the savings on room design and construction off-setting equipment costs – the operating expense saving due to the efficiency of an integrated design can reduce cost of around 27-29% over a five year period.

My other discussion was with the much smaller but well-established data center infrastructure provider, Trendpoint. Trendpoint has been in business around ten years and its initial product was the EnerSure smart meter which provides accurate circuit-level measurement of data center power use. It recently launched EnviroCube, which takes them into the cooling market for the first time. According to their CEO, Bob Hunter, the new product came about because of the input from a customer running a prestige data center for a global IT company. They wanted to know if they could use the detailed data provided by EnerSure on heat and power performance to adapt their cooling system. After a number of pilots, a large scale demonstration showed savings of around 30% on cooling costs using accurate data on IT power use. Trendpoint has now productized some of the insights from the EnviroCube project.

EnviroCube works by providing accurate information on demand and performance to the cooling system. The EnviroCube gathers data on both the output airflow and the return air flow to the cooling system as well the power usages/heat from the IT equipment. Then, air flow can be matched to the actual demands placed on that cooling unit rather than simply adjusting the flow in relation to the environmental temperature. Trendpoints’ argument is that adjusting temperature to regulate temperature, as environmental sensor based systems do, is always going to be an inefficient and inaccurate approach given the circular nature of the dependencies. An additional benefit of the EnviroCube approach is that it monitors the efficiency of the chiller unit and predicts likely failures. This means Trendpoint can claim that it is addressing both energy efficiency and reliability.

What particularly interested me about the Trendpoint approach is that it is further development in the visibility of data center operations and another step in closer integration of data center IT and facilities. Close monitoring of the performance of both becomes even more important in virtualized data center offering cloud computing services, with higher densities of equipment and greater unpredictability of demand. Bob Hunter makes the case, for example, that this level of visibility on heat and power in the data center offers the prospect of being able to manage distributed virtual machines in order to balance out computing power to match the environmental conditions, moving VMs from a hot spot to cooler area of the data center.

In some ways the modular solutions provided by Emerson Network Power are the direct opposite to the best-of-breed approach to data center management offered by Trendpoint. However, what they share is a drive towards closing the gap between cooling, power, and IT systems through greater visibility in to infrastructure and IT performance, embedded intelligence and automated response to real-time changes in the environment. This has to be achieved while continuing to assure reliability. Moving in this direction, the gap between facilities and IT narrows even further and we move closer to closed-loop management of the data center.


Landis+Gyr+Toshiba: First Truly Global Smart Grid Company?

— May 19, 2011

The long rumored acquisition of L+G by Toshiba has finally happened. It appears Bayard Group, the investment group that assembled the current incarnation of L+G from more than five companies, got their price ($2.3 billion) without the originally anticipated IPO, making their investors happy. Perhaps it is fitting that L+G have been picked up by a Japanese company, as this effectively rounds out the regional scope of the U.S. and European components from which L+G was built. So does this make L+G the first truly global smart grid company?

Well, no, not really, but the answer hinges on the definition of “smart grid.” Certainly companies like GE, ABB, Siemens, and even Toshiba itself, would validly claim a long-term global presence in grid infrastructure, including smart technologies. But if the definition includes smart metering, then we might have to say “maybe.” Prior to Bayard assembling the various pieces that become the “new” L+G, metering was largely a regional business. By combining L+G, Cellnet, Hunt, and a number of other firms, L+G became one of the first to seek synergies between regions – specifically North America and Europe – for smart metering. The resulting L+G corporate rationalization was a bit rocky and not without challenges, but it did ultimately result in a single integrated company, even if the smart meter market remains regionally fragmented. The Itron-Actaris merger, and similar moves by Elster, also aimed to create global scale (or at least North and South America + Europe). As part of Toshiba, L+G have the potential to accelerate smart metering growth in Asian markets, while Toshiba may leverage L+G’s relationships in North American markets.

Success here is not automatic. The big prize in Asia, of course, is China. Pike Research estimates that China will consume an average of 30 million smart meters per year over the next three years, almost three times the number in North America. Although Toshiba has a significant presence in China and L+G has made some progress with C&I meters, China has been effectively closed to all but indigenous Chinese meter vendors.

Why is globalization so important for smart meter makers? It comes down to the numbers. Unlike other high-growth high-tech items such as cell phone and PCs, the ultimate installed base of electric meters is relatively static – no need for multiple meters per household or per person. And even if smart meter lifecycles end up being shorter than the simple meters they replace, they are still far longer than other high-tech devices. So the current out-of-cycle upgrades to the electric meter installed base that is driving growth within each region will ultimately be followed by a valley where meter sales may be below the traditional once-every-twenty-years replacement rate. Pike Research has been forecasting a North American peak for 2012-2013, so a declining – though still robust – North American smart meter market is already in sight. Europe is forecasted to pick-up the pace in the second half of the decade, with overlapping and extended growth from Asia. So without a global presence, smart meter vendors will be looking at dividing up a smaller pie.

This trend may be impacting the other anticipated 2010 smart grid IPO that didn’t happen: Silver Spring Networks. Rumored to be seeking a $3 billion valuation, and without L+G’s global exposure (or revenue), the $2.3 billion sales price paid by Toshiba is likely disappointing. An interesting question is whether other Asian giants, such as Fujitsu, LG, Mitsubishi, Panasonic, Samsung, and Sony, all of whom likely have some level of interest in Smart Grid technologies, will feel compelled to make a similar move.

In the meantime, we expect that Toshiba will mostly leave the existing L+G structure alone and L+G customers should be comforted by Toshiba’s financial backing. How longer term potential market, regional, or technical synergies work out will be interesting to watch.


Is China’s Wind Power Growth Sustainable?

— May 18, 2011

By 2020, the Chinese government plans to generate 15% of the nation’s total energy consumption by increasing the use of alternatives to fossil fuels, such as wind and solar power. Today, China is the largest wind power market in the world, but this rapid growth is experiencing a backlash on several fronts. For example, the country is now imposing new quality standards to weed out smaller companies whose products have suffered from quality control, and concentrating manufacturing in larger, more established firms.

Furthermore, European manufacturers that entered the Chinese wind power market, such as the Spanish company Gamesa, have not generated the revenues they had hoped. This is largely due to the China’s strict local content rules that require 70% of all components be manufactured by its domestic supply chain. In what has now become a familiar tale, foreign manufacturers try to balance the pros and cons of doing business in a market that is clearly tilted toward maximizing returns for China – and not foreign international corporations. There are inevitable winners and losers.

In 2010, China increased its total wind power capacity to 41.8 GW, up 62% from the previous year. However, for the first time since 2005, growth in wind power is slowing down in China because of the following reasons:

  • While China used Germany’s feed-in tariffs and mandatory grid access as a model, so far its laws have never been enforced. In fact, it is estimated that approximately 30% of China’s installed wind capacity has yet to be connected to the grid and actually delivering valuable carbon free electricity.
  • Many PPA’s signed in China contain grid curtailment provisions that lack compensation, reducing expected profits for developers.
  • Traditionally, subsidy payouts from the Chinese government happened monthly. Subsidies have been paid out every six months, creating cash flow issues for developers. This bi-annual payout makes it particularly difficult to finance projects in China when depending upon international sources of credit.
  • There is a striking lack of coordination between different provincial government actions and the central government. While such bureaucratic matters are not unique to China, the country’s inexperience in managing such large portfolios of variable renewable generation raises questions about the sustainability of the world’s hottest market for green energy.
    • The Chinese company that has the most sophisticated strategy for global wind power development is Goldwind Science & Technology Co, Ltd., a state-owned company, that is impressing wind industry veterans with its superior technology and creative business approach. The company appears to combine the best of all possible worlds: European engineering experience, U.S. entrepreneurship and China’s ability to drive down technology costs to the lowest possible levels.

      Unlike other successful Chinese wind turbine companies – such as Sinovel Wind Group – Goldwind is looking well beyond China’s borders for business opportunities and has launched a joint venture in the United States. For example, the firm has installed its 1.5 MW turbine in Pipestone Town, Minnesota and has also signed a contract for a larger turbine delivery project (>106 MW) in Shady Oaks, Illinois.


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