Navigant Research Blog

Price Gap Challenges Transportation Innovation

— April 29, 2014

Renewable energy technologies such as solar and wind power are increasingly becoming cost-competitive alternatives to traditional generation sources.  The consulting firm Eclareon says that the levelized cost of commercial solar power has pulled even with retail electricity rates in Italy and Germany.  Navigant Research’s Solar PV Market Forecasts report states that by 2020, solar photovoltaic systems will have an installation cost in the range of $1.50 per watt to $2.19 per watt throughout the world, and will thus achieve grid parity without subsidies in almost all geographic locations.  When cost-competitive solar and wind are combined with existing hydropower resources and advances in energy storage capabilities, the electricity sector can and will continue to reduce emissions.

On the other hand, the transportation sector almost exclusively relies on high-carbon fuels like gasoline and diesel, and thus may become the sector where attaining major emissions reductions will be the most difficult.  The biggest obstacle is the relatively large cost gap that exists between zero emissions vehicles (ZEVs) and their internal combustion engine (ICE) counterparts.

Reasons for Optimism

This gap will have to be at least partially addressed by increasing investment from the world’s major suppliers and automakers into alternative technologies.  According to KPMG’s Global Automotive Executive Survey 2014, only 9% of automotive executives surveyed plan to invest the most in battery electric vehicles (BEVs), with 46% reporting ICE downsizing and optimization as the technology they plan to invest in most heavily.  This means that small improvements to ICE vehicles should be expected over major improvements in BEV performance and prices, at least from the major automakers.  The Intergovernmental Panel on Climate Change (IPCC) recently stated that, without the implementation of major mitigation strategies, transport emissions could double by 2050 to more than 13 gigatons of carbon dioxide, up from 6.7 gigatons in 2010, which represents 22% of the world’s total emissions.

With the demand for personal vehicles growing in economies like China, India, and Brazil, the challenge of significantly reducing transportation related emissions is huge.  Still, there are some reasons for optimism.  Hopes for viable ZEVs largely lie in the area of battery and hydrogen fuel cell technology advances.  One of these eight potential electric vehicle battery breakthroughs would be a great start.

 

How to Save a Half Billion Gallons of Diesel

— April 16, 2014

Hosesteps_webTrying to reduce fuel use by Class 8 over-the-road sleeper cab tractors is a key challenge facing the trucking industry and regulators.  The trucks use a tremendous amount of fuel (averaging about 6.6 mpg and traveling 80,000 to 100,000 miles per year) and have to provide the driver comfort as the trucks stop overnight.  In order to provide the overnight creature comforts (sometimes referred to as hotel power), the trucks need to have a source of energy, whether an offboard source, the large truck diesel engine, or a small energy source called an auxiliary power unit (APU).  The APU industry has been espousing the fundamental truth that utilizing APUs reduces fuel use, emissions, and associated costs by reducing idle times of the large truck engines.

Yet, one of the challenges is trying to understand just how much fuel and emissions are being offset by APUs.  Having spent a large amount of my time at the Mid-American Trucking Show (MATS) this past March, I was able to speak with almost every APU manufacturer displaying at the MATS and have been able to pull together an estimate for these savings.

First, a little more background.  It is not entirely clear when APUs first became widely available, but by the early to mid-2000s, Bergstrom, Thermo King, Carrier, and RigMaster, along with a number of other competitors, were all offering APU systems.  Today there are a lot of commonalities between the machines.  The vast majority of APUs are of two designs, either all-electric or diesel-powered.  Diesel-powered APUs use diesel from the truck’s fuel tank to fuel 2-cylinder small diesel engines from Yanmar, Caterpillar, Perkins, and others.  All-electric systems store energy in absorbed glass mat lead-acid batteries that can then be used to provide power to air conditioning compressors or inverters.  Other technologies that are being tested include fuel cells, lithium ion batteries, and compressed natural gas systems, but the cost-effectiveness of these systems remains essentially unmarketable.

Methodology and Findings

For the purpose of this macro analysis, I had to make several assumptions when it comes to the number of APUs on the road.  First, since there isn’t consensus on when the Class 8 sleeper cab APU market even started, I considered the start date to be roughly 2005, with about 35,000 units on the road by the end of that year.  While recognizing that this is a rough estimate, this at least gave me a starting point for calculating the scrappage rate of APUs.  Based on conversations during MATS and some combing of forums, I assumed the average lifespan of an APU to be about 6 years, and from there the number of APUs on the road today, which is estimated to be about 309,000 units, with about 25% being all-electric.

These 309,000 units translate into 486.5 million gallons of diesel saved by APUs on Class 8 sleeper cabs in 2013 (or about 1,576.5 gallons per APU).  Put into economic terms, at the average retail price of $3.89 per gallon for diesel in January 2014, the fuel costs offset by APUs are a staggering $1.89 billion.  Even taking into consideration the cost of new APU units ($8,000 estimated) and maintenance ($145 annually), the offset is $1.49 billion.  Put into environmental terms, the Argonne GREET model calculated the greenhouse gas emissions per gallon of diesel fuel consumed to be 20.2 lbs carbon dioxide equivalent (CO2-eq) per gallon of diesel fuel, so the emissions offset are 9.827 billion lbs of CO2-eq.  Of course, this analysis does not take into account the 116 truck stops that have electrification to allow drivers to shut off the engines overnight, which would further improve these fuel savings figures.

Estimated Gallons of Diesel Used by Class 8 Sleeper Cabs for Hoteling: 2013Dave H. APU chart for blog

(Source: Navigant Research)

Certainly, from a macro standpoint, it’s hard to argue the benefit of APUs.  Fleets with a large number of trucks are likely to see cost benefits that are compounded over a number of trucks.  The picture is more complicated for truck owner-operators that have to justify the extra upfront cost and calculate the payback on a single unit.  This payback typically ranges between 2 and 4 years depending on the APU selected and the cost of fuel, which makes the owner-operator market seem like a good place for some targeted tax incentives.

 

U.S. National Parks and Electric Vehicles: A Match Made in Heaven?

— April 8, 2014

The U.S. Clean Cities program and the National Park Service (NPS) recently announced nine new projects to deploy clean vehicles at U.S. national parks. These projects are part of the Clean Cities National Park Initiative launched in 2010. The nine projects mainly feature plug-in electric vehicles (PEVs) and hybrid electric vehicles (HEVs).  Around 21 vehicles will be installed through the funding, including some low-speed electric vehicles (EVs).  The projects also include the installation of EV chargers for park visitors. While any move to make the U.S. parks cleaner is welcome, the relatively modest ambitions of this funding effort reflect the challenge that parks present in the adoption of EV or HEV technology.

Parks have long been an attractive target for greener transportation. This is not only for symbolic reasons, but also for practical reasons. Diesel and gas vehicles are noisy and disruptive. Park vehicles may spend time idling, which is both an emissions problem and a cost concern given the large amount of fuel essentially wasted during idling. These factors would seem to make PEV and HEV technology a good option, but to date, deployments have largely been pilot or demonstration programs and there has yet to be a full-scale shift toward electric drives at the U.S. parks.

A Building Barrier

One major barrier has been the lack of truly commercial vehicles available. As discussed in the Navigant Research report Hybrid and Electric Trucks, most of the traditional truck original equipment manufacturers (OEMs) are offering hybrid versions in the larger trucks classes that are not applicable to the park service. In the truck category, parks would primarily utilize utility trucks, pickup trucks, or vans and trucks outfitted to transport passengers.  These would be vehicles in the Class 2b light duty category or medium duty Classes 3-5, where, until recently, there was more attention focused on producing electrified vehicles for delivery service.

Even though pickup trucks are among the top-selling vehicle in the United States, U.S. OEMs have tailed off production of hybrid pickups and only ever offered demonstration models of plug-in trucks.  However, in the past 18 months, there has been an uptick in companies focused on these class levels and in applications with some applicability to national parks. In January, U.S. startup VIA Trucks announced a major commitment by Canadian company SunCountry to place VIA’s plug-in vans into passenger transport services at Best Western hotels. VIA also develops plug-in electric utility trucks, which will be used at several electric utilities in a pilot project funded in part by the U.S. Department of Energy (DOE). U.S. company Odyne Systems will be delivering 120 utility trucks through the same DOE funding; the plug-in system allows utility workers to avoid engine idling by running equipment off of the battery.

Looking at the larger class of passenger buses that are used in national parks, the biggest push is coming from China’s BYD, which has been targeting parks and transit agencies. While most of the company’s orders are outside of the United States, BYD is making a strong push for the U.S. market. After winning bids in Los Angeles and Long Beach, California, the company began to face major backlash from activists and its U.S. competitors. The Long Beach order was recently canceled, although, evidently, the reason was simply a paperwork glitch. In any case, this environment would make it difficult for the NPS to adopt these buses until BYD becomes more established in the United States through transit deployments like the one in Los Angeles.

While increased vehicle availability will help make electric and hybrid options more feasible for any park looking to convert, the issue of the price premium still looms large. With hybrids costing well over 25% more than conventional vehicles and electric buses often reaching a 100% price premium, cash-strapped public services like the NPS will likely find themselves unable to make the switch even if they want to. Lower-cost options, like propane, continue to see uptake in national parks for this reason. This also explains why the Clean Cities National Park Initiative is still necessary to move these vehicles into U.S. parks.

 

Flywheels Offer Hybrids a Mechanical Advantage

— April 4, 2014

It is often assumed that all hybrid vehicles must use a battery for energy storage.  But the essence of a hybrid powertrain is not necessarily engine-off operation, but to provide more efficient transportation over a stop/start journey drive cycle.  The key factor in this mode is to be able to recapture large amounts of energy very quickly and then reuse it, which requires high power density.  While batteries typically have a high energy density, they often do not respond well to high charge rates and may not be able to capture all the available energy from regenerative braking.  Larger vehicles, in particular, have a lot of kinetic energy to store when slowing down.

So the focus for hybrid vehicles is often high power density rather than high energy density.  It is this factor (as well as the lower cost) that has led some manufacturers, particularly Toyota, to continue installing nickel-metal hydride batteries when the rest of the industry has shifted to the higher energy density of the lithium ion battery.  But there are other options for higher power density, if total energy capacity is not an issue.  Ultracapacitors are one alternative and Navigant Research has produced a report on another option: Hydraulic Hybrid Vehicles.  However, a new alternative technology based on the flywheel is now in testing.

Powerful and Economical

Volvo Car Group has recently been conducting testing in the United Kingdom of a flywheel developed by Flybrid Automotive (now part of Torotrak) to determine the potential for fuel savings.  Initial results show a performance boost of 80 hp while improving fuel economy by up to 25%.  The testing uses real-world driving data from public roads and test tracks in both Sweden and the United Kingdom.  Volvo has installed the flywheel system on the rear axle of a front-wheel drive passenger car.  Under braking, the vehicle kinetic energy is used to spin a 6 kg carbon fiber flywheel at up to 60,000 rpm.  When the driver wants to accelerate again, the energy from the spinning flywheel drives the rear wheels directly via a specially designed transmission.

The benefits for the driver are that the engine can be switched off during some braking and accelerating maneuvers, plus there is extra power available when needed to supplement the internal combustion engine.  The Volvo test vehicle is about 1.5 seconds quicker than the standard vehicle going from 0 to 60 mph.

Mechanics of Storage

The Flybrid system uses the mechanical motion directly to power the transmission, so there are no energy losses transferring from one format to another.  Another type of flywheel system, developed for motor racing by Williams Hybrid Power (and since April 1, part of GKN), uses a flywheel driven by an electric motor.  Instead of storing energy chemically as in a battery, the energy is stored mechanically in the spinning flywheel and then converted back to electricity to be used by the electric drive motor.

Both systems use the same mechanical energy storage format and have to address the same issues.  Safety and reliability are important, as is longevity.  Cost is also important, and at present, the flywheel is a lot cheaper than a battery.  It’s good to see some alternative solutions being adopted by larger companies, and this topic will be covered in much more detail in our upcoming report on vehicle efficiency.

 

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