Navigant Research Blog

EV Maker Coda Moves Into Chaotic Grid Battery Market

— January 30, 2012

Even before selling its first all-electric sedan, Coda Automotive has spun out a subsidiary looking to take its battery technology in a new direction. 

The newly created Coda Energy will leverage the company’s expertise in designing automotive battery systems and apply it to the grid energy storage market.  Coda Energy  hopes to carve out a niche in the burgeoning market for lithium batteries that will be used to support utilities, renewable power, and microgrids. 

Coda is hardly alone in this move.  Many battery companies that originally targeted the automotive market (e.g., A123 Systems and Ener1) have widened their focus to include the grid storage market. 

With its origin as an automaker Coda is unique, but the company has built up several battery assets that it will use to pursue grid opportunities.  The company’s batteries are produced in China through a joint venture with China’s Lishen Power Battery, and Coda acquired battery management systems company Energy CS in September of 2011.  This expertise in building complete battery systems can be applied to either market, although there are important distinctions (customers, regulatory requirements, etc.) that Pike Research will be exploring in an upcoming webinar

Though sales from lithium ion battery makers to the transportation industry are expected to be more than four times greater than to the grid services market ($14.6 billion and $3.5 billion, respectively, in 2017), having a secondary battery market is essential to producing batteries in volume and for competing with other similarly diversified companies. 


Diversifying the battery customer base is a credible strategy for a young company, but dividing the company’s attention even before the first sedans are sold (cars are due to ship in February) could give the impression that the Coda is hedging its bets on becoming a serious contender in the EV world. 

Coda is also hoping to build batteries packs in Ohio, but it has been waiting for a loan from the Department of Energy.  Approval for that loan would face intense political scrutiny as many of the clean tech companies that have received loans have been in Republican crosshairs since the Solyndra debacle.   

Most recently, on January 26, 2012 DOE loan recipient and lithium ion battery maker Ener1 filed Chapter 11 bankruptcy, and the political blowback occurred almost immediately.  However, as PluginCars.com pointed out, state and Federal and state financial support started during the Bush Administration, and was championed by Indiana’s Republican governor Mitch Daniels, who is featured in an Ener1 promotional video. 

 

EV Industry Makes Room for the Big Guys

— January 27, 2012

Electric and hybrid vehicles are often derided for their petite size, hefty purchase prices, and lack of range.  Recent improvements have made these cars more appealing to individual consumers, but like their size, their deployment globally has so far been relatively small.  Recent reports show that more than 17,000 plug-in vehicles were sold in the United States in 2011, mostly first year models of the Nissan Leaf and the GM Volt ().

Though lower than the ambitious targets set by Nissan and GM, sales of both the Leaf and Volt outpaced the first year sales of the popular hybrid vehicles Toyota Prius and Honda Insight when they were launched more than a decade ago.  Furthermore, nearly every major auto-manufacturer in the world has declared it has some type of plug-in model in the works.  Despite these indicators though, Pike Research estimates that the U.S. market share for plug-in vehicles will not breach the 1% mark before 2017.

Countering the subcompact image of EVs, though, is a growing number of medium to heavy duty electric and hybrid vehicles that stand to make a significant impact in electrified transportation.  While these vehicles also tend to carry high initial purchase prices, models are being developed and deployed for almost every transportation related purpose, from garbage trucks to school buses.  The cost reductions are greater, and range concerns fewer, for fleet managers deploying these vehicles than for individuals buying new passenger plug in models.

Plug-in vehicles can significantly reduce costs tied to vehicle maintenance and transportation fuel, an appealing element for fleet managers who have few conventional alternatives for cutting operating costs.  Fleet vehicles often run predictable routes and distances, so that the limited ranges of electric vehicles do not pose the same concerns for fleet managers as they do for individual consumers.

The Electric Drive Transportation Association (EDTA) reports fleet managers are willing to pay 10-14% more for electric vehicles based on operating costs reductions, and 73% of government fleet managers are willing to consider deployment of these vehicles in their own fleets.  In accordance with these findings, Pike Research estimates that by 2017 sales of plug in and hybrid medium/heavy duty vehicles will gain increasing market shares in major world markets, from 6% in the United States to 22% in the United Kingdom.  All which indicates that while sleek sports cars and subcompacts may get most of the publicity, the transition to electrified transportation will likely be exemplified by boxy delivery trucks as well.

 

Texas a Lone Star in EV Charging Infrastructure

— January 25, 2012

In the 19th century, Texas became well known for its longhorns and the Alamo. The 20th century saw the oil boom, the Cowboys, and an infamous Dallas afternoon in November, 1963. In the 21st century, the state is becoming defined by its surprisingly progressive stand on energy through its wind farms and embracing of electric vehicles.

NRG Energy and its EV Services division have been leading the drive to bring clean power and transportation to Texas. The company now controls 450 megawatts of wind power in the state, and has executed the most aggressive rollout of EV infrastructure in the country.

These two developments are closely linked, according to Arun Banskota, the president of NRG EV Services, with whom I spoke at the recent Consumer Electronics Show in Las Vegas. NRG is investing $25 million in public EV charging equipment in Houston and the Dallas-Fort Worth area, Banskota said. That’s a hefty investment in a speculative market, especially for a publicly-traded company. Despite the area’s reputation as an oil town rich in land yachts, NRG is installing 50 “Freedom Stations” in Houston and 75 in DFW. Each of the charging stations has at least one DC fast charger and one Level 2 charging station, and they cost more than $100,000 per location.

The strategy appears to be working. According to Banskota, 80 percent of Nissan Leaf owners in the two regions have signed up for the EVGO program, a subscription service that enables charging at home or around town. NRG customers can specify only clean energy when they sign up.

Banskota said the company’s wind farms produce an abundance of power at night, when demand is low, which can result in spilling the excess power or negative pricing. Enter the EVs, which can charge at night and enable NRG to generate more revenue from its wind farms. Tying wind to EV charging in Texas mirrors similar endeavors in The Netherlands and Denmark, but is unique in the United States.

Texas is one of four states (along with Hawaii, California and Virginia) that currently do not regulate EV charging services, and NRG is likely to offer a similar service in one of the other states during 2012. NRG is looking to integrate EV charging into home energy management applications so that all of a home’s energy can be managed through a single application. The company also plans to introduce vehicle to grid (V2G) technology in several states. The company acquired V2G technology from the University of Delaware, but does not expect there to be much demand for using vehicles to provide power to the grid for three to five years.

 

A Fuel Cell By Any Other Name

— January 23, 2012

To my chagrin, both flow batteries and fuel cells are often referred to as “fuel cells.”  Neither term is incorrect, strictly speaking, but this usage causes confusion about what each technology can do.

The misunderstanding has been compounded since the fuel cell industry began rigorously promoting hydrogen and fuel cell technology for energy storage.  There have always been discussions of energy storage and fuel cells, especially for island systems and large-scale renewables integration.  However, there has been more market activity in this sector recently, on the fuel cell side.

For the sake of clarity, what exactly is a fuel cell? And what’s the difference between a fuel cell and a flow battery?

A fuel cell – such as the ones that helped power the space shuttle – generates electrical and thermal energy much like the engine in a car does (point of clarification: a fuel cell is a more efficient generator than a car engine but the basic function is the same).  For example, the Honda Clarity is a car with a fuel cell instead of an engine.

The other type of “fuel cell” is actually a flow battery.

In the case of a flow battery, the “fuel” is in fact an electrolyte mixture that passes through a cell, or many cells, as the case may be.  The battery is rechargeable, meaning it can charge and discharge energy over and over again.  Conceivably, with an additional supply of the electrolyte mixture, you could keep “fueling” the battery.  On its own, a flow battery does not generate any energy; it stores and releases energy from another source.

In the case of a fuel cell, the “fuel” is hydrogen, natural gas, methane, or any number of hydrocarbon fuels that undergo an electrochemical reaction.  A fuel cell also has an electrolyte, in the membranes that the fuel passes through.  This is where the electrochemical reaction occurs that generates heat, electricity, and water (along with other emissions, depending on the fuel).  Without fuel, a fuel cell will not run.

Both are exciting technologies with profound implications for the grid, renewables, air quality, and energy security.  For the sake of clarity, I promise to refer to fuel cells only as fuel cells, and flow batteries as flow batteries.

 

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