Navigant Research Blog

On Energy Efficiency, Congress Dithers

— February 17, 2014

The current congress’s first session was the least productive in recent history, and after the recent Politico Event, Energy and the 113th Congress, I’m not holding out much hope for the next one. During the event, Rep. Joe Barton (R-Texas), senior Republican on the House Energy and Commerce Committee, remarked, “This is not going to be an active legislative congress,” as he dismissed the Energy Savings and Industrial Competitiveness Act (which has been bogged down in the Senate).  Rep. John Shimkus (R-Ill.) agreed, claiming that efficiency would account for only a small percentage of energy use.

Nothing could be further from the truth. As pointed out in Navigant Research’s report, Energy Efficient Buildings: Global Outlook, commercial buildings accounted for 22% of total national energy consumption in 2012.  Currently, the efficiency standards of these buildings are set locally by state and municipal government.  ASHRAE 90.1 – a standard developed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers that sets minimum requirements for building envelops, heating, ventilation, air conditioning (HVAC) and lighting efficiency, and controls – has been adopted by many states in some form. But not every state has adopted the 2010 version, and some states that have adopted it are trying to revert to an older, less-strict version.

Cutting Demand

Provisions of the current version, ASHRAE 90.1-2010, translate to energy savings of about 18% from the 2007 version, according to the Pacific Northwest National Laboratory.  The Energy Savings and Industrial Competitiveness Act establishes ASHRAE 90.1-2010 as the national baseline for energy codes, and requires incremental energy efficiency increases on top of that.  This would have a profound impact on the country’s energy demand.  To put an 18% reduction in commercial building energy use in perspective, an energy use reduction of just 1.3% for the existing commercial building stock translates to a savings equivalent to the output of a typical nuclear power plant.  In other words, energy efficiency is a big deal. Similarly, The National Academies explains how 98% of the chemical energy stored in coal is wasted between generation and a typical incandescent light bulb.

Thankfully, Rep. Diana DeGette (R-Colo.) offered a reasonable perspective, calling energy efficiency “the low-hanging fruit,” insisting that Congress must come to a bipartisan agreement on the subject.  Indeed, the Energy Savings and Industrial Competitiveness Act has gained support from industry (the American Chemical Society, the National Small Business Association, the U.S. Chamber of Commerce, and the National Association of Manufacturers), environmental groups (the Sierra Club, the Natural Resources Defense Council, and the Environmental Defense Fund), not to mention the Christian Coalition of America.  Despite legislative gridlock on this bill, a more stringent regulatory environment is likely to take hold in the United States over the next several years.

 

Demand Response Will Improve EV Economics

— February 17, 2014

With EVs selling in the U.S. by the thousands each month, their collective impact on the grid is getting increasing attention from utilities that are looking to reward EV owners for helping to balance power supply and demand.  EVs give power providers a new resource for smoothing peak loads and contending with the rising amount of variable power produced by renewable solar and wind assets.

For several years organizations such as the SAE, IEEE, and SGIP have been creating standards to enable smart grid equipment to communicate with EVs and their charging stations. This “smart charging” technology will delay or ramp up vehicle charging in response to changing grid conditions, including through demand response (DR) programs.  According to Navigant Research’s Vehicle to Grid Technologies report, by 2020 EVs enrolled in commercial DR programs will be able to curtail up to 272 MW of peak load in North America, which will come in handy on those hot afternoons when power demand outpaces supply.

Utilities are slowly removing humans from the DR equation through automated demand response systems.  According to Navigant Research’s recently published report, Automated Demand Response , roughly $13 million is expected to be spent on ADR globally in 2014, with investment rising to $185 million in 2023.

ADR Spending by Region, World Markets: 2014-2023

 

(Source: Navigant Research)

EVs connected to charging equipment using service provider Greenlots’ software platform will be able to participate in demand response thanks to a software upgrade.  Greenlots announced last week that the OpenADR Alliance has certified its SKY EV charging platform as compliant with OpenADR 2.0b, a standard that utilities are rallying around to send pricing information and demand response signals.

Utilities compensate demand response participants when they voluntarily reduce their consumption, which in the case of EVs could include payments to “site owners” where the vehicles charge, automotive companies (which can aggregate the power consumed by EV drivers) and the vehicle owners themselves. While slicing the revenue this way reduces the money available to EV owners, the payments could reduce the cost of vehicle charging and make EVs a more attractive purchase.

For example, employers could offer free or heavily discounted EV charging to workers who agree to participate in the company’s DR program.  Electricity vehicle charging amounts to only 25-30% of the cost of gasoline to power a vehicle, and dropping the “refueling” cost to close to zero would shorten the payback of switching to electric drive.

In the future, utilities could take advantage of this new grid-to-vehicle communications platform to prevent transformer overheating, which is expected to be the most common problem for the grid caused by the proliferation of EV charging.  However, because of the cost of adding sensors to transformers that would detect stress, utilities are likely to wait until the current installed equipment fails before replacing it with EV-friendly technology.

 

Audi’s Strategy to Enable Carbon-Neutral Driving

— February 16, 2014

Audi recently announced that results from testing of the company’s synthetic liquid fuels, or e-fuels, indicate that e-fuels perform significantly better than conventional fuel counterparts in conventional vehicle internal combustion engines.  The company subsequently announced that it will broaden its e-fuels initiative through its partnership with French biofuels company Global Bioenergies.  Audi’s e-fuels initiative is unique, as no other major automaker has pursued the development or distribution of gaseous or liquid fuels – carbon-neutral or not – for the transportation market.

Audi plans to produce e-gas and, through a partnership with Joule, e-diesel and e-ethanol.  The company also intends to produce e-gasoline through a partnership with Global Bioenergies.  The purpose of this initiative is to provide drivers of Audi vehicles with carbon-neutral driving options as a selling point for its gasoline, diesel, and/or compressed natural gas (CNG)-powered vehicles.  However, Audi drivers worldwide may be physically unable to fill up with the carbon-neutral synthetic fuels developed by Audi due to a lack of refueling stations.  The automaker will enable Audi drivers to indirectly contribute to increased amounts of carbon-neutral synthetic fuels into the overall fuel pool through what amounts to offsets.

Powered by E-Gas

An example of how Audi’s strategy works is its production of e-gas, the e-fuel closest to market.  E-gas is produced from the electrolysis of water, which produces hydrogen, which is then combined with waste CO2, producing methane as a synthetic natural gas substitute.  The e-gas production facility is powered by wind turbines and uses concentrated waste CO2 from a nearby biogas plant.  The production and consumption of e-gas using this system generates no new carbon emissions.  The e-gas is then piped into the greater natural gas network at the e-gas production facility in Werlte, Germany.

Early adopters of Audi’s forthcoming CNG- and gasoline-powered vehicle, the A3 G-Tron, will be able to buy quotas of e-gas upon purchasing the car.  This allows them, through an accounting process, to say their Audi is powered by the carbon-neutral e-gas produced at the plant.  This offset option will only be available to European customers though, as light duty CNG vehicles have failed to catch on outside of Europe primarily due to a scarcity of CNG refueling stations.

Outside of Europe, similar programs are expected to emerge alongside Audi’s development of liquid e-fuels.  The end markets for these fuels are significantly greater than those for e-gas, since the vast majority of vehicles worldwide are powered by liquid fuels.  However, these e-fuels are still far from reaching the market.  Actual implementation of Audi’s carbon-neutral strategy outside of Europe is therefore limited in the near term, barring a significant increase in CNG infrastructure options.   But the promise of Audi’s and its partners’ work on liquid e-fuels may significantly speed development and adoption of carbon-neutral fueling options, holding  significant implications for the vast majority of vehicles in use powered by conventional petroleum-based liquid fuels.

 

Self-Driving Cars and Real-World Roadways

— February 16, 2014

On a recent weekend road trip, I took the opportunity to consider the practicality of an autonomous vehicle doing the driving. The 300-mile journey involved single-lane twisty country roads, dual carriageways (in U.S. terms, a four-lane divided highway), and motorways (freeways). The first part of my journey took place on a narrow country road with speed limits that ranged from 30 mph through small villages to 60 mph on the open stretches. On this route, there were very few opportunities for passing, so the driving process was relatively straightforward. A combination of the latest advanced driver assistance systems (ADAS) should be able to cope with such a drive with minimal driver input.

The next part of the journey took place on a dual carriageway, and again the driving process was quite simple, requiring that my vehicle stayed within well-marked lanes, kept to the speed limits, and avoided running into the back of slower vehicles.  All these functions could be handled by adaptive cruise control, lane keeping, and traffic sign recognition.  The one activity that would need a new system is lane changing to move to the inside lane when not overtaking. Blind spot detection would be a partial solution to this, but it would also need some highly sophisticated decision-making software.

Smoothing the Flow

The bulk of the driving took place on the U.K. motorway system, and the satnav in my car proved that it could handle giving directions to navigate the quickest route. Driving on motorways is where the benefits of autonomous vehicles would be more widespread. For some of the journey, traffic moved along briskly at the speed limit, but as vehicle volumes increased, there were periods where all lanes of traffic slowed down. If all the vehicles in the outside lane used adaptive cruise control, the traffic flow would be much smoother, and some traffic jams would be eliminated.

So the three main parts of my journey could have been handled effectively by technology that is available today. Intersections, however, represent more of a challenge. Simple traffic lights at a crossroads are not too difficult, but some roundabouts are a different matter, and will require considerable development of decision-making software. While the mechanics of driving can be replicated today, the role of the driver cannot. There are many considerations involved in driving, such as estimating closing speeds of vehicles in front and behind to decide whether it is appropriate and safe to change lanes. Anticipating what other drivers will do is another useful driving skill. It may be that an artificial intelligence system that can learn from experience will be a key component of the self-driving vehicle of the future.

10 Years Out

Some of the more advanced autonomous driving features that I outlined above will be coming to market in the next few years. As long as they are treated as driver assistance features, I believe they will be very attractive to customers and will contribute to safer and more efficient road travel. Full details about all the systems are described in Navigant Research’s recent report, Autonomous Vehicles. However, the jump to fully autonomous driving that can handle any situation remains at least a decade away. We can forget about catching up with emails or sleep while the car does the driving for many years, but the number of crashes due to driver error will surely be reduced, and soon.

One consideration for governments at present is how to encourage the development and implementation of this advanced driving technology. On one section of the trip, there was an alternative toll road to the standard highway. It appears that the majority of drivers prefer to travel on the free roads even when road work causes lane narrowing and speed limit reductions. It would improve revenue if more people used the toll road, so perhaps an incentive for drivers who use ADAS would make sense. A toll road that offered higher speed limits for vehicles with self-driving capability would both generate demand for the technology and increase road revenue.

I am looking forward to discussing these and other autonomous vehicle issues with industry colleagues at the upcoming Autonomous Driving 2014 conference in Berlin, Germany, February 27-28, 2014. I hope to share Navigant Research’s perspectives on the topic and learn more about other aspects of this rapidly evolving technology. Let me know if you will be there.

 

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