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Plug-In Community Needs to Respond to Outdated/Biased NAS Report

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  • Felix Kramer
    When the National Academy of Science s outgoing fuel cell analyst team produced a flawed study as its last act, the broad community promoting plug-in hybrids
    Message 1 of 1 , Dec 21, 2009
      When the National Academy of Science's outgoing fuel cell analyst
      team produced a flawed study as its last act, the broad community
      promoting plug-in hybrids and electric vehicles barely noticed. There
      were so many things wrong with the report that we thought it pass
      unnoticed. But because of its source and its message, it's been
      picked up broadly -- especially by media that often first build up
      and then undermine innovative, promising solutions. With the
      publication of a very critical editorial in the Washington Post aimed
      directly at Vice President Biden, it's clear this report could
      provide the rationale for a full-scale "rollback" effort by opponents
      of vehicle electrification. This is a threat to the still-growing
      commitment of the U.S. Department of Energy to that strategy.
      Unfortunately, the useful insights in the report are overshadowed by
      its poor analysis and shallow thinking. We're on vacation this week
      but are taking time off to post some quick comments and urge all the
      involved constituents to step up to the challenge of responding to
      this report. Below that you'll find sources and backup information
      that we hope will spark others to jump in with critiques, especially
      to media and to elected officials.

      (Shortly after it goes out on email, this posting will also be
      viewable at http://www.calcars.org/news-archive.html -- there you can
      add CalCars-News to your RSS feed.)

      THE SOURCE OF THE REPORT: It's by the "Committee on Assessment of
      Resource Needs for Fuel Cell and Hydrogen Technologies," which after
      completing its 2008 report, "Transitions to Alternative
      Transportation Technologies--A Focus on Hydrogen," was asked to stay
      on to extend its analysis to PHEVs. The chairman (a retired Exxon
      Mobil executive) acknowledges, "It is unusual for the NRC to
      reconvene a committee organized for one purpose to investigate
      another but this is an unusual committee in another way, too," citing
      the high caliber of the committee members. At the end of this posting
      we include a listing of the Committee members, so readers can see who's who.

      THE DOE FLARE-UP ON HYDROGEN: This report arrives a few months after
      an unusual series of developments, when governemnt funders for the
      first time in decades addressed the problem that fuel cells in cars
      were always "10-20" years away, and that the solution got a free ride
      on the engineering implications of hydrogen being only a carrier of
      energy, not an energy source. The Department of Energy, led by
      Secretary Steven Chu, essentially zeroed out support for hydrogen
      fuel cells in transportation, saying that plug-in vehicles and other
      solutions were far more feasible for the near- and mid-term. Down but
      not out, the fuel cell industry then successfully lobbied in Congress
      to reinstate the funding.

      WHAT NEEDS TO HAPPEN NOW: This report is an incendiary tool that
      others are using to undermine support for PHEVs and EVs. Its science
      and economics need to be refuted -- and its implications need to be
      responded to publicly and politically. We believe the Fuel Cell
      Committee was unqualified and insufficiently broad to conduct this
      study. It consulted minimally with automakers, battery manufacturers
      and utilities. Its conclusions overlook the current and future
      business modeling of those communities -- all of which are now
      proving that PHEVs' prospects are fare better than the simplified and
      beyond-worst-case scenarios painted by the Committee. Those whose
      views are inadequately reflected in the report are best equipped to
      rebut the study. Industries with a strong stake in vehicle
      electrification include automakers, battery and other component
      suppliers, and electric utilities. Equally important to step forward
      are Congressional supporters -- and the Department of Energy itself,
      with the department's views and documentation from its National Labs.
      We hope all these constituencies will release or develop their own
      analyses and responses -- including ones they may have submitted
      privately to the Fuel Cell Committee -- for public review.

      THE STUDY'S MAIN CONCLUSION is the beginning of the conversation, not
      a reason to abandon PHEVs: It will take decades for vehicles that use
      less fossil fuels than today's gas-guzzlers to have a significant
      impact on petroleum or greenhouse gas reduction. We've been saying
      that for the past year: market penetration isn't fast when you're
      gearing up to build first tens and hundreds of thousands, then
      millions and tens of millions of new vehicles to add to or replace
      the 250 million vehicles in the U.S. and the 900 million globally.
      That's why the study's suggestion that we take as many steps as
      possible to improve energy efficiency in conventional cards is a
      non-controversial given, as is reduction in miles travelled. And
      that's why we aim to persuade plug-in advocates to join a new effort
      to fix millions of the largest gas-guzzlers as soon as possible. Our
      "Big Fix" campaign http://www.calcars.org/ice-conversions.html is the
      equivalent in vehicles to weatherization ("cash for caulkers") and
      other steps to fix the vast number of buildings that will remain in
      use for decades.

      now 2. Move as quickly as possible 3. Explore every way of reaching
      our goals sooner. Let's translate each of those items into what the
      Fuel Cell Committee says and what we and others think should happen:

      1. START NOW: the Fuel Cell Committee concludes: "A portfolio
      approach to research, development, demonstration, and, perhaps,
      market transition support is essential. It is not clear what
      technology or combination of technologies -- batteries, hydrogen, or
      biofuels -- will be most effective in reducing the nation's oil
      dependency to levels that may be necessary in the long run."

      a chance to post a full analysis of the Electrification Coalition
      report from November: it's an essential document, and it presents a
      different approach. The top leaders of Fedex, Nissan, Johnson
      Controls, A123Systems, Cisco and others say it's time to pick a
      winner! (Get the report NOW at
      http://www.electrificationcoalition.org .) A few excerpts: "Instead
      of scattered, inconsistent federal support for a wide variety of
      alternatives, what is required is a coherent, focused strategy
      designed to radically drive down oil consumption in the light-duty
      fleet. Part of this strategy must be the acknowledgement that other
      alternatives, while having value, cannot ultimately revolutionize
      America's light-duty fleet and end oil dependence. (page 13) The
      transportation sector will most likely provide the greatest
      opportunities for early emissions abatement in the United States and
      elsewhere. (page 35) Electrification of transportation is the best
      solution for dramatically reducing oil dependence. The United States
      now has the capacity to permanently enhance its national security and
      safeguard the economy. To do so, however, the nation must choose to
      commit to a new path: a fundamental transformation of our
      transportation sector, moving from cars and trucks that depend on
      costly oil- based fuels to an integrated system that powers our
      mobility with domestically-generated electricity. (page 36)

      Committee effectively is calling for a scaling down of commitments to
      battery and PHEV commercialization, saying that it will lock us into
      decades of non-cost-effective choices and long-term subsidies in the
      hundreds of billions of dollars. Instead it favors more of the
      ecumenical "support all approaches" -- which of course, puts hydrogen
      back into the picture.

      said in calling some of the report's assumptions "off the mark:" "The
      NRC report reaches its conclusions by assuming battery costs that are
      far higher than current industry estimates. In addition, the report
      underestimates expected reductions in cost as battery technology
      continues to improve and economies of scale come into play. 'The
      battery cost assumptions going into this report not only run counter
      to our own exhaustive research, they run counter to the findings of
      most anyone who has looked at this issue or worked in this field,'
      PRTM, a global management consulting firm that has provided market
      analysis and technical input for the Electrification Coalition,
      said." http://www.electrificationcoalition.org/news-nrc.php

      PHEV-FOCUSED VIEW FROM CALCARS: Here's a re-run of our posting last
      week at CalCars-News, focusing on GM's Volt: GM BATTERY COSTS REBUT
      DOWNBEAT ASSUMPTIONS: The latest flawed study of PHEVs, this time
      from the U.S. National Research Council, projects a PHEV-40 battery
      pack costing $14,000, resulting in the vehicle costing $18,000 more
      than its equivalent non-hybrid. The report says if battery technology
      changes incrementally, this cost will decline only one-third by 2020;
      even if there are some "battery breakthroughs," they won't show up in
      vehicles until 2030. When asked about battery cost for its 40-mile
      pack, GM hasn't been specific but has said it's well below these
      estimates, and heading much lower in its second generation in a few
      years. And of course, GM and other carmakers are getting advanced
      battery designs that didn't exist a few years ago into production
      volumes for cars in years, not decades.

      vehicle battery prices are often quoted out of context. Even if
      accurate, such figures can be a factor of 2-3 off from actual battery
      pack costs to manufacturers, thereby mis-stating the economic
      viability of plug-in technology. It's most useful to focus cost of
      complete battery packs in high volumes, calculated per
      "useful-pack-kWh kilowatt-hour" (capacity actually used by the
      vehicle). For example, the cells in the Volt's pack have a nameplate
      total capacity of 16 kWh, but to ensure long battery life, the Volt
      actually uses only 8 kWh. Pack costs per nameplate capacity may run
      3-4x the cost of individual cells, though over time this should
      decline to as little as 1.5x. Retail costs for small quantities of
      cells developed specifically for cars can't be used for calculations
      -- they will cost far more than the wholesale rates to carmakers. The
      NRC report's figure of $14,000 for a Volt-like 8 useful-kWh pack
      yields $1,750 per useful-pack-kWh. GM's costs are closer to
      $1,000/useful-kWh for the first-generation Volt, and we've seen
      industry figures closer to $600/useful-pack-kWh for production packs
      for delivery in the next few years. The NRC report also says we can
      expect minimal cost declines from technology improvements and
      economies of scale because Li-ion batteries are already produced in
      great quantities for consumer products. But these are very different
      cells and packs. Those required for plug-in vehicles are just
      beginning production, with significant efficiency improvements
      already appearing, along with better-than-expected battery life.
      Consumer cells are currently selling in quantity for $150-250/kWh.
      Calculations with best assumptions1.5x $150 or conservative 4x $250
      translate into $225-$1,000/useful-pack-kWh -- a far cry from the
      paper's $1,750/useful-pack-kWh estimates!

      3 HOW FAST CAN WE GET THERE? The Fuel Cell Committee says the most
      possible PHEVs and EVs by 2030 is 40 million -- but 13 million is a
      more realistic target. The Electrification Coalition thinks with a
      massive (and essential) effort, we can get 123 million by then. Is
      there some disconnect? Is there some of the same "business as usual"
      mentality that was the problem in the Boston Consulting Group's
      report on plug-in vehicles commissioned by the Presidenty's
      Automotive Task Force last spring?
      http://www.calcars.org/calcars-news/1055.html . This needs to be a
      national topic of discussion and debate.

      THE WASHINGTON POST'S EDITORIAL BOARD has inspired much controversy
      in recent months, especially in its much-criticized (and ridiculed)
      decisions to feature multiple columns on climate change by George
      Will without minimal fact-checking (documented by the ClimateProgress
      blog and others), culminating in its decision to feature Sarah
      Palin's views on that subject. Now shifting its attention, its
      December 17 editorial titled "Plug-in hybrid subsidies are a bad deal
      for taxpayers" starts with a frontal attack on Vice President Biden's
      push to increase tax credits for plug-in vehicle technologies, It
      stirs the pot with a provocative comment that this is all an effort
      to benefit upper-income people, buttressed with imprecise comments
      about the price of impending PHEVs: The Volt will cost "as much as a
      BMW" (rather than saying it's expected to cost $30-35,000). No
      mention of Toyota's plans to bring in a PHEV much cheaper than that.
      It adds an eye-catching $303 billion as the price tag for subsidies
      to make them competitive by 2047! It concludes by suggesting as the
      alternative REDUCING fossil fuel use by improving conventional
      vehicle efficiency. (Of course most people support this, but it's
      very different than DISPLACING fossil fuels with electricity.)

      FOR THE FULL FUEL CELL COMMITTEE REPORT: It's "sort of" available at
      http://www.nap.edu/catalog.php?record_id=12826. It's a
      pre-publication review document (i.e. in theory it could be revised
      before final publication): you can download the PDF for $30, get the
      Executive Summary in PDF For free, or view the entire document for
      free online, chapter by chapter.

      QUICK SUMMARY OF REPORT: Here's the first half of the news release
      "Plug-In Hybrid Vehicle Costs Likely to Remain High, Benefits Modest
      for Decades"
      http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12826 :

      Costs of plug-in hybrid electric cars are high -- largely due to
      their lithium-ion batteries -- and unlikely to drastically decrease
      in the near future, says a new report from the National Research
      Council. Costs to manufacture plug-in hybrid electric vehicles in
      2010 are estimated to be as much as $18,000 more than for an
      equivalent conventional vehicle. Although a mile driven on
      electricity is cheaper than one driven on gasoline, it will likely
      take several decades before the upfront costs decline enough to be
      offset by lifetime fuel savings. Subsidies in the tens to hundreds
      of billions of dollars over that period will be needed if plug-ins
      are to achieve rapid penetration of the U.S. automotive market. Even
      with these efforts, plug-in hybrid electric vehicles are not expected
      to significantly impact oil consumption or carbon emissions before 2030.

      Battery technology has been developing rapidly, but steep declines in
      cost do not appear likely over the next couple of decades because
      lithium-ion batteries are already produced in large quantities for
      cell phones and laptop computers. In the first generation of
      production, the PHEV-10 battery pack is estimated to cost about
      $3,300, and the PHEV-40 battery pack about $14,000. While these
      costs will come down, a fundamental breakthrough in battery
      technology, unforeseen at present, would be needed to make plug-ins
      widely affordable in the near future.

      According to the committee that wrote the report, the maximum number
      of plug-in electric vehicles that could be on the road by 2030 is 40
      million, assuming rapid technological progress in the field,
      increased government support, and consumer acceptance of these
      vehicles. However, factors such as high cost, limited availability
      of places to plug in, and market competition suggest that 13 million
      is a more realistic number, the report says. Even this more modest
      estimate assumes that current levels of government support will
      continue for several decades. [Followed by warnings of what happens
      if drivers charge at times of high demand, and comparisons of the
      relative fuel economy and CO2 emissions, with comparisons to hybrids
      rather than to internal combusion engine vehicles.]

      Research and Engineering Company (retired), Moorestown, New Jersey
      RAKESH AGRAWAL, NAE, Purdue University, West Lafayette, Indiana *
      DAVID L. BODDE, Clemson University, Clemson, South Carolina * DAVID
      FRIEDMAN, Union of Concerned Scientists, Washington, D.C. * SUSAN
      FUHS, Conundrum Consulting, Hermosa Beach, California * JUDI
      GREENWALD, Pew Center on Global Climate Change, Washington, D.C. *
      ROBERT L. HIRSCH, Management Information Services, Inc., Alexandria,
      Virginia * JAMES R. KATZER, NAE, Massachusetts Institute of
      Technology, Washington, D.C. * GENE NEMANICH, ChevronTexaco
      Technology Ventures (retired), Scottsdale, Arizona * JOAN OGDEN,
      University of California, Davis, Davis, California * LAWRENCE T.
      PAPAY, NAE, Science Applications International Corporation (retired),
      La Jolla, California * IAN W.H. PARRY, Resources for the Future,
      Washington, D.C. WILLIAM F. POWERS, NAE, Ford Motor Company
      (retired), Boca Raton, Florida * EDWARD S. RUBIN, Carnegie Mellon
      University, Pittsburgh, Pennsylvania * ROBERT W. SHAW, JR. Arete
      Corporation, Center Harbor, New Hampshire * ARNOLD F. STANCELL,2 NAE,
      Georgia Institute of Technology, Greenwich, Connecticut * TONY WU,
      Southern Company, Wilsonville, Alabama * CONSULTANT: JAMES CANADA;
      PROJECT STAFF: Board on Energy and Environmental Systems * ALAN
      CRANE, Study Director * JAMES ZUCCHETTO, Director, * BEES JONATHAN
      YANGER, Senior Project Assistant; NAE PROGRAM OFFICE: PENELOPE
      GIBBS, Senior Program Associate

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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