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Wall St. Journal: Validation of Plug-in Cars Despite Negative Headline

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  • Felix Kramer
    As enthusiasm and support builds for plug-in cars, we re having a hard time keeping up with and refuting distracting articles sounding alarms about raw
    Message 1 of 1 , May 2, 2008
      As enthusiasm and support builds for plug-in cars, we're having a
      hard time keeping up with and refuting distracting articles sounding
      alarms about raw materials for batteries, EMF emissions, water used
      for power plants -- whatever might slow the momentum. In some cases,
      we're relieved when grim headlines (which often, alas, are all most
      people see) turn out to be followed by favorable articles. Case in
      point: Today's Wall Street Journal story forecasts a "Grim Collision"
      and "Raising" electric costs.

      Read the whole story below and pass it along. The article in fact
      delivers some of the best answers we've seen to every major objection
      about the implications of plugging in cars (besides battery issues),
      and descriptions of many of the benefits of the "electrification of

      * Smart meters and price signals via time-of-use rates will
      discourage peak charging
      * We have more than enough off-peak power to power the entire vehicle fleet
      * PHEVs could help utilities convert efficiency savings to lower
      electric costs for all customers
      * California's leadership now has Michigan state and utility
      officials joining in
      * Plug-ins deliver significant CO2 savings and could reduce imported oil by 50%
      * Carmakers/utility spokespeople/regulators join a vision of a
      cleaner/cheaper plug-in future

      It's on the much-read first page of the Marketplace B section of the
      Wall Street Journal; it includes photos of the GM Saturn Vue PHEV,
      the Volt and a smart meter, and under the continuation on page 2,
      it's followed by a story, "Electric Nissans Planned in US by 2010,"
      http://online.wsj.com/article/SB120966606763059713.html quoting CEO
      Carlos Gohn saying "The electric car is not a niche product for us,"
      and predicting new business models, including that of Project Better
      Place (described but not named in the story), and possible EV
      alliances with other carmakers.

      Utilities, Plug-In Cars: Near Collision?
      Electric Firms Say Daytime Charges May Raise Costs
      By REBECCA SMITH rebecca.smith@...1
      May 2, 2008; Page B1

      Car makers are preparing to introduce plug-in electric cars in 2010,
      but their success will depend on players beyond their control: the
      electric utilities.

      The plug-ins are a new generation of hybrid cars that can run 10 to
      40 miles on electric batteries before they have to tap their gasoline
      engines. This gives them, on a tank of gas, a driving range of as
      much as 600 miles without recharges to potentially thousands of miles
      with recharges.

      CAPTION: The Edison SmartConnect meter, above, knows when an electric
      car's battery is charged. Utilities would prefer charging at night.

      To recharge the battery, drivers will plug it into a standard
      electric wall outlet at a cost of a dollar or two. As a result, the
      car companies are betting that the plug-ins will succeed where
      previous electric cars have failed, lifting their industry from the
      doldrums and slashing oil consumption.

      But the cars will need ready access to inexpensive, plentiful
      electricity. That means the new vehicles "will make utilities more
      important than the oil companies" to many drivers, says General
      Motors Corp. spokesman Robert Peterson. If utilities discourage the
      cars' proliferation by charging more for their electricity, the push
      toward plug-in cars could falter.

      So far, most utilities view the cars with a mixture of excitement and
      trepidation. If drivers charge their batteries at night, when demand
      is low and the utilities have generating capacity to spare, utilities
      will increase their electricity sales and make more efficient use of
      their existing power plants. But if most drivers recharge their cars
      during the day, when demand is twice as high, utilities could have to
      make or buy extra electricity when it is most costly. They could even
      be forced to build new power plants.

      A study by the Oak Ridge National Laboratory agreed that the number
      of plug-in vehicles in use and when they recharge could profoundly
      influence power-generating costs. Under some scenarios, electricity
      costs would drop, but under others, they could more than double.

      Worries about capacity aren't the only source of anxiety and
      friction. Congress is considering greenhouse-gas legislation that
      would effectively tax carbon-dioxide emissions. Utilities worry that
      their power-plant emissions could rise if they have to produce a lot
      more electricity to power plug-in cars. They argue that if they help
      cut oil use by furnishing electricity to cars, they should get credit
      for it. Currently, though, there is no mechanism in the major bills
      to reward the utilities.

      Nonetheless, in some states, utilities have already begun investing
      in technology that will leverage the benefits of plug-in vehicles:
      "smart" utility meters that will allow both utilities and customers
      to track power use by purpose and time of day. The meters will permit
      utilities to move toward variable rates for electricity, charging
      more during peak demand in the daytime, and less at night. The plan
      is to steer plug-in owners toward charging their cars at night. Done
      right, the meters could be important enabling technology, as
      important to the plug-in vehicle as the elevator was to the
      skyscraper or the shopping cart to the supermarket.

      "The plug-in hybrid has a tremendous future," says Michael Peevey,
      president of the California Public Utilities Commission. "Off-peak
      rates are a key component."

      Hoping to influence consumer behavior, some utilities are already
      creating special rates for plug-in cars. Sempra Energy's San Diego
      Gas & Electric Co., for example, has created a nighttime rate for
      plug-in cars that is half that of its daytime rate.

      Edison International, the parent of Southern California Edison,
      believes the next couple of years will be pivotal. "We're on the cusp
      of a commercial breakthrough that could reshape both industries,"
      says Chairman John Bryson. "But it has to be done right."

      So far, California is shaping up as the market that is best prepared
      for plug-in vehicles. With 17 million light vehicles in use today, it
      is both the biggest U.S. auto market and the biggest gasoline market.
      It has also adopted aggressive targets for carbon-dioxide reduction,
      and it is spending more money than any other state on advanced utility meters.

      The state's three big investor-owned utilities -- PG&E Corp's Pacific
      Gas & Electric Co., San Diego G&E and Southern California Edison --
      are installing $5 billion worth of advanced utility meters, and they
      expect to have blanketed the state by 2012. One meter vendor, Cellnet
      + Hunt, estimates 30 million smart meters will be installed in U.S.
      homes in the next three or four years, about one-quarter of the
      potential market.

      In Michigan, state officials are encouraging utilities and car makers
      to coordinate their efforts as they roll out new technologies.
      Detroit's utility, a unit of DTE Energy Co., plans to start testing
      smart meters soon, and it is considering equipping all customers with
      the meters by 2013.

      CAPTION: Views of the Chevrolet Volt plug-in concept car from General Motors.

      Later this year, Southern California Edison will see how smart meters
      work in conjunction with actual plug-in cars. The utility is
      partnering with Ford Motor Co. to get prototypes of the Ford Escape
      plug-in in field tests in Southern California. The cars will be
      paired with drivers who have access to smart utility meters.

      "We want to know how the whole story works, how things fit together,"
      says Mike Tamor, executive technical leader for Ford's plug-in
      vehicle team in Detroit. "We want to know how much fuel is saved and
      how people feel about plugging into the grid."

      The plug-in car's potential to slash fuel use is dramatic. The
      Pacific Northwest National Laboratory found that existing U.S. power
      plants could meet the electricity needs of 73% of the nation's light
      vehicles if the vehicles were replaced by plug-ins that recharged at
      night. Such a huge shift could cut oil consumption by 6.2 million
      barrels a day, eliminating 52% of current imports.

      Another study, by the Electric Power Research Institute and the
      Natural Resources Defense Council, concluded that electricity
      consumption would rise only about 8% if 60% of light vehicles in the
      U.S. were replaced by plug-in vehicles by 2050. That would also cut
      U.S. carbon-dioxide emissions by 450 million metric tons annually,
      equivalent to scrapping 82 million cars.

      Carbon-dioxide emissions would probably fall even if coal-fired
      plants made the electricity, some studies have found, because they
      burn coal more efficiently than automobiles burn gasoline. What we're
      learning, says Ed Kjaer, director of electric transportation at
      Southern California Edison, is that "the grid is a mighty powerful tool."

      Tony Posawatz, vehicle line director for the Chevy Volt, the plug-in
      car that General Motors Corp. is developing, says great changes are
      needed. Globally, there are 800 million vehicles in use today and the
      number is expected to grow by 300 million vehicles to 1.1 billion by
      2020. "They can't all be petroleum-based," he says. "We believe in
      electricity. It's everywhere, and you can make it from a variety of fuels."

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