Ford Electric Car for 2011

By John Addison (originally published in Clean Fleet Report 10/26/09).

My test drive of the new Ford electric car for 2011 demonstrated that Ford (NYSE:F) is building an electric car that millions will want. The Ford Focus EV prototype provided a quiet and smooth drive for a prototype. One Ford engineer indicated that he was going beyond a 60-mile daily range in Michigan without nearing battery depletion.

The Focus EV looks and drives like the popular gasoline powered Ford Focus four-door sedan. It comfortably seated four adults, but good luck if you want three people in the back – it will help if the one in the middle is a child. This BEV will appeal to mainstream drivers that want a sedan that looks and drives like a regular car. Instead of ever visiting a gas station, they will charge in their home garage and/or at work.

This prototype was a converted Focus. It did not include the SmartGauge™ with EcoGuide display available in Ford Fusion and Mercury Milan Hybrids, nor did it include a navigation system with smart charge display user interface expected in the 2011 BEV. The final version is expected to have friendly yet sophisticated display options and some of Ford’s newly introduced telematics.

It drives with quicker acceleration than its gasoline cousin. The prototype, like the final version, had a Magna (MGA) electric drive system. Unlike the final version of the Focus EV, the prototype had a Magna Steyr battery pack taking part of the trunk space. One Ford rep believed that the battery cells were EnerDel (HEV) lithium titanate. Ford will make its own packs for the 2011 commercial version and would not state who will make the cells. Volvo is part of Ford Motor Company. The concept Volvo C30 Battery Electric Vehicle will use EnerDel batteries. Volvo will use A123 (AONE) cells in heavy vehicles integrating a Magna Steyr battery system. Ford has expressed a past preference for the cells to be made in the United States, which would include a number of candidates such as EnerDel and A123.

During my recent tour of a Johnson-Controls (JCI) Saft (SGPEF) joint venture design and manufacturing plant, I was shown a lithium-ion 13 kWh battery with cylindrical cells for the 2012 Ford PHEV. Johnson-Controls gave no indication that it was in the running for the 2011 Ford Focus EV.

No pricing has been announced for the Ford Focus EV. If it comes in at under $40,000 with a $7,500 tax credit, I would be interested in buying one. However, if Nissan or BYD beats Ford to the U.S. BEV market with better delivery and better price or lease rates, then they are likely to get my business over Ford.

In its drive for market share, volume, and improved profit margins, 2012 will be a big year for Ford when the company will have a common C-segment platform for a number of vehicles including the Focus, Focus C-Max, and Escape. As future gasoline price volatility causes shifts in consumer demand, Ford can quickly change its mix of what is manufactured on a common platform. For example if gasoline prices jump, Ford could increase production of vehicles with fuel efficient eco-boost and make less with conventional. Ford could also quickly increase production of electric cars.

The Focus EV will be made in America – Warren, Michigan. Ford is investing $550 million to transform its Michigan Assembly Plant into a lean, green and flexible manufacturing complex that will build Ford’s next-generation Focus global small car along with a new battery-electric version of the Focus for the North American market.

Clean Fleet Report predicts that in 2012, Ford will offer a new global Focus available with several drive systems: conventional engine, 2 liter eco-boost, electric vehicle, both hybrid and plug-in hybrid. By 2012, Ford may be using lithium-ion even for its hybrids. The vehicle will have better range because it will be lighter as Ford executes a strategy of removing 250 to 750 pounds per vehicle. Ford will be well on the way to a 35 percent fuel economy improvement over its 2005 fleet.

The new 2.0-liter, 4-cylinder EcoBoost engine will go on sale in the 2010 calendar year.
It is the first EcoBoost engine to include Twin-Independent Variable Cam Timing
(Ti-VCT) and will deliver a 10 to 20 percent fuel economy improvement versus larger-displacement V-6 engines. By 2012, the company plans to produce 750,000 EcoBoost units annually in the U.S. and 1.3 million globally. By 2013, Ford will offer EcoBoost engines in 90 percent of its product lineup. 2010 Focus Homepage

I get questions (or rather lectures that start with a questions), “Why would someone pay more for an electric vehicle, when you can’t even cost justify a hybrid?” First, some people make money with hybrids over comparable non-hybrids. When I bought my 2002 Prius for $20,000, I paid about $4,000 more than for a non-hybrid with similar features. Over seven years, the car saved my wife and me over $5,000 in gasoline, and then I sold it about $4,000 more than a similar non-hybrid.

While I was test driving the Focus EV in San Francisco, I saw many taxis that were Ford Escape Hybrids, Toyota Priuses, Toyota Camry Hybrids, and even a Ford Fusion Hybrid Taxi. These taxis put on 90,000 miles per year. Hybrids make the owners money by saving a fortune in fuel. New York has over 2,000 Ford hybrids in its taxi fleet.

The fact is that hybrids make money for some owners and not for others. It depends on how the cars are used and how often. In the past 12 months of severe economic downturn, Ford has increased its hybrid sales 73 percent.

Early adopters will not shell out $40,000 for an EV to save money over a sedan for less than half that cost. For mass market success, auto makers and battery makers must drive cost down the learning curve over a few years. Competition is growing for battery electric, hybrid, and plug-in hybrid car leadership. By 2020, these vehicles could represent up to 25 percent of Ford’s production – that’s 2 million cars annually with electric drive systems and advanced battery packs.

<!– By John Addison, Oct 26th, 2009. Learn about the future of cars and transportation in John’s new book – Save Gas, Save the Planet.–> By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers. (disclosure: author owns stock in Ener1, parent company of EnerDel)

H2O to H2 w/o C

by Richard T. Stuebi

Although much of the ink these days about innovative vehicles relates to plug-in hybrids, work continues to explore the potential for hydrogen-based fuel cells to play a key role in the transportation sector — particularly in light of the recent decision by Congress to reauthorize funding for hydrogen autos.

Admittedly, as hydrogen critics and skeptics are quick to point out, the vision for personal automobiles running on hydrogen is very long-term and thus quite murky due to a number of factors, perhaps most notably the lack of a ubiquitous hydrogen refueling infrastructure. The challenges facing hydrogen vehicles are real, but for fleet vehicles with limited service radii, the lack of refueling infrastructure is less of a problem, as one dedicated refueling system can fit the bill. As a result, fleet vehicles – especially inner-city buses – are the primary focus of current testing activities for hydrogen fuel cells in transportation.

Of course, to achieve the full environmental benefits of the hydrogen economy vision the hydrogen will need to be derived by electrolyzing water via renewably-sourced electricity (e.g., from the sun or the wind) to power the electrolyzer.

Although conceptually straightforward, renewably powering electrolyzers turns out to be a non-trivial challenge. This is mainly because solar and wind electricity voltage and current are highly variable, and the electronics of the control systems in electrolyzers tend not to like fluctuations in input power.

To address this challenge, a team here in Cleveland is spearheading a project to install a solar/wind-powered electrolyzer to generate hydrogen from Lake Erie water, with the hydrogen to supply a refueling station that will power a fuel cell bus serving Cleveland-area riders.

With seed funding from the Cleveland Foundation, the project is being managed by the Ohio Aerospace Institute, and the team includes NASA’s Glenn Research Center in Cleveland, Cleveland’s Regional Transit Authority (RTA), the Great Lakes Science Center in Cleveland, Cleveland-based Parker Hannifin (NYSE: PH), and United Technologies (NYSE: UTX). The Great Lakes Science Center is already home to a 225 kw wind turbine and a 32 kw photovoltaics installation, and will be home to the electrolyzer-fed fueling station. RTA will run the fuel cell bus on the recently-renovated Euclid Corridor. United Technologies will be providing the fuel cell bus, and Parker Hannifin is providing key control systems for the fueling station. If all goes well – meaning, primarily, raising an additional $1 million or so to fully complete the project – the hydrogen fueling station and fuel cell bus will operate on a demonstration basis in a couple of years.

Of particular note, NASA is providing the intellectual expertise in developing the algorithms for controlling the electrolyzer to match the variable input power from the solar and wind generating systems. This expertise comes from considerable mission experience, in which photovoltaics systems generate electricity from the sun to power the spacecraft, and energy storage and charge control systems must accommodate power supply interruptions as planetary bodies transit in front of the sun.

To the team’s knowledge, because managing the intermittency of electricity supply in electrolyzer operation is non-trivial, there is only very limited experience with renewable electrolysis for hydrogen production, and virtually none involving more than a little bit of hydrogen production daily. So, this Cleveland project could be an important step along the path to developing truly carbon-free hydrogen-fueled transportation solutions.

As the Fellow for Energy and Environmental Advancement at the Cleveland Foundation, Richard T. Stuebi is on loan to NorTech as a founding Principal in its advanced energy initiative. He is also a Managing Director at Early Stage Partners, and is the founder of NextWave Energy.

Cleantech Blog Readers – Unite! Let’s Color the Volt

Ok, I couldn’t resist.

GM is running a contest to name the silver green color for the Volt. Winner gets to go to the LA auto show and drive a pre-production Volt.

So if any of you have a few minutes to amuse yourself, add your color name idea in the comments to this post, or email it to me, and we’ll take the best ones (we’ll run a poll if time allows) and submit them as the Cleantech Blog submissions. (Or just submit straight to GM if you want to try yourself).

For the record, if we win, we’ll auction off the right to represent Cleantech Blog at the LA autoshow and give the proceeds to a green non profit.

Regards,

Neal Dikeman

Duke Energy’s Electric Vehicle Future

By John Addison (Originally Posted 10/19/09 at Clean Fleet Report).

Duke Energy (NYSE: DUK) committed to an electric vehicle future when it committed with the FPL Group (NYSE: FPL) to buy 10,000 electric vehicles and plug-in hybrids in the coming decade, as they upgrade their fleets. The energy storage in these vehicles could eliminate the need for peaking plants and enable the expanded use of renewable energy. Duke Energy’s electric vehicle future may save billions in future power plant investments.

On October 10, Duke Energy CEO Jim Rogers shared a few minutes discussing electric vehicles and future strategy with me before he spoke at the Society for Environmental Journalist Conference. At first his commitments to electric vehicles, energy efficiency, and renewable energy seem surprising, given that he is CEO of the nation’s third largest emitter of greenhouse gases. The emissions are largely the result of being the nation’s third biggest consumer of coal. He does not hide Duke’s emissions, instead he puts the issue right up front and talks about the future where Duke will replace all power plants between now and 2050.

First, let’s look at the commitment to 10,000 electric vehicles made with FPL at the latest Clinton Global Initiative (CGI). The $600 million investment over 10 years has more to do with good business than PR. Vehicle operations impact the earnings of any utility. Hybrid trouble trucks are already cutting fuel cost in half, as they use hybrid batteries to run lifts and auxiliaries for hours. Clean Fleet Report of PG&E. Plug-in hybrids would cut fuel more. Mr. Rogers stated, “We need to wean our country from dependency on oil.”

“A 10-year commitment gives us time to adopt, test and integrate new technology into fleets as a wider range of vehicles are developed,” said Jim Rogers at the CGI. “Currently, the only near-term options for available PEV supply are sedans, minivans, vans and a few bucket trucks. Over a 10-year horizon, it is expected that options will be available for most utility service categories.”

Electric vehicles including plug-in hybrids can be charged at night when there is excess electricity available. That electricity costs far less than gasoline and diesel. Duke Energy has 634 megawatts (MW) of land-based wind energy in Pennsylvania, Texas and Wyoming and another 99 MW under construction. An additional 251 MW of wind projects scheduled to begin operation in 2010. Siemens (SI) is one beneficiary of Duke’s renewable expansion. Duke even plans to lead in a pilot of offshore wind in North Carolina. Offshore wind has benefited Denmark, providing electricity for longer hours than land-based and more renewable energy during peak demand hours. This December, global leaders will see the wind towers in Copenhagen Harbor as the leaders discuss climate solutions.

In a 1993 annual report, Mr. Rogers was ahead of other utility leaders in stating, “We must turn our attention to carbon.” Jim Rogers has been active in climate meetings leading up to Copenhagen including co-founding US-CAP, chairing the Edison Institute who supported Waxman-Markey, and as a Copenhagen climate counselor. Rogers sees it as unlikely that Congress will deliver a bill before Copenhagen, yet Duke’s CEO feels that business leaders can achieve significant progress. His progress in diversifying Duke away from coal and oil dependency is one example. Working with China is another.

“What I admire about China is the mindset of can-do,” said Duke Energy CEO Jim Rogers, who at CGI announced a joint technology development deal with Chinese energy giant ENN Group encompassing solar, biofuels, smart grid, efficiency, carbon-capturing algae and other areas. “They’re not looking for excuses as to why we can’t do something.” Clinton Global Initiative (CGI) Quotations from Clint Wilder’s report at Clean Edge

The recession has given utility executives some breathing room by reducing electricity demand. Electricity consumption in the U.S. fell reports the EIA. Coal usage dropped 13 percent in one year. Nuclear is off 2 percent. Net generation from wind sources was 18 percent higher and was the second largest absolute increase after natural gas. New drilling techniques make natural gas cheap and plentiful.

Duke wants coal power with carbon capture and sequestration (CSS) to be a big part of its future generation. After 20 years of experiments, “clean coal” is still largely non-existent. No doubt that coal can be captured. It can even be sequestered, at least for years. There is no evidence, however, that coal with carbon sequestering can economically compete with natural gas plants. “Clean coal” takes significant extra coal, capital expenditure, pipelining of CO2 and finding a willing oil company or cavern owner to store the greenhouse gas. Coal mining causes environmental damage and release of methane, a greenhouse gas 20 times more destructive than CO2. Duke wants to bet on coal, yet it may find difficulty getting taxpayer or rate payer support for the added billions for CSS. For baseload power, natural gas would be cheaper, but natural gas prices have fluctuated wildly in the past years.

Utility executives want predictable pricing to make the best decisions about investing in power plants that may run for 40 years. Predicable pricing is one reason that Duke supports cap-and-trade. Rogers does not see cap-and-trade as hurting Duke or the U.S. economy. Rogers states, “We run our business as if COP-15 is in the rearview mirror.” A price for carbon is assumed in all Duke decision making.

Most promising for Duke, may be energy efficiency and renewable energy. Duke, like many utilities, has experimented with supporting electric vehicles. In partnership with Progress Energy, Duke is piloting drawing energy from vehicles during peak hours (V2G) using GridPoint technology. The key is to shape charging demand off-peak. Rogers feels that “variable pricing to shape demand is quite doable.” If successful, V2G could lower Duke’s investment in frequency management, spinning reserves, and peak generation.

It will be a smart grid that manages efficiency, demand management, critically needed distributed generation, and electric vehicles. Echelon (ELON), Cisco (CSCO), and GridPoint, are some of the suppliers for smart grid hardware and software for Duke. Renewables include wind, solar, woody biomass

“Water is going to be the next oil.” stated Rogers. Global warming is already correlated with draughts, loss of water storage in snow, and agricultural losses in Duke’s North Carolina headquarters state and in its multi-state service area. Although coal, nuclear, and natural gas are water intensive, wind and solar are not.

Jim Rogers is looking to the future, “We are in most transformative period in history of power industry.” He recognizes that challenges and opportunities are different in this 21st Century. Duke Annual Report Summary

By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

On Energy Subsidies

by Richard T. Stuebi

as posted to Huffington Post

To an economist, subsidies are powerful and dangerous things. They are powerful because they work. They are dangerous because they encourage economic actors to take actions that have direct impacts that are often unanticipated and unwanted, and at the expense of other positive actions that could otherwise be taken but aren’t due to resource constraints.

In the case of energy, subsidies are legion, though hard to identify. A recent report by the Environmental Law Institute (ELI), “Estimating U.S. Government Subsidies to Energy Sources”, attempts to do just that.

The ELI report estimates that the U.S. government subsidized energy with $101 billion during the period 2002-2008, with $72 billion to fossil fuels and $29 billion to renewable energy.

$29 billion to renewable energy sounds fairly impressive, particularly when renewable energy represents only about 10% of overall U.S. energy supply. However, underlying these statistics are three important observations:

  1. The fossil fuel industry is over a hundred years old and is still receiving sizable subsidies even though enormously profitable, whereas the renewable energy sector is young, developing and (by most accounts) worthy of encouragement by public support to make more financially attractive to market participants.
  2. Most of the subsidies for fossil fuels are permanently embedded in the tax code, whereas the renewable subsidies tend to have finite durations that undercut their effectiveness in providing clear incentives for long-term investment or behavioral decisions.
  3. About half of the renewable subsidies are for corn-based ethanol, prompted by support from the agricultural community, but at questionable cost-effectiveness and impact on greenhouse gas emissions.

So, the amount of funding support received by renewable energy is less impressive than initial impressions would suggest.

The forces supporting the preservation of fossil fuel energy subsidies are unbelievably strong, so the topic of energy subsidies is a potent political boogeyman that few have dared to touch. However, that may be changing.

In a September 10 statement to the Senate Subcommittee on Energy, Natural Resources, and Infrastructure by Alan Krueger (Assistant Secretary for Economic Policy and Chief Economist) of the U.S. Department of Treasury , the Obama Administration is clearly aiming to unwind several provisions of beneficial tax treatment that the U.S. oil and gas industry receives.

As Krueger concludes, current tax subsidies for the oil and gas industry “divert resources from other, potentially more efficient investments and they are inconsistent with the Obama Administration’s goals to reduce [greenhouse gas emissions] and build a new, clean energy economy….Removing these subsidies will have a very small effect on the price of oil and gas, the production of oil and gas, and domestic jobs. In fact, removing these subsidies could actually make our economy more efficient by reducing distortions in the tax code.”

On a global basis, as widely reported from the recent G-20 meeting in Pittsburgh (see Washington Post article), world leaders pledged to phase out fossil fuel subsidies in the “medium term”. As bad as the situation in the U.S. is, energy subsidies in developing economies are arguably much worse: according to estimates by the International Energy Agency (IEA), $310 billion per year is spent on subsidizing energy, mainly transportation fuels.

Of course, these subsidies are implemented in the name of aiding the poor citizens in these countries, but they cause massive distortions in public sector budgets, national trade balances, private sector investments and behavior, global security, and environmental protection. And, frankly, the main beneficiaries of the subsidies are urban upper- and middle-income citizens, as the poor are much too poor to afford cars anyway.

Removing subsidies on fossil fuels will not, in itself, drive the world economy to full implementation of desirable energy efficiency and renewable energy options. But, it will definitely help: a step in the right direction. Let’s hope that our leaders can summon and sustain the political will to overcome the inevitable opposition and phase these fossil energy subsidies down and out, so we can get on with building the clean energy economy in a more efficient manner.

As the Fellow for Energy and Environmental Advancement at the Cleveland Foundation, Richard T. Stuebi is on loan to NorTech as a founding Principal in its advanced energy initiative. He is also a Managing Director at Early Stage Partners, and is the founder of NextWave Energy.

Al Gore Prioritizes Energy Innovation

By John Addison (10/12/09). Vice President Al Gore is optimistic about a meaningful agreement in Copenhagen that includes the United States and China. During his keynote speech at the Society of Environmental Journalists Conference (SEJ) in Madison, Wisconsin, he acknowledged that negotiations are going slowly, because climate change is complex and involves consensus of almost all nations, but that a new agreement is likely.

The need for a global agreement is urgent as the burning of coal and oil heat the earth. Melting glaciers and depleted aquifers make healthy water scarce for more Americans and unavailable for a billion people. Draughts are causing damage to many states. Lack of water affects the ability to grow food. Interrelated eco-systems are showing their stress and the problems are starting to get visible on Main Street. Mr. Gore observed, “Never before in human history has a single generation been asked to make such difficult and consequential decisions.”

Mr. Gore stated, “We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that’s got to change.”

At SEJ, I asked Vice President Gore about the most promising innovations to reduce our dependency on fossil fuels such as coal and oil. Mr. Gore identified a number of areas where Americans are innovating.

Energy efficiency tops his list for innovation that is making an immediate impact. Many new buildings have a fraction of the greenhouse gas emissions of the buildings they replace due to innovative design, materials, windows, and water management. Older buildings are made more energy efficient with better insulation.

Mr. Gore identified wasted heat as an underestimated opportunity. He sees room for significant innovation in combined heat and power and in the reduction of wasted heat.

Super Grid will Spur Innovation

He sees the super grid as an opportunity for a high level of efficiency. The super grid envisions a national network of high capacity electricity transmission. It would include energy storage, high reliability, and smart grid intelligence. High voltage lines have far less energy loss than lower capacity. A super grid could deliver much of America’s needed energy from untapped wind that blows in middle states from the Dakotas to Texas. Super Grid Wikipedia Description

Mr. Gore feels that a super grid could bring a transformation comparable to the Internet. The super grid and smart grid technology is already attracting major investments from firms like KPCB where Al Gore devotes part of his time as a partner. KPCB Greentech Portfolio He pointed to energy storage and demand response as major super grid areas of opportunity.

A portfolio of renewable energy solutions can power the nation according to Mr. Gore. Wind supplied 40 percent of the incremental energy added in the United States in 2008. Concentrating solar power is another renewable that is promising where up to 15 hours of energy storage, such as molten salt, can be used. Vice President Gore sees the greatest innovation in solar photovoltaics as a “distributed distribution architecture” is put in place.

Enhanced geothermal at one to two kilometers underground has the potential to meet our need for baseload grid power. Gore said, “There is an estimated 35,000 year supply of enhanced geothermal to meet U.S. energy needs.” This industry will benefit from the drilling and drill bit innovation existing in the oil and gas industries.

Historic Transformation of Automobile

In the future the need for getting baseload power from coal will be diminished by grid energy storage innovation. Gore said, “There will be a historic transformation of automobile fleets to and plug-in hybrids and all-electric vehicles. That vehicle fleet will serve as a massively distributed battery.” Electric Vehicle Reports

He continued, “Innovation of battery storage is likely to be extremely significant.”
Video of Vice President Gore’s discussion of energy solutions.

New Climate Agreement in Copenhagen

“We have all the tools to solve three or four climate crises.” Vice-President Gore expressed a level of optimism that surprised a number of the 500 journalists in attendance. He is optimistic that the Senate will approve some form of the Boxer-Kerry legislation and that it will be Conference Committee pending when Copenhagen convenes. It will have compromises that will discourage some environmentalists and some business interests. Gore said, “The large number of defections from the National Chamber of Commerce is a sign that business leaders want to be part of the solution.”

He reminded those concerned about a climate crisis that in 1987 the Montreal Protocol was also criticized as too weak. In Montreal, Canada, on September 16, 1987, the Montreal Protocol on Substances that Deplete the Ozone Layer was signed into agreement by 24 major countries of the world, including the United States. These countries recognized that it was critical to be leaders, rather than wait years for all nations to agree. The agreement was ratified and then signed by President Ronald Reagan.

A process for nations to phase-out production of dangerous CFCs and halons was established. Developing countries were giving extra years to comply. Years later the agreement was strengthened in Copenhagen. Now 191 nations have agreed to the Montreal Protocol and are phasing-out the destructive gases from China to Chile and from India to Indonesia.

The Montreal Protocol is proof that the major nations of the world can agree to stop destroying our atmospheric shield.

A new climate agreement in Copenhagen would accelerate innovation and growing commercial success of efficient buildings, fuel efficient transportation, a transformative super gird, and renewable energy.

Mr. Gore’s new book – Our Choice: A Plan to Solve the Climate Crisis – will be available November 3. It will include the important role of innovation in reducing our dependency on fossil fuel.

The complete audio recording of the speech can be heard on the Society of Environmental Journalists.

By John Addison, author of the book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Energy Efficiency: How NOT To Do It

by Richard T. Stuebi

On October 5, First Energy (NYSE: FE) announced a planned energy efficiency program, involving the delivery of two compact fluorescent lightbulbs (CFLs) to each of its residential and small commercial customers in Ohio. This was to be a part of First Energy’s revived energy efficiency programs, stimulated in large part by the 2008 passage of Ohio SB 221, which stipulates that utilities must reduce their customers’ energy consumption by 22.5% by 2025.

Approved in a case by the Public Utilities Commission of Ohio (PUCO) without comment on September 23, the plan would have had each customer pay $21.60 on bill surcharges over 36 months for this package of two CFLs – whether they were used or not, or even wanted or not.

The story accompanying the roll-out of this program in the Plain-Dealer went into considerable detail about its economics. The $21.60 in extra charges not only covered the cost to First Energy of acquiring and delivering the two CFLs, but also would reimburse First Energy for the reduction in revenue associated with the use of these more efficient CFLs in lieu of traditional incandescent bulbs.

Although seemingly shocking to Ohio readers, the provisions of SB 221 do in fact allow for utilities to recover lost revenues associated with energy efficiency implementation, in recognition of some basic utility economic realities.

In traditional regulatory approaches, utilities earn more profits by selling more electricity. As is the case with most businesses, the company succeeds by selling higher volumes of its product. Thus, if we agree that we want to encourage less electricity consumption, we have to eliminate the financial motivations that utilities have against that desirable goal. In other words, we have to make it equally attractive for utilities to promote saving energy instead of consuming energy; we have to “decouple” electricity volumes from utility profitability.

Recovery of lost revenues from energy efficiency is by no means a novel concept. Indeed, California pioneered such “decoupling” ratemaking treatment all the way back in 1982 with the adoption of its Electric Revenue Adjustment Mechanism. But, in Ohio, it is very new – only now being adopted in the wake of SB 221. And, neither First Energy nor the PUCO made significant effort to educate the public that ratemaking practices of this type have been employed for decades, and are being increasingly employed around the country, for very sensible reasons.

At least equally concerning, First Energy claimed that each bulb was costing the company $3.50, for a total of $7.00 for the package of two. However, a little snooping around area stores revealed that a five-pack of CFLs could be bought at Ace Hardware (hardly the lowest-cost source) for $13.99, or about 20% lower on a per-bulb basis than what First Energy was proposing to charge customers for similar products sourced elsewhere – at presumably higher volumes and more favorable pricing.

In the wake of the initial article, reader reaction was overwhelmingly negative. People didn’t want to pay for light bulbs they didn’t request, and may not use. They didn’t want to get gouged on the cost of the bulbs. And, they didn’t want to pay First Energy for kilowatt-hours that weren’t being sold.

Not only did readers call the Plain-Dealer in complaint, they called their elected officials as well – including all the way to Governor Ted Strickland, who asked the PUCO to stop the program. Within a couple of days, the resulting political pressure prompted the PUCO Chairman Alan Schriber to ask First Energy to withdraw this proposed energy efficiency program. And so, in compliance with the PUCO order, First Energy postponed the program.

As reported in a follow-up Plain-Dealer article, John Paganie of First Energy admitted that “we didn’t do a good enough job in helping customers understand the purpose, the reason for [the program] and the impact.” Yep: First Energy didn’t sufficiently communicate to customers – or engage with trusted advocates such as the Ohio Consumers Counsel in working out the details of the program so they could offer their support – before the program roll-out appeared in newspaper ink.

In the same article, PUCO Chairman Alan Schriber noted that “although the PUCO allowed FirstEnergy to implement its program, we did not approve the charge that will appear on monthly bills as a result.” In other words, PUCO gave First Energy the go-ahead to do the program, but PUCO didn’t consent to how First Energy would be compensated. Huh?

So, the net result of this program announcement was a lose-lose-lose: First Energy came off as being greedy, the PUCO came off as being inattentive to program details, and promoters of energy efficiency came off as imposing unwanted economic burdens on customers. Certainly, Thomas Suddes’ editorial in the Plain-Dealer makes everyone look bad.

I thus submit this little vignette as a classic case study of how NOT to implement energy efficiency.

In my humble opinion, this would not have been such a public relations debacle if First Energy and the PUCO had both accumulated a greater store of citizen goodwill over the preceding decades. Unfortunately, this hasn’t been the case. And, resulting from this bungling by distrusted players, the generally-favorable cause of energy efficiency gets a public black eye in Ohio.

As the Fellow for Energy and Environmental Advancement at the Cleveland Foundation, Richard T. Stuebi is on loan to NorTech as a founding Principal in its advanced energy initiative. He is also a Managing Director at Early Stage Partners, and is the founder of NextWave Energy.

Delivery and Service Vans Plug-in

By John Addison (10/5/09). A growing number are eager to buy plug-in hybrids from Toyota, Chevy, Ford, Fisker, and others that are completing new manufacturing for 2010 orders and serious competition in 2011. Oil prices have doubled from their low this year. People are planning to save on fuel for years, by using more inexpensive electricity and less gasoline.

Fuel costs millions for the delivery and service fleets that bring us our mail and goods and keep our cities running. About one million new vans are purchased annually in North America.

For years, the United States Postal Service (USPS) has piloted electric vehicles in its fleet of over 200,000 delivery vehicles. Azure created custom electric vehicles for the post office. Encouraged, the USPS has ordered 165 of the new plug-in hybrid Chrysler Town & Country Minivans for delivery use. Next year, these Chrysler vans will be available for commercial sale by everyone from small businesses to active soccer families.

Ford is starting to take orders from municipalities and other government agencies that will use the new Transit Connect light-duty van in a variety of applications from city maintenance to on-demand transit. Deliveries of these electric vehicles, made for Ford by Smith Electric Vehicles, will start in 2010. Transit Connect may also do well with small businesses and local delivery fleets. Clean Fleet Ford Report

South Coast Air Quality Management District has helped fleets achieve significant mileage gains with Sprinter Vans converted to be plug-in hybrid.

The electric utilities that will help power these plug-ins often have thousands of vehicles in their fleet. Utilities have turned to companies like Eaton to double the mileage of their trouble trucks with hybrid and plug-in hybrid drive systems. Ford F550s were first converted into hybrids and now into plug-in hybrid trouble trucks. In addition to using less diesel fuel, these trucks can run all their accessories electrically. Previously, they had to idle the truck engine for hours to host a repair technician into the air, to run repair equipment, and all auxiliaries. Clean Fleet PG&E Report

The Eaton hybrid-electric drive system will be used in 138 FedEx delivery vans. In New York alone, FedEx deployed 48 E700 Eaton hybrids. Clean Fleet FedEx Report Local delivery vans can particularly benefit in fuel savings by capturing braking energy with frequent stops, by establishing a central charging infrastructure, and by having mid-day opportunities for recharging in between morning pick-ups and afternoon deliveries.

Eaton Corporation’s truck and electrical businesses will support a $45.4 million grant to develop a fully integrated plug-in hybrid systems for Class 2 to 5 vehicles, weighing up to 19,500 pounds. A demonstration fleet of 378 plug-in hybrid trucks and shuttle buses will be put into use. Green Car Congress

Plug-in vans and trucks can have a major impact on U.S. oil dependency. Federal, state, and local fleets own 4 million vehicles. Corporations have bigger total fleets. There is great interest in extending the electric-range of vehicles. Most attention has been placed on battery improvements. A more practical way to extend range is to make vehicles more aerodynamic and lighter.

Bright Automotive wants to make 50,000 plug-in hybrid vans per year that are built from the ground-up to deliver 100 mpg in a van that can carry 180 cubic feet of cargo. A typical van carrying such load might achieve 15 mpg. This spin-off of the Rocky Mountain Institute has major strategic partners including Alcoa, Johnson-Controls, and Google. The Bright IDEA van weighs only 3,200 pounds, less than a Prius, and can go 30 miles on battery power alone. It will be stronger than steel, yet built with light-weight aluminum and composite material like the Tesla. With a sub-.3 drag coefficient, the van only needs a 10 kWh lithium battery pack. In demanding delivery applications, each Bright IDEA could save $6,000 per year in fuel.

Bright is currently doing a project for the U.S. Department of Defense that involves converting a VW Transporter to be a plug-in hybrid. Bright hopes to secure a federal loan to build a manufacturing plant in Indiana to build the new light aerodynamic vans in volume.

Fleets are taking the lead in energy security and reduced emissions with fleets of hybrids, plug-in hybrids, and electric vehicles.

John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Fight Stupidity Now!

by Richard T. Stuebi

As a big sports fan, I’ve become an enthusiastic listener of Mad Dog Radio on Sirius, enjoying the rantings and ravings of both hosts and callers alike. It’s quite an eyehole (or earhole) into an interesting segment of Americana.

Unfortunately, one disconcerting aspect about this segment is reflected by the advertisers that choose to send their messages to this audience. Advertisers include such products and services of dubious veracity as the Hollywood Cookie Diet, the California Psychic Hotline, and water vapor cigarettes.

Clearly, the demographic of the Mad Dog Radio listening audience is such that discriminating intelligence is not its hallmark characteristic.

To this apparently intellectually-challenged audience, an organization called the Institute of Policy Innovation has begun to run a 30-second soundbite called “Is the Earth Actually Cooling?”, narrated by Dr. Merrill Matthews. Dr. Matthews, whose stated credentials are in health care policy (in contrast to climatology, a more useful background for someone who’s going to opine on this topic), alleges – without substantiation, other than the offhand comment that unnamed “Russian scientists” are increasingly convinced – that the evidence is now suggesting that the earth is “on the verge of a mini-Ice Age”, rather than warming. He closes with the following cheap shot:

“ But at least all those global warming scolds may leave the rest of us alone allowing them to fly around in their private jets openly and guilt free.”

This dreck I find very annoying and insulting. By affiliation with its fellow advertisers, I put the Institute of Policy Innovation right alongside the California Psychic Hotline in terms of credibility. However, to an audience inclined to believe that psychics can provide good personal advice, no doubt Dr. Matthews’ asinine and unsupportable message is compelling to many.

This is not to say that cleantech advocates don’t also offer up their share of absurdities. As an example, I can’t tell you how fatigued I’ve become with “green job” mantras, almost implying that such jobs can be created by whim or fiat. No, they can’t: jobs (at least, good long-term non-governmental ones) are created only after economic opportunities for profit- and wealth-creation emerge. Instead of focusing on creating green jobs, the debate should be about creating a healthy market environment within which employers can/will hire people to pursue those economic opportunities.

I don’t know about you, but for me, I want people in key positions affecting my life – such as my doctors, for example – to be both smart and educated in their disciplines. Why don’t more of us insist that those who are debating our political and social futures, on key issues such as climate change and the future green economy, also be among the most intelligent and well-informed?

More of us need to take a stand: fight stupidity now!

Our future increasingly depends on wise choices in a complex world. We cannot abide those who pollute airwaves with misleading or erroneous statements on critical civic topics — especially to listeners whose judgment on matters more important than sports is probably not highly refined, but who nevertheless vote and otherwise make their voices heard in the political arena.

As the Fellow for Energy and Environmental Advancement at the Cleveland Foundation, Richard T. Stuebi is on loan to NorTech as a founding Principal in its advanced energy initiative. He is also a Managing Director at Early Stage Partners, and is the founder of NextWave Energy.