Save the World, Make Millions. Here’s How…

by John M. Powers, associate editor

You can’t go to an industry event these days without hearing about plug-in hybrid electric vehicles, or PHEVs. PHEVs are the hot new thing in the electric power industry and it makes sense. PHEVs offer so many benefits to the utility industry-getting more renewable power to the grid, cutting greenhouse gas emissions, accelerating the adoption of smart grid technologies, and gaining utilities a new customer segment.

John Powers sits at the back of a plug-in hybrid school bus. The bus, made by IC Corporation, uses conventional hybrid technology with an extra large battery pack that can be plugged into a standard 110- to 220-volt power supply. (EL&P photo/Nancy Spring)
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Let’s get some groundwork done first. You’ve probably heard of a hybrid electric vehicle (HEV). An HEV is a car that has a combustion engine and an electric motor. The HEV runs off both electric power stored in batteries that are recharged while driving, and by gasoline. HEVs are pretty popular cars. In June of this year, Toyota announced it had sold 1 million hybrid vehicles, the Prius being the car maker’s most popular model.

PHEVs are much the same but with one important difference. Hank Courtright, senior vice president at the Electric Power Research Institute (EPRI), served on a panel about PHEVs at the Edison Electric Institute’s Annual Convention and explained the PHEV. “The simple way of viewing it is to take something like the Toyota Prius or the Ford Escape, which are hybrid designs with both an electric motor and a conventional gasoline motor, but instead of just charging the batteries from the electric motor you actually can charge the batteries [by] plugging into the wall, to a 110-volt outlet. You’re able to use electricity from the grid, usually at night when it’s fairly cheap, to be able to provide the initial run on those batteries.”

So why is that so exciting? Let’s start with the environmental benefits of PHEVs. Recently EPRI and the Natural Resources Defense Council (NRDC) released a study in which they examined the impacts of widespread use of PHEVs in the U.S. on greenhouse gas emissions and air quality. The study found, among other things, that if the use of PHEVs became widespread between 2010 and 2050, they could reduce greenhouse gas emissions by more than 450 million metric tons annually, which is equivalent to removing 82.5 million passenger cars from the road. John Bryson, CEO of Edison International, was at the press conference when EPRI and the NRDC presented the study’s findings. “82 million [cars] is just a tick more than one-third of all the cars that are on the road today,” he said.

While so many emissions would be eliminated, consumers and utilities would be benefiting financially. Courtright said the cost per gallon equivalent of charging a PHEVs’ battery is somewhere between 70 cents to 80 cents a gallon. “So instead of paying $3.50 at the pump, or $4 in some areas, you’re paying 75 cents, maybe 80 cents, for your quote “Ëœgasoline’ for a certain amount… Most cars only drive about 30 [or] 40 miles a day,” Courtright said. Obviously, utilities would be selling that “gasoline.” That’s a whole new customer segment. Rather, it’s recapturing a customer segment that used to belong to utilities. According to the documentary “Who Killed The Electric Car?,” 100 years ago there were more electric cars on the road than gas-powered. Transportation used to be the business of utilities.

If PHEVs found widespread adoption, demand doesn’t seem to be a problem. The joint EPRI-NRDC study found that even with a 60 percent U.S. market share, electricity consumption would rise only 7 percent to 8 percent in 2050. And would that demand increase the cost of electricity? Mark Duvall, the program manager for electric transportation at EPRI, said no. “The cost of electricity is not going to be affected very much by the adoption of plug-in hybrid electric vehicles. There are key drivers- environmental regulation, performance and availability of technology-that have a much more direct effect on the cost of electricity. And we believe that off-peak electricity will probably increase asset utilization within the electric sector and that can be beneficial economically.”

An IC Corporation plug-in hybrid bus is parked next to the site of EEI’s Annual Convention in Denver this summer. Attendees could board the bus and learn more from John Morrison (left), vice president operations, Advanced Energy. (EL&P photo/Nancy Spring)
Click here to enlarge image

So what sort of infrastructure would utilities have to put in place to make PHEVs an optimal mode of transportation? Bryson called the infrastructure costs “scant” and Roger Duncan, deputy general manager of Austin Energy, said all he needs are extension cords. Courtright gave a broader explanation. According to him, the vision to optimize PHEVs is that where there is an outlet-at work, the mall, the airport, etc.-a driver will be able to plug in and the car will communicate with the utility, informing it to charge the driver’s home meter. “It’s as much on the communications side as it is on the power grid side,” said Courtright.

Courtright went further, explaining that with such communications infrastructure in place, utilities and consumers will find an even deeper benefit with PHEVs, the ability to sell energy from a PHEV. PHEVs will most likely be charged at night, when energy is cheap and demand is low. With advanced communications technology in place, a utility experiencing a power shortage can pull electricity from cars that are plugged in and pay consumers whatever the going rate of electricity is at that time. “You might have bought it at a nickel and are willing to sell it at 15 cents,” Courtright said.

As it happens, Pacific Gas and Electric is currently developing what they call “vehicle to grid” or V2G technology that will allow bi-directional sharing of energy between PHEVs and a utility. PG&E worked with the Bay Area Air Quality Management District and a company called Energy CS to convert a Toyota Prius from an HEV into a PHEV by replacing the nickel-based battery with a lithium-ion battery, adding an inverter, and a 120-volt plug. Keely Wachs, the environmental communications manager at PG&E, explained how V2G works. “Once you plug in, your meter will actually show energy coming out of your home into your car like it would with any other appliance… And then what we do is flip the switch on [the car], literally. The inverter then kicks in and reverses the flow of electricity… then the car, serving as a battery source, sends energy back into the grid via the cord.”

Wachs said PG&E sees an adequate number of PHEVs on the road as a potential help for grid reliability. Another potential the utility sees in PHEVs is the ability to bring more renewables to the grid since the cars would recharge at night when renewable energy is online. However, Wachs cautioned that V2G isn’t quite ready yet. “I always liken it to Bill Gates and Steve Jobs in their garages in the early ’80s and ’70s building the first PC,” said Wachs.

So where can you get one of these PHEVs? Well, PHEVs aren’t available to regular drivers like you and me, but there is one PHEV that’s out of the prototype stage and is commercially available. It’s the plug-in hybrid school bus.

The plug-in hybrid school bus, made by IC Corporation, uses conventional hybrid technology with an extra large battery pack that can be plugged into a standard 110- to 220-volt power supply. John Morrison is the vice president of operations at Advanced Energy, a company that’s helping to bring the plug-in hybrid school bus to the market. Morrison said the bus makes sense from a fuel savings standpoint, and it runs cleaner than a conventional bus, which more and more school systems are interested in for health reasons. And there’s a benefit for utilities, the obvious one being an opportunity for off-peak energy sales. “If a bus is charged twice a day, a typical bus will use in the order of about 22 kilowatt hours per charge. And so, if you run the math out, that means that every two to four buses is [the] equivalent of a new residential customer. For utilities, it can represent some rather significant new energy sales,” said Morrison.

Those sales could be significant, especially if you think about how many buses some school systems have in their fleets. For example, the Miami-Dade public school system operates more than 1,500 school buses, and Dallas County operates more than 1,400. Now all that needs to happen is getting the plug-in hybrid buses on the roads.

As with any exciting and promising technology, we’re going to have to wait just a bit. But with all the benefits PHEVs are promising, like cleaning up our air, getting more renewables to the grid, accelerating the adoption of smart grid style communications, and the money to be made with a whole new customer segment, we may not be waiting that long.

Visit and click on the Currents Podcast button for more about PHEVs. Episode 6 of Currents: The Energy News Podcast, features interviews with industry leaders, including Hank Courtright, senior vice president, EPRI.

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