Category Archives: Pacific Northwest

Which came first, the Chicken or the Egg? The Cars!

chicken or egg1Its hard to be dispassionate about the things we love, but to be successful we must constantly question and search for the truth.

It’s been an interesting week for two reasons.  ECOtality filed for Chap 11 Bankruptcy and GM released a story plans to create a PEV that travels 200 miles per charge and costs $30,000, to rival the success of Tesla.

Let’s discuss both developments.

ECOtality received over $110m from the US Dept of Energy to create the EV Project, designed to deploy private and public charging infrastructure in select U.S. markets in conjunction with sales efforts of Nissan and GM.  Providing Idaho National Lab with data from over 100m electric miles, that aspect of the project has been an unqualified success.  In addition, when the EV Project started, 17,000 PEVS were sold for the entire year (2011)!  By comparison, 10,800 PEVs were sold just during August 2013.  So the average consumer in 2011 didn’t see electric vehicles on the street and had no knowledge of chargers. With the EV Project, we now have regions of the country where charging is available, common and car sales are sturdy and increasing exponentially.  Can ECOtality get all the credit for promoting the technology?  Surely not. But they were an integral part in making charging conspicuous, and worked hard to streamline state regulatory structure, promote supportive policy and simplify  bureaucracy.

The real reason ECOtality’s business collapsed is that people were unwilling to pay for public charging (in Oregon, some of their level 2 chargers were used only 5x per month!), there are still too few cars and PEV owners do not rely on public charging routinely – they can charge at home, at night, daily. So in many ways the collapse of ECOtality is a message to charging station providers who are literally banking on creating large subscriber-based networks as a revenue stream that they best re-think their model. PEVs can be charged conveniently and cheaply at home or the workplace. Public charging needs to offer something competitive: better parking access, free electricity, advertising, features consumers and vendors are willing to support.

As cars improve, the need for a broad-based public charging will diminish. We need strategic DC fast chargers as insurance for those of us who forget to plug in the night before or who travel longer distances. But the longer we wait, the more strategic and appropriate our investments in charging technology will be, on the consumer and EVSE industry level.  The good news is – cars are NOT going away.  In fact, we’re seeing PEV sales at twice the rate of hybrids in their first 3 years.

Had ECOtality failed a year ago, we’d be in a different situation in terms of deployment – because a risk existed that consumers wouldn’t figure out that they really didn’t need public charging to fully use the vehicles. Now that they have,  I predict little impact on car sales as a result of any bad ECOtality press.  As a result we also may well have gotten full value from our meager public investment in the EV Project ($110m is frankly nothing in the scheme of government boondoggles and bailouts).

At the same time that we see the ECOtality business plan unraveling, we see GM brazenly step to the microphone to say it will create a 200 mile range BEV costing $30,000!  Besides the question of “when?,” my first thought was that the 200 mile number is apparently the Holy Grail of PEV range.  My wife and I debate the sweet spot of mileage range to accelerate a mass market for PEVs.  My thought is that a 150 mile range would be the threshold, provided all other costs are equal.  I now see 200 miles gets me to 99.9% of my annual destinations.  I don’t want to drive much more than 200 miles in a day if I can avoid it.  If I can drive 200 miles without needing to stop, the BEV’s usefulness dramatically increases.  This distance probably is sufficient to link most major metropolitan areas together, those sister cities where people commonly visit or commute to and from.  And the gas savings would be extreme.

Three years ago, here in Portland Oregon, we believed we needed the public infrastructure to jump start consumer demand.  Today, I believe we now see the cars are the place to put incentives and emphasis.  If cars arrive, infrastructure will follow organically to meet consumer demand.

ECOtality should be lauded for being first to test the public charging model. Now we are in the position to learn from this failure and push this technology to the next level.

 

 

 

Travel Oregon and Oregon Vintners- It’s Not All about the Pinot Noir

 

When we think of wine tasting, we try to capture a fleeting moment of pleasure as we sip and gurgle. We use words not often used in our day-to-day manner to try to capture the experience, even if they seem like crude tools.  We test the “nose”, we watch the “legs”, we taste the “rich tones of cherry and oak.”

In many ways the same struggle to describe the fleeting flavor of a new wine occurs when we try to describe driving electric.  The car is silent, save for a high end background noise, a whine, a powerful register not out of place. The tire treads seeth, growl and roar along the roadbed, keeping pace with the speed.  The car responds like a horse with spurs to its side, instantly, and it accelerates with a straight build-up of speed like nothing we have felt before.  We wait for the hesitation of gears but find only more power.  A Tesla’s acceleration is like experiencing the recoil of a high velocity rifle for the first time.  There is no smell but the smell of other cars.  Sitting in traffic, we are like an athlete between events, quiet, alert and ready, but not wasting any energy in the moment before the true test.  We try to explain it, this driving electric, but like a rare vintage, it is best left for each person to actually experience.  When it comes to driving a vehicle we are all unlikely connoisseurs as we have spent prodigious amounts of our lives performing the task.  Our muscles and minds harbor sophisticated impressions of what it is to “drive”.  Trying to reduce it down to language only displays how crude and blunt an instrument is vocabulary.

But this post is not actually about Oregon wine.  Its about the unlikely combination of wineries and electric charging stations.

As Oregon strives to push the EV envelope and make effective use of its existing charging infrastructure, Travel Oregon has created an opportunity for our wineries to participate in attracting Eco-Tourist dollars.  The plan is simple- any winery that installs chargers and is a sustainable business can be placed on an EV itinerary.

I have personally visited four wineries – with five more to come- and found much enthusiasm to install chargers and attract the EV crowd.  Winery owners seem to appreciate, more than other industries, the long-term impact of electrifying transportation on the climate- which more and more is messing with their harvests and forcing them to plant their vines at higher elevations.  EVs are good for their business and good for their vineyards.  So, check out the Black Walnut Inn, or Elk Cove, or Sokol Blosser when you next want to try a tasting room with a view.  And as you partake of the fruit, think about how you’d describe the drive to get there- a powerful electric whine with a clean finish.

 

 

 

 

Time to Join the Party: Early Data on Plug in Adoption and Industry Investment

By choosing to employ regulatory streamlining and supportive policies and incentives on consumer deployment and in-state industry development, Oregon and California now have evidence that those dollars leverage high economic value.

In late 2009 in Oregon, a few EV oriented businesses, manufacturers and professionals created an industry cluster in a third floor conference room of the Portland Development Commission, and concocted a strategy to harness state funds to promote its development.   Now called Drive Oregon, the group convinced the Oregon Innovation Council of its value and successfully lobbied state legislators to invest $1.2m of state funding at a time when the state’s budget left many lawmakers on the retreat, cutting public safety measures and teacher salaries.  The pitch, that Oregon needed to have a means of fueling its EV industry cluster’s growth and have a conduit for federal and private grants funding alternative fuel technologies, was persuasive but not without great uncertainty.  Should Oregon gamble on using state funds to fuel development in a sector that many, even today, dismiss as doomed to fail?  Recently the Northwest Economic Research Center (“NERC”) released the results of its first study designed to define what companies constitute Oregon’s EV cluster and measure its strength and economic impacts.

Tom Potiowsky, director of NERC and former Oregon state economist, concluded that: “Our research indicates that the electric vehicle industry generates gross economic activity of $266.56 million, total value added of nearly $148 million and provides more than $89 million in total employee compensation.  The industry continued to grow during the Great Recession, while other transportation industries suffered enormous losses.”

NERC estimated that EV economic activity created a ripple effect, adding 1169 jobs to the economy in addition to the 411 full-time EV jobs.  Tax revenue to the state amounted to $11.9m and $20.8m to the federal authorities.   More importantly, in a little over a year DriveOregon has gotten over forty businesses to join the cluster and leveraged over $2.5 million dollars to date through its matching grants program.

Why has the EV industry taken root in Oregon?  Sophisticated local demand may explain some of this phenomena, a population given to a willingness to try new things for the benefit of themselves and the planet.    Oregon’s skilled workforce, supportive legislative and regulatory policy atmosphere, and a diffuse EV industry structure involved in manufacturing of different types of EVs, parts and components all contribute to its health. But it is more.  It took impassioned individuals and courageous political leadership.

What of the other side of the coin- deployment? What benefits might be achieved through a state’s aggressive measures to foster consumer purchasing of PEVs?

In the UCal-Berkeley study released in September 2012, titled, “Plug-In Electric Vehicle Deployment in California: An Economic Assessment”, focused on providing an economic assessment of the state’s accelerated deployment of PEVs.   Its author, David Roland-Holst, who employs a long-term economic forecasting model, concludes that:

-Light duty vehicle electrification can be a catalyst for economic growth, contributing up to 100,000 additional jobs [in California] by 2030.

-On average, a dollar saved at the gas pump and spent on other goods and services that households want creates 16 times more jobs. (Yes, read that again).

-The majority of the new demand financed by PEV fuel cost savings goes to in-state services.

Individual Californians gain from economic growth associated with fuel cost savings due to EVs, whether they buy a new car or not. Average real wages and employment increase across the economy and incomes grow faster for low-income groups than for higher-income groups.

(Emphasis added.)

In essence the type of savings achieved through PEV adoption are quite different than those expenditures on the fossil fuel supply chain, creating stronger multiplier effects on state product and job creation and providing a positive net value to those states that adopt them.  PEV-related transportation efficiency also stimulates job creation across all economic activities, not just in the  “green collar” sector, through this expenditure shifting phenomenon.  Quite simply, “a dollar saved on traditional energy is a dollar earned by 10-100 times as many new workers.” (p.17)

The importance of these studies should not be underestimated.  They add yet another analytic block to the foundation supporting the business case for society’s investment in PEV technology and adoption and, perhaps most importantly, for the ongoing political support of policies designed to assist its rapid ascent.  When read in conjunction, these studies make clear that we have ever more to gain by the acceptance of EVs then “just” GHG reduction, balancing the grid, and a better driving experience.   We have local jobs to gain and, with them, hope for a sustainable energy future.  For California and Oregon, the gamble appears to be paying off.  Can other parts of the country afford to not to invest in a technology sector whose odds get more favorable all the time?