Batteries Barriers

PHEVs avoid many of the barriers to AFVs discussed earlier. They do not have a limited range. They do not have major safety and liability issues although great care would have to be taken in the design of any home-based system that charged PHEVs or allowed them to feed back into the grid. They do not have a high fueling cost compared to gasoline. In fact, the per mile cost of running on electricity is likely to be less than the per mile cost of running on gasoline. The chicken & egg problem is minimized because electricity is widely available and charging is relatively straightforward.

The vehicle will almost certainly have a higher first cost, but this is likely to be more than compensated by the economic benefit of a lower fuel bill, as the 2003 study by The California Energy Commission and Air Resources Board concluded. Also, that study did not consider a large potential revenue stream the vehicle owner may be able to extract from the utility by having what is essentially a portable electric generator.

The largest potential revenue stream that a PHEV owner might be able to extract is for so-called spinning reserves, which, as one analysis explains, "are contracts for generating capacity that is up and running, and is synchronized with the power line." When called upon, a spinning reserve "must ramp up to its full output within 10 minutes." Spinning reserves are valuable to a utility or power system because they contribute "to grid stability helping to arrest the decay of system frequency when there is a sudden loss of another resource on the system."58 Value can also be extracted by generators that can provide faster response when grid voltage needs to be increased or decreased, so-called "regulation services." Since cars are designed to start rapidly, they could quickly add their power to the electric grid when needed. Utilities would pay for this service if there was a guarantee that the car could deliver juice when needed, which suggests that this is more practical for vehicle fleets or for a corporate sponsor.

The potential value of such services is significant: $700 to $3000 per year. This value is so large that it might allow the monthly cost of purchasing or leasing a PHEV to be lower than a conventional car, and perhaps even cover the replacement cost for batteries if they prove not to have a 100,000+ mile lifetime typically expected of modern cars. It is critical that we fund some real-world demonstrations of PHEVs providing these services, to see if this value can be extracted. If it can, we might see major utilities helping to subsidize the cost and/or financing of PHEVs.

Environmentally, PHEVs offer two potentially significant benefits. First, since they are designed to run all electric for short trips such as commuting, they offer the possibility of being zero-emission vehicles (ZEVs) in cities. Since the decision to run the car all electric will reside with the driver, some method of verification will be required if these vehicles are to receive ZEV credit. Given that early adopters, such as electric utilities, will probably want to maximize all-electric use, some sort of remote verification (similar to smart-pass technology) seems viable. The best early uses of PHEVs may well be to replace dirty diesel engine vehicles used regularly in cities, such as buses, maintenance vehicles, and delivery trucks. If hydrogen fuel cell cars ultimately prove impractical, PHEVs may be the only viable option for urban zero emission vehicles.

The potential greenhouse gas benefits of PHEVs are even more significant, if a source of zero-carbon electricity can be utilized for recharging. PHEVs have an enormous advantage over hydrogen fuel cell vehicles in utilizing zero-carbon electricity. That is because of the inherent inefficiency of generating hydrogen from electricity, transporting hydrogen, storing it onboard the vehicle, and then running it through the fuel cell. The total well-to-wheels efficiency with which a hydrogen fuel cell vehicle might utilize renewable electricity is 20% to 25%. The well-to-wheels efficiency of charging 15 an onboard battery and then discharging it to run an electric motor in a PHEV, however, could exceed 80%.

As Alec Brooks, a leading designer of electric vehicles, has shown, "Fuel cell vehicles that operate on hydrogen made with electrolysis consume four times as much electricity per mile as similarly-sized battery electric vehicles."60 Ulf Bossel, founder of the European Fuel Cell Forum, comes to a similar conclusion in a recent article, "The daily drive to work in a hydrogen fuel cell car will cost four times more than in an electric or hybrid vehicle."

This relative inefficiency has enormous implications for achieving a sustainable energy future. To replace half of U.S. ground transport fuels (gasoline and diesel) in the year 2050 with hydrogen from wind power, for example, might require 1400 gigawatts of advanced wind turbines or more. To replace those fuels with electricity in PHEVs might require under 400 gigawatts of wind. That 1000 GW difference may represent an insurmountable obstacle for hydrogen as a greenhouse gas mitigation strategy-especially since the U.S. will need several hundreds of gigawatts of wind and other zero-carbon power sources in 2050 just to sharply reduce greenhouse gas emissions in the electricity sector. As Bossel writes, "the forced transition to a hydrogen economy may prevent the establishment of a sustainable energy economy based on intelligent use of precious renewable resources."