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Report on Transportation Convergence

On Feb 28th Roger Duncan delivered the Report to the City Manager on Transportation Convergence to the Council

Here is the Executive Summary

The Perfect Storm

According to an increasing number of policy makers, industry analysts, and environmental groups, there is a growing awareness of a Perfect Storm of conditions that may change how we drive and what we drive.

This perfect storm of strategic, economic, and environmental conditions compels us to find ways, within a relatively short period of time, to dramatically reduce oil consumption.

Some of these national organizations have even called for a “Set America Free” project.

Important Key Elements in this project include plug-in hybrid electric vehicles and other flexible fuel vehicles. It calls for using electricity as a transportation fuel. Specifically, in the policy recommendations, the Set American Free proponents call for incentives to enable new players, such as utilities, to enter the transportation fuels market.

Alternatives to Petroleum

There is no “silver bullet” that will easily and cheaply replace petroleum. Rather, there will be many solutions that will combine to first reduce oil consumption, and eventually completely replace it for transportation purposes.

The major alternatives to petroleum are efficiency, alternative fuels, hydrogen, and Electric Fuel. Electricity provides a multi-fuel alternative to petroleum. Electricity can either do the work of running a transportation vehicle, or produce an alternative fuel for the transportation vehicle. It is both a “fuel” and a “fuel maker.”

Electric Fuel in the Transportation Sector

The idea of using electric fuel to power transportation devices is not new. It is not even uncommon. Many cities in Europe and the rest of the world use bus and light rail systems that are powered by overhead lines.

When Henry Ford finally put a good engine and plentiful gasoline all together in his famous Model T, the head start that Edison gave the electric car industry was lost. And within a decade, the electric car disappeared.

Now, the major reasons behind that disappearance are changing. An electric gallon of gasoline is less expensive than a petroleum-based gallon of gas. Plug-in hybrid cars have no range limitations, and lithium ion batteries can provide 200 to 300 mile ranges for all- electric vehicles. And the price of an electrically fueled vehicle (EFV), although still higher, is only incrementally higher. The savings from the fuel cost differential can make the electric choice a wise economic choice, as well as a solid environmental choice.
The Gas-Optional Vehicle

We think that a more appropriate designation for a flexible fuel plug-in hybrid should be a “gas-optional vehicle”. You don’t have to put gas in it. You can if you want to, but it would not be necessary.

The Impacts on Austin and Austin Energy

Electrification of the transportation sector is a very attractive idea for Austin Energy.

One, the transportation sector is roughly equal to the electric sector in Austin. It is therefore a market, which if penetrated, can provide substantial revenue.

Two, electrification of the transportation sector will have substantial environmental benefits. Even in worse case scenarios, using the emissions profiles from our base load coal plants, an electric gallon of gas may be less polluting. Best-case scenarios using wind energy and other renewables are clearly superior to standard gasoline vehicles.

Three, as the rest of the world continues to place growing demand on the resource base, the likelihood of the continuation of cheap oil seems remote at best. Diversifying into electrical fuel will provide Austin residents a hedge against the potential results of high demand and constrained availability.

Four, electrifying the transportation sector can be accomplished without substantial changes in our infrastructure, and it fits well with Austin Energy’s needs and capabilities.
Austin Energy’s load at night is 50% of its load in the afternoon. A fleet of electrical transportation appliances charged during this period would therefore not stress our system. More importantly, such a fleet of transportation appliances could store our nighttime wind energy, thus allowing for a larger wind fraction in our overall generation portfolio.

Finally, if Austin Energy and Austin act now, we will be able to reap the benefits of the technological and economic developments that will be realized; and we will profit as a community as such an electric transportation cluster develops.

Economic Impacts

Using AE’s average residential electric rate of 9 cents per kWh, total annual sales revenue from charging 100,000 EFVs would be 27 million dollars. Although this is a relatively small increase in our overall sales, this level of sales can be met with a minimum of costs.

In Summation

There is a sea change occurring. This sea change comes from a growing general consensus among many in Industry and Government that now is the time for Electric Utilities to become participants in the transportation fuel market.

This general consensus comes from an understanding that our present liquid fuel supply chain is very stretched and very delicate. A major loss of production from a major supplier would bring reverberations throughout the liquid fuel markets.

Moreover, there is also a general consensus that the hydrogen fuel cell economy is further away than many have predicted. Because of this, advanced electric fuel appliances and other gas optional vehicles, such as the plug-in hybrid are now on the radar screen.

A growing consensus is seeing the need for Electric Fuel, and for the gas-optional plug-in hybrid that makes electric fuel the clean, convenient, and economic Fuel of Choice.


Conclusions

Austin and Austin Energy should support the development of a “Gas-Optional Vehicle”/”plug-in hybrid” along with other appliances and strategies that will allow and facilitate the unification of the electric sector with the transportation sector.

Following is a proposed incentive package for Gas-Optional Vehicles. It is of particular note that this proposal is in agreement with some of the particular recommendations of the “Set America Free” document from the Institute for the Analysis of Global Security.

It calls to “Provide incentives to auto manufacturers to produce and consumers to purchase plug-in hybrid electric vehicles and FFVs (flexible fuel vehicles) across all vehicle models.” It asks governments to “Mandate substantial incorporation of plug-ins and FFVs into federal, state, municipal and covered fleets.” It further calls to “Provide incentives to enable new players, such as utilities, to enter the transportation fuel market”

We feel that the following recommendations will meet the multiple goals of providing incentives for flexible fuel plug-in hybrids and they will begin the process of developing a comprehensive electric fuel policy.

RECOMMENDATIONS

I. Initiate THE GAS OPTIONAL VEHICLE INCENTIVE PROGRAM

A. Promote flexible-fuel plug-in hybrid vehicles (Gas Optional Vehicles) through a combination of utility rebates, government fleet purchase commitments, private business fleet commitments, environmental consumerisms and other means.

1. Austin Energy develops a rebate program for a limited number of initial GOVs to government fleets, businesses, and general ratepayers.

2. City of Austin and other local government agencies indicate willingness to place future fleet orders for GOVs.

3. Greater Austin Chamber of Commerce leads effort to enlist private businesses to commit to future GOVs.

4. Austin environmental leaders promote purchase and advance orders of GOVs among Austin environmental community.

5. Austin community supports local, state and federal policies promoting GOVs.

6. Austin provides leadership to largest 50 cities in US to adopt a similar incentive.

7. Austin helps organize support for GOVs from key national sectors.

B. Open discussion with state and national organizations regarding the award of emission credits to utilities for reduction on emissions in the transportation sector, based on incentives and the source of fuel for the electrification.

II. Investigate and promote other forms of electric transportation such as Segways, electric bicycles and electric scooters.

III. Investigate the production of alternative fuels, such as hydrogen, as part of a comprehensive approach to powering the transportation sector.

IV. Develop A COMPREHENSIVE ELECTRIC FUEL INITIATIVE (CEFI)

A. To promote the use of Electric Fuel in the private sector.

B. To Promote Electric Fuel in Public Transportation

C. To promote Electric Transportation Fuel in our Schools, Universities, and other Institutions

posted by AE @ 2:22 PM