Opinion: Introducing the “Cash-Back Plug-In” Concept
27 January 2007
by Felix Kramer, CalCars.org
|Jon Wellinghoff of FERC is promoting the “Cash-Back Plug-In”|
Think you’ve heard all there is about the benefits of plug-in hybrids? Sure, substituting “cleaner/cheaper/domestic” electricity for gasoline that has none of those characteristics is good enough reason to evolve cars. It turns out there’s much more.
Plug-In Partners, the national PHEV support campaign led by utilities, including local governments, companies and individuals, launched with a splash a year ago. On its first anniversary, Plug-In Partners’ Congressional and press briefing in Washington, co-sponsored by the Environmental and Energy Study Institute (EESI), served as the platform for a new way of thinking about electrifying transportation.
You’ll find it in four slides by Jon Wellinghoff of the Federal Energy Regulatory Commission, about aspects of what’s often described as “Vehicle-to-Grid” (V2G). Much becomes possible when millions of PHEVs and electric vehicles, parked more than 20 hours a day, are available as distributed energy storage for the electric power grid. A quick description and old links are found at the CalCars.org FAQ.
CalCars has soft-pedalled the potential of all the variants of V2G. It’s seemed too futuristic to talk about without sounding like a snake-oil salesman. And it’s not one thing: it’s about perhaps a dozen different services or relationships. But experts are starting to get excited about these opportunities. Remember when we used “personal” computers? Wasn’t it a surprise when the home and business computers of the ’80s in the mid ’90s evolved into a global network that has profoundly changed the world?
V2G and variants like V2H (emergency home backup) could some day overshadow the initial PHEV benefits on which we now focus. It’s still far away. But that doesn’t mean it shouldn’t motivate our decisions now—both to begin real-world demonstration programs and to provide more reasons for car-makers to move rapidly from “interest” in PHEVs to demonstration fleets.
In October we highlighted two reports about V2G and its reverse, G2V, showing parked PHEVs’ potential to store wind power in Sacramento and to offer Bay Area Rapid Transit commuters free parking and charging. And this month the Pacific National Lab’s eye-opening report dispelled capacity concerns by showing that if overnight all our cars became PHEVs, we could fuel 84% of them off-peak on today’s grid without adding more generators.
Now a member of the Federal Energy Regulatory Commission weighs in. Wikipedia explains FERC as “the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. FERC also reviews and authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines and non-federal hydropower projects.” FERC has clout.
When Jon Wellinghoff, a former Nevada utility lawyer who is one of five FERC Commissioners, looks at the future potential for PHEVs, everyone starts to take notice. Wellinghoff’s opening graphic of a green dollar sign on a road is powerful. Even more compelling is what he calls PHEVs: “The Cash-Back Plug-In Car.” He shows annual fuel costs: $1,200 for a conventional car, $720 for a hybrid, $495 for a PHEV. Next come the important new numbers. After paying for fuel, CAR OWNERS GET $425 NET ANNUAL PAYMENTS for a Cash-Back Plug-In Car that provides “spinning reserves” to utilities (relieving them of having to maintain plants ready to kick in for unexpected demand). And CAR OWNERS NET $2,790 by providing both spinning reserves and “regulation services” (helping utilities maintain the system voltage within narrow ranges. (Not calculated are revenues for providing peak power!)
Wellinghoff also projects how rapidly a PHEV could pay back its additional costs. Calculations are based on additional costs of $19,000 for a PHEV or $20,000 cost for a V2G-capable PHEV—probably several times higher than mass-production costs. But even saddled by such conservative assumptions, the $2,790 number gives a five-year payback (see slide two for Wellinghoff’s sources).
FINE PRINT: Lest we sound overly enthusiastic, some of these applications may require relatively small fleets. For instance, regulation services for the entire State of California might require only 20,000 cars. Some may be most appropriate at big parking lots with heavy-duty electrical connections. Some, like peak power, may affect battery life because they deeply discharge batteries, while others, like spinning reserves, may take minimally stress the batteries (spinning reserves). None have yet been tested in real-world applications.
All present fertile immediate opportunities for groups like the US Department of Energy, the California Energy Commission and power companies to begin demonstration projects. And with state and federal government, utilities and industry all now saying, “wake up,” we hope auto-makers start paying attention to interconnection opportunities—on top of the urgent greenhouse gas and independence benefits—already driving the electrification of transportation.
If they don’t, someday the strategy of holding out for years for somewhat better batteries for PHEVs could go down in history as the least practical idea and the worst mistake the auto industry ever made.
Felix Kramer is Founder of The California Cars Initiative, a Palo Alto-based nonprofit startup of entrepreneurs, engineers, environmentalists and consumers promoting plug-in hybrids through advocacy and technology development.
TrackBack URL for this entry:
Listed below are links to weblogs that reference Opinion: Introducing the “Cash-Back Plug-In” Concept: