We have within our grasp automotive technology to reduce US oil dependence dramatically. Its development and use, however, requires a coordinated effort between the nation's public utilities and car manufacturers. Now is the time for the electric power industry to apply its expertise and clout to the development of new automotive technology that relies to a greater degree on domestic energy resources.
The prospect of millions of vehicles plugging into the nation's electric grid in coming decades has never been better. In 2005, the number of hybrid electric vehicles (HEV) reached 1.2 percent of new cars sold in the United States, more than doubling the number of the previous year. Spotting a trend, carmakers are rushing to bring hybrids into their dealers' showrooms.
It would be a natural step – and a great benefit – to allow hybrids to charge their batteries via the electric grid. Indeed, there is a growing movement to bring plug-in hybrids to market. This is driven by the economic and national-security benefits that result from displacing gasoline with electricity. Dozens of businesses, utilities, municipal governments, and environmental groups have joined a grass-roots campaign called Plug-In Partners to demonstrate to automobile manufacturers that a national market exists for plug-in vehicles.
While there are no commercially available plug-in hybrids now, prototypes have been built and tested, most notably at the University of California, Davis, and by a collaboration between the Electric Power Research Institute and DaimlerChrysler.
In addition, three start-up firms offer conversion kits for hybrid cars to allow grid charging of the on-board battery pack. These offer the potential to almost double a hybrid's fuel efficiency to approximately 100 miles per gallon.
This past summer, Jim Press, president of Toyota's North American subsidiary, announced that the company was looking at developing a plug-in hybrid that travels farther without gasoline than current hybrid models. Toyota is the leading manufacturer of hybrids, selling more than half of those purchased in the US in 2005. Both Ford and General Motors also have recently announced development plans for plug-in vehicles based on a variety of platforms.
We believe that commercial success of plug-in hybrids hinges on an aggressive development and marketing effort by a major automaker. Equally important is support from the electric power industry to facilitate a smooth transition by allowing electricity to serve as a growing energy source for transportation.
On one dollar's worth of electricity, a car can travel the same distance as it would on one gallon of gasoline. The electricity would cost even less if users could buy it at lower, off-peak prices.
We performed simulations for the impact of plug-in hybrids on electric load in six different regions of the nation. We found that the current and planned electric-power infrastructure in America can meet the increased demand from plug-in hybrids.
In addition, during the 90 percent of the time that most vehicles are sitting parked, electric-drive cars could actually supply power to the electric grid through a concept known as "vehicle to grid" technology or V2G for short. The V2G concept envisions the use of a bidirectional charger that allows electricity to flow into a vehicle's battery for charging, or lets stored electricity in the battery flow back onto the power grid. This could increase grid reliability and generate hundreds of dollars of revenue per year for hybrid owners.
While the cost of electricity from electric-drive vehicles is too high to make it attractive for utilities to buy during "baseload" power times, it is quite marketable for "peak power" times and for what are called "spinning and regulation reserves." There are regulatory issues to overcome – the rules are typically written to accommodate incumbent technologies – but this concept can be made into reality.
And the additional cost of installing V2G technology in hybrid cars would be minimal when amortized over a fleet of tens of thousands of vehicles.
Plug-in hybrid automobiles represent an exciting opportunity to create greater energy independence and reduce harmful emissions. As the electric-supply mix becomes "greener," this affords additional environmental benefits.
It is time for the nation's public utilities to lend their voices to the growing chorus of stakeholders calling for the major auto manufacturers to deliver a commercial plug-in hybrid to the market. The utilities also should begin designing the vehicle-grid interface, proceed with vehicle-to-grid demonstration projects, and develop business models that can profitably exploit the emerging V2G potential.
• Steven Letendre is associate professor of business, economics, and the environment at Green Mountain College in Poultney, Vt. Paul Denholm is a senior energy analyst and Peter Lilienthal is senior economist at the US Department of Energy's National Renewable Energy Laboratory. This article is adapted from a technical paper they wrote in the December 2006 issue of Public Utilities Fortnightly.