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Plug-In Community Needs to Respond to Outdated/Biased NAS Report
Dec 22, 2009 (From the CalCars-News archive)
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This posting originally appeared at CalCars-News, our newsletter of breaking CalCars and plug-in hybrid news. View the original posting here.
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When the National Academy of Science's outgoing fuel cell analyst team produced a flawed study as its last act, the broad community promoting plug-in hybrids and electric vehicles barely noticed. There were so many things wrong with the report that we thought it would pass unnoticed. But because of its source and its message, it's been picked up broadly -- especially by media that often first build up and then undermine innovative, promising solutions. With the publication of a very critical editorial in the Washington Post aimed directly at Vice President Biden, it's clear this report could provide the rationale for a full-scale "rollback" effort by opponents of vehicle electrification. This is a threat to the still-growing commitment of the U.S. Department of Energy to that strategy. Unfortunately, the useful insights in the report are overshadowed by its poor analysis and shallow thinking. We're on vacation this week but are taking time off to post some quick comments and urge all the involved constituents to step up to the challenge of responding to this report. Below that you'll find sources and backup information that we hope will spark others to jump in with critiques, especially to media and to elected officials.

THE SOURCE OF THE REPORT: It's by the "Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technologies," which after completing its 2008 report, "Transitions to Alternative Transportation Technologies--A Focus on Hydrogen," was asked to stay on to extend its analysis to PHEVs. The chairman (a retired Exxon Mobil executive) acknowledges, "It is unusual for the NRC to reconvene a committee organized for one purpose to investigate another but this is an unusual committee in another way, too," citing the high caliber of the committee members. At the end of this posting we include a listing of the Committee members, so readers can see who's who.

THE DOE FLARE-UP ON HYDROGEN: This report arrives a few months after an unusual series of developments, when governemnt funders for the first time in decades addressed the problem that fuel cells in cars were always "10-20" years away, and that the solution got a free ride on the engineering implications of hydrogen being only a carrier of energy, not an energy source. The Department of Energy, led by Secretary Steven Chu, essentially zeroed out support for hydrogen fuel cells in transportation, saying that plug-in vehicles and other solutions were far more feasible for the near- and mid-term. Down but not out, the fuel cell industry then successfully lobbied in Congress to reinstate the funding.

WHAT NEEDS TO HAPPEN NOW: This report is an incendiary tool that others are using to undermine support for PHEVs and EVs. Its science and economics need to be refuted -- and its implications need to be responded to publicly and politically. We believe the Fuel Cell Committee was unqualified and insufficiently broad to conduct this study. It consulted minimally with automakers, battery manufacturers and utilities. Its conclusions overlook the current and future business modeling of those communities -- all of which are now proving that PHEVs' prospects are fare better than the simplified and beyond-worst-case scenarios painted by the Committee. Those whose views are inadequately reflected in the report are best equipped to rebut the study. Industries with a strong stake in vehicle electrification include automakers, battery and other component suppliers, and electric utilities. Equally important to step forward are Congressional supporters -- and the Department of Energy itself, with the department's views and documentation from its National Labs. We hope all these constituencies will release or develop their own analyses and responses -- including ones they may have submitted privately to the Fuel Cell Committee -- for public review.

THE STUDY'S MAIN CONCLUSION is the beginning of the conversation, not a reason to abandon PHEVs: It will take decades for vehicles that use less fossil fuels than today's gas-guzzlers to have a significant impact on petroleum or greenhouse gas reduction. We've been saying that for the past year: market penetration isn't fast when you're gearing up to build first tens and hundreds of thousands, then millions and tens of millions of new vehicles to add to or replace the 250 million vehicles in the U.S. and the 900 million globally. That's why the study's suggestion that we take as many steps as possible to improve energy efficiency in conventional cards is a non-controversial given, as is reduction in miles travelled. And that's why we aim to persuade plug-in advocates to join a new effort to fix millions of the largest gas-guzzlers as soon as possible. Our "Big Fix" campaign http://www.calcars.org/­ice-conversions.html is the equivalent in vehicles to weatherization ("cash for caulkers") and other steps to fix the vast number of buildings that will remain in use for decades.

TO SPEED MARKET PENETRATION OF PLUG-IN VEHICLES, we need to: 1. Start now 2. Move as quickly as possible 3. Explore every way of reaching our goals sooner. Let's translate each of those items into what the Fuel Cell Committee says and what we and others think should happen:

1. START NOW: the Fuel Cell Committee concludes: "A portfolio approach to research, development, demonstration, and, perhaps, market transition support is essential. It is not clear what technology or combination of technologies -- batteries, hydrogen, or biofuels -- will be most effective in reducing the nation's oil dependency to levels that may be necessary in the long run."

PHEV-FOCUSED VIEW FROM ELECTRIFICATION COALITION: We have not yet had a chance to post a full analysis of the Electrification Coalition report from November: it's an essential document, and it presents a different approach. The top leaders of Fedex, Nissan, Johnson Controls, A123Systems, Cisco and others say it's time to pick a winner! (Get the report NOW at http://www.electrificationcoalition.org .) A few excerpts: "Instead of scattered, inconsistent federal support for a wide variety of alternatives, what is required is a coherent, focused strategy designed to radically drive down oil consumption in the light-duty fleet. Part of this strategy must be the acknowledgement that other alternatives, while having value, cannot ultimately revolutionize America's light-duty fleet and end oil dependence. (page 13) The transportation sector will most likely provide the greatest opportunities for early emissions abatement in the United States and elsewhere. (page 35) Electrification of transportation is the best solution for dramatically reducing oil dependence. The United States now has the capacity to permanently enhance its national security and safeguard the economy. To do so, however, the nation must choose to commit to a new path: a fundamental transformation of our transportation sector, moving from cars and trucks that depend on costly oil- based fuels to an integrated system that powers our mobility with domestically-generated electricity. (page 36)

2. MOVE AS QUICKLY AS POSSIBLE WITH TODAY'S TECHNOLOGY: The Fuel Cell Committee effectively is calling for a scaling down of commitments to battery and PHEV commercialization, saying that it will lock us into decades of non-cost-effective choices and long-term subsidies in the hundreds of billions of dollars. Instead it favors more of the ecumenical "support all approaches" -- which of course, puts hydrogen back into the picture.

PHEV-FOCUSED VIEW FROM ELECTRIFICATION COALITION: Here's what the EC said in calling some of the report's assumptions "off the mark:" "The NRC report reaches its conclusions by assuming battery costs that are far higher than current industry estimates. In addition, the report underestimates expected reductions in cost as battery technology continues to improve and economies of scale come into play. 'The battery cost assumptions going into this report not only run counter to our own exhaustive research, they run counter to the findings of most anyone who has looked at this issue or worked in this field,' PRTM, a global management consulting firm that has provided market analysis and technical input for the Electrification Coalition, said." http://www.electrificationcoalition.org/­news-nrc.php

PHEV-FOCUSED VIEW FROM CALCARS: Here's a re-run of our posting last week at CalCars-News, focusing on GM's Volt: GM BATTERY COSTS REBUT DOWNBEAT ASSUMPTIONS: The latest flawed study of PHEVs, this time from the U.S. National Research Council, projects a PHEV-40 battery pack costing $14,000, resulting in the vehicle costing $18,000 more than its equivalent non-hybrid. The report says if battery technology changes incrementally, this cost will decline only one-third by 2020; even if there are some "battery breakthroughs," they won't show up in vehicles until 2030. When asked about battery cost for its 40-mile pack, GM hasn't been specific but has said it's well below these estimates, and heading much lower in its second generation in a few years. And of course, GM and other carmakers are getting advanced battery designs that didn't exist a few years ago into production volumes for cars in years, not decades.

CALCARS TECHNOLOGY LEAD RON GREMBAN EXPLAINS BATTERY PRICING: Plug-in vehicle battery prices are often quoted out of context. Even if accurate, such figures can be a factor of 2-3 off from actual battery pack costs to manufacturers, thereby mis-stating the economic viability of plug-in technology. It's most useful to focus cost of complete battery packs in high volumes, calculated per "useful-pack-kWh kilowatt-hour" (capacity actually used by the vehicle). For example, the cells in the Volt's pack have a nameplate total capacity of 16 kWh, but to ensure long battery life, the Volt actually uses only 8 kWh. Pack costs per nameplate capacity may run 3-4x the cost of individual cells, though over time this should decline to as little as 1.5x. Retail costs for small quantities of cells developed specifically for cars can't be used for calculations -- they will cost far more than the wholesale rates to carmakers. The NRC report's figure of $14,000 for a Volt-like 8 useful-kWh pack yields $1,750 per useful-pack-kWh. GM's costs are closer to $1,000/useful-kWh for the first-generation Volt, and we've seen industry figures closer to $600/useful-pack-kWh for production packs for delivery in the next few years. The NRC report also says we can expect minimal cost declines from technology improvements and economies of scale because Li-ion batteries are already produced in great quantities for consumer products. But these are very different cells and packs. Those required for plug-in vehicles are just beginning production, with significant efficiency improvements already appearing, along with better-than-expected battery life. Consumer cells are currently selling in quantity for $150-250/kWh. Calculations with best assumptions1.5x $150 or conservative 4x $250 translate into $225-$1,000/useful-pack-kWh -- a far cry from the paper's $1,750/useful-pack-kWh estimates!

3 HOW FAST CAN WE GET THERE? The Fuel Cell Committee says the most possible PHEVs and EVs by 2030 is 40 million -- but 13 million is a more realistic target. The Electrification Coalition thinks with a massive (and essential) effort, we can get 123 million by then. Is there some disconnect? Is there some of the same "business as usual" mentality that was the problem in the Boston Consulting Group's report on plug-in vehicles commissioned by the President's Automotive Task Force last spring? http://www.calcars.org/­calcars-news/­1055.html . This needs to be a national topic of discussion and debate.

THE WASHINGTON POST'S EDITORIAL BOARD has inspired much controversy in recent months, especially in its much-criticized (and ridiculed) decisions to feature multiple columns on climate change by George Will without minimal fact-checking (documented by the ClimateProgress blog and others), culminating in its decision to feature Sarah Palin's views on that subject. Now shifting its attention, its December 17 editorial titled "Plug-in hybrid subsidies are a bad deal for taxpayers" starts with a frontal attack on Vice President Biden's push to increase tax credits for plug-in vehicle technologies, It stirs the pot with a provocative comment that this is all an effort to benefit upper-income people, buttressed with imprecise comments about the price of impending PHEVs: The Volt will cost "as much as a BMW" (rather than saying it's expected to cost $30-35,000). No mention of Toyota's plans to bring in a PHEV much cheaper than that. It adds an eye-catching $303 billion as the price tag for subsidies to make them competitive by 2047! It concludes by suggesting as the alternative REDUCING fossil fuel use by improving conventional vehicle efficiency. (Of course most people support this, but it's very different than DISPLACING fossil fuels with electricity.) http://www.washingtonpost.com/­wp-dyn/­content/­article/­2009/­12/­17/­AR2009121704152.html

FOR THE FULL FUEL CELL COMMITTEE REPORT: It's "sort of" available at http://www.nap.edu/­catalog.php?record_id=12826. It's a pre-publication review document (i.e. in theory it could be revised before final publication): you can download the PDF for $30, get the Executive Summary in PDF For free, or view the entire document for free online, chapter by chapter.

QUICK SUMMARY OF REPORT: Here's the first half of the news release "Plug-In Hybrid Vehicle Costs Likely to Remain High, Benefits Modest for Decades" http://www8.nationalacademies.org/­onpinews/­newsitem.aspx?RecordID=12826 :

Costs of plug-in hybrid electric cars are high -- largely due to their lithium-ion batteries -- and unlikely to drastically decrease in the near future, says a new report from the National Research Council. Costs to manufacture plug-in hybrid electric vehicles in 2010 are estimated to be as much as $18,000 more than for an equivalent conventional vehicle. Although a mile driven on electricity is cheaper than one driven on gasoline, it will likely take several decades before the upfront costs decline enough to be offset by lifetime fuel savings. Subsidies in the tens to hundreds of billions of dollars over that period will be needed if plug-ins are to achieve rapid penetration of the U.S. automotive market. Even with these efforts, plug-in hybrid electric vehicles are not expected to significantly impact oil consumption or carbon emissions before 2030.

Battery technology has been developing rapidly, but steep declines in cost do not appear likely over the next couple of decades because lithium-ion batteries are already produced in large quantities for cell phones and laptop computers. In the first generation of production, the PHEV-10 battery pack is estimated to cost about $3,300, and the PHEV-40 battery pack about $14,000. While these costs will come down, a fundamental breakthrough in battery technology, unforeseen at present, would be needed to make plug-ins widely affordable in the near future.

According to the committee that wrote the report, the maximum number of plug-in electric vehicles that could be on the road by 2030 is 40 million, assuming rapid technological progress in the field, increased government support, and consumer acceptance of these vehicles. However, factors such as high cost, limited availability of places to plug in, and market competition suggest that 13 million is a more realistic number, the report says. Even this more modest estimate assumes that current levels of government support will continue for several decades. [Followed by warnings of what happens if drivers charge at times of high demand, and comparisons of the relative fuel economy and CO2 emissions, with comparisons to hybrids rather than to internal combusion engine vehicles.]

WHO'S ON THE COMMITTEE ON ASSESSMENT OF RESOURCE NEEDS FOR FUEL CELL
AND HYDROGEN TECHNOLOGIES: CHAIR: MICHAEL P. RAMAGE, ExxonMobil Research and Engineering Company (retired), Moorestown, New Jersey • RAKESH AGRAWAL, NAE, Purdue University, West Lafayette, Indiana • DAVID L. BODDE, Clemson University, Clemson, South Carolina • DAVID FRIEDMAN, Union of Concerned Scientists, Washington, D.C. • SUSAN FUHS, Conundrum Consulting, Hermosa Beach, California • JUDI GREENWALD, Pew Center on Global Climate Change, Washington, D.C. • ROBERT L. HIRSCH, Management Information Services, Inc., Alexandria, Virginia • JAMES R. KATZER, NAE, Massachusetts Institute of Technology, Washington, D.C. • GENE NEMANICH, ChevronTexaco Technology Ventures (retired), Scottsdale, Arizona • JOAN OGDEN, University of California, Davis, Davis, California • LAWRENCE T. PAPAY, NAE, Science Applications International Corporation (retired), La Jolla, California • IAN W.H. PARRY, Resources for the Future, Washington, D.C. WILLIAM F. POWERS, NAE, Ford Motor Company (retired), Boca Raton, Florida • EDWARD S. RUBIN, Carnegie Mellon University, Pittsburgh, Pennsylvania • ROBERT W. SHAW, JR. Arete Corporation, Center Harbor, New Hampshire • ARNOLD F. STANCELL, NAE, Georgia Institute of Technology, Greenwich, Connecticut • TONY WU, Southern Company, Wilsonville, Alabama • CONSULTANT: JAMES CANADA • PROJECT STAFF: Board on Energy and Environmental Systems • ALAN CRANE, Study Director • JAMES ZUCCHETTO, Director, • BEES JONATHAN YANGER, Senior Project Assistant • NAE PROGRAM OFFICE: PENELOPE GIBBS, Senior Program Associate

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