UPDATE: FERC: Electric Vehicles Must Be Integrated Into Grid
January 26 2009 - 12:52PM
Dow Jones News
Federal Energy Regulatory Commission Chairman Jon Wellinghoff
said Monday regulators and the automobile industry must integrate
electric vehicles into the national power grid.
The call by the newly appointed FERC chairman is in line with
President Barack Obama's plan to reduce greenhouse gas emissions
and wean the country off of crude imports, and comes as the
President announced two major initiatives that would increase
vehicle fuel efficiency standards.
FERC has the power to implement rate structures that could
encourage the growth of the hybrid industry.
"Consumers are going to understand from an economic standpoint
that these automobiles make a lot of sense, so we have to integrate
them into the grid," Wellinghoff said at a PJM Interconnection
conference in Pennsylvania.
PJM is a regional transmission company that coordinates
wholesale electricity flows across more than a dozen Northeastern
states.
"You can see that if you're an automobile company, you'd better
get on the bandwagon, because if you don't, you're going to be left
out of the band because there is definitely going to be a move
toward electrification worldwide," Wellinghoff said.
By using electric generation from coal, nuclear, renewable and
natural gas sources, battery-power cars could dramatically cut
demand for crude products.
Obama said Monday his administration would review a request by
California to set its own emission standards that would force
higher fuel efficiency standards, a decision being watched by more
than a dozen other states that want to implement similar new
standards.
The President also said he was considering increasing national
fuel standards beyond what the previous administration had recently
ruled.
"Any emission-related focus will encourage the market for
plug-in vehicles, hybrids, and fuel efficient cars," said Arshad
Mansoor, vice president of power delivery and utilization at the
Electric Power Research Institute.
With cars often used only a small fraction of a 24-hour day,
battery-operated vehicles could be paid for services to make the
national grid more efficient, as part of an artificially
intelligent transmission system, Mansoor said.
Batteries in plug-in vehicles could help in an essential part of
managing a grid called balancing, the second-by-second matching of
power supply with demand.
"You are using the battery as a shock absorber, two-way energy
flows that are either dumping energy into or out of the system,"
Mansoor said by telephone from the conference.
"It is creating a market where there's a value to the electric
utility industry and to the consumer," Mansoor said.
Wellinghoff said the FERC could create rate structures that
could help to encourage the plug-in market, paying car owners for
services such as balancing and helping to solve intermittancy
challenges that arise with some renewable energies such as wind and
solar. When the sun isn't shining and the wind blowing, a vast
multitude of batteries in cars stored in sleeping owners' garages
could help provide supply.
Besides the long-term effects of reducing greenhouse gases and
oil imports, the advantages of a cash-back hybrid include "saving
owners money on the total energy bills, and it will cost less than
a conventional car in three years or less of ownership,"
Wellinghoff said.
If gasoline prices return to $4 gallon, which many energy
industry analysts predict will happen especially if the government
fulfills its vow to put a premium on emitting greenhouse gases,
then consumers who want to buy electric vehicles could help to
finance their costs through a FERC cash-back policy.
"Incorporating that savings into financing could lower first
costs for the car," the FERC chairman said.
New electric cars can cost double conventional combustion-driven
vehicles, creating a barrier to demand and keeping production costs
higher than if manufacturers were able to mass produce the new
technology.
In an effort to jump-start the industry, federal lawmakers are
considering $2,500 to $7,500 tax credits for consumers who want to
buy an electric vehicles.
Mansoor said one of the first test for the industry will be how
well Chevrolet's electric Volt model sells. Chevrolet is a unit of
General Motors Corp. (GM).
Although the Volt won't have the two-way-electricity flow
technology that's necessary, Mansoor said, "If that (model) is
successful, then the market evolving for balancing resources and a
smart grid evolving to accommodate that communication... you're
looking at a five- to 10-year time frame."
-By Ian Talley, Dow Jones Newswires; 202-862-9285;
ian.talley@dowjones.com
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