In part, the 2009 stimulus bill was formulated by our legislative branch to get the deposit multiplier going through the grant funding of “shovel ready” infrastructure, healthcare and clean energy and efficiency projects. Since it is the current economic situation that needs to be jumpstarted, our politicians insisted that immediate economic effect was necessary. To this end, $43 billion dollars of grant money was allocated to clean energy and energy efficiency projects that were ready to start construction immediately.
Here is the rub. The lifecycle of large clean energy project is long (2-3 years for a decent size wind project). There are few clean energy developers that sit around with “shovel ready” projects waiting for the stimulus grant fairy to come and put a slug of grant money under their pillow. The time value of money prevents this tactic. By the time a project has become “shovel ready” the developer has already invested significant time, resources, and capital into getting it to that point. For example, it could take a year to negotiate and lock-up wind energy leases, and install meteorological towers to gather wind speed data on a site - next comes an arduous environmental assessment and permitting process. After that, a typical grid interconnection agreement can take 1.5-3 years to push through a PUC, and that is often needed BEFORE a power purchase agreement (PPA) can be negotiated with buyer! Finally, equipment procurement, wind turbine purchase agreements, and contractors must be lined up before you have a “bankable” project (i.e. before a tax equity investor will buy the project from you). A project is not “shovel ready” until it has all of these pieces in place. Morale of the story, this is not a fast process, and if there is no tax equity light at the end of the tunnel (i.e. September 2009 – through today) the process is often halted or delayed to preserve capital.
To be fair, there are the “lucky” distressed assets out there as a result of tax equity leaving the market in fall 2009. (Their wishes have come true, and projects that were ready to be scrapped as uneconomic are now looking very attractive). But for the most part, if a project was economic and “shovel-ready” without the grant money then it had already locked up its financing before being “shovel ready”.
The challenge for the Department of Energy and other governmental organization that are receiving these funds is to balance the pressure to get them out the door fast with the need to maximize the impact that they have. Not an easy task.
Saturday, April 11
Exciting Infrastructure Support for Plug-in Hybrid Electric Vehicle (PHEV) Adoption
Slowly but surely innovation in the automotive industry is pushing toward PHEV technology. On a recent trip to Shanghai, I spoke with the CEO of Ford, China. He believed the PRC officials in Beijing were going to leap-frog the U.S. - going straight from combustion engines to PHEV technology through blunt force (as is typical in China). U.S. national policy seems focused on providing incentives for consumers to purchase PHEVs (mostly in the form of rebates), and putting a gun to Detroit’s head by forcing PHEV innovation with strings attached to the bailout money.
Some controversy about the actual mpg performance of existing models has questioned the economic savings at the pump. Several DOE tests done under real-world driving conditions showed only 51mpg performance for vehicles that were capable of 100mpg performance under lab conditions.
Despite the challenges there are several firms who are locking-in their first mover advantage in the U.S. urban markets they think will be early PHEV adopters.
Two top competitors in this space are starting their efforts in California. Coulomb Technologies has plans to install 500 PHEV charging stations along California highways in 2009. Better Place is focusing on charging stations that also offer battery swap services. A San Jose news report stated that a Coulomb’s “ChargePoint” charging station was installed in twenty minutes and cost only $2,000 dollars (paid for by Coulomb). The unit is only three-feet high x one-foot wide and in this case they had strapped it onto a modified street lamp. Coulomb customers who have an account, sign-up for a access key, that when swiped at a charging station, opens the door to the outlet. Once plugged in, you close and lock the door (so that no one is tempted to unplug you). What I found fascinating was that Coulomb is emulating the electric utilities’ rate model by charging customers a “subscription fee” which blends the cost of the electricity that they consumed at the charging station with maintenance costs, and the up-front capital cost it took to install the station. Most importantly, the units have bi-directional metering so if your car is plugged into a charging station at a parking deck during peak hours, Coulomb’s software will stop charging your battery during those peak hours to help the electric utility “peak shave” demand. There is a revenue sharing business model with “hosts” who buy the charging stations, although this isn’t released. They have also integrated with Google Maps to not only show the location of charging stations in their network, but through their network software they can determine which station is occupied at a given moment. This will allow customers to plan their route and choose the closest unoccupied station. The company has already formed a joint venture with a German company to distribute Charge Point stations throughout Europe, the Middle East, and Asia (EMEA). Although GridPoint’s V2Green has through their partnership in the “Pecan Street Project” marked Austin as their target. There are two PHEV vehicles on a proof-of-concept project with Austin Energy to determine the value of PHEVs as load-management resources. It will be interesting to see if these two California players make inroads in the Austin market in the next 3-5 years.
Web Sources:
http://cleantechnica.com/2009/02/18/smartlet-stations-charge-plug-in-vehicles-from-sidewalk/
http://www.coulombtech.com/aboutus.php
http://www.betterplace.com/
http://www.gridpoint.com/solutions/electricvehiclemanagement/
http://www.verdek-ev.com/MainPage.aspx
http://www.greentechmedia.com/articles/are-the-benefits-of-plug-in-hybrids-overstated-6014.html
Some controversy about the actual mpg performance of existing models has questioned the economic savings at the pump. Several DOE tests done under real-world driving conditions showed only 51mpg performance for vehicles that were capable of 100mpg performance under lab conditions.
Despite the challenges there are several firms who are locking-in their first mover advantage in the U.S. urban markets they think will be early PHEV adopters.
Two top competitors in this space are starting their efforts in California. Coulomb Technologies has plans to install 500 PHEV charging stations along California highways in 2009. Better Place is focusing on charging stations that also offer battery swap services. A San Jose news report stated that a Coulomb’s “ChargePoint” charging station was installed in twenty minutes and cost only $2,000 dollars (paid for by Coulomb). The unit is only three-feet high x one-foot wide and in this case they had strapped it onto a modified street lamp. Coulomb customers who have an account, sign-up for a access key, that when swiped at a charging station, opens the door to the outlet. Once plugged in, you close and lock the door (so that no one is tempted to unplug you). What I found fascinating was that Coulomb is emulating the electric utilities’ rate model by charging customers a “subscription fee” which blends the cost of the electricity that they consumed at the charging station with maintenance costs, and the up-front capital cost it took to install the station. Most importantly, the units have bi-directional metering so if your car is plugged into a charging station at a parking deck during peak hours, Coulomb’s software will stop charging your battery during those peak hours to help the electric utility “peak shave” demand. There is a revenue sharing business model with “hosts” who buy the charging stations, although this isn’t released. They have also integrated with Google Maps to not only show the location of charging stations in their network, but through their network software they can determine which station is occupied at a given moment. This will allow customers to plan their route and choose the closest unoccupied station. The company has already formed a joint venture with a German company to distribute Charge Point stations throughout Europe, the Middle East, and Asia (EMEA). Although GridPoint’s V2Green has through their partnership in the “Pecan Street Project” marked Austin as their target. There are two PHEV vehicles on a proof-of-concept project with Austin Energy to determine the value of PHEVs as load-management resources. It will be interesting to see if these two California players make inroads in the Austin market in the next 3-5 years.
Web Sources:
http://cleantechnica.com/2009/02/18/smartlet-stations-charge-plug-in-vehicles-from-sidewalk/
http://www.coulombtech.com/aboutus.php
http://www.betterplace.com/
http://www.gridpoint.com/solutions/electricvehiclemanagement/
http://www.verdek-ev.com/MainPage.aspx
http://www.greentechmedia.com/articles/are-the-benefits-of-plug-in-hybrids-overstated-6014.html
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