Flipping Fleets: The Case for Electrification

The Department of Energy (DOE) this week released information that it is launching a Funding Opportunity Announcement (FOA) entitled “Alternative Fuel and Advanced Vehicle Procurement Aggregating Initiatives.” While it might not have the catchiest title, or even sound like a particularly exciting development in the ever-evolving electric vehicle space, this particular FOA could be a small move with big implications. According to documents released by DOE, the aim of the funding opportunity is not to directly support the purchase of alternative fuel vehicles. Instead, the object of the FOA is to “develop and implement effective purchasing/procurement processes designed to coordinate and consolidate bulk alternative fuel vehicle and advanced vehicle orders and reduce per-unit prices of commercially-available vehicles.” But what does that mean? In the FOA, DOE explains that alternative fuel vehicles are generally more expensive than their internal combustion counterparts, largely because of their higher initial costs. Much of this is related to the fact that they are not produced on the same volume or scale as conventional vehicles. This is already a problem for mass-market vehicles such as the Nissan LEAF, Chevrolet Volt, or Tesla Model S. However, the challenge is even greater for commercial vehicles, especially when new alternative fuel technologies offer value beyond simple fuel savings. Many companies are finding ways to find utility from emerging transportation technologies are extend beyond getting from Point A to Point B and saving on fuel costs. For an example of this, we look at Pacific Gas and Electric Company (PG&E), the country’s largest investor-owned utility. PG&E has been using battery technology in their bucket trucks, enabling them to provide power during outages, and eliminate idling while on job sites. These trucks, the utility industry's first plug-in electric hybrid drivetrain Class 5 bucket trucks, were developed in partnership with Efficient Drivetrains Incorporated. They feature up to 40 miles all-electric range and "electrify" all onboard equipment including the boom, eliminating the need to idle the truck engines while at job sites. In 2012, the Electrification Coalition published a study about the usefulness of these trucks. Repair crews loved them for a variety of reasons. First, eliminating engine idling was a tremendous advantage—the crew were able to communicate easily without yelling over a loud diesel engine for hours at a time. This has a tremendous impact on safety and efficiency on the job site. The trucks also give the crews greater flexibility regarding when they would undertake repairs—idling diesel engines often violate neighborhood noise restrictions, forcing crews to stop working in the middle of a job and start again the next day if they didn’t finish before certain hours. This might not sound like a significant benefit, but to electric repair crews interviewed in the EC’s study, it saved hours of time. Using batteries in this way also, of course, saves massive amounts of fuel, by offsetting 6-8 hours of daily consumption from idling. The batteries can also be recharged by plugging into the grid, creating additional flexibility. Additionally, bi-fuel utility trucks are particularly valuable during widespread power outages created by large storms or other natural disasters. During hurricane Sandy, gas stations were unable to pump fuel because electrical outages rendered gasoline pumps useless. If vehicles for emergency responders or utilities had the ability to refuel in two ways, it could significantly reduce the number of situations where fleets cannot properly utilize their vehicle resources due to inability to access fuel. In addition, the power exporter units on these trucks can be used in some cases to restore power to buildings, or even neighborhoods, enabling a slight return to normalcy. So what does this have to do with DOE’s funding proposal? The Department of Energy is hoping that more companies will think outside the box about the capabilities of alternative fuel vehicles. However, instead of 50 different companies developing 50 different specialized vehicles, DOE is trying to encourage ways for companies to understand their collective needs and help manufacturers create vehicles that are useful to as wide a swath of companies and industries as possible. After all, volume is the “bread and butter” of the auto-manufacturing industry. Since scale is an essential aspect of reducing costs, vehicles that only support a small niche are unlikely to remain viable for manufacturers in the long run. There’s also the fact that in many ways, corporate or municipal fleets are better equipped to lead the charge on alternative fuel vehicles than mainstream consumers. During an event on Tuesday, when PG&E was showcasing some of its newest electric utility trucks, one of the event speakers mentioned that “fleets might flip on electric vehicles before consumers do.” Although it sounds like a revolutionary concept, we’ve actually known this for some time. The reasons why are summarized in this table, from the 2010 report, the Fleet Electrification Roadmap.


Now, 3 years into the commercial introduction of electric vehicle technology, maybe the time has come for fleets to “flip.” DOE’s grants can help move in that direction, but it will also take courage and creativity from companies to get us there.