Strategic Energy Development and Implications for Powering Utility Vehicles

Strategic Energy Development and Implications for
Powering Utility Vehicles

By Stephen Metzger, PhD., Senior Editorial Advisor, IUV Magazine

As we are still early in the new year, and this is often the starting point for implementing new business strategies—and in the case of industry analysts, the time for revising forecasts and outlooks.  As my forecast has been recently published in IUV Magazine, I won’t be doing any revising right now, but I would like to speculate on an important aspect of the longer term potential for the small, task-oriented vehicle (STOV) industry, especially the utility vehicle component.

I should note, parenthetically, that the Society of Automotive Engineers (SAE) has established a committee under the direction of Anthony Williams, Director of Engineering at E-Z-GO Textron, for the purpose of creating a technically-defined product category for STOVs.  This is clearly an opportunity for defining a robust generic class of vehicles that now commands a market of several billion dollars, not counting parts and accessories, and which has excellent growth prospects.

Power Sources in the Context of the Green Movement

Certainly one of the major factors influencing the development of STOV-type utility vehicles is the potential for accomplishing diverse tasks (i.e.,work) with lower pollution.  Thus, there has been a gradual, but definite progression toward non-polluting power sources within the STOV class of vehicles.  Mainly this has been a phenomenon of switching from gasoline engines to electric power.

With the rise of the use or potential use of electric power, the issue of an adequate infrastructure to support necessary recharging has also emerged.  With the widespread use of electric-powered vehicles (still to come) overnight charging will not be sufficient to meet the needs of the new power paradigm.  There are two predominant solutions to issue:

Widely distributed recharging stations or “pumps” operating on the grid;

Charging stations, depots, wherein discharged batteries are swapped out for fully charged batteries.

In the first case, companies such as Coulomb Technologies (Charge Point system) and General Electric (the WattStation™) are teaming with electrical utilities serving several U.S. urban areas to place electrical charging pumps at various heavily trafficked locations.

The “swap-out” solution is in use in Israel and apparently is working well. The Chinese company, Kandi Technologies producer of a low speed electric vehicle, CoCo,  recently announced a formal agreement with battery maker, Tianneng Power International, Ltd. and Jinhua Bada Group, a subsidiary of State Grid Power Corporation, China’s largest power company, to create China’s first electric vehicle battery replacement services company.   By virtue of its patent on the swapping process, Kandi will realize revenues not only on sales of the CoCo EV, but also on its share of the battery rental, replacement, charging and recycling fees generated by the joint venture.

Kandi commenced, in January, promotional activities for vehicle sales and the battery swapping process, including test drives, in Jinhua City, Zhejiang Province.  Jinhua City has a population of about 4.5 million residents and is a manufacturing site for the company.

A Better Place is another contender in the battery swap approach, pioneered by Israeli entrepreneur, Shai Agassi.  The swapping process takes about a minute, making this aspect of moving from point A to point B comparable, if not faster than filling your tank with gas.  The market development strategy for A Better Place is somewhat different than Kandi, as it is initially appealing to the automotive (and light truck) fleet market with site-oriented swapping stations rather than a general, dispersed network of stations for consumer use.

Implications for Utility Vehicles

What, if any, are the implications of these technologies for utility vehicles?  Certainly, both the charge stations and battery swapping stations greatly reduce concerns over the distance that electric-powered vehicles can be operated.  The battery swapping process might be considered superior in this regard as a full recharge can be accomplished very quickly.  Forklift fleets have, of course, used the swap out technique for some time, but beyond this application little has been done so far.  Therefore, it stands to reason that these technologies can greatly add to the feasibility and convenience of electric-powered utility vehicles and STOVs in general regardless of particular type.

Alternatives to On-Grid Electricity

Although on-road vehicles and consumer-oriented LSVs will likely have batteries recharged through centralized steam generation (baseload) units and their associated network of electricity transmission lines, there is considerable potential for more local, site-based electricity generation to service utility vehicle fleets. According to NaturalGas.org, a website developed by the Natural Gas Supply Association, with technological advancements, there is a trend towards what is known as ‘distributed generation’. Distributed generation refers to the placement of individual, smaller sized electric generation units at residential, commercial, and industrial sites of use. These small scale power plants, which are primarily powered by natural gas, operate with small gas turbine or combustion engine units, or natural gas fuel cells.

Two types of distributed electricity generation are of particular interest.  As classified by the NGSA, these are industrial gas turbines powerful enough to supply electricity to an entire plant or building facility, and gas microturbines, with output ranging from 25 to 500 kilowatts of electricity and well-suited to supply the needs of small-scale industrial and commercial establishments.

Both types are 20-40% efficient, which equals or surpasses that of base load utility plants.  Because they are located quite close to the power-using equipment, however, these distributed generation technologies avoid the considerable line loss experienced in centralized base load systems.  In addition, because industrial gas turbines and microturbines throw off considerable heat in their operation, recapturing that heat for a variety of purposes (e.g., space heat), can result in efficiencies reaching 80%.

Why the Interest in Electricity Generated via Natural Gas?

The supply chain from raw materials to end market product is most often a long one and this is especially true of manufactured products.  In the case of energy, the supply of which is vital for all industrial activity, the movement from wellhead to end user is carefully tracked as a critical component of private markets, as well as an important issue of national defense.  For the first time in a good number of decades, the United States has available an energy form, which carries the potential for complete energy independence. The energy form is natural gas.  With the development of shale gas exploration/development techniques, a huge reservoir of natural gas supplies is now available, onshore U.S. at quite competitive costs (i.e., read, “no government, taxpayer subsidy needed”). While the greater part of this resource will be developed in the future, it is interesting to note that natural gas usage in the United States has increased steadily over the past two decades.  The new shale gas resources, given on-going pipeline construction should allow this trend to continue.

One thing is clear and that is on-site natural gas-using turbines will allow and encourage the expansion of electric power driven commercial fleets.  Charging the vehicles can be either through plug-in electric or battery swap systems.  The only thing that would seem to deter this development is the direct use of natural gas in utility vehicle fleets.  Given the fact that this would eliminate energy losses in the conversion to electricity, a strong argument could be made for this approach.  But, for some reason, little is said about it—and this, despite many pilot programs involving vehicles using compressed natural gas and the fact that, according to the American Gas Association, some 3.2 million vehicles are now running on CNG. A topic for a future column.

About the Author:


Stephen Metzger, PhD, is Managing Director of International Market Solutions, LLC, an internationally-based market research firm. He is also Principal of International Competitive Assessments, the market research arm of IMS. ICA has produced four major studies of the small, task-oriented vehicle market since 2000.

Mr. Metzger is Senior Editorial Advisor for Industrial Utility Vehicle Magazine.