ABB’s Jouret Seeing Positives as Vehicles Go Electric: Q&A

By Richard Stubbe, Bloomberg New Energy Finance editor. This article first appeared on the Bloomberg Terminal and is available to clients here.

The electrification of transportation is already showing some surprising and positive results, according to Guido Jouret, chief digital officer for ABB Ltd. Chargers are getting better, buses are playing an important role, and batteries are lasting far longer than expected.

Not many companies have more to gain from the world’s transition to electric vehicles than ABB. The Zurich-based company makes vehicle-charging stations and has a substantial business serving utilities with robotics, controls and more that will be used to modernize the grid.

The company operates in about 100 countries worldwide. It’s divided into four segments: Electrification Products, Robotics and Motion, Industrial Automation, and Power Grids.

Jouret took questions from BNEF about the state and future of electric transportation in a phone interview in mid-May.

Q: It’s 2018. What’s the overview on electric vehicles?
A: ABB is involved not in the generation but the transmission of electricity, and how we use that electricity, whether it’s for robotics, drives or motors. We have a strong interest in the electrification of all forms of transportation. Before cars, we were busy electrifying trains and buses, and electric cars are just a natural extension. In order for electric-vehicle adoption to succeed, we need fast charging available in lots of places to overcome range anxiety and let people travel long distances.

The high-performance charger that we just announced can charge a car, if the car is able to take it, in about 8 minutes.

Q: What are the other implications of that?
A: As you solve one problem, you create another. If you put a lot of these fast chargers in lots of places, that presents to the grid a lot of short-term demand for power, which you either address by having batteries combined with the fast charger so you don’t dip into the grid, or you put the storage in the grid itself so it can accommodate these demands.

We have a sizable utility business where we supply transformers and substations and transmission capabilities, so we like EV charging a lot. We think the world is going to go electric for almost all forms of transportation — including aviation.

Q: In what order do these improvements happen?
A: All of the above, all at the same time. We need a combination of things. The vast majority of people have a regular commute to work, and then they work and then they go home. The charger at home or at work should ensure that the car is up most of the time.

The new cars coming out allow you to drive for three or four hours before you need to charge. So we need fast chargers for people to take long-distance drives and people who drive for a living like taxi drivers. Unless fast charging is available along interstates, then we won’t see the fundamental adoption of EVs really take off.

Q: What does that mean for the grid?
A: The implications vary. If people are charging at home most of the time, then there’s shifting demand for power from during the day to increasingly at night, which for a lot of the grid is OK, up to a point.

In California, you’re starting to see peak demand, which used to be in the middle of the day or the afternoon, turn into a trough because of all the solar power. Some of that demand has shifted into the evening. That leads to a challenge on the grid side, which is how do we handle a huge surge in demand from 5 p.m. until about 9 p.m.

Q: Who else is affected?
A: We’re starting to see fleets of electric trucks and vans in many places, and there will be more. The average UPS or FedEx truck does about 200 miles a day, well within current battery limits. But those trucks will all come back to the depot around 6 or 7 p.m. and want to plug in. That will put a lot of load on the grid at a particular point.

Q: Buses are expected to be a tipping point in the electrification drive. Won’t they have the same problem?
A: We have an interesting solution to this, the ABB Tosa solution. With these big vehicles, the battery also has to be big, and then you need more energy to lug the battery, so there’s a point of diminishing efficiency.

A bus might drive 18 hours a day, so when do you charge it? Our solution is to put small batteries on the bus and a supercapacitor on top. When the bus pulls into a stop, a retractable arm lowers itself onto the top of the bus and gives it enough electrons to get to the next stop and repeat the process. So the bus can pretty much drive indefinitely and never have to be sitting in a depot getting charged. We’ve sold this into places like Geneva and cities in Belgium. It’s an elegant solution.

Q: What else is going on with batteries?
A: One of the other entrancing implications is that electric cars are just batteries on wheels.

We’ve seen some data from the Tesla utility-scale battery that was put into South Australia a few months ago. The battery on the grid can smooth out the peaks efficiently and very quickly. In just a couple of months, it has reduced the peak cost of electricity in that state by over 90 percent. It’s been a tremendous boon.

But wait a minute. We have lots of batteries there sitting in trucks or buses or cars, and the vehicle-to-grid use case is embryonic. I’m interested to see what happens as fleets come along. UPS or FedEx may have 20 of these vans and they’ll say, “You know what? When they’re sitting in the depot, I can get paid for participating in a grid peak-shaving exercise.” Perhaps some of the grid-scale battery technology could be coming from these trucks.

Q: Is the technology progressing fast enough to support these ideas?
A: There’s some good news. When the first lithium-ion car batteries were put into the new Teslas, it wasn’t known how fast the batteries would degrade. The early signs are that the pessimistic assumptions that people had aren’t borne out. There’s a taxi company in Las Vegas that’s been operating a fleet of Teslas since 2012. The operators are doing what Tesla recommends you don’t do, which is charging with the superchargers all the time. Batteries like it when you charge and discharge them slowly.

The operators need the taxis to run 18 hours a day, so they were charging these cars nonstop several times a day on the superchargers. After six years, they found the battery degradation was only about 6 percent. They were seeing this battery go to 500,000 miles and still be at 70 percent performance.

So now you have to consider whether the battery will outlast the car. You could take the batteries and put a stack of them in the depot to create a grid-scale battery, and the cars that come to the depot to recharge could get their power from those batteries.

Eventually they’ll wear out, and you can recycle them back into the base materials. If you have a bunch of trucks with batteries in them, you might be willing to pay more up front and then make money from the battery after the truck’s life. There could be interesting derivative markets for those batteries.

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