***************************************************************** CALFUELS PLAN Developing An Infrastructure Plan For Alternative Fuel Vehicles California Energy Commission September 1994 Publication Number: P500-94-002 ***************************************************************** ACKNOWLEDGEMENTS Research Development and Demonstration Committee Sally Rakow, Presiding Member and Vice Chair Charles R. Imbrecht, Second Member and Chairman Eric Wong, Senior Policy Adviser to Vice Chair Sally Rakow John Wilson, Senior Policy Adviser to Chairman Charles R. Imbrecht Management Nancy J. Deller, Deputy Director, Energy Technology Development Division Chuck Mizutani, Office Manager, Technology Evaluation Office Pat Perez, Energy Commission Supervisor, Technology Evaluation Office Heather Raitt, Project Manager, Technology Evaluation Office Technical Support Contractor Bevilacqua-Knight, Inc. Contributing Staff Sue deWitt, Transportation, Technology, and Fuels Office Karla Fillion, Transportation, Technology, and Fuels Office Carrie Hilton, Technology Evaluation Office Ken Koyama, Transportation, Technology, and Fuels Office Jonathan Teague, Transportation, Technology, and Fuels Office Rafael Valentin, Transportation, Technology, and Fuels Office Donaldo Wilson, Technology Evaluation Office ***************************************************************** TABLE OF CONTENTS Page EXECUTIVE SUMMARY i CHAPTER 1: OVERVIEW Introduction Background Perspective Summary of Findings Fuel Supplies Fueling Facilities Fueling Hardware Ratepayer Responsibility Consumer and Vehicle Support Codes and Regulations Recommendations CHAPTER 2: ELECTRICITY Initial Overview Fuel Supplies Fueling Facilities Fueling Hardware Codes and Regulations Consumer and Vehicle Support CHAPTER 3: LIQUID FUELS Initial Overview Fuel Supplies Fueling Facilities Fueling Hardware Codes and Regulations Consumer and Vehicle Support CHAPTER 4: GASEOUS FUELS Natural Gas Initial Overview Fuel Supplies Fueling Facilities Fueling Hardware Codes and Regulations Consumer and Vehicle Support Liquefied Petroleum Gas Initial Overview Fuel Supplies Fueling Facilities Fueling Hardware Codes and Regulations Consumer and Vehicle Support Hydrogen Initial Overview Introduction Use of Hydrogen Fuel Supplies Fueling Facilities Fueling Hardware Codes and Regulations ***************************************************************** EXECUTIVE SUMMARY INTRODUCTION The California Energy Commission (Commission) has been actively involved with alternative fuel vehicles (AFVs) for 15 years. The major thrust of the Commission's work, focused on conducting AFV demonstrations, has helped influence and support development of these vehicles. The experiences from these demonstrations ‹ along with information and perspectives from a variety of industry and government specialists ‹ have helped form a basis for the present document, prepared in response to Assembly Bill 3052 (Chapter 762, Public Resources Code 25326). Passed in 1992, this legislation requires the Commission to report on the infrastructure needed to support AFVs and vehicles powered by reformulated gasoline (RFG) to provide recommendations for facilitating its deployment. The fuels included in this legislation, and therefore this report, are electricity, RFG, methanol, ethanol, natural gas, liquified petroleum gas, and hydrogen. As directed by the legislation, this report focuses on the following infrastructure issues: o Fuel supply o Convenient fueling and charging sites o Standard specifications for infrastructure design and testing o Customer service, education, and training o Quick charging o Electrical and building code revisions o Strategies to ensure vehicle service and support o Ratepayer responsibility for utility infrastructure development Creating a specific action plan for establishing the infrastructure necessary for each vehicle type is beyond the scope of this report. In addition, the report does not address vehicle-related issues that are not directly related to infrastructure, such as vehicle technology status and development and the comparative costs of operating the different AFVs. Also omitted is a discussion of liquified natural gas and consideration of the unique infrastructure requirements for use of alternative fuels in heavy-duty vehicle applications. This document discusses actions already under way to develop an alternative fuel infrastructure, examines infrastructure issues and barriers, and identifies organizations that could best address these issues. BACKGROUND Several general observations and perspectives are offered to provide a context for more specific findings. The most crucial observation is that alternative fuels play a minor role in today's transportation system. The timing and extent of commercialization for the various AFVs is uncertain, with the exception of electric vehicles (EVs). EVs are expected to meet the state mandate that two percent of new vehicles offered for sale in 1998 must be Zero Emission Vehicles (ZEV). This requirement increases to ten percent in 2003. Currently, the existing fueling network for AFVs is extremely limited. Customer service and training have been minimal and work in the areas of technology standardization and code revisions is in the early stages, particularly for natural gas and electric vehicles. Even so, private industry has achieved great success in bringing this fledgling technology to its current level of activity. Given these uncertainties, continued support is necessary to attract investors who will finance the needed infrastructure elements. Activities that reduce market uncertainty and investment risk may be necessary to ensure infrastructure investments. Properly timing market intervention, strategies and investments also will be essential to ensure that resources are directed toward necessary and productive activities. Because of state budget considerations, creative strategies that will not require state funding beyond what is already available will be especially valuable. SUMMARY OF FINDINGS An important finding of this study was that no major infrastructure barriers exist to hinder introduction of RFG. In fact, RFG is the only fuel in this study that can use the existing gasoline distribution system without alteration. Although industry and government have worked together to advance AFV infrastructure, both near-term and long-term infrastructure issues must be resolved. This report examines in detail a variety of infrastructure issues for each AFV. For a quick overview, the following highlights the key barriers identified for each vehicle type: o All AFVs - Lack of training for vehicle technicians and emergency personnel - Need for increased public awareness about AFVs - Uncertainty about final market price for fuel o Electric vehicles - Lack of standard charging connector - Need for the state to adopt code revisions in time to serve the ZEV mandate and to disseminate code information to local enforcement agencies o Methanol vehicles - Limited fuel supplies - Cost of production facilities - Limited fueling network o Ethanol vehicles - High fuel price - Limited fueling network o Natural gas vehicles - Limited fueling network - Cost of natural gas compression and fueling systems - Need for the state to adopt national code revisions and to disseminate code information to local enforcement agencies o Liquified petroleum gas vehicles - Need for the state to adopt national code revisions and to disseminate code information to local enforcement agencies o Hydrogen vehicles - Need for additional research, development, and demonstration - Perception of high safety risks RECOMMENDATIONS The Commission's ultimate goal is to facilitate private-sector investment in the AFV fueling infrastructure. To achieve this goal, the Commission can support selected ongoing initiatives and facilitate partnerships between the different players that would benefit from early investment in this potentially large market. The following section briefly summarizes key roles California government agencies and industry could take to cost-effectively foster AFV infrastructure development. Staff and financial resource commitments necessary to implement these recommendations have not been estimated. All state actions should be compatible with national activities and encourage uniformity on a national and international basis. AFV FUEL SUPPLY Goal: Encourage the use of renewable feedstocks in the production of alternative fuels. Action: Provide coordination and risk mitigation strategies for developing new renewable fuel production facilities, especially within California. These projects could take advantage of collaborative projects involving agricultural waste disposal, urban waste management, land fill gas disposal, and other opportunities. Timing: Ongoing Lead: California Energy Commission Collaborate: California Department of Conservation, California Integrated Waste Management Board, California Department of Commerce, and local air quality management districts AFV FUEL SUPPLY AND PRICE PROJECTIONS Goal: Minimize market uncertainty surrounding alternative fuels by forecasting supply and price. Action: Analyze fuel supply and price factors for each of the alternative fuels, including fuel taxes, projected fuel supplies, projected fuel demand, and projected fuel price. These activities should be conducted as part of ongoing Commission efforts, such as the Fuels Report or the California Transportation Energy Analysis, to evaluate alternative fuels. Lead: California Energy Commission Collaborate: California Air Resources Board, California Department of Transportation, California Public Utilities Commission, industry, fuel providers, State Board of Equalization, and Franchise Tax Board HARDWARE TESTING AND DEMONSTRATION Goal: Achieve safe, cost-effective, efficient, and convenient AFV fueling and charging technologies. Action: Support the industry by funding the testing and demonstration of new AFV infrastructure technologies and equipment. Future work should focus on technologies and methods that advance the safety, performance, efficiency, reliability, and economic viability of infrastructure fueling systems. Existing state programs which provide a cost-share for demonstration projects have focused on vehicle technologies, but future efforts should emphasize infrastructure demonstrations. The fueling infrastructure established and/or used to support the AFVs purchased for use in state fleets will provide opportunities for testing and demonstrating advanced AFV infrastructure technologies and in turn can serve as technology transfer models. Timing: Immediate Lead: California Energy Commission Collaborate: California Air Resources Board, California Department of Transportation, Department of General Services, and industry PUBLIC EDUCATION Goal: Increase public acceptance of AFVs and their supporting technologies. Action: Working in partnership with industry and building on their ongoing efforts, develop and initiate a coordinated campaign to increase public awareness and knowledge of AFVs. Familiarity with the unique properties, features, attributes, and safety aspects associated with each of the AFV options will inevitably increase consumer acceptance. Educational efforts should also inform the public on the location of fueling and charging sites. Specific activities include cofunding preparation of publications, television advertising, a toll free information phone number, and educational videos. Timing: Immediate Lead: California Energy Commission Collaborate: California Air Resources Board, California Department of Transportation, industry, utilities, and building and fire officials MECHANIC TRAINING AND CERTIFICATION Goal: Increase consumer acceptance and satisfaction with AFVs by facilitating the availability of properly trained and high quality AFV service technicians. Action: Support ongoing initiatives to train and certify AFV service mechanics. This activity should emphasize working with -- and outreach to -- the vast cadre of independent service providers. The Commission expects that the original equipment manufacturers will provide their own training to employees and dealerships. In addition, the state should work with the public education system to establish minimum training standards to ensure that students leaving training centers have the requisite level of knowledge in this area to compete for jobs. The state can support efforts to publicize the availability of AFV training programs, and help build an early demand for such programs by encouraging or requiring state agency mechanics to attend sanctioned AFV training programs. Further, the state should become involved in setting up AFV mechanic certification programs and continuing education. Timing: Immediate Lead: California Air Resources Board and Bureau of Automotive Repair Collaborate: California Energy Commission, California Department of Transportation, community colleges, industry, and utilities TRAINING FOR AFV EMERGENCY RESPONSE Goal: Increase consumer acceptance and safety in using AFVs by ensuring adequate development of emergency response procedures. Action: The state should work with industry and local fire officials to develop and disseminate information on the recommended procedures for dealing with AFV emergency situations. Emergency personnel need to be trained on any unique safety characteristics for AFVs. A critical element of this activity will include establishing standardized and effective mechanisms for identifying the type of power system being used in a vehicle so that appropriate safety procedures can be followed. In some cases, vehicle safety features need to be standardized. Timing: Immediate Lead: California State Fire Marshal Collaborate: California Energy Commission, California Air Resources Board, California Department of Transportation, National Highway Traffic and Safety Administration, industry, and fuel providers CODE ADOPTION Goal: Encourage fueling and charging network expansion by standardizing the permitting process. Action: At the state level, new and developing AFV building, fire, and safety codes should be identified and or developed where none presently exist. The California State Fire Marshal, with support from the Commission, should accumulate and evaluate all existing AFV codes and evaluate them for state wide adoption. To the extent possible, model code changes that have been made for AFVs should be adopted by the state. The most appropriate regulatory mechanism for amending California codes will need to be identified. The California State Fire Marshal should work cooperatively with the Commission. Meanwhile, the state should focus on informing local city and county officials of the state adopted regulations. Information packages on each type of AFV regulation should be provided to all local building and fire officials to assist them in correctly interpreting and applying these new regulations. Timing: Immediate Lead: California State Fire Marshal Collaborate: California Energy Commission, California Air Resources Board, California Department of Transportation, California Building Officials, California Occupational Health and Safety Administration, the building industry, local fire and building officials, industry, and fuel providers LOCAL GOVERNMENT RESOURCE GUIDE Goal: Encourage fueling network expansion by increasing local government awareness of alternative fuels. Action: Inform local governments on the actions needed to facilitate the installation of fueling and charging stations for AFVs. This includes developing a resource document for distribution to local jurisdictions throughout the state to provide local government representatives with information on AFVs and fueling facilities, and on acquiring AFVs for their fleets. This effort would facilitate AFV acquisition and consistent regulatory treatment of AFV fueling and charging stations statewide. Lead: California Energy Commission Collaborate California Air Resources Board, industry, fuel providers, air quality management districts, local planning agencies, and local fire officials AFV INFRASTRUCTURE PROBLEM RESOLUTION Goal: Provide leadership in resolving AFV issues and problems. Action: Monitor infrastructure development to remain aware of key players, issues, and problems. Thus informed, the Commission is well-positioned to play a leadership role in working with key partners to facilitate a resolution to any outstanding problems. Examples of actions that could be pursued include: 1) Developing an action plan for strategically expanding the fueling infrastructure network to targeted geographic areas. Fueling facilities could be deployed along major corridors to allow for travel between metropolitan areas. The state could develop a demonstration program targeted at expanding the natural gas or liquid fuel network along such corridors. Adoption of a statewide requirement that underground storage tanks be alcohol compatible would improve potential for deployment. 2) Developing a state-established pre-1998 convention for conductive charging connectors for EV charging if existing efforts to do so are not successful by the end of 1994. 3) Developing performance standards, such as efficiency and power quality levels, for AFV infrastructure appliances including EV chargers and natural gas compressors. 4) Developing a mechanism requiring that utilities be informed when a new EV is purchased. The Department of Motor Vehicles could set up a reporting mechanism to show the number of EVs registered within each utility service territory. This information could be used to support utility demand side management efforts. 5) Developing and demonstrating a standard fuel dispenser interlock for non-gasoline liquid alternative fuels. 6) Facilitating adoption of state highway signage for all alternative fuels. Timing: Ongoing Lead: California Energy Commission Collaborate: California Air Resources Board, California Department of Transportation, industry, air quality management districts, and fuel providers COORDINATE STATE AFV ACTIVITIES Goal: Increase statewide coordination of AFV activities to facilitate AFV technology acceptance, and establish a fueling network to demonstrate infrastructure options and to leverage state influence on AFV industry issues such as fueling standardization. Action: Take a lead role in bringing together appropriate state agencies to develop and implement a cohesive AFV infrastructure development and demonstration strategy to support the Energy Policy Act vehicle procurement requirements. This will include leveraging state funding with federal funding to support advance infrastructure technologies. This coordination will include achieving a balance between obtaining AFV and infrastructure funding. State purchase agreements can be used as a tool to influence industry standardization efforts. Timing: Immediate Lead: California Energy Commission Collaborate: California Department of Transportation, California Air Resources Board, local air quality management districts, Department of General Services, and fuel producers ***************************************************************** CHAPTER 1: OVERVIEW INTRODUCTION In 1992, the Legislature passed, and the Governor signed in to law, Assembly Bill 3052 (Chapter 762, Public Resources Code 25326) sponsored by Assemblyman Polanco. A.B. 3052 requires the California Energy Commission (Commission) to report on the infrastructure needed to support alternative fuel vehicles (AFVs) and vehicles powered by reformulated gasoline (RFG) and provide recommendations for facilitating its deployment. The legislation requires the Commission to address specific topics, including: ensuring adequate fuel supply; identifying convenient fueling and charging sites; developing standard specifications for infrastructure design and testing; providing customer service, education, and training; exploring the development of quick charging; recommending electrical and building code regulatory revisions; initiating strategies to ensure vehicle support; and considering ratepayer responsibility for utility infrastructure development. The Commission was directed to work in collaboration with the California Public Utilities Commission (CPUC), the California Air Resources Board (CARB), the California Department of Transportation, local agencies, utilities, and the private sector in developing the plan. In response to this directive, the Commission established teams of experts to examine all of the critical issues involved in developing an alternative fuel infrastructure in California. Since the infrastructure requirements vary by the type of fuel, the report is organized in chapters according to the following fuel types: o Electricity o Liquid fuels, including RFG, methanol, and ethanol o Gaseous fuels, including natural gas, liquefied petroleum gas, and hydrogen For each fuel type, the report shows actions already underway to develop an alternative fuels infrastructure in California and identifies areas in which further action is needed. It is important to note that because this report focuses on AFV infrastructure, only peripheral attention is given to vehicle technologies and comparative costs of vehicle operations. BACKGROUND Although the Calfuels Plan focuses on charging and fueling infrastructure development, the following summarizes government and industry actions to support AFV commercialization and the development of reformulated gasoline (RFG). Alternative fuels are being developed as part of the effort to improve air quality, diversify fuel supplies, and enhance economic vitality. Over the past 15 years, the Commission has been actively involved with AFVs. Commission-sponsored programs have focused on conducting AFV demonstrations in fleet applications. Through its involvement in AFVs, the Commission has influenced and supported the development of AFVs that may offer improved efficiency, reduced emissions, and/or enhanced driver features. The successes in the vehicle technology aspects of AFVs have drawn attention to the need to establish comprehensive AFV infrastructure systems that encompass a convenient and safe network of fueling stations, vehicle and customer support services, training programs, and the attendant hardware, regulations, and institutions that go along with operating these systems. While AFV technology development has continued since the mid-1970s, interest and investments in these technologies have accelerated as a result of the recent adoption of aggressive AFV legislation and regulation. The California and federal governments have taken lead roles in moving the transportation sector towards alternative fuels. Specifically, three key legislative and regulatory mandates are largely responsible for spurring the AFV industry. In 1990, California adopted the world's most stringent vehicle tailpipe and evaporative emissions standards: the California Low-Emission Vehicle and Clean Fuels Program (LEV/CF). An option being pursued to achieve these new standards is the use of alternative fuels, as well as RFG. The program also requires select automakers to provide zero-emission vehicles (ZEVs) for sale in the state. Currently, only electric vehicles (EVs) qualify as ZEVs. Starting in 1998, two percent of the autos and light-duty trucks offered for sale by major automobile manufacturers (over 35,000 units annually) must have zero emissions. The percentage increases incrementally to 10 percent in 2003 and beyond. In 1991, CARB adopted Phase I and Phase II RFG regulations which were created to lower emissions from motor vehicles. The regulations mandated the production of Phase I RFG in 1992 which lowered the Reid Vapor Pressure of gasoline, required the addition of detergent additives, and eliminated on-road use of leaded gasoline. In 1996, the petroleum industry must produce Phase II RFG. The stringent fuel specifications for Phase II RFG are designed to reduce criteria and toxic pollutants from vehicles which operate on gasoline. California has also implemented various legislation to encourage AFV use. These are summarized in Table 1. At the federal level, the 1990 Clean Air Act Amendments (CAAA) established the Clean Fuel Fleet Vehicle (CFFV) program. Beginning in 1998, select fleets in cities classified as serious, severe, or extreme nonattainment areas for ozone ‹ or in some cases carbon monoxide ‹ that do not opt into the California LEV/CF program, must participate in the CFFV program, which includes strict tailpipe emission standards and clean fuel vehicle purchase mandates. Beginning in 1998, these mandates require that 30 percent of new light-duty vehicle purchases be CFFVs, increasing to 70 percent in 2000 and beyond. Along with California and CAAA mandates, key elements of the national Energy Policy Act of 1992 (EPACT) will continue to propel AFV purchases and development. For example, a tax deduction of up to $2,000 is available for all qualifying light-duty AFVs, a tax credit of up to $4,000 is available for EVs, and a $100,000 tax deduction is available for each clean-fuel fueling facility put in service. (Note that EPACT does not consider RFG-powered vehicles to be AFVs.) ***************************************************************** TABLE 1 EXISTING LEGISLATIVE PROGRAMS ENCOURAGING AFV USE in CALIFORNIA LEGISLATION/DATE/ACTION Chapter 796-89/1989/Requires the state to buy a percentage of low-emission vehicles, provided funds are available and vehicles are commercially available and meet cost guidelines. Chapter 990-90 (Senate Bill 1006)/1989Exempts from state sales tax the incremental cost of low-emission vehicles over the purchase price of a comparable gasoline-powered vehicle. For non-electric low-emission vehicles, this exemption may not exceed 200 percent of the gasoline vehicle. Local sales and use taxes may still be imposed. Expires December 31, 1994. Chapter 1611 (Senate Bill 2600)/1990/Provides a one-time state income tax credit for converting vehicles to natural gas, propane, electricity, methanol, and ethanol and for purchasing new vehicles that run on these fuels. The maximum per vehicle credit is 55 percent of the conversion or purchase price, not to exceed $1,000 for automobiles or $3,500 for larger vehicles. The bill sunsets January 1, 1995, and the total amount of credits available annually is $750,000. Senate Bill 146, signed into law in 1993, extends this low-emission vehicle income tax credit to off-road nonrecreational vehicles. Expires January 1, 1998. Senate Bill 2211/1990/Provides $500,000 from petroleum violation escrow account funds for AFV development, demonstration, and infrastructure expansion. Senate Bill 135/1991/Effective January 1, 1997, requires public vehicles operated for compensation -- transit vehicles and taxis - in districts not achieving air quality standards to meet CARB's low-emission standards. Assembly Bill 2766/1991/Authorizes the use of motor vehicle registration fees for clean air projects. Assembly Bill 1338/1991/Requires the Commission and CARB to develop recommendations for a program to expand the use of alternative fuels in medium-duty vehicles. Chapter 1171 (Assembly Bill 3236)/1992/Allows the state Employment Training Panel to use up to $5 million in existing funds for encouraging development of EVs and AFVs industries. Assembly Bill 3052/1992/Requires the Commission to develop a master plan on the infrastructure to support AFVs development, production, and operations. Senate Bill 314/1992/Appropriates $1.3 million in petroleum violation escrow account funds to match federal monies from the EPACT to fund alternative fuel mass transit and electric vehicle development. ***************************************************************** EPACT requires select fleet owners to begin buying AFVs. Alternative-fuel providers must ensure that 30 percent of the new vehicles they purchase in 1996 are AFVs. To further encourage and accelerate use of AFVs in fleets, President Clinton signed an executive order that requires federal fleets to buy 50 percent more AFVs than mandated by EPACT for the years 1993 to 1995. Thus, under the order, federal fleet must purchase 7,500 AFV in 1993, 11,250 in 1994, and 15,000 in 1995. Starting in 1996, federal fleet purchase requirements increase significantly: AFVs must equal 25 percent of new vehicles purchased in 1996, building up to 75 percent in 1999 and beyond. And in state fleets, AFVs must make up 10 percent of new vehicles purchased in 1996, increasing to 75 percent in 2000 and beyond. Table 2 summarizes the fleet purchase mandates in EPACT. These recent legislative requirements, regulations, and programs have created an initial market for AFVs, so the current challenge is to sustain and expand this market. The Commission's experience in establishing methanol fueling stations, supporting natural gas and electric vehicles, and other fuel suppliers' experience with their alternative fuel facilities provide ample evidence of the complicated and sometimes difficult problems encountered in attempting to establish an AFV fueling network and other vehicle and customer support systems. While this report addresses AFV infrastructure issues and recommends actions to be taken to facilitate infrastructure development, additional work is needed to advance AFV technology, make vehicles available at competitive prices, and to increase consumer confidence in purchasing AFVs. In part, the commercialization of AFVs requires the successful deployment of a comprehensive, convenient, and reliable AFV infrastructure. PERSPECTIVE The most crucial observation is that alternative fuels play an extremely minor role in today's transportation system. For example, liquified petroleum gas (LPG) is the most widely used alternative transportation fuel in California, currently powering about 56,000 vehicles. LPG vehicles, however, represent only one-quarter of one percent of the 22 million vehicles registered in the state. AFVs current minor role has some serious implications. Foremost, the market potential for the various AFVs is uncertain, which makes non-stakeholders reluctant to invest in expanding the infrastructure for these nascent products. Further, the fueling network is extremely limited, reflecting the state of the market for AFVs. Customer service and training has been minimal, and work in the areas of technology standardization and code revisions is in the early stages, particularly for natural gas and electric vehicles. Complicating matters is the fact that increased market acceptance and use of AFVs will be tied to the establishment of a convenient, safe, and reliable fueling/charging infrastructure. Developing the infrastructure requires capital investment. Investors, however, are reluctant to make large capital outlays into AFV infrastructure because of the risk of investing in an emerging technology. The requirement for additional infrastructure development as a condition for expanding the broad-based acceptance of AFVs highlights the importance of the use of financial and non-financial mechanisms to reduce initial market uncertainty and investment risk. ***************************************************************** TABLE 2 EPACT FLEET AFV PURCHASE REQUIREMENTS AFV PURCHASES REQUIRED (expressed as percent of new vehicle purchases) Year Alternative Fuel Provider1) Federal State Private and municipal (early program3) Private and municipal (late program3) 1993 5,0002 1994 7,5002) 1995 10,0002) 1996 30 percent 25 percent 10 percent 1997 50 percent 33 percent 15 percent 1998 70 percent 50 percent 25 percent 1999 90 percent 75 percent 50 percent 20 percent 2000+ 90 percent 75 percent 75 percent 20 percent 2001 20 percent 2002 30 percent 20 percent 2003 40 percent 40 percent 2004 50 percent 60 percent 2005 60 percent 70 percent 2006+ 70 percent 70 percent 1 Electric utilities that plan to purchase EVs can defer compliance until 1998. 2 Federal fleet purchases for the years 1993-1995 are not expressed as a percent of new vehicle purchases. Rather, the bill designates a total number of vehicles to be owned by the federal fleet. Executive Order 12844 increases these numbers by 50 percent as follows: 7,500 vehicles in 1993, 11,250 vehicles in 1994, and 15,000 vehicles in 1995. 3 The bill describes an early and later program for private and municipal fleets and requires the Department of Energy (DOE) to choose to promulgate one or the other. If DOE has not made a decision by January 1, 2000, no private/municipal fleet mandate will go into effect. ***************************************************************** Assuming that the market uncertainties are resolved and infrastructure development activities are implemented, there remain both near-term and long-term infrastructure issues that must be resolved to avoid impeding the large-scale commercialization of AFVs. Near-term: o Codes and regulations not designed to accommodate technology innovation o Limited public awareness of and interest in the characteristics and benefits of AFV options Long-term: o Inadequate supply of selected alternative fuels o Noncompetitive price of selected alternative fuels If these factors are eliminated as issues, following the kick-start already being provided by a variety of existing federal, state, and regional vehicle and fuel purchase mandates, vehicle purchase rebates and tax credits, and infrastructure development incentives, normal market forces will drive development of the AFV infrastructure as the AFV technologies come into wider use. Resolving the fuel supply and price issues is ultimately the key to establishing a sustainable AFV market. Timing is a critical element in infrastructure development; technology development generally is responsive to demand. For example, until recently, interest in natural gas vehicles (NGVs) was limited. Because NGVs were generally restricted to a confined area and typically fueled at one site, connector standardization was not an issue. As a result, some 15 different fueling connector systems are being used throughout the United States (U.S.). As NGVs became more widely available, their use more widespread, and fueling at different sites more common, the need for a standard connector became urgent. The industry responded to this market pressure by evaluating options and recommending a fueling connector standard. Timing also relates to experience. In another example, material compatibility was a major issue early in the deployment of methanol-powered vehicles. Field experience with the operation of methanol fueling stations has been critical to understanding which types of fueling hoses and nozzles are most effective. The price of alternative fuels will affect consumer acceptance of competing AFV technologies and therefore, the infrastructure requirements for each fuel. Ultimately, price of the fuel to the consumer will be determined by supply, demand, other market factors, and taxation. Because the current tax structure is not uniform for different fuels, the Calfuels Plan examines fuel prices exclusive of taxes. As the market for other vehicles grows, it is expected that industry will identify and resolve similar issues as they arise. Experimentation and failures are part of technology and system development. Forcing a standard too early in a technology's development cycle can actually impede technology and product innovation and evolution, and, ultimately, consumer acceptance. While it is appropriate to examine infrastructure issues and frame solutions, implementing such solutions must be carefully timed to coincide with and support product introduction. Knowing when to act will also help to ensure the best use of state resources. Attention to timing will minimize the risk of making unneeded and premature investments in infrastructure developments and technology, and creating inappropriate public expectations. SUMMARY OF FINDINGS This summary will discuss the key infrastructure challenges for the various alternative fuels and present the information needed to: o Identify problems and determine whether such problems could and should be addressed through state policy initiatives or left to industry to resolve. o Determine actions government and industry can take to encourage AFV infrastructure development. Because it focuses on infrastructure challenges, this summary will not review reformulated gasoline (RFG) in detail. The petroleum industry is moving forward with the required modifications to produce Phase II RFG. RFG will use the well-established infrastructure now used for conventional gasoline and Phase I RFG. The most significant infrastructure challenge for Phase II RFG is the major capital investment required to modify existing petroleum refineries. Statewide, the petroleum industry is investing $4-6 billion to upgrade refineries and construct new facilities in preparation for the production of Phase II RFG.[1] In addition, the industry will need to modify the terminal stations where fuel is stored. The cost for modifying the terminal stations has not been estimated, but is expected to be small relative to the cost of retrofitting the refineries. The following discussion will exclude hydrogen. Because technology for this fuel is still in its early stages of development, and experience with hydrogen in transportation applications is limited, at this time too many unknowns exist about the feasibility and costs of using hydrogen to fuel vehicles to make reasonable conclusions about the hydrogen infrastructure requirements and issues. Fundamental technology issues must be resolved before hydrogen infrastructure issues can be identified and meaningfully addressed. FUEL SUPPLIES To understand the supply implications of using alternative fuels in transportation, it is necessary to first examine projections of the numbers of AFVs that could be in use in the future. Summarized in Table 3 are the preliminary results of the Transportation Energy Analysis Report (prepared in response to Senate Bill 1214, Public Resources Code 2500.5). The purpose of the Transportation Energy Analysis Report is to develop forecasts for energy demand and to estimate the economic and environmental costs of these forecasts. These estimates assume the availability of an adequate fueling infrastructure and that methanol, natural gas, and RFG vehicles can meet the CARB low-emission vehicle standards. EVs are expected to meet the ZEV standard. Additional analysis of fuel prices, including its effect on fuel demand and economic benefits to California, will be addressed in future analyses of the Commission's Transportation Energy Analysis Report. Table 3 estimates the number of AFVs currently operating in California and market projections for the year 2010. The 1994 supply of each fuel and the future fuel requirements to power the number of AFVs projected to be in operation in 2010 are also shown in Table 3. The total supply and transportation requirements for each alternative fuel provide the framework for examining future fuel supply issues. In general, potential problems with providing adequate supplies of methanol and ethanol at competitive prices are likely to restrain the growth in the market for methanol- and ethanol-powered vehicles. In contrast, there are no significant barriers to providing sufficient supplies of natural gas, LPG, or electricity at competitive prices. The specific supply-related issues associated with each fuel alternative are described in the following sections. Fuel price is the companion issue for fuel supply. Table 4 provides baseline information on the average 1992 price for the alternative fuels, excluding taxes. The price implications of increased fuel demand will be discussed in conjunction with examining the supply issues associated with the introduction of each AFV type. Currently, excise taxes, or road taxes, are charged on RFG and some alternative fuels, but the fuel taxes are not equivalent on an energy basis for each fuel type, nor are the taxes based on actual road usage. As the demand for AFVs increases, the unequal tax treatment tax structure could impact revenue generation for highway maintenance. The unequal treatment of taxes can also affect the relative competitiveness of each fuel. Evaluation of transportation fuel taxes is complex, and is an area that deserves further study. ***************************************************************** TABLE 3 1994 AFV Fleet and Year 2010 AFV Market Penetration and Fuel/Energy Requirements in California 1994 2010 Vehicle/Fuel Vehicles in Use Fuel Supply (million) Vehi- cles in Use (mi- llion) % Total LDV1 Fuel Require- ment (million) % 1994 Supply FFV/Methanol2 10,0003 2,5804 gallons (N. America) 2 - 514 7 - 17 500 -1,300 gallons14 20 - 50 percent (N. America) EV/Electricity5 2,8776 232,9047 kWh (Calif) 115 - 214 4 - 8 715 - 10 GWh14 4 percent (Calif) NGV/Natural Gas 6,0278 20,2549 therms (Calif) 114 3 500 therms14 2 percent (Calif) LPGV/LPG10 56,00011 66712 gallons (Calif) n/a10 n/a10 n/a10 n/a10 HV/Hydrogen 113 n/a n/a n/a n/a n/a 1 AFV as percent of total 2010 light-duty vehicle (LDV) fleet as projected in reference 7. 2 Long-term methanol prices are very uncertain. This analysis assumes a range of M85 prices from $0.75 to $0.91 per gallon (1992 $) in 2010. 3 California Energy Commission, Transportation Technology and Fuels Office, Light Duty Vehicle Program Staff, 1994. 4 California Energy Commission, 1993 Fuels Report, December 1993. 5 A range is given for the EV forecast, but both scenarios assume that the ZEV mandate will be met. The range in magnitude of the estimates reflects differences in assumptions about economic and vehicle sales growth and vehicle scrappage rates in the state. 6 Department of Motor Vehicles, May 17, 1993, Master File Pass. This estimate may be high as it includes some non-highway vehicles. 7 California Energy Commission, Electricity Report 1994, Commission order adopted demand forecast, March 16, 1994. 8 California Natural Gas Vehicle Coalition, September 1994. 9 California Energy Commission, 1993 Natural Gas Market Outlook, October 1993 (amounts shown represent 1990 supply/deliveries to California). 10 Although the Commission has not developed a forecast for LPG as a transportation fuel, LPG vehicles are expected to continue to be available and in use through 2010. 11 R.F. Webb, "The Supply, Infrastructure, and Economics of an Expanded Motor Vehicle Fuel Market for LPG in the U.S.," U.S. Consumption in 1989, page 1-8, October 1992. 12 Energy Information Administration, State Department Energy Data Report, 1991. 13 Letter from Hydrogen Consultants, Incorporated, September 14, 1994. 14 California Energy Commission 1993-1994 California Transportation Energy Analysis, Technical Appendixes, Draft Report, February 1994. 15 California Energy Commission, Analysis of Electricity Demand, Electricity Supply and Emissions Impacts of Electric Vehicles, Staff Report, February 1992. ***************************************************************** Table 4 1992 Price for Gasoline and Alternative Fuels (1992 dollars per gallon, excluding taxes) 1992 Fuel Specific Gasoline Equiva- lent Cents per Mile1 Gasoline2 0.81 0.81 2.7 Methanol (M85)2 0.61 1.07 3.4 Compressed Natural Gas2 0.77 (per therm) 0.89 2.8 Liquefied Petroleum Gas2 0.76 1.05 3.5 Electricity2 (Off-peak) 0.083 (per kWh) n/a 2.4 Ethanol3 (E90) 1.25 1.79 7.1 1 Cost/mile is based on the gasoline equivalent price. 2 California Energy Commission, Fuels Planning Office 3 California Energy Commission, AB 234 Report: Cost and Availability of Low Emission Motor Vehicles and Fuels, 1991. ***************************************************************** Electricity: Supplying adequate quantities of electricity required to fuel the EVs projected to be operating in the future will not pose any problem for California. California's major utilities have substantial excess electricity generation capacity off-peak and the ability to purchase power from other states through a comprehensive and inter-connected electricity transmission system. If load management strategies are successful, and the majority of EV charging is performed during off-peak hours, the expense for electricity distribution system upgrades can be minimized. Off-peak EV charging will even-out power usage over the 24-hour day and help utilities operate more efficiently and economically, in turn helping to stabilize costs for utility customers. The electricity requirement to support the approximately 1.3 million EVs projected to be in use by 2010 represents less than three percent of the current total electricity consumption in California. Recent utility projections of off-peak electricity rates for EV charging indicate that electricity costs will stay low for the foreseeable future. Complementing this supply situation, a ubiquitous electricity distribution system ensures easy access to this energy source. As with natural gas, the ability to deliver adequate quantities of electricity will not be a constraint for developing the EV market. The price of electricity also will be competitive and is actually projected to drop in constant (inflation adjusted) dollars. Moreover, electricity is expected to be the lowest cost transportation fuel on a cost per mile basis ‹ as long as off-peak power is used to fuel EVs. Methanol: The availability of sufficient quantities of methanol at a competitive price for fueling methanol-powered vehicles is a potential major problem. Because methanol can be made from numerous feedstocks ‹ including natural gas, coal, and biomass ‹ theoretically, methanol supply is extensive. The current total North American supply of methanol is 2,580 million gallons; an 800-million-gallon increase in supply from sources in North and South America also is planned. Today, flexible fuel vehicles operating in California use the equivalent of less than one percent of the U.S. methanol supply. The rest is consumed for other uses. The demand for methanol in the form of an oxygenate to be used in RFG ‹ already a major market for methanol ‹ is expected to increase dramatically, putting further pressure on the limited domestic supply of methanol. Meanwhile U.S. and worldwide investments in new large-scale methanol plants are decreasing. An increase in methanol prices would be the consequence of a stagnant or slowly growing supply and a rapidly growing demand. Because the market demand for methanol vehicles will be driven by fuel price, the implication of higher-than-expected methanol prices ‹ a reasonable scenario unless the methanol supply is increased substantially ‹ is constrained market growth for methanol-powered vehicles. In addressing this supply/price issue, an initial Commission analysis shows that the most cost-effective means to expand the supply of methanol is to utilize natural gas from foreign sources. Large-scale methanol production facilities at these sites could provide transportation-fuel-grade methanol, which could then be shipped to U.S. markets in tankers. Although this is an attractive scenario, it would require substantial investments in off-shore conversion facilities and in building a wider U.S. distribution system. Competition from other methanol uses for this same product also would continue to influence the market price for methanol. Use of domestic natural gas resources to produce methanol, another option, would result in a higher cost fuel. Biomass, a virtually inexhaustible feedstock if properly managed, could also be utilized once production costs for this source drop to competitive levels. Note that fuel cost and demand are in part a function of the existing tax structure, and are subject to change. The methanol supply issue also needs to be considered in a broader business/product venture context: currently there is no major product champion in either the automotive or fuels/energy industries that is advocating methanol. Without a major push from private industry, new investments in methanol production facilities targeted at the transportation fuels market will be minimal. Ethanol: Due to its limited supply and high cost, ethanol is not likely to be used in volume as a direct transportation fuel in California. Ethanol presents a cost/supply challenge greater than methanol. Potential ethanol sources ‹ crops and biomass ‹ are theoretically vast, but ethanol is more expensive than either methanol or gasoline. As with methanol, wider use of ethanol-fueled vehicles would also require new investments in ethanol production and distribution facilities. The California Renewable Fuels Council (Council) represents ethanol. The Council has actively lobbied national and state policy makers to support ethanol, but industry involvement in California has not evolved to the level of competing fuels. In the absence of a dramatic technological breakthrough, the expanded use of ethanol as a primary transportation fuel in this state is highly unlikely. An additional factor could affect supplies of ethanol. Like methanol, ethanol has a higher market value as a petrochemical feedstock and as a gasoline additive than as a transportation fuel. To the extent that the supply is limited, the demand for ethanol for these higher-value applications could drive up the price for ethanol used in transportation applications. Natural Gas: Supply is not considered an issue for natural gas over the next 60 plus years. The extensive natural gas reserves in North America, combined with a comprehensive and interconnected pipeline system, assure that adequate quantities of natural gas will be available for transportation applications in the foreseeable future. Natural gas ‹ even accounting for the cost of compression ‹ is competitive with gasoline, and using more of this fuel in transportation should not significantly increase its price. The natural gas requirement to support 1,000,000 NGVs for 2010 is equivalent to only about 2.5 percent of the current statewide consumption of natural gas. The natural gas supply outlook suggests that substantially greater numbers of NGVs could be easily supported. Consequently, the supply of adequate quantities of competitively priced natural gas will not constrain the market for NGVs. Although most of the world's reserves of natural gas are located in the mid-east and the former Soviet Union, imported natural gas is not considered a significant risk factor in the supply, unlike petroleum. Natural gas would need to be liquified and imported as liquefied natural gas. Based on reserves (which have remained at a constant 20-year supply for the past 20-30 years), there has been no need to import natural gas from these areas, and the possibility of doing so remains remote. LPG: A substantial increase in the use of LPG-powered vehicles in California could result in seasonal LPG supply shortages and a fuel price increase for all LPG consumers. While the national supply of LPG for transportation uses is significant, it is nonetheless limited. Exacerbating the LPG supply issue is the fact that the demand for this fuel experiences seasonal fluctuations. Demand for LPG is high in the winter (when LPG is used for residential heating) and lower in the summer. Consequently, LPG supplies can become limited ‹ with accompanying price hikes ‹ in winter months, and over-abundant in the summer. In California the winter demand for LPG is twice the summer demand. While it is expected that the LPG requirement to support the increased use of this fuel in transportation applications could be met by importing more LPG from other states, the LPG prices are likely to increase somewhat. Building additional storage facilities to capture the excess summer supply could help mitigate the seasonal supply and fuel price variations, but would require new investment. This, however, is not seen as a significant barrier. The LPG industry has routinely expanded storage capacity in response to increased demand. Another factor limiting the supply of transportation-quality LPG (auto-LPG) is the availability of propane. Auto-LPG is formulated to meet a regulatory requirement that it consist of at least 80 percent propane. The percentage of propane in LPG can vary significantly, depending on the refining process. LPG typically consists of a minimum of 50 percent propane. Because of the necessity to meet the 80 percent requirement for auto-LPG, simply increasing the supply of butane, another major component of LPG, will not necessarily increase the availability of auto-LPG. A relaxation in the requirement that at least 80 percent of auto-LPG be propane (and therefore allowing a greater butane content) would increase the available supply of this transportation fuel option. FUELING FACILITIES ‹ Convenient Public and Private Fueling and Charging Generally, because AFV use has been limited, the existing AFV charging and fueling network is not extensive. The exception is LPG, which can be obtained at more than 1,000 sites. An increase in the AFV market will be a driving force in the expansion and siting of AFV fueling facilities. The major issue common to all fuels, except at-home charging with electricity, is the large (and initially risky) investment required to establish AFV fueling facilities. Government support may be needed to stimulate initial investments in expanding the AFV fueling network. Such investments and facilities are critical to ensure that early market adopters can fuel their vehicles. This summary looks at technical and regulatory barriers to market-driven expansion. Despite the financial risks, steps already have been taken toward providing AFVs with a fueling infrastructure. These actions range from the formation of cooperative industry/government working groups that address a spectrum of infrastructure issues to the actual creation of fueling stations now in existence. The existing infrastructure accomplishments for each fuel group are discussed in the following sections. Methanol, ethanol, natural gas, and LPG fueling times are similar to that of gasoline. The routine methods for charging EVs will require substantially more time, but the vehicles will be charged while parked between trips. Charging EVs in an amount of time that is comparable to gasoline fueling increases the cost of their infrastructure. Electricity: Home charging is expected to be the dominant option for EVs and will not be constrained by technological and regulatory barriers. EV users are expected to predominantly charge their vehicles at their home base. Public charging facilities can augment home charging and are likely to be focused at locations where vehicles remain parked for several hours, such as at the workplace, shopping centers, and public parking facilities. Experience with providing public EV charging facilities is very limited and all efforts are still in the experimental stage. Current regulatory issues for home and public charging are being addressed by a coalition of industry representatives and should not significantly restrict the evolution of charging facilities and outlets. Current and proposed codes and regulations require that EV charging facilities be kept a safe distance from liquid or gaseous fuels, and mechanical ventilation for indoor charging of vehicles with batteries that generate gas. Fast charging for EVs is still in the experimental stage. The feasibility and desirability of establishing a network of EV fast-charging is unknown. Issues surrounding the technology which are currently being reviewed by industry include safety, impact on battery life, effect on the electrical grid, and cost. The cost issue is not insignificant and encompasses equipment and electricity costs as well as the cost of the load management systems needed to mitigate peak charging demand. Methanol: No major technical or institutional barriers exist to impede expanding the network of methanol fueling facilities. About 50 methanol fueling sites are currently in California. Typically, methanol is dispensed at gasoline service-stations in methanol-compatible gasoline pumps. Because methanol is a liquid fuel with similar properties to gasoline, integrating methanol into the existing gasoline fueling network is relatively simple when compared with gaseous fuels or electricity. Because of methanol's corrosive properties, however, special attention needs to be paid to using methanol-compatible materials for tanks, hoses, nozzles, etc. Further, regulations tend to facilitate, rather than restrict, methanol fueling expansion. For example, fire codes treat methanol in the same way as gasoline, and local regulations already in place require that new underground tanks at service stations be methanol-compatible. As the market for methanol as a transportation fuel increases, suppliers are not expected to face major barriers ‹ other than a return on investment ‹ in expanding the fueling network. Ethanol: Establishing a network of ethanol fueling stations in California is unlikely without government intervention. Ethanol faces the same situation as methanol. Few ethanol vehicles currently are being operated in California, and no known public ethanol fueling stations are in operation. To date, ethanol's price disadvantage ‹ along with the limited original equipment manufacture (OEM) support and the lack of vehicles ‹ has resulted in very modest interest in this fuel in California. The lack of a clear market advantage for this fuel and the absence of a developed ethanol industry in California has hindered establishment of this fuel in California. Natural Gas: Regulations that restrict the siting of natural gas fueling systems at existing gasoline stations are the major barrier to expanding the natural gas fueling network. The existing limited network of public and private NGV fueling stations has been the product of the efforts by the three major gas utilities in California. These utilities are committed to expanding the public NGV fueling network, which ideally would be co-located at gasoline service stations. Current regulations that restrict dispensing natural gas within certain distances of potential ignition sources, however, limit the feasibility of dispensing natural gas at existing service stations. Because adding a natural gas fueling capability at an existing gasoline station is far more cost-effective ‹ and convenient ‹ than establishing a new stand-alone natural gas facility, mitigating real and perceived fire risks to facilitate integrating natural gas into the existing gasoline fueling network will have a profound impact on expanding the number of natural gas fueling outlets. The use of new fueling technologies, station and system designs, and safety measures would minimize these risks. All public NGV fueling facilities use quick fueling technology, which is more costly than conventional fueling but technically viable and feasible. Private fueling ‹ acceptable for many fleets ‹ can use slow-fill systems which are less expensive. At-home NGV fueling is also an option, and systems are available and in use today. Widespread use of at-home NGV fueling will be tied to reducing the cost of these systems. LPG: Current regulations greatly restrict the co-siting of large-capacity LPG fueling systems at existing gasoline stations. Similar to natural gas, existing codes and regulations restrict the siting of LPG fueling stations. Because the risk of a fire or explosion is considered greater with LPG than natural gas, the LPG siting regulations are more stringent and currently make co-siting LPG and gasoline fueling difficult. While co-siting is not expressly prohibited, the large distances required between the LPG storage tanks and other fueling facilities or structures make this option physically impossible for many urban locations. Until this safety issue is resolved, expansion of the public LPG fueling network will be constrained. These regulations may force the market for LPG vehicles toward large fleets that can establish private LPG fueling operations to meet their needs. One advantage of an LPG fueling facility is that the equipment is relatively inexpensive and easy to install. No technical barriers exist to impede expanding the auto-LPG fueling network. FUELING HARDWARE ‹ Standards Specification The various industries involved in AFVs are focusing attention on establishing standards for the design and testing of AFV infrastructure equipment. Generally, early markets are flooded with competing designs. As the market grows, the need for standardization increases accordingly, and industry responds by limiting options ‹ usually to those technologies preferred by the growing marketplace. Government could play a role in helping develop performance standards and testing procedures for infrastructure equipment. Testing would focus on ensuring that fueling equipment meets minimum performance standards, and is safe and reliable. This section will discuss some of the major fueling hardware issues now being examined. While several important hardware standardization issues remain to be resolved, none of these issues are seen as being near-term market inhibitors. Stakeholder industries ‹ including the automotive, components, and fuel and utility companies ‹ are unanimous in their belief that it is the private sector's responsibility to identify technology standards. Government's role is to codify, verify compliance, and enforce standards. Electricity: Standardization of the charging connectors and power requirements is critical to the long-term commercialization of EVs and is a key goal for the industry. Recognizing that standardization is critical to customer convenience and acceptance and to the fundamental design of an EV, the EV industry has made the development of standards for EV connecting equipment, charging current, and voltage a high priority. The Infrastructure Working Council has recommended preliminary standards for both conductive and inductive connectors. The objective is to achieve auto and utility industry agreement and adoption of these standards by late-1994. A substantial delay in adoption of these standards could impact the 1998 introduction of EVs. Methanol: Refinements in the fueling hardware and systems are needed to increase customer convenience and broaden market acceptance. To prevent drivers of gasoline vehicles from mistakenly fueling with methanol, a card-key system was implemented to limit access to methanol dispensers at public access fueling stations. Methanol vehicle operators, however, now perceive this system as a hindrance. The industry now is searching for a more user-friendly system to limit access. In that flex-fuel methanol vehicles also use gasoline, using a dedicated fueling nozzle is not considered feasible. Instead, efforts are focused on using a standard fueling nozzle which incorporates an interlock system that would permit only methanol-compatible vehicles to fuel with methanol (a similar system could be used for ethanol). The use of such an interlock system will enhance customer convenience. Installation and use of methanol compatible fueling equipment is essential to ensure fuel quality and proper vehicle performance. The cost for these systems, however, and the change-over to durable methanol-compatible material at existing fueling stations, which is essential to maintaining fuel quality, will serve as a barrier to their early adoption. Station operators, concerned with achieving a reasonable return on their investments, may delay use of these technologies until demand for the fuel increases. Natural Gas: Evolutionary technology and system enhancements can be expected, but no substantial hardware barriers have been identified. As NGV use increased ‹ and experience was gained ‹ the industry responded by developing a standard fueling nozzle and on-vehicle receptacle. Use of this standard equipment configuration is key to establishing an inter-connected and compatible natural gas fueling network throughout California and the nation, and will enhance NGV user convenience, confidence, and satisfaction. Continued refinements in the fueling system hardware and operations can be expected over time. The primary focus will be on increased customer convenience and safety. Card-key systems currently in use at existing natural-gas-only fueling stations have worked well and operate similar to point-of-sale systems now being introduced at gasoline fueling stations. LPG: Standard fueling equipment for LPG is already in place and working effectively. Nonetheless, product improvements aimed at minimizing evaporative emissions when breaking the fueling connection and increasing customer convenience are necessary. LPG fueling is performed only by trained operators. The future of LPG powered vehicles will be in the use of card-lock systems. Proper training will be a prerequisite to issuance of fueling cards. RATEPAYER RESPONSIBILITY Although the utilities have been active in their efforts to advance NGV and EV infrastructure, their appropriate role and extent of involvement is being evaluated by the CPUC. The CPUC is conducting an administrative proceeding to develop a policy governing appropriate utility involvement in the market for LEVs. The Investor-Owned Utilities ‹ Southern California Edison, Pacific Gas & Electric, and San Diego Gas and Electric ‹ each submitted testimony on their proposed EV and NGV programs to cover a six-year period from 1995 to 2000. This public forum includes participation from other interested parties including the Commission, the oil industry and ratepayer advocates. The utility proposals cover research and development and market activities for vehicle and infrastructure technologies and incentives. The proposals are currently under review to ensure consistency with criteria for appropriate utility activities such as protecting long-term ratepayer interests and ensuring that anti-competitive consequences are avoided. A decision on the utilities' proposed funding requests is expected in 1995. CONSUMER AND VEHICLE SUPPORT ‹ Service, Education, Training, Insurance, and Financing Large vehicle manufacturers can be expected to provide service, warranty, and customer education programs for AFVs that are similar to those available to owners of conventional vehicles. High-quality service and support are recognized as being essential to building customer loyalty and market growth. Independent and small (in financial terms) conversion companies are not likely to have the resources to provide such services, and the lack of adequate warranties, services, and parts supply for vehicles from such small manufacturers will likely pose problems. Unless the state is willing or able to provide or underwrite these services, it is unlikely that government intervention will remedy this situation. The market is expected to solve such problems by refusing products that are accompanied by inadequate service. The state can play a substantive role in helping to provide training for service technicians. The state has already provided support through the Employment Training Panel to establish training centers, but the effort needs to become more widely available. There currently is a lack of AFV training programs for independent service providers and service technicians in private fleets. The state could intervene by creating AFV service technician certification programs and by working with existing institutions, such as the community college system, to create and offer standardized and recognized training curricula. A need exists also to provide training for emergency response personnel. The use of a more diverse array of vehicle fuels requires broader knowledge of the technologies involved. Since the state regulates safety codes and furnishes information pertaining to safety issues, it could easily be the provider for this education and certification. Also, the state can play a role in developing a public relations campaign that will provide general information about AFVs and their fueling infrastructure. This campaign would increase public awareness of and confidence in these new technologies, and help build overall market acceptance of these new and beneficial transportation options. Other consumer issues include financing and insurance. Financing AFVs is not expected to present any unusual difficulties. An institution will base its decision to finance an AFV primarily on the credit worthiness of the individual applying for the loan. This one factor generally determines whether the loan will be repaid, regardless of events, over the life of the vehicle that might put repayment at risk. A possible EV scenario illustrates this risk. EV technology could improve rapidly. If this happens, vehicles bought in 1998 could cost considerably more and provide lower performance than vehicles which will be available in later years, dramatically decreasing the residual value of the early vehicles. Owners may discover that the cost of doing a necessary major repair ‹ or of buying new batteries ‹ far outweighs the residual value of the vehicle covered by a loan and consequently choose to scrap the vehicle before the loan is repaid. According to financial institutions, whether or not owners choose to fully repay the loan in such situations depends principally on their proven credit worthiness. In all, the risks to financing institutions are small because relatively few AFVs will be financed over a large number of institutions. OEMs may also offer financing to encourage the public to buy ZEVs. Although owner credit worthiness would remain important, institutions would evaluate additional factors when considering financing a fueling station because of the relatively high capital requirements for an AFV station. Such additional factors include technology viability, ability to ensure a return on investment, and business projections. Insuring AFVs poses difficulties. Insurers are required by state law to insure all vehicles, yet lack the basic information required for ratesetting. Such information ‹ not expected to be available for many years for AFVs ‹ includes vehicle price, vehicle damage in crashes, liability factors, cost of repairs, and the residual value of vehicles. Lacking information, insurers will be taking on considerable risk as they set rates. Actuaries, underwriters, and lawyers would likely use the best available information to hammer out rates. For example, information on comparable, conventional vehicles could be used as a baseline for establishing AFV rates. The baseline rates would likely be adjusted up or down to account for such factors as the change in vehicle replacement cost and relative safety. Proposed AFV rates would then be submitted to state insurance regulators for approval. Insurance issues could pose problems for AFV owners, as well. AFV insurance rates could be higher than those for conventional vehicles. Owners of home fueling or charging equipment could face higher property insurance. Steps that could help alleviate some insurance-related risks for owners and insurers follow: o The state could help manage the safety risks of conversions by setting certification standards for all vehicle conversions. o Any information on AFVs could be provided to insurers. The Commission, for example, has run AFV demonstrations for 10 years, and could collect data to insurers. Insurers could access federal documents on federal motor vehicle safety standard certifications for vehicles that have undergone this testing. OEMs may also be able to provide additional test data results. o The costs of damage to AFVs and AFV repairs ‹ and the ability of owners to find repairers ‹ may remain an uncertainty area until there is more experience with these vehicles. CODES AND REGULATIONS In California (and nationally), codes and regulations not designed to accommodate technology innovation are generally considered to be a serious barrier to developing the AFV infrastructure and fueling network. The lack of adequate and appropriate codes that accurately reflect the use of alternative fuels in transportation applications and fueling operations, and the availability of new state-of-the-art technologies, handling procedures, and safety provisions is frustrating to both the AFV industry and code officials. In the absence of appropriate codes, public officials, whose mission is to protect the safety of the public, often must search for related codes to understand how best to regulate the installation of these new technologies and will always err on the conservative side. The electric, natural gas, and LPG industries are actively engaged in reviewing existing codes that could affect AFVs and their infrastructure, and recommending new codes and/or code changes to code officials as necessary (as noted previously, alcohol fuels are treated in the same manner as gasoline and therefore have no unique code issues). The process of changing codes, however, is a long, complex, and ongoing procedure. Code adoption is further complicated as the process is not uniform at federal, state, and local levels. A brief overview of the code development and adoption process illustrates some of the problems involved. In general, codes are established in response to a real need, and are created only as new technologies (1) come into use, and (2) deviate from existing technologies. Once a code issue is defined, industry representatives then need to agree on appropriate new codes or code changes. The process of achieving industry consensus is non-trivial and in itself can be very time-consuming. Code revisions (including new codes) are then presented by the industries that best understand the new technologies to the organizations that develop national building, electric, and fire codes. After extensive technical review, the code revisions are adopted or rejected, and, if adopted, integrated into the next edition of the code manuals. At the national level, new code documents are published every three years. On a state-by-state basis, the national codes are then either adopted by states or used by states as a model for developing their own codes. Likewise, local jurisdictions can either adopt the state codes or use them as the model for developing their own local codes. Local jurisdictions have the authority to deviate from the state codes as long as their codes are at least as restrictive as the state codes. As can be seen, this process is time-consuming and conducive to complications. The process of recommending and revising or adopting a national code requires a long lead time. Revising or adopting a state or local code requires even more time. Further, adoption of a code at the national level does not ensure that the code will be uniformly adopted or interpreted at the state or local level. Finally, code development is an ongoing process. As technologies change and improve, and new information becomes available pertaining to safety risks, codes change and revisions must be proposed and accepted to reflect these changes. The most substantial contribution that the state could make to facilitate this process would be to ensure the adoption and implementation of national standards. Also, California could establish a mechanism and resource/reference materials for educating and increasing the awareness of state and local code officials about the status of AFV technologies, the real safety issues associated with using AFVs, and the applicable codes. The goal of this effort would be to encourage code officials to understand what procedures and features are necessary and unnecessary to protect the public. It is important to recognize that code officials take their responsibility of ensuring a high level of public safety seriously. Unless the codes reflect the specifics on the "accepted practice" for AFV infrastructure installations, officials do not have the discretion to ignore existing code requirements. RECOMMENDATIONS The ultimate goal of the Commission is to facilitate private-sector investment in the AFV fueling infrastructure. To achieve this goal, the Commission can support selected ongoing initiatives and facilitate partnerships between the different players that would benefit from early investment in this potentially large market. The following section briefly summarizes key roles California government agencies could take to cost-effectively foster AFV infrastructure development. Staff and financial resource commitments necessary to implement these recommendations have not been estimated. All state actions should be compatible with, and encourage uniformity on a national and international basis. AFV Fuel Supply o Goal: Encourage the use of renewable feedstocks in the production of alternative fuels. o Action: Provide coordination and risk mitigation strategies for developing new renewable fuel production facilities, especially within California. These projects could take advantage of collaborative projects involving agricultural waste disposal, urban waste management, land fill gas disposal, and other opportunities. o Timing: Ongoing o Lead: California Energy Commission o Collaborate: California Department of Conservation, California Integrated Waste Management Board, California Department of Commerce, and local air quality management districts AFV Fuel Supply and Price Projections o Goal: Minimize market uncertainty surrounding alternative fuels by forecasting supply and price. o Action: Analyze fuel supply and price factors for each of the alternative fuels, including fuel taxes, projected fuel supplies, projected fuel demand, and projected fuel price. These activities should be conducted as part of ongoing Commission efforts, such as the Fuels Report or the California Transportation Energy Analysis, to evaluate alternative fuels. o Lead: California Energy Commission o Collaborate: California Air Resources Board, California Department of Transportation, California Public Utilities Commission, industry, fuel providers, State Board of Equalization, and Franchise Tax Board Hardware Testing and Demonstration o Goal: Achieve safe, cost-effective, efficient, and convenient AFV fueling and charging technologies. o Action: Support the industry by funding the testing and demonstration of new AFV infrastructure technologies and equipment. Future work should focus on technologies and methods that advance the safety, performance, efficiency, reliability, and economic viability of infrastructure fueling systems. Existing state programs which provide a cost-share for demonstration projects have focused on vehicle technologies, but future efforts should emphasize infrastructure demonstrations. The fueling infrastructure established and/or used to support the AFVs purchased for use in state fleets will provide opportunities for testing and demonstrating advanced AFV infrastructure technologies and in turn can serve as technology transfer models. o Timing: Immediate o Lead: California Energy Commission o Collaborate: California Air Resources Board, California Department of Transportation, Department of General Services, and industry Public Education o Goal: Increase public acceptance of AFVs and their supporting technologies. o Action: Working in partnership with industry and building on their ongoing efforts, develop and initiate a coordinated campaign to increase public awareness and knowledge of AFVs. Familiarity with the unique properties, features, attributes, and safety aspects associated with each of the AFV options will inevitably increase consumer acceptance. Educational efforts should also inform the public on the location of fueling and charging sites. Specific activities include cofunding preparation of publications, television advertising, a toll free information phone number, and educational videos. o Timing: Immediate o Lead: California Energy Commission o Collaborate: California Air Resources Board, California Department of Transportation, industry, utilities, and building and fire officials Mechanic Training and Certification o Goal: Increase consumer acceptance and satisfaction with AFVs by facilitating the availability of properly trained and high quality AFV service technicians. o Action: Support ongoing initiatives to train and certify AFV service mechanics. This activity should emphasize working with ‹ and outreach to ‹ the vast cadre of independent service providers. The Commission expects that the OEMs will provide their own training to employees and dealerships. In addition, the state should work with the public education system to establish minimum training standards to ensure that students leaving training centers have the requisite level of knowledge in this area to compete for jobs. The state can support efforts to publicize the availability of AFV training programs, and help build an early demand for such programs by encouraging or requiring state agency mechanics to attend sanctioned AFV training programs. Further, the state should become involved in setting up AFV mechanic certification programs and continuing education. o Timing: Immediate o Lead: California Air Resources Board and Bureau of Automotive Repair o Collaborate: California Energy Commission, California Department of Transportation, community colleges, industry, and utilities Training for AFV Emergency Response o Goal: Increase consumer acceptance and safety in using AFVs by ensuring adequate development of emergency response procedures. o Action: The state should work with industry and local fire officials to develop and disseminate information on the recommended procedures for dealing with AFV emergency situations. Emergency personnel need to be trained on any unique safety characteristics for AFVs. A critical element of this activity will include establishing standardized and effective mechanisms for identifying the type of power system being used in a vehicle so that appropriate safety procedures can be followed. In some cases, vehicle safety features need to be standardized. o Timing: Immediate o Lead: California State Fire Marshal o Collaborate: California Energy Commission, California Air Resources Board, California Department of Transportation, National Highway Traffic and Safety Administration, industry, and fuel providers Code Adoption o Goal: Encourage fueling and charging network expansion by standardizing the permitting process. o Action: At the state level, new and developing AFV building, fire, and safety codes should be identified and or developed where none presently exist. The California State Fire Marshal, with support from the Commission, should accumulate and evaluate all existing AFV Codes and evaluate them for state wide adoption. To the extent possible, model code changes that have been made for AFVs should be adopted by the state. The most appropriate regulatory mechanism for amending California codes will need to be identified. The California State Fire Marshal should work cooperatively with the Commission. Meanwhile, the state should focus on informing local city and county officials of the state adopted regulations. Information packages on each type of AFV regulation should be provided to all local building and fire officials to assist them in correctly interpreting and applying these new regulations. o Timing: Immediate o Lead: California State Fire Marshal o Collaborate: California Energy Commission, California Air Resources Board, California Department of Transportation, California Building Officials, California Occupational Health and Safety Administration, the building industry, local fire and building officials, industry, and fuel providers Local Government Resource Guide o Goal: Encourage fueling network expansion by increasing local government awareness of alternative fuels. o Action: Inform local governments on the actions needed to facilitate the installation of fueling and charging stations for AFVs. This includes developing a resource document for distribution to local jurisdictions throughout the state to provide local government representatives with information on AFVs and fueling facilities, and on acquiring AFVs for their fleets. This effort would facilitate AFV acquisition and consistent regulatory treatment of AFV fueling and charging stations statewide. o Timing: Immediate o Lead: California Energy Commission o Collaborate California Air Resources Board, industry, fuel providers, air quality management districts, local planning agencies, and local fire officials AFV Infrastructure Problem Resolution o Goal: Provide leadership in resolving AFV issues and problems. o Action: Monitor infrastructure development to remain aware of key players, issues, and problems. Thus informed, the Commission is well-positioned to play a leadership role in working with key partners to facilitate a resolution to any outstanding problems. Examples of actions that could be pursued include: 1) Developing an action plan for strategically expanding the fueling infrastructure network to targeted geographic areas. Fueling facilities could be deployed along major corridors to allow for travel between metropolitan areas. The state could develop a demonstration program targeted at expanding the natural gas or liquid fuel network along such corridors. Adoption of a statewide requirement that underground storage tanks be alcohol compatible would improve potential for deployment. 2) Developing a state-established pre-1998 convention for conductive charging connectors for electric vehicle (EV) charging if existing efforts to do so are not successful by the end of 1994. 3) Developing performance standards, such as efficiency and power quality levels, for AFV infrastructure appliances including EV chargers and natural gas compressors. 4) Developing a mechanism requiring that utilities be informed when a new EV is purchased. The Department of Motor Vehicles could set up a reporting mechanism to show the number of EVs registered within each utility service territory. This information could be used to support utility demand side management efforts. 5) Developing and demonstrating a standard fuel dispenser interlock for non-gasoline liquid alternative fuels. 6) Facilitating adoption of state highway signage for all alternative fuels. o Timing: Ongoing o Lead: California Energy Commission o Collaborate: California Air Resources Board, California Department of Transportation, industry, air quality management districts, and fuel providers Coordinate State AFV Activities o Goal: Increase statewide coordination of AFV activities to facilitate AFV technology acceptance, and establish a fueling network to demonstrate infrastructure options and to leverage state influence on AFV industry issues such as fueling standardization. o Action: Take a lead role in bringing together appropriate state agencies to develop and implement a cohesive AFV infrastructure development and demonstration strategy to support the Energy Policy Act vehicle procurement requirements. This will include leveraging state funding with federal funding to support advance infrastructure technologies. This coordination will include achieving a balance between obtaining AFV and infrastructure funding. State purchase agreements can be used as a tool to influence industry standardization efforts. o Timing: Immediate o Lead: California Energy Commission o Collaborate: California Department of Transportation, California Air Resources Board, local air quality management districts, Department of General Services, and fuel producers ***************************************************************** References 1 California Energy Commission, Fuels OFfice, September 1994. ***************************************************************** CHAPTER 2: ELECTRICITY I. INITIAL OVERVIEW Electric vehicles (EVs) are an emerging technology currently in use in small numbers in California. The major auto manufacturers are developing demonstration EVs; small companies are converting gasoline vehicles to operate on electricity, and enthusiasts have independently converted their gasoline vehicles to operate on electricity. Almost 2900 EVs are in operation in California.[2] The adoption of Low Emission Vehicle and Clean Fuel Regulations (LEV Regulations) by the California Air Resources Board (CARB) has accelerated EV development in recent years. Beginning in 1998, the regulations require that two percent of the new vehicles offered for sale in California by seven major auto manufacturers must be zero-emission vehicles (ZEVs). This requirement increases to 10 percent by 2003, at which time intermediate volume manufacturers are affected. Battery-powered EVs represent the only commercially viable technology expected to qualify as ZEVs in the 1998 to 2003 time frame. Since EVs currently have limited driving ranges and typically require several hours to charge, they are expected to be charged predominantly at the users home base overnight and, to a lesser extent, when parked between trips. Instead of driving to a fueling station, EV users charge their vehicles while they are parked. The infrastructure being developed for EVs is aimed at ensuring ready access to California's already well-established electricity generation and distribution system. Achieving this goal will require activities such as standardizing the charging interface and revising electrical and building codes to allow safe and cost-effective installation of charging facilities. The largest national effort to advance EV infrastructure is being led by the Electric Power Research Institute, through the Infrastructure Working Council (IWC). IWC is composed of utility, automaker, and industry representatives working to develop consensus on the configuration of the infrastructure. IWC is composed of five working committees: Connector & Connecting Stations; Health & Safety; Load Management, Distribution & Power Quality; Data Interfaces; and Utility Information & Customer Education. Each committee reports to the Infrastructure Steering Committee. The IWC has made considerable progress in revising national electrical codes, and is working to develop consensus on standardizing the charging interface and to revise the national building codes. In addition to the IWC, other national, state and local efforts are underway to ensure that the EV infrastructure will be in place to support the LEV Regulations. The California electric utilities have played an active role in the IWC and are working to facilitate the installation of EV charging facilities in their service territories. Also, several California communities have included EV charging facilities in their city planning process. The state can provide assistance to such efforts by encouraging the adoption of national codes on a local level, by developing a state building code, by supporting the development of a safe and efficient infrastructure through testing and demonstration efforts, by ensuring that emergency and technical support personnel are trained to work with EVs, and by encouraging the adoption of standardized charging interfaces. The following sections identify the key ongoing activities that address and resolve EV infrastructure issues, as well as areas in which further work is needed. II. FUEL SUPPLIES Ensuring adequate supplies of electricity to power EVs is not expected to be a constraint, assuming that demand-side management (DSM) techniques are employed by utilities and used by consumers. Meeting fuel demands is the responsibility of the utilities and, to a lesser extent, the state, as it regulates the investor-owned utilities (IOUs). A. Fuel Mix to Produce Electricity Electricity can be generated from any fuel, and California has the world's most diverse resource mix for electricity generation. In 1991, electricity consumed in California was generated using the following mix of fuels: 31 percent natural gas, 15 percent nuclear, 10 percent hydroelectric, 10 percent coal, 6 percent geothermal, 1.5 percent wind and solar, and 23 percent from sources located outside California which use hydropower, coal, natural gas, and other fuels.[3] B. Impact of EVs on Generation, Transmission, and Distribution Systems The electricity demand from EVs and its impact on the electricity system results from many factors, including the number of vehicles being charged, the time of day vehicles are charged, the efficiency of the vehicle and charging system, and the voltage and amperage at which vehicles are charged. The time of the day consumers choose to charge their vehicles is important because utilities manage electricity demand to ensure that increased electricity use does not add to existing peak demand periods. Minimizing peaks and leveling the load improves the overall efficiency of the electricity system. Electricity Demand Projections For the 1992 Electricity Report, the California Energy Commission (Commission) completed a study of the potential effects on Southern California Edison's (SCE's) electricity system from charging the number of EVs sold to meet CARB's ZEV mandate. The study evaluated two charging scenarios ‹ one that assumed a theoretical maximum level of off-peak charging and a second that assumed no utility-sponsored load shifting. The results showed how the timing of vehicle charging can impact system loads. In the scenario assuming maximum off-peak charging, the annual peaks were not increased, while the scenario assuming no charging control increased the system peak by 200 MW.[4] More recently, the California electric utilities projected the statewide electricity consumption, assuming that approximately 1,324,000 EVs[5] will be in use by the year 2010. These vehicles will consume an estimated 7,483 GWh of electricity in 2010.[6] To put this quantity of electricity in perspective, a total of 232,904 GWh were consumed in California in 1993. The projected EV load for 2010 is equivalent to about 3.2 percent of the 1993 load, which is approximately equivalent to two years worth of normal load growth. Electricity Supply Outlook California's five major utilities have extensive electricity generating capacity. Augmenting this capacity, each utility has access to, and routinely uses, electricity generated by other power producers to meet their customers_ demands. Through the use of load management and on-line system capacity, California_s utilities can meet the incremental demand for electricity needed to serve future EVs. California utilities have projected that approximately 75 percent of the EV load will be served using in-state power plants. In the Commission's analysis for the 1992 Electricity Report, it found that electricity demand for EVs would require little or no electricity generation additions in SCE's service territory through 2011. More recent analysis by the utilities show similar results. The California IOUs are currently participating in proceedings with the California Public Utilities Commission (CPUC) to develop policies and new rates that will shape utility involvement in the market for low-emission vehicles. SCE, Pacific Gas and Electric (PG&E), and San Diego Gas and Electric (SDG&E) each submitted testimony for their proposed EV programs to cover a six-year period from 1995-2000. As part of their testimony, the utilities estimated the actions necessary to provide adequate electricity supplies to charge EVs. The IOUs and the municipal utilities ‹ e.g., Los Angeles Department of Water & Power (LADWP) and the Sacramento Municipal Utility District (SMUD) ‹ estimate that they can meet the electricity demand for EVs with little or no additions to their generation or transmission systems. These estimates assume that most of the charging will occur off-peak due to DSM practices. Assuming demand is managed, only 4.5 percent of EV charging will occur on-peak; SCE estimates that it will need to add only 200 MW of capacity in 2008. Assuming unmanaged demand, nine percent on-peak charging, SCE estimates that it will need to add 200 MW in 2005, 2008, and again in 2013 to meet demand. SCE did not show any need to add capacity to the transmission system.[7] The other utilities found no need to add generation capacity or transmission lines to meet EV energy demand. Electricity Distribution Impacts The distribution system is the portion of the electricity network that transfers high voltage power that has been transmitted from power plants, to low voltage power that is usable by the customer. The distribution system begins at a substation that "steps down" voltage from a transmission voltage (usually 66kV) to a distribution voltage (4, 12, or 16kV) and terminates at the customer's structure. Excessive load on the distribution system can overheat the components and cause accelerated degradation, or in the worst case, a local system failure. The IOUs have estimated that meeting the electricity demand for EVs will require incremental distribution system upgrades in some areas during the next 20 years. It is important to note that the need to upgrade the distribution system will occur gradually, and only in specific areas with high EV utilization. Moreover, monitoring and managing the impacts of new loads is part of routine business procedures for utilities. As an example, SCE's analysis shows that its system is capable of handling the majority of off-peak load growth through 2005. If there is more on-peak charging than expected, however, SCE's analysis shows a potential need for distribution upgrades as early as 2000 in selected areas with high EV saturation. SCE's analysis also shows that a strong heat wave may compel customers to use their residential air conditioners while charging their vehicles. Simultaneous use of air conditioners and vehicle chargers overload a local distribution system. This potential barrier can be overcome by upgrading the distribution system or by implementing DSM programs.[8] C. DSM Can Help Reduce On-Peak Demand Ensuring adequate supplies of electricity is not expected to be a barrier, assuming DSM practices employed are successful. EV Load Management Devices Utilities are developing sophisticated electronic devices to communicate load demand information directly to the utility. These new tools will supplement existing load management systems, including mechanical devices that turn appliances on and off . The first load management device that is currently available and likely to be used for EVs is a standard meter that records the amount and timing of electricity used. By installing a separate time-of-use (TOU) meter for EV charging, utilities can bill customers a lower rate for using electricity during off-peak hours, and more for on-peak charging. Utilities are currently working with the IWC and EV manufacturers to develop an EV infrastructure (EVI) device that will help utilities manage the EV load and forecast future load patterns. The planned EVI device will be a major component of a comprehensive load management program for the utility. Some functions that are envisioned include control of load, two-way communications between the EV and the utility, communications between the EV and the EV manufacturer, data acquisition, and electricity pricing information. Two-way communication between the utility and the EV would be established via existing or planned communications systems. Each device would be connected to a personal computer that would be able to perform local demand system management, billing, and data transfer functions. This device will be a very important tool that will allow utilities to have greater control over load demand and distribution, while ultimately benefiting rate payers by providing more cost-effective electrical service. TOU Rates The utilities plan to encourage off-peak charging through the deployment of TOU rates that make it less expensive to charge EVs during off-peak periods and more expensive to charge during peak times. Using TOU rates will require installation of a separate meter for billing purposes. LADWP and SMUD have already adopted TOU rates. The IOUs have submitted proposed TOU rates to the CPUC for approval. In the summer time, the on-peak rates are seven to eight times more expensive than the off-peak rates. Further, PG&E is proposing to offer TOU rate schedules for customers who elect to forego their access to charging during peak hours. The hours that define on- and off-peak times differ by utility, season, and sector. In general, the residential customer's peak tends to occur in the evening when people return home from work, and the off-peak hours are in the middle of the night when people sleep. Table 5 gives examples of the TOU rates for residential customers proposed by the IOUs. Each utility plans to offer its customers several options. The rates already developed by LADWP and SMUD are similar to those shown in Table 5. ***************************************************************** Table 5 Proposed Residential EV Rates (cents per kWh) SCE TOU EV-1 PG&E TOU-A SDG&E EV-TOU Summer 12:01 a.m. 4.5¢ 4.1¢ 3.4¢ 6:01 a.m. 4.5¢ 4.1¢ 5.9¢ 12:01 p.m. 35.8¢ 10.2¢ 26.0¢ 6:01 p.m. 35.8¢ 29.9¢ 26.0¢ 9:01 p.m. 4.5¢ 10.2¢ 5.9¢ Winter 12:01 a.m. 4.9¢ 5.1¢ 3.4¢ 6:01 a.m. 4.9¢ 5.1¢ 5.9¢ 12:01 p.m. 9.6¢ 11.0¢ 9.1¢ 6:01 p.m. 9.6¢ 11.0¢ 9.1¢ 9:01 p.m. 4.9¢ 11.0¢ 5.9¢ ***************************************************************** Electricity Price Projections Each utility in California is planning to implement TOU rates to encourage off-peak EV charging. The electricity rates being proposed range from 4-6 cents per kWh (in 1993 dollars) for off-peak charging to more than 35 cents per kWh in peak periods. The off-peak rates are lower ‹ in a cents per mile basis ‹ than any of the other fuel options, and the on-peak rates are higher. A comparison of alternative fuel vehicle (AFV) fuel costs are shown in Table 6. ***************************************************************** Table 6 Comparison of Current Fuel Costs (reflects existing fuel tax structure) Fuel Current Fuel Cost Fuel Cost Gasoline-Equivalent Fuel Efficiency Fuel Cost cents per mile Elec- tricity $0.08 kWh1 n/a 0.3 kWh/mile 2.5 Gasoline $1.19/gallon $1.19/gal 29.69 Mi/gal 4.0 M85 $0.80 - 0.98/gallon $1.32 - 1.62/gal2 31.79 Mi/gal2 4.2 - 5.1 Natural Gas $0.69 - 0.78/therm $0.81 - 0.92/gal2 30.70 Mi/gal2 2.7 - 3.0 1. Off-peak rate. 2. Fuel cost and efficiency expressed in gasoline equivalent gallons. ***************************************************************** Education Education is an essential tool to encourage customers to charge their EVs during off-peak hours. This is important for residential customers, as they may have a greater willingness to pay higher rates to charge their vehicles to increase charging flexibility and convenience. Commercial or fleet EV users are more likely to be cognizant of the financial impacts of charging their vehicles on-peak, as these users closely monitor operating expenses. Also, fleet users tend to operate their vehicles in set driving routes and fuel their vehicles systematically. Utilities have effectively used education in the past to minimize load peaks. This is an area where efforts by the state, such as providing educational grants and materials, could also become necessary with the widespread introduction of EVs. D. Storage Technologies to Maximize Off-Peak Charging Localized electricity storage devices, such as large batteries or flywheels, could minimize effects of on-peak charging. It should be noted that a peak load results from the simultaneous demand for electricity from a wide variety of end users and would not be solely caused by EVs. Stationary technologies that store electricity generated during off-peak times for use during peak hours can mitigate peak loads. The cost-benefit analysis of such devices must be done on a case-by-case basis. E. Battery Infrastructure Although not strictly a fuel supply issue, battery infrastructure (manufacturing, distributing, servicing, and recycling) will need to be developed along with the vehicles infrastructure. This topic could become a major EV infrastructure issue. Due to the high risk of emerging battery technologies quickly becoming obsolete and customer concern over battery replacement costs, battery leasing may be offered as an option by auto manufacturers or other private entities. The manufacturing and recycling of batteries for EVs will require investments in tooling and facilities. Such investments are high-risk, as technology advances could quickly make initial investments obsolete. Industry has suggested that this is an area in which government financing may be needed.[9] To address the health and safety issues associated with recycling EV batteries, CARB has issued a contract for a study to evaluate battery recycling capacity needs and emission implications. The study will examine recycling issues for battery types that are most likely to be used in EVs over the next 10 years. The report is expected to be complete by the end of 1994. III. FUELING FACILITIES ‹ Convenient Public and Private Charging EVs are expected to be charged predominantly at private home base locations, such as a residential or company garage. Because EVs currently have limited driving ranges, the availability of public charging facilities for full or partial charges away from the home base ‹ called "opportunity" charging ‹ will help build consumer confidence and increase use of, and the early market for, EVs. Logical locations for opportunity charging include parking facilities for shopping areas, the workplace, park and ride lots, and airports. Fleet or commercial users may also need access to public charging facilities away from their home base. Chargers for most public and private charging will likely use a 240 V and 40 A power level. EV charging at this level will require 4-8 hours for a full charge, depending on battery type. Charging an EV using standard 110 V outlets may also be possible. Charging times using these lower power outlets would be substantially longer. Technologies are becoming available to charge an EV in an amount of time that is more comparable to fueling a gasoline vehicle. Quick charging with high power voltages and swapping discharged batteries with a fully charged battery pack offer two opportunities to rapidly charge EVs. Each have limited applications. A major concern with fast charging is that it may occur during the peak hours for electricity use. This will greatly increase the cost of charging and could cause utility capacity problems. As part of their responsibility to provide adequate service to their customers, the utilities are taking the lead in establishing the necessary charging infrastructure for EVs. In the utilities' six-year proposal for EV programs, some of the IOUs have requested that the CPUC allow them to install charging infrastructure at residential locations, and to install infrastructure for demonstration at commercial, industrial and public sites. The CPUC is currently evaluating these proposals, and a discussion of the process is given in the overview. In addition, both LADWP and SMUD are installing EV charging stations in their service areas. As with other alternative fuels, a federal tax deduction of up to $100,000 is available for expenditures on fueling facilities through the year 2001. Between 2001 and 2004, this deduction will decrease. The following sections discuss home and public charging, including public quick charging and battery swapping. A. Home Charging Homes will require a dedicated electrical circuit to support EV charging. For the typical EV owner, this will involve obtaining a building permit and installing wiring and a dedicated circuit breaker. Older homes may require more extensive modifications. A study in the LADWP, PG&E, and SCE service territories shows that the average cost of upgrading a household is about $805 (excluding metering, load management devices, and the charger). On average across all three utilities, homes with detached garages cost $226 more to retrofit than homes with attached garages.[10] With certain restrictions, some of the IOUs are proposing to make arrangements with auto dealers, construction workers, and electricians to retrofit residential homes for EV charging within two to three days of an EV purchase. The IOUs also propose to pay the up-front costs for these upgrades. This initiative would remove market barriers for EV consumers by increasing convenience and lowering initial costs. Utilities would recover installation costs through special EV charging TOU rates. The CPUC is evaluating this proposal. It is expected that the municipal utilities will adopt programs similar to those of the IOUs. B. Public and Worksite Charging Some IOUs also are proposing to cost share the installation of charging facilities for demonstration at various non-residential sites. The sites for installation include fleet garages, employee parking lots, public opportunity charging locations, and residential locations without garages. The demonstrations would include a variety of technologies suited to the needs of specific applications. Public charging is also being addressed on a less technical, less hardware oriented level. The IWC and General Motors have sponsored design competitions to encourage the development of a standard looking public charging station that will be safe, easy to use, attractive, and easily recognized by the public. CALSTART, a consortium made up of public and private California businesses and utilities, has an infrastructure program that is working to coordinate the deployment of public charging sites in California. CALSTART is currently developing a map of existing public charging sites. Public and private access stations have been installed by LADWP, SMUD, Burbank and Riverside Public Utilities, PG&E, and SCE. C. Quick Charging Quick-charging technologies would provide the power necessary to restore 60-80 percent of the charge to high-charge-density batteries (20-60kWh) in five to 15 minutes.[11] Quick-charging technology prototypes have been developed, but will require significantly more development and testing before commercialization. Quick charging also raises several technical issues. As yet, IWC has not defined the specific voltage, current, and supply service for quick charging. The power level could be 480 V three-phase AC and 300 A, or above 250 V DC. Also, technological issues arise over the need to protect battery packs from possible heat build up and gassing as a result of quick charging.[12] In any case, providing energy safely and economically at such high charging requirements poses a significant challenge. Another uncertainty is the impact of quick charging on the electricity load. The load could be managed and planned for because it would be part of a commercial load. Impacts on the utility system could be a long-term issue if quick charging during peak hours becomes widespread. Because of safety and economic issues, quick charging is not likely to be suitable for widespread charging applications. This capability could help boost consumer confidence in EVs by allowing quick charge capability and could be used to provide emergency roadside service. It is not likely to become widely deployed. The need for "fast charging" may occur during the peak hours for electricity use, which will greatly increase the charging cost and could cause utility distribution problems. D. Quick Battery Exchange An alternative to quick charging that provides a similarly fast "charge" is rapid replacement of a discharged EV battery pack with a fully charged one. A major issue with this strategy is the cost associated with owning and maintaining additional battery packs plus the labor costs for making battery exchanges. An advantage is that the batteries can be charged off-peak. Battery swapping may work well for bus fleets because the batteries could be owned and maintained by one party and swapped within the fleet. Also, EV transit buses are used in relatively controlled niche applications in which new technologies can be readily demonstrated and evaluated. The Commission currently is cofunding a feasibility study on three different configurations for battery swapping in San Luis Obispo. Battery swapping for personal vehicles is more problematic and much less likely to be commercially developed. This strategy would probably require a third party, such as a service station operator, willing to own and maintain an inventory of battery packs. The auto industry would likely have to agree upon a standard battery size and type and a vehicle configuration amenable to quick battery removal. The facility could have high capital costs to cover equipment costs for lifting and moving heavy battery packs. E. Electricity Sale for Resale Currently, CPUC regulates utilities that generate or purchase electricity, and sells the electricity to third parties. Specifically, any establishment that generates and sells electricity to three or more customers must register as a utility and abide by CPUC regulations. With the advent of EVs, non-utility sale of electricity becomes a significant issue, as today's regulations would not allow a non-utility to own a public EV charging station. The natural gas industry faced a similar issue that was resolved in 1992, with the passage of California Senate Bill 547. This legislation allows non-utilities to sell natural gas for transportation uses at fueling outlets. A similar provision has not yet been created for electricity. Allowing electricity to be sold by a third party to the public is a complex issue connected to the issues of wholesale and retail electricity wheeling. Simply put, wholesale wheeling is the wholesale of electricity using another utility's transmission system, and retail wheeling is retail sale using another utility's transmission systems. The 1992 Energy Policy Act cleared the way for wholesale wheeling. Many view this move as a precursor to retail wheeling, which is seen as the next step and an enabling condition for electricity resale. The sale of electricity by a third party is analogous to deregulation of the telephone industry. Under deregulation, local and long distance entities are permitted to gain access to phone lines owned by another company for a fee and sell their service directly to the general public. IV. FUELING HARDWARE ‹ Standard Specifications Activities are currently under way to standardize key aspects of EV charging to facilitate a smooth commercialization of EVs. Standardization is important to ensure safe and reliable energy supply, and to facilitate convenient charging. IWC is addressing these issues through its committee on Connector and Connecting Stations. A. Vehicle/Power Supply Interface Current retrofit vehicles can be charged from a standard 120 V plug configuration. These outlets are widely accessible with an appropriate extension cord. Future purpose-built, commercial EVs are expected to charge with connecting equipment different from a standard plug, but may allow use of the standard plug. IWC is working to gain consensus with the seven mandated manufacturers on the configuration that will connect a charging system with the power supply. This has been a contentious issue as there are two distinctly different types of charging interfaces being developed, conductive and inductive. General Motors (through its subsidiary Hughes) has developed a vehicle that uses an inductive charging system, but Ford and Chrysler are using a conductive connector in their vehicles. Currently, the IWC has decided to support two sets of standards for the EV charging interface ‹ one for conductive and one for inductive charging. The IWC has nearly completed adoption of both conductive and inductive standard charging systems and expects to finalize the standards by the end of 1994. Proliferation of more than one configuration could cause problems. Public charging facilities could be inaccessible for some EV consumers, and the charging sites, or the vehicle, might have to be equipped with more than one interface. Both outcomes could reduce consumer acceptance of EVs and hinder their commercialization. This situation has been likened to the VHS versus Beta\format issue for VCRs. In the end, the market defined the winner, and the market would likely settle the connecting conflict as well. However, to facilitate EV commercialization, it may be beneficial for the state to take steps to encourage the adoption of one standardized connection for EVs. Many experts, on the other hand, feel that the marketplace should be left to decide the most appropriate connector convention. B. Power Levels IWC is also working to standardize energy levels for charging vehicles. Three levels of charging have been agreed upon:[13] Level 1: Slow Charge at 15 A, 120V AC (conventional outlets) Level 2: Normal Charge at 40 A, 240 V AC Level 3: Fast Charge at 75-200 kVA (the specific volt and amperage levels have not been agreed upon yet) Establishing power quality standards for EVs is another IWC issue. Major appliances such as a charger can cause disruptive feedback into the electricity distribution system, which can accelerate degradation and increase maintenance requirements on the system. Poor power quality can also create interference which disrupts the use of adjacent appliances, such as computers. C. Electric and Magnetic Fields Electric and magnetic fields (EMF) are produced from electricity and are suspected of causing adverse health effects. EMF are encountered daily. Typical sources include powerlines, electrical appliances, and even small transformers for pocket calculators. In response to a perception that EVs could have high EMF levels, auto manufacturers and utilities are investigating the issues. PG&E is taking the lead in developing a standard protocol for measuring EMF in and around EVs and chargers. PG&E will also conduct initial testing and evaluations of charging systems. As EMF health effects are better understood, recommendations will be made on the steps that should be taken to control or mitigate EV-related EMF.[14] V. CODES AND REGULATIONS EV charging facilities must meet existing electrical and building codes. Code requirements could negatively affect EV commercialization in a number of ways. For example, classification of EV charging as hazardous would entail strict limits on structures containing charging equipment. Likewise, classification of charging as vehicle fueling would prohibit charging in commercial garages because of restriction on the transfer of liquid fuels. To prevent such problems, IWC is working to revise national codes to adequately address the safety needs of EV charging sites without creating overly burdensome restrictions that would unduly increase installation costs. The sections below discuss these issues in greater detail. A. Drafting EV-Specific Codes After reviewing codes and EV issues, IWC determined that the areas of greatest risk with EVs are: o Gas, vapors, or liquid waste in the charging process for unsealed batteries o Compounding of potentially hazardous factors found in one EV by multiple EV charging o The presence of flammable, toxic, or corrosive materials in EV batteries To alleviate such problems, IWC has begun to develop and submit proposals to regulatory bodies. Examples of submitted proposals include: o New NEC Section 29c and d o New Article 625 - Electric Vehicle Charging System Equipment. o Revision of section 511-9p Commercial Garages, Repair and Storage - Electric Vehicle Charging. o Revisions for Table 400-4 Flexible Cords and Cables. Additional work is being focused on building codes that will address issues related to both batteries and charging. B. Local Permitting Procedures and Code Enforcement The Uniform Code serves as the model for California codes. For application and enforcement, however, local jurisdictions can apply and amend the state codes to fit local conditions. To help mitigate the potential negative effects of narrowly defined or strict local code enforcement, the state should monitor IWC activities and take steps to facilitate adoption of appropriate standards in California. Specifically, the state should support information transfer between local regulatory officials and industry to ensure that safety concerns are adequately addressed and to encourage adoption of national codes on a local level. It should be noted that both LADWP and SMUD are taking an active role in making cities such as Los Angeles, West Hollywood, and Sacramento EV-ready, through such actions as setting goals for providing EV charging ports at parking facilities and developing local building code requirements. VI. CONSUMER AND VEHICLE SUPPORT ‹ Service, Education, and Training Efforts to inform and educate service and support personnel as well as the general public are just beginning. As the market for EVs grows, so will the need, and surely the investment, in expanding product awareness, education, and training. The Commission assumes that any vehicle to be sold by an original equipment manufacturer will be fully backed by the manufacturer. The auto companies will train technicians as part of their normal operations and maintain adequate parts inventory and service locations to fully support the vehicles in the marketplace. This support includes warranties comparable to those for conventional vehicles. To protect consumer safety, emergency personnel also need to be trained on how to approach and handle AFVs in an emergency situation such as a collision. Already, Ford, General Motors, and Chrysler have jointly developed a video to inform fire rescue personnel of the safety precautions to be aware of when dealing with an EV. To the extent that small manufacturers develop vehicles, they will also need to keep fire officials informed on the attributes of their vehicles. As the market develops, safety features should be standardized and more efforts will be needed to train emergency personnel. An issue of potential concern is the wide use of EVs built by specialty and retrofit manufacturers. Small manufacturers may not be able to afford a broad-based network of service outlets, warranties, or an adequate inventory of spare parts. This situation has occurred in the past and has created customer dissatisfaction. The deployment of public education and awareness can help minimize this concern. ***************************************************************** References ***************************************************************** CHAPTER 3: LIQUID FUELS - REFORMULATED GASOLINE, METHANOL & ETHANOL I. INITIAL OVERVIEW Alternative liquid fuels examined in this chapter are reformulated gasoline (RFG), methanol, and ethanol. Experience with the use of each fuel and its infrastructure requirements varies significantly. Phase I RFG was introduced in California in 1992, and Phase II RFG is scheduled for introduction in March 1996. The California Air Resources Board (CARB) has estimated that the California refiners are investing between $3-$6 billion to modify existing refineries to produce RFG. Because of the similarities between reformulated and conventional gasoline, the existing gasoline storage, distribution, and fueling infrastructure will be used for RFG. There are no unusual infrastructure problems associated with the use of RFG. Therefore, this discussion will focus on infrastructure issues associated with using methanol and ethanol. Fuel methanol is available in the state on a demonstration retail basis, and a significant population of methanol vehicles is now in operation. In contrast, the use and availability of ethanol in California is very limited, for reasons discussed later. The technology issues associated with using methanol and ethanol vehicles have generally been identified and solved. Ford, General Motors, and Chrysler have collectively sold 9,500 vehicles in California. The vehicles are configured to allow consumers the flexibility to fuel with methanol, ethanol, and/or gasoline. Because the alcohol fuels have a lower energy density than gasoline, the vehicle needs to be fueled more often when it operates on an alcohol fuel than when it runs on gasoline. The principal issues today center on bringing these vehicles to wider market use and acceptance. The state, by facilitating technological, product, market and infrastructure information exchange, will support the evolution of the alcohol-fuel market. The more significant barriers are economic, rather than technical in nature, as the current volume of alcohol fuel use is not yet sufficient to trigger the potential economies of scale in fuel production, transportation, and distribution, as well as in equipment manufacturing. II. FUEL SUPPLIES A. The Current and Potential Market A small and increasing inventory of methanol-powered motor vehicles are operating in California. These include both light-duty vehicles (LDVs) and heavy-duty vehicles (HDVs). HDVs include heavy-duty trucks, buses, and construction and agricultural machinery. Almost all LDVs are fuel-flexible vehicles (FFVs), which can run on M85, regular unleaded gasoline, or any combination of these two fuels. (M85 is a blend of 85 percent methanol and 15 percent unleaded gasoline. M100, a fuel containing 100 percent methanol, is called neat methanol.) In 1994, approximately 10,000 light-duty FFVs are operating in the state.[15] Experience to date suggests that these FFVs are predominantly operated on gasoline.[16] Fleets are the dominant FFV users, although the use of FFVs by private individuals has been increasing. Some 500 heavy-duty methanol vehicles are operating in the state, primarily in transit or school bus applications.[17] The Los Angeles County Metropolitan Transit Authority currently operates 333 methanol transit buses on M100. In addition, 16 school districts in the state operate a total of 150 methanol-powered school buses that were provided as part of the Katz Clean Safe School Bus Program.[18] Most of these buses operate on M85, but some are being converted to M100. There is currently a small fleet of ethanol vehicles in California. Elsewhere in the U.S., efforts are underway to acquire 2500 E-85 optimized vehicles for use in government and corporate fleets. B. Sources of Methanol and Ethanol Methanol can be produced by several processes from a variety of different feedstocks. About 75 percent of all methanol is produced from natural gas in a two-stage commercial process. First, natural gas is reformed with steam under high pressure and temperatures to produce a "synthesis gas" consisting principally of carbon monoxide, carbon dioxide, and hydrogen. This mixture is then converted over a synthesis catalyst into methanol. The process converts approximately 60-65 percent of the energy in the natural gas into methanol. As the technology advances, the cost and efficiency of methanol synthesis will continue to improve. Some processes have been reported to achieve 70 percent efficiency.[19] Other light hydrocarbons can be used as methanol feedstocks as well. Producing methanol has not been an economically attractive option compared with other, higher value uses of these products. Several processes to produce methanol from coal have been commercially demonstrated as well. In these processes, coal is first gasified at high temperatures to form a medium-British Thermal Unit (Btu) synthesis gas which is then reformed to produce methanol as described above. Biomass such as wood waste or other cellulosic materials can also be used in a similar gasification/reforming process. Landfill gases are another source of medium Btu gas that can be reformed to produce methanol. The pr