The industry is getting more complex every day. Senior executives at Southern Company, PPL, TXU Energy, Direct Energy and PJM discuss business trends, resource strategies, electric vehicles and...
Smart charging is just the start of the electric vehicle revolution.
The most disruptive technologies are those that add value to a fundamental product—while simultaneously reducing cost. Predicting that increase in bang-for-buck, however, isn’t necessarily easy at the early stages of a disruptive technology trend.
Case in point: when Sony introduced the first CD player in 1982, it was heralded as an important step forward in audio recording technology. At $900 ($1,780 in today’s dollars), the CD-P 101 was expensive, and it could do just one thing—play a music CD on a stereo system. No one could’ve guessed this single innovation would begin the chain of events that has so radically disrupted the music industry.
By digitizing music files, Sony’s technology allowed music to escape the physical medium. When a new virtual medium emerged in the form of the Internet, music quickly became more valuable and vastly cheaper to distribute. Now, instead of going to a store to buy a plastic disc, we download digital music files instantly onto our pocket-sized media players and computers. We share and shuffle songs, and generate instant playlists based on the style and genre of a specific song. We use songs as ringtones for our cell phones, and background music for family videos we post on YouTube.
Sony’s CD-P 101 couldn’t do any of that, but it started the digital revolution that made it all possible.
In some respects, the electric vehicles (EV) now rolling off automakers’ production lines bear a family resemblance to that first CD player. They’re expensive and limited in range, but they mark a technological tipping point. By tapping into the smart grid, EVs promise to free transportation fuel from the physical medium—raising its practical value while simultaneously diminishing its cost.
At this early stage it’s difficult to see how EVs will add significant value or shave end-user costs. For example, this spring, automaker Nissan announced the $32,000 sticker price for its new Leaf EV. At first glance, that seems a fair price for a first-of-its kind, five-passenger vehicle that will never visit a gas pump, as contributor Steven Andersen puts it in this month’s cover story ( “Tipping Point,” p.22 ). But when a prospective buyer kicks the tires on the Leaf, the first question likely will be “how far will it go on a charge?” Nissan’s answer—80 miles—will send all but the most determined early adopters running for the nearest hybrid.
But as happened with music CDs, tomorrow’s EVs will soon make us forget the costs and limitations that today seem so daunting. Money is pouring into battery research and development. Breakthroughs in nanotechnology promise exponential improvements in performance per dollar of cost ( see “ Solar Eclipse ,” Frontlines, May 2010 ).
As interesting and important as battery technology might be, however, what’s more important is the way it will be used, and how it will change the business of fueling transportation.
Today’s drivers visit service stations to buy motor fuel, and when the tank nears empty they buy more—at a cost today of