Vehicleto Grid Electricity

Here's where the plug-in hybrid/electric car story transcends its category. Picture a fleet of these cars being charged overnight with off-peak power and then driven into town by commuters who will spend the day at the office. Thousands of batteries, full of energy downloaded from the grid during the night, represent a huge potential source of peak power. Plug them back into the grid, and they can feed some of that energy back at a time—the middle of the day—when it - most needed. Called "vehicle-to-grid," or V2G, such a system might save money all around. The local utility avoids having to build expensive new peak generating capacity, while the car owner gets paid peak power rates for juice he or she bought during the night for less. The downside is that the extra work might shorten battery life, but several possible solutions are being proposed, including creating a secondary market for batteries that are no longer efficient enough for automotive use but still have a bit of life, and/or having the electric utility actually own the battery and charge customers for its use on their monthly electric bill. When a battery falls below a given performance level, the utility would swap it for a new one and add the old one to solar or wind power storage systems.

Object Lesson: Toyota and GM

Bird in Hand versus Pie in Sky

In the early 1990s, gas was cheap and Americans weren't much interested in fuel economy. Toyota and GM, not surprisingly, responded to this complacency in very different ways. Toyota began moving up the food chain, using its engineering talents to morph Camry into Lexus and strike directly at the heart of the luxury car market. But at the same time, true to its incremental-improvement, small-car culture, it sought to raise its vehicles' fuel economy in the near term, eventually pioneering the hybrid concept. GM, meanwhile, surveyed a world of low gas prices and rising American incomes and concluded that fuel economy wouldn't matter for at least another couple of decades, if ever. So it followed its Big Iron instincts and brought out a line of ever-larger gas-guzzlers that culminated in the T-Rex of the oil age, the Hummer. To prepare for the far-off day when fuel efficiency might matter, GM created a high-profile, rhetorically rich program to leapfrog the whole internal combustion engine paradigm by developing fuel cell vehicles. Chapter 10 explains that technology, but for now, it's sufficient to say that fuel cells might indeed change the world someday. And to many observers, GM's highly public push in that direction made it look like the more advanced company. But today fuel cells are still far from viability, and GM's effort is still longer on press releases than products. Whereas Toyota went for something achievable, if imperfect—the hybrid—in order to be covered should gas once again become expensive, GM used fuel cells as an excuse to avoid the hard work of raising fuel efficiency in the present. Now Toyota is selling all the Priuses it can build, while GM dealerships are

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Figure 7.2 Toyota versus General Motors

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quiet places full of large, increasingly dusty SUVs. Figure 7.2 illustrates the stock market's opinion of the two companies' strategies. The moral: Anyone can announce a plan to develop a flashy new green technology. But something less flashy that works in the here and now is a far safer investment. So beware of companies that appear to be using green initiatives as a means to avoid tackling their current problems.

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