While many government officials nervously await the outcome of the November elections and speculate as to its implications for the cleantech sector, one federal department is likely to be relatively unaffected regardless of the outcome: Defense.

According to panelists at the recent “Mission Critical: Clean Energy and the U.S. Military“ event in Denver, the military’s growing commitment to reducing its use of fossil fuel, for both national security and economic reasons, will not waver regardless of who’s in charge in the White House or the Congress.

Senator Mark Udall of Colorado rattled off a series of statistics that underline the reasons for the military’s emphasis on becoming as green as the army’s uniforms:

• The military is 25 percent of government’s energy burden
• The Pentagon is biggest consumer of fossil fuels in the world, burning 300,000 barrels of oil per day at a cost of more than $30 million in fuel per day
• A $1 increase in the price of oil increases DoD’s energy cost by $100 million per year
• 1 out of every 50 convoys in a combat zone results in a casualty, and the Army has accrued more than 3300 fatalities in convoys since 2001
• Convoy and security costs $100 per gallon for combat zones

Udall emphasized that the military is implementing many fuel-reducing technologies because of the high human price paid in getting fuel to the front lines. “Saving energy saves lives,” he said, adding that adopting clean energy technologies is “one of the most patriotic things we can do.”

Despite any changes that might occur in the leadership in the executive or legislative branches, the military will continue to be an early adopter of clean technologies that enable it to become more energy independent. These includes making military bases self-sufficient (and less vulnerable to attack) by creating microgrids, and purchasing a large number of hybrid and electric vehicles for its non-combat fleet.

While investors may be endangering the cleantech industry by exiting or staying out of the market, the military remains committed to deploying solar and wind. The military will generate 25 percent of its energy from renewables by 2025, according to Mark Mahoney, director of the Army Regional Environmental and Energy Office.  Mahoney said one benefit to renewable adoption is that a platoon can reduce the load it carries by 700 pounds simply by replacing portable generators with solar chargers.

Fort Carson, Colorado, recently achieved the challenging trifecta of becoming a “net zero” facility for energy, water and waste. Fort Carson became the second such army facility, joining Fort Bliss in El Paso, Texas.  The military’s unrelenting commitment to clean energy is consistent with its overarching mantra of preparedness.  According to Mahoney, we can’t “afford to wait until the next international energy crisis … or national tragedy forces us to act.”

Power provider NRG Energy’s proposed settlement with the California Public Utilities Commission (CPUC), which would include the company’s ownership of EV charging equipment across the state, was lauded by some EV manufacturers and met with displeasure from EV industry participants and competitors.  The company responded by adjusting its settlement offer, and along with the CPUC on April 27 filed an amended settlement offer with the Federal Energy Regulatory Commission (FERC), which has 90 days to review the deal.

I submitted questions to NRG about the changes to the revised agreement and the impact on Californians, and below is an edited transcript of the email exchange with Arun Banskota, president of NRG Energy’s EV Services division.

Pike Research: How do you think that this agreement will accelerate the demand for PEV ownership in California?

Arun Banskota: This is a significant investment of capital that addresses the “Chicken and Egg” problem facing the industry as a whole: how do you build a network when there aren’t enough cars on the road? NRG’s investment and innovation in DC fast-chargers will break open the EV market by addressing the number one challenge facing the industry–range anxiety.  This settlement puts the state on the path to creating a “backbone” of fast-charging stations and work place and residential charging as well as charging at institutions such as schools, hospitals and community colleges that are crucial to meeting California’s goal of having 1.5 million EVs on the road by 2025.  More EVs on the road means more opportunities for companies throughout the sector as we create a technology- and vendor-neutral infrastructure to encourage EV adoption and demand growth.

PR: What are the benefits from the settlement to California ratepayers who don’t own an electric vehicle?

AB: NRG’s EV infrastructure will deliver multiple benefits to California families and businesses, including those that don’t currently use EVs.  NRG’s project will:

• Create jobs and new investment in California;
• Open up increased market opportunities for existing and new businesses in the EV sector, from technology to manufacturing to EV charging hosts;
• Improve air quality in the of the state’s largest most densely populated metropolitan areas;
• Make EVs more accessible to consumers of all socioeconomic backgrounds;
• Give consumers another choice for transportation amidst rising oil prices;
• Reduce greenhouse gas pollution;
• Provide greater exposure to the benefits of EVs through the car sharing program we will support.

PR: Can you explain how the modifications to the agreement address the concerns filed by Ecotality?

AB: NRG worked closely with the CPUC to ensure that this settlement will drive growth and preserve competition in the EV market so that Californians can meet their clean energy goals.  California is targeting 1.5 million EVs on the road by 2025.  To get there, the state needs the kind of investment that we are making – and then some.  The 200 public freedom stations and the make ready sites will be spread across 55,000 square miles of the most densely populated metropolitan areas in California.  While it is significant, it doesn’t saturate the market.  Additionally, a good percentage of our infrastructure will be built in low and moderate income areas, something that was unlikely to happen outside the scope of this type of settlement.

Most importantly, there is no exclusivity for the locations where the Make-Readies or the Freedom Stations will be installed–our competitors can build right next to our installations.  Additionally, the make ready infrastructure is being built for and will be delivered to the citizens, businesses and property owners of California.  This investment will enable other companies to make subsequent investments in a more mature market as we are taking the up-front risk to create longer-term value for the entire sector by paying to build an infrastructure that our competition will have access to after 18 months.  By building the make readies, we are lowering the barrier to entry for the entire market.  The infrastructure cost (approximately $10,000-$15,000) is the most significant portion of the overall cost to install chargers.

PR: Other EV charging services companies have objected to the 18-month period where NRG gets exclusive access to installing charging equipment at the make ready locations.  Why was this clause inserted and how can it expand rather than impede competition in EV charging services?

AB: I would emphasize that the CPUC wanted someone with “skin in the game” to ensure this infrastructure was successful by incenting NRG to site this infrastructure at properties with a higher probability of attracting EV drivers.  The 18-month period allows us to have a short amount of time to try to take advantage of our $40 million investments, but is short enough to ensure that competitors can take advantage of it as well when this period is over.

PR: Is NRG required to give away any vehicle charging services or equipment as part of the agreement? I understand that the make-ready wiring and upgrades will become property of the location or residential EV owner, but will power be given to EV owners at no cost, or will any of the charging equipment be owned by the location owners?

AB: The make ready sites, a $40 million investment by NRG, will be turned over to the facility owner after the expiration of the 18 month exclusivity period and NRG will not own this infrastructure.  By design, neither the actual chargers nor the electricity will be part of the infrastructure we supply to enable the property owners or our competitors to take advantage of the infrastructure in a way that best fits their respective business models.

PR: How does the equipment provided by this agreement compare with the free charging equipment given to PEV owners via the EV Project and ChargePoint America?

AB: The EV equipment we use will be acquired through a technology- and vendor-neutral RFP process.  Probably one of the most important comparisons is the difference that our equipment is privately funded to ensure a sustainable business model that is only dependent on success of EV adoption.

Is this a good deal for EV owners, the industry, and California as a whole? Should FERC okay this with the 18-month exclusivity contract intact? Please share your comments below.

A proposed settlement to make amends for energy price-fixing during the Enron era is causing shockwaves around California’s electric vehicle charging industry.  The settlement between the California Public Utility Commission (CPUC) and NRG Energy, which was announced on March 23, would require the energy company to spend $100 million on building out EV infrastructure and pay $20 million in cash to the CPUC.

The settlement is based on energy market manipulations committed more than a decade ago by Dynegy Inc., which at the time was a co-owner, along with NRG, of a portfolio of power generating plants that NRG later acquired in full.

More than half of the infrastructure investment would go towards installing 200 commercial EV charging stations.  NRG would install the stations in the San Francisco Bay area, the San Joaquin Valley, the Los Angeles Basin and San Diego County, all areas expected to see significant penetration of EVs during the coming years.

The DC charging stations, which enable battery electric vehicles to fully charge their batteries in 15 minutes or less, would be owned and operated by NRG, which would receive all of the revenue derived from their usage.  An obvious question is, How does opening up retail locations to distribute one’s services and generate revenue constitute reparations?  This is akin to a petroleum company being ordered to open up more gas stations because they were overcharging customers.

The dissatisfaction with the settlement was a frequent topic of conversation in the hallways at the EV Infrastructure USA conference in San Diego last week.  Competing EV charging services companies are unhappy that the “penalty” would give the company first-mover advantage in fast DC charging in many key locales throughout California.  California currently has only one installed DC charging station.

Earlier in the week EV charging services company ECOtality filed a motion for public review of the CPUC settlement.  The filing points out the potential hindrance to competition through the “monopoly-like benefits” and asks, “Does [the settlement] carry the potential to impair competition among different developing business models?”

Of the remaining funds, $40 million would go towards wiring homes, multi-unit dwellings, and public locations, such as schools and hospitals, to make them ready for the installation of EV charging stations.  While this aspect of the contract at first glance might appear to serve the public interest (for those who happen to plan on buying a plug-in vehicle in the next few years), the ECOtality filing points out that “the settlement would confer exclusivity on NRG at the ’make ready’ sites for 18 months before competitors would have access to the use of these sites.”

The nascent EV charging infrastructure industry is as much about the land grab for prime locations as it is about technology and business models.  EV charging vendors see great value in forging relationships with real estate companies and retailers before EVs become commonplace.  An amendment to the agreement that would not inhibit competition would open up access to the pre-wired sites to competitive bidding amongst EV charging services companies.

EV owners could benefit initially if the infrastructure is put in place earlier than if the market were left to its natural evolution, but the benefits may be short-lived if competition is reduced.  Many industry folks believe that the NRG settlement is unlikely to be approved if additional scrutiny and public review are permitted – which in this case seems only appropriate.

When looking for the perfect environment for selling electric vehicles, look to island resorts.  Companies offering plug-in electric vehicles (PEVs) and charging equipment are making inroads in many of the world’s top vacation spots including Hawaii, Bermuda, the Cayman Islands and Singapore.

Islands offer many ideal conditions for PEVs, including:

• Short driving distances (limited by geography)
• Expensive gas
• Local motivation to reduce carbon emissions
• Higher income residents and tourists who can afford the vehicle premium
• Abundant sun to enable solar EV charging

These factors add up to islands logically being at the forefront of PEV adoption.  Many islands can be circled without depleting an EV’s battery, so drivers can forget about range anxiety.  Many island governments and cultures stress sustainability due to concerns about rising ocean levels, such as in Kiribati, where they are considering drastic measures.  Many tourists won’t mind paying a premium for renting a zero-emissions vehicle as well as for the convenience of not having to refuel the car.

The Caribbean is home to two such PEV initiatives.  Car seller Cayman Automotive Leasing is bringing EVs to its hometown islands, as well as to Bermuda.  Amp Electric Vehicles has signed a deal with solar EV charging station company U-Go Stations to import its converted electric SUVs into Bermuda as well.  The Bermudan government encourages EV adoption by waving the import tariff for the vehicles, according to U-Go Stations president Bill Policastro. Solar charging stations can make economic sense on islands that often have high electricity prices as they can produce power at peak times and sell excess to the grid.

In Hawaii, where a regular gallon of gas now costs $4.55, according to AAA’s fuel gauge report, EV services company Better Place is rolling out an EV charging network across the islands and has installed 70 public charging stations.  PEV owners on Oahu, Maui, Kauai and the Big Island can even charge their cars for free for this year at any of the public charging stations.  According to Pike Research’s Electric Vehicle Geographic Forecasts report, with a population of only 1.3 million people, Hawaii is expected to have more than 14,000 PEVs on its roads by 2017, which would place it ahead in PEV adoption of much larger states including Kansas, Utah and South Carolina.

Better Place is similarly targeting the Japanese islands as well as the “island continent” of Australia for its EV charging services.

Singapore is home to EV infrastructure startup Greenlots, which is building a network of charging stations across the city-state as well as selling charging equipment to other islands in the region.

With their small geographies, islands can be covered with sufficient public charging infrastructure at a more reasonable cost since the vehicles will never be far from a charging station.  Driving an electric vehicle in a tropical paradise can be both carefree and emissions free.