The Viability of

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• The Viability of
• New Technology Vehicles

Zeenat Abdoolakhan The University of Western
Australia
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1. Introduction
2. HEV Status in the US and Australia
3. HEVs vs. Conventional Vehicles
4. Alternative Fuels Keeping a lid on the demand
for HEVs?
5. Hybrid Technology An Intermediate Step
Towards the Hydrogen Fuel Cell?
6. Future Petrol Prices and the Future of New
Technology Vehicles
7. Conclusion
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1. Introduction

• Increasing concerns about spiralling petrol cost,
  energy security, air pollution climate change
• Developments in alternative fuels in new
  technology vehicles are the current responses to
  these concerns

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2. HEV Status in the US Australia
Table 1 Number of Hybrid Cars Sold in the US
Source http//www.hybridcars.com/sales-numbers.ht
ml

• US First two hybrid models are Honda Insight
  released in 1999 followed by the Toyota Prius in
  2000
• Waiting lists for hybrid vehicles have lengthened
  in the US

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• Australia Adoption of hybrid cars rather slow
• In 2004, nearly 1,300 hybrid cars sold in
  Australia (although 4 times more than the
  previous year)
• The US Federal Government offers tax incentive
  programs encouraging people to adopt the hybrid
  technology
• More hybrid models are planned to hit the US
  market from various automakers

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3. HEV vs. Conventional Vehicle

• What is the hybrid technology?
• -Combines a petrol-powered combustion engine
  paired with an electric motor.
• -The engine, which uses regular fuel, charges
  the electric motor's battery (also charged
  through regenerative braking)
• -The engine provides most of the vehicle's
  power, and the electric motor provides additional
  power when needed, such as for accelerating and
  passing.
• http//www.eere.energy.gov/cleancities/hev/what_is
  _hev.html/

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3.1 Advantages of HEVs

• Fuel efficient The Prius averages 4.4L/100km
  (4.6L city/4.2L highway) while the conventional
  Camry gets 9.8L/100km (9-11L city, 6-7L highway)
• HEVs do NOT need to be plugged in to be charged
• Lower emissions Statistics show that hybrid
  vehicles can reduce emissions of smog-forming
  pollutants by up to 90 and cut carbon dioxide
  emissions in half

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3.2 Market Barrier for HEVs

• Incremental price of a hybrid system is the
  biggest barrier to acquiring HEVs
• US Price of Prius at around US21,000 can be
  compared to that of conventional Camry
• Australia Prius costs around AU37,000 while the
  Honda Civic hybrid is at AU30,000

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4. Alternative Fuels Keeping a lid on the
demand for HEVs?

• Alternative fuels electricity, biodiesel,
  ethanol, natural gas (CNG or LNG), LPG and
  hydrogen
• Most common alternative fuels in use at present
  are ethanol, natural gas and LPG
• US All 3 used
• Brazil About 40 of the fuel used is ethanol and
  all petrol contains a minimum 25 of ethanol by
  law
• Australia LPG used mainly by taxis and CNG are
  used in buses

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4.1 Cost of Alternative Fuels

• US Alternative fuels tend to generally cost more
  than regular petrol. However, vehicles that can
  run on LPG represent the biggest share of
  flexible fuel vehicles
• Brazil Ethanol (from sugarcane) sells at about
  half the price of petrol and approximately 4
  million cars run on pure ethanol
• Australia LPG is less than half the cost of
  petrol

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• Alternative fuels could be curbing the demand for
  HEVs
• US Various state and federal incentives and laws
  to encourage people to reduce petrol consumption
  through the use of alternative fuel vehicles
• Australia State Government rebates are offered
  on both new LPG vehicles and conversion of
  vehicles to LPG

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5. Hybrid Technology An Intermediate Step
Towards the Hydrogen Fuel Cell?

• Hydrogen economy" refers to a global economy
  powered by hydrogen, not oil
• "Hydrogen Economy" The ultimate solution to all
  problems of energy and environment ?
• The way to a hydrogen economy is not all that
  simple

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5.1 What is a Hydrogen Fuel Cell?

• A fuel cell converts chemical energy directly
  into electricity by combining oxygen from the air
  with hydrogen (H2) gas
• H2 needs to be extracted from compounds such as
  hydrocarbons and water, at the cost of an energy
  input
• Most of H2 produced is for industrial
  applications and comes from steam reformed
  natural gas
• Challenge Find inexpensive and efficient routes
  to create hydrogen in sufficient quantities from
  non-fossil natural resources
• http//www.eere.energy.gov/hydrogenandfuelcells/

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5.2 Questioning Hydrogen

• A H2 economy requires a new fuel distribution
  network.
• A study carried out by the US Argonne National
  Laboratory estimated that the hydrogen delivery
  infrastructure to serve 40 of the light duty
  fleet in the US with current technologies is
  likely to cost over US500 billion
• "How much energy is needed to operate a hydrogen
  economy?"

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• Two Swiss engineers tackled this question and
  looked at 4 H2 production paths

• Conclusion In all production paths, energy input
  exceeds the energy content of the delivered H2
• Other issue H2 Zero pollution ?
• Depending on the production path for H2 ,
  pollution levels will vary
• US Government talking about Hydrogen from Coal
  Program (Clean Coal Program)

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• Cost of H2 Fuel Cell vehicles (HFCVs) very high
  Incremental cost of a HFCV will decrease from 1
  million in 2003-2005 to about 9,300 in 2012 to
  2020 (California Air Resources Board)

• Cost of H2 fuel would depend highly on the
  production path chosen.
• H2 cost goal set by US Department of Energy
  2.00-3.00 per kg in 2015 (2005) approx same
  energy as 1 gallon of gasoline
• 0.528 - 0.793 per litre (untaxed) in 2015

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6. Future Petrol Prices and the Future of New
Technology Vehicles

• Increasing world oil demand.
• Oil provides some 40 of the worlds energy use
  and as much as 90 of it is for transportation

World Oil Consumption by End-Use Sector, 2002-2025
Source http//www.eia.doe.gov/oiaf/ieo/pdf/0484(2
005).pdf
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• World Oil Production and Future Decline
  Predictions

Source http//stcwa.org.au/BO2/ATRF-OilDepletion.
pdf
The Big Rollover or Peak Oil is the term
commonly used to refer to the peak in production
of conventional oil
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Petrol Prices

• Oil Prices in current and constant dollars 1972
  2005

Source http//www.economist.com/agenda/PrinterFri
endly.cfm?Story_ID4268274
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Price Projections

• Projections of oil prices vary significantly
  between analysts due to the many uncertainties
  that exist in the oil market
• IEO2005 presents three price scenarios with
  prices projected to reach 21, 35, 48 (in 2003
  dollars) in the low world oil price, the
  reference and high world oil price cases

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• IEO2005 World Oil Prices in Three Scenarios,
  1990-2025 (2003 dollars
• per barrel)

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• Profitability of Various OPEC Market Strategies
  according to Gatelys model (2005)

1. NPVA corresponds to the NPV of discounted
profits in the baseline scenario, with the
International Energy Agency non-OPEC supply
path. 2. NPVB corresponds to the NPV of
discounted profits in the baseline scenario, with
the U.S. Department of Energy non-OPEC supply
path.
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Gatelys conclusions- OPECs optimal market
share is between 41-46, equivalent to an output
of 52-59 mbpd (million barrels per day) in 2030
-Oil prices are projected range between 39 and
56 a barrel (2003 dollars) in 2030

• Moreover
• Once non-OPECs production peaks, a strong upward
  pressure on price would be the most likely result
  
• At its current rate of production, Saudi Arabia,
  will exhaust its reserves before Iran. One can
  therefore expect it to reduce its production rate
  which would result in petrol price increases

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7. Conclusions

• H2 is the most challenging of all alternative
  fuels
• Uncertainty about H2 benefits linger
• Assuming that OPEC will behave as an entity and
  in an optimal way in the future, it is very
  likely that an upward pressure on oil prices will
  persist
• Rising petrol prices and uncertainties
  surrounding the world oil market have encouraged
  Americans to adopt HEVs

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• HEVs use the current fuelling infrastructure
• More HEV models on the market means increased
  competition which would result in HEV prices to
  drop

• HEVs that are at the lower end of the price
  range are likely to become mainstream in the US
• HEV is already a viable option
• Australia LPG costs less than half the price of
  petrol and it is cheaper to convert a vehicle to
  the LPG system than buying a HEV

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Thank You!