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The U.S., Canada and Puerto Rico Welcome Electric Vehicles

As a recent documentary would have it, 2011 is the dawn of The Revenge of the Electric Car, the flip side of its apparent demise eight years ago, when General Motors closed down a pilot leasing program for the automaker’s EV1. Major automakers – General Motors, Nissan, Toyota and Mitsubishi, among others — have begun rolling out electric cars, vans and trucks at a level of commitment that suggests the umbilical cord tying vehicles to oil could eventually be cut. Passenger models range from the costly battery-only Tesla, which can run up to 300 miles on a charge, to the more affordable plug-in Prius, which gives its hybrid engine a 13-mile boost by means of a small lithium-ion battery.  And the new offerings go beyond household cars to include delivery vans, city buses, and trucks by manufacturers such as Ford, NaviStar, Smith, Proterra and Balqon.

In a number of North American markets, buyers are lining up to become early adopters of these innovative vehicles, and many states and provinces – especially those with stringent climate action plans, low-carbon fuel standards and serious air-quality problems – are encouraging the trend through policies that make it easier and more affordable for residents to enter the new automotive era. Policy initiatives run the gamut from focused incentives, similar to what has been available for early buyers of hybrid vehicles, to the very broadest efforts that aim to electrify a significant portion of a state’s public and private vehicle fleet.

The current review recaps some of the major steps taken recently to encourage vehicle electrification, charging infrastructure development and beneficial integration of EVs with the power grid.

Broad Initiatives

U.S.

California and Hawaii are currently the states with the most far-ranging policies for supporting vehicle electrification.  In California, the enactment of AB 32, The Global Warming Solutions Act, along with a number of subsequent bills and executive orders, set a framework for an aggressive reduction of carbon emissions that will require substantial deployment of electric vehicles to succeed.  In Hawaii, while climate is also a concern, an even more immediate motivator is the state’s especially high reliance on imported oil.

California

The state of California became the prime mover behind the first EV piloting by U.S. and Japanese automakers in the 1990s when it mandated that manufacturers produce a certain number of pollution-free cars to help ameliorate its severe air pollution problems. Now, in the second and far larger wave of EV roll-outs, it continues to maintain a leading position, with an added emphasis on climate change.

According to the 2010 report California’s Clean Energy Future, which was prepared by a number of state agencies, vehicle electrification will be a critical element in the state’s mandated plan to reduce greenhouse-gas emissions 80 percent below 1990 levels by 2050 along with its goal of increasing energy security. A 2011 analysis, which demonstrated exactly how California could reach this target, also cited vehicle electrification as a major component for ensuring success, calling for the replacement of nearly 45 percent of the state’s conventional light-duty fleet with EVs.

Translated into specific numbers (for example, here and here), the near-term goal is to integrate 1 million plug-in hybrid and full battery vehicles into California’s power grid by 2020. The scale of California’s ambition is apparent when comparing its objective to President Obama’s aim of deploying 1 million EVs nationwide by 2015, something that many experts consider optimistic. The state plans to use both retail electricity rate reform and wholesale market price signals to incentivize charging practices that on the one hand, minimize the infrastructure costs associated with such an enormous increase in demand and on the other, maximize the use of EVs to help integrate renewable energy.

In order to influence consumer choice, California is offering $15 million worth of rebates to individuals and businesses, including commercial fleets, that purchase EVs or fuel-cell vehicles in fiscal year 2011 – 2012. Over $11 million worth of rebates were already distributed from 2009 to 2011. The state is also trying to support industry by providing grants for EV infrastructure and furthering the commercialization of new technologies, including those that will extend beyond ordinary passenger cars into the realm of larger commercial and public transit vehicles. A dedicated government Web site, Drive, contains all the information about key state policies, including incentives and grants, that aim to support the transformation of California’s transportation sector.

Hawaii

Hawaii grapples with the challenge of reducing its reliance on imported oil, which is proportionately greater than that of any other U.S. state.  With a population of 1.3 million, Hawaii imports 50 million barrels of oil per year, or 77 times the energy, measured in BTUs, that it takes to feed each resident over the same period of time. To reduce its economically risky level of dependency, in January 2008 the state entered into a memorandum of understanding with the U.S. Department of Energy that created The Hawaii Clean Energy Initiative (HCEI), a strategy through which it pledged to manage an impressive 70 percent of state energy needs by means of energy efficiency (30 percent) and renewable resources (40 percent).

Soon thereafter, an Energy Agreement was also signed between the governor, several agencies and Hawaii’s electric companies to promote the transformation of the state’s transportation sector in order to reduce fuel consumption, combat climate change and improve the security and reliability of the power grid.  According to the pact, electric vehicles will be a critical resource in helping to diversity Hawaii’s energy sources by providing storage for intermittent energy sources and increasing demand for off-peak renewable energy. As part of the agreement, the state’s electric companies have pledged to make Hawaii as friendly to EVs as possible.

The state committed over $4 million of federal stimulus funds to support energy diversification for the transportation sector, establishing rebates for buyers of electric vehicles and their chargers along with a series of grants that back larger, more integrated, or more complex projects than can be funded through the rebates alone. There is a range of additional inducements , too, including registration-fee exemptions for 5 years, free parking at government facilities and dedicated spots at private ones, high-occupancy-vehicle (HOV) lane privileges, and laws protecting the right to install chargers at private and multi-family dwellings. And the state is planning to lead by example through its own purchases of alternative-fuel and electric vehicles for government fleets.

California and Hawaii are also the only U.S. states to have contracted with Better Place, a company that installs conventional charging infrastructure, but has also developed an innovative alternative charging model that allows drivers to switch depleted batteries for fully charged ones in no more time than it takes to buy gas. In collaboration with the Renault-Nissan Alliance, Better Place will soon begin to construct stations in these states — and elsewhere in the world – where battery switches can occur for Renault and Nissan  models. In addition to the appeal of efficiency and the familiarity of “refilling” at service stations, the strength of the Better Place plan resides in its potential to lower the cost of EVs, since the price of batteries is what adds significantly to their expense.

Canada

Québec

Québec’s vehicle electrification initiative, entitled the Electric Vehicles 2011–2020 Action Plan, is another policy with an impressive scope. The Action Plan builds on the province’s prior steps of providing financial incentives for individual and commercial EV users, for the electrification of public transit and to spur the growth of local EV-related industries. The province has also carried out pilots, in collaboration with Hydro-Québec, to examine the likely impact of vehicle charging on the grid and test wintertime performance of EVs. The new plan has three aims that are similar to those of California and Hawaii: helping to reduce greenhouse-gas emissions 20 percent below 1990 levels by 2020; leveraging opportunities for industrial development; and reducing oil imports.

To these ends, the province will invest CAD $250 million to accelerate public-transit electrification, launch major EV projects, promote municipal fleet purchases of EVs, stimulate R & D and investment in the local electric-vehicle industry and encourage Québécois to embrace EVs through a combination of higher incentives and a more vigorous public education campaign. Hydro-Québec will continue to be an active partner in the initiative, supporting it by further studying the integration of EVs into the grid, developing plans for needed infrastructure, and advancing new technologies for power trains and batteries.

By 2025, Québec aims to have 25 percent of new light-duty vehicles – or about 118,000 vehicles — electrified.  The projected benefits of the plan are expected to include a 900,000 ton decrease in greenhouse-gas emissions, the stimulation of CAD$500 million of private industrial investment from the CAD$55 million invested by the government and the growth of up to 5,000 new jobs.

Structures for Developing Policies and Pilot Projects

Three other states and provinces, plus the Commonwealth of Puerto Rico, have enacted laws and published plans that aim to enhance the adoption of EVs and encourage the public benefits that vehicle electrification can offer. These jurisdictions are not yet as far along in their efforts as California, Hawaii and Québec, but they clearly intend to move rapidly and aggressively in a similar direction.

Illinois

Illinois has thrown its hat in the ring to become a strong promoter of vehicle electrification with its Electric Vehicle Adoption Act, put into effect on July 11 of this year. It authorizes the governor to appoint an electric vehicle coordinator for the state, who will act as the point person for EV-related policies and activities. Further, it creates the Illinois Electric Vehicle Advisory Council, charged with investigating and recommending strategies to promote the use of electric vehicles, including, but not limited to, potential infrastructure improvements, state and local regulatory streamlining, and changes to electric utility rates and tariffs.

Simultaneously, another bill was enacted that amends the earlier Alternate Fuels Act by setting up several funding requirements and recommendations. In a uniquely innovative provision, it requires that $500,000 of the amount appropriated for rebate programs under the Act during fiscal years 2012 and 2013 be designated instead to fund a grant program that supports the adoption of electric vehicles powered by solar generation. It also recommends that the state Environmental Protection Agency in fiscal years 2012 and 2013 make a grant of $500,000 to a not-for-profit car-sharing organization for the purpose of purchasing electric vehicles from an original equipment manufacturer that operates a manufacturing facility in Illinois.

Maryland

Maryland, too,  passed two interesting bills related to electric vehicles in May of this year. The first requires the Public Service Commission to establish electric-vehicle charging pilots, in conjunction with power companies, that will include incentives for residential, commercial, and governmental customers to recharge EVs in ways that encourage the reliability and efficiency of the electric power system and lower peak demand through strategies such as time-of-day pricing, credits on distribution charges, rebates on the cost of charging systems, demand-response programs or other incentives approved by the commission.

The second establishes the Maryland Electric Vehicle Infrastructure Council to which it assigns a broad range of charges, including to:

  • Develop an action plan to facilitate the rapid and seamless successful integration of electric vehicles into the state’s transportation network;
  • Assist in developing and coordinating statewide standards for streamlined permitting and installation of residential and commercial EV charging stations and supply equipment;
  • Develop a recommendation for a statewide metering and charging infrastructure plan, including placement opportunities for public charging stations;
  • Develop targeted policies to support fleet purchases of electric vehicles;
  • Develop charging solutions for existing and future multi-dwelling units;
  • Investigate how EV charging will impact electricity demand and develop strategies to increase off–peak charging and recommend policies that support EV charging from clean energy sources;
  • Recommend a method of displaying pricing information at public charging stations;
  • Establish performance measures for meeting EV–related employment, infrastructure, and regulatory goals; and
  • Pursue other goals and objectives that promote the utilization of electric vehicles in the state.

The Council is to submit a final report on its conclusions to the governor and general assembly by December 1, 2012.

Manitoba

Manitoba has created an Electric Vehicle Road Map, which plans to build on the province’s pre-existing plug-in infrastructure, used in the wintertime for vehicle pre-heaters and block heaters. Although the charging outlets would only allow for Level I, or relatively slow, battery charging, it is still highly significant that approximately one-half-million plug-in points are available in homes, businesses, garages and parking lots. Manitoba also wants to capitalize on its ability to both advance consumer savings through its electricity rates, which are the lowest in North America, and reduce greenhouse-gas emissions by drawing on its 98-percent renewable power supply.

The plan has three pillars:

  • To create partnerships among the province’s companies, Manitoba Hydro and academic institutions to speed up adoption, promote the province’s advantages for further EV-related business development and raise public awareness about EVs;
  • To set up an advisory committee that will devise policies that speed up EV adoption, evaluate needed regulations, codes and standards, and suggest appropriate financing mechanisms, among other tasks; and
  • To establish an EV demonstration and learning center to monitor vehicle performance and educate the public.

Puerto Rico

With the data available through the government-commissioned Puerto Rico Electric Vehicle Introduction Study, completed early this year, the commonwealth aims to stimulate widespread electric vehicle adoption in Puerto Rico through financial incentives, educational campaigns and installation of public charging infrastructure. In April 2011, the Renault-Nissan Alliance signed a Memorandum of Understanding with the Puerto Rican Government for the introduction of the zero-emission Nissan LEAF electric vehicle.  Further, the agreement allows for the implementation of a pilot program, which may include the creation of a battery recharging network and possible incentives for using it.  . And in 2010, the governor of Vieques had already announced a plan, with the federal government’s support, to create a “Vieques Verde” by aggressively developing wind energy resources for domestic use and export, and by eventually electrifying its vehicle fleet. The plan aims to make the island into a microcosm showcasing what can be achieved for clean-energy economy in the rest of Puerto Rico and the United States.

Focused Incentives

At least 17 states and two provinces – Ontario and Québec– offer specific incentives, including rebates, tax credits, sales tax exemptions and HOV privileges, to encourage the purchase of electric and other alternative fuel vehicles.  A list with details about the specifics of each state program is available through the Web site of Plug-In America, a nonprofit organization formed to advocate for clean and sustainable vehicles. A similar list for Canadian federal and provincial incentives is available through the Web site of Electric Mobility Canada, the country’s main clean transportation industry association.

Final Words

Although this review of current policies does not claim to be exhaustive, it illustrates the types of commitments being made to promote vehicle electrification on the part of many North American jurisdictions. In line with diffusion patterns typical for new technologies, EV acceptance will occur in stages, with the first-comers often referred to as innovators and early adopters. Unlike the 1990s, when EV piloting became stuck at the earliest stage, now the market appears to be moving from the innovator to the early-adopter stage, from acceptance by only a very few technically-savvy experimentalists to adoption by a slightly larger cohort, ready and able to take some risk for potentially high rewards. The policies being enacted and developed at present have the potential of hastening the adoption process, enlarging the consumer market until the next cohort, the so-called early majority, begins to spread the technology into the mainstream. And as the early adopters of state, provincial and commonwealth policies see it, the shift into the mainstream should produce a range of public benefits that will enhance grid reliability and energy security, the integration of renewable resources, and the growth of local industries and jobs that will improve life for all their constituents.

   —By Eleanor Saunders

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