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December 21, 2014 / 29 Kislev, 5775
 
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Is It A Car? Is It A Network? No — It’s Both


Better Place electric car dealership

Better Place electric car dealership
Photo Credit: Serge Attal/FLASH90

It’s February in Israel and, mercifully, we’ve been having one of the wettest winters in many years. The level of the Sea of Galilee is now almost 3ft above where it was this time last year.

But stark headlines are screaming of summer electricity shortages. In June, pioneering electric car company Better Place will begin delivering to customers in Israel the battery-switch capable Renault Fluence ZE sedan – just a month into peak air conditioning season. How irresponsible is it to load the grid with electric cars when there is a recognized shortfall in generating capacity? There is a very clever reason these cars may actually help, and it relates to a controversial law that Israel has passed: charging an electric car from the regular electricity system is illegal. You may only use (at present) a Better Place charge point. Critics are screaming about state-appointed monopolies and rewards for crony lobbyists.

First some background on Israel’s electricity infrastructure: The so called ‘Arab spring’ has seen Israel’s supply of natural gas from Egypt interrupted by pipeline sabotage numerous times in the last year. Israel gets 61% of its electricity from imported coal, 37% from gas and the rest from fuel oil (source: Israel Electric Company). Israel has its own small gas field on stream now but the more major recent finds are not on stream yet.

Israel is a hot, desert country and summer is by far the peak time for energy use – with air-conditioning at a near-ubiquitous usage. The average daily summer temperature on the coast in Tel Aviv is above 87℉from March to November, while Eilat in the southern desert is much hotter.  A little-known mitigating factor is the almost universal use of simple radiated heat – solar water heaters in 90% of homes and businesses for hot water. These cheap, simple devices were made mandatory for new residential building in the early 1990s meaning there is very little hot water heating during the summer.

Whatever the internal causes, the news right now is full of predictions that Israel will have production reserves of only 2-3% in the summer. Energy minister, Uzi Landau has said “There is a great danger that the electricity grid will fail if there is any type of breakdown at the power station, especially during peak usage hours.” Plans are in place to ship in portable 25 megawatt generating equipment to help out.

For those who don’t know, Better Place is on the verge of going live in Israel with the first all electric cars to be offered to the public in Israel. These Better Place cars differ from other electric vehicles like the Chevy Volt or Nissan Leaf because their depleted battery can be swapped for a full one in around 4 minutes. The Renault ZE is also larger than the Nissan or the Chevy: sized more like a Honda Accord a real, practical family car.

The cars are sold to consumers with a big sticker: “battery not included”. The battery, and most importantly, all the electricity you will ever put into your car, are bought from Better Place in the form of a monthly subscription. These subscriptions are dependent on the number of miles you plan to drive but start at a relatively high level of 12,000 miles per year. Better Place does not want low mileage drivers: Better Place’s business model makes it’s money per mile! By not forcing the consumer to buy the most expensive single part of the car, it’s battery, the sticker price of the car is competitive with similarly-equipped gasoline cars on the Israeli market. Right now, Better Place is fixing the subscription price for the next four years. The price is highly competitive when compared to the cost of gasoline in Israel — which is over double the price in the US.

So how does that square with a car that can only drive 100 miles on a full charge? Included in the purchase price is the complete installation of a home charging point with it’s own meter and separate connection to the power company – it does not appear on the home owner’s electricity bill. Commit to 16,000 miles per year and you can have one at your place of work too. So, for many users who drive less than 100 miles per day or 100 miles each way to a place of work, home charging will be their sole source of power. Better Place is also installing public charge spots in mall parking lots and other locations. Each owner has a smart card that identifies them and opens a public charge port for them.

The unique part of Better Place, however, is the network of battery switch stations they’re rolling out along every major route in Israel. Drive into one, it looks like an automatic car wash, sit in the car and 5 minutes later drive out with 100% charge. Your depleted battery is taken inside, cooled to 40℉ and rapidly charged ready for another car. Israel is a small country. East to west through Tel Aviv you can cross the country and return on a single charge. North to south would take two or three battery swaps. Around 60 stations are enough for the whole country.

But why the need to prohibit by law, other electric cars in the Israeli market, and why is nobody screaming about the lack of generating capacity to service this new fleet of electric cars?

At this point it’s useful to know that Better Place’s founder, Shai Aggasi, built a successful software company in Israel. This was bought by SAP which led him to be number two at the German software giant and in line to be the youngest-ever CEO of a Fortune 100 company. He mysteriously left his position at SAP 5 years ago after a discussion at Davos, only to pop up a few months later with a hair-brained idea to cut Israel’s (and later the world’s) dependence on oil for transportation. Better Place is not a car company, it’s an infrastructure-builder and an operator of a network – more like a mobile phone network operator than a builder and seller of cars.

Better Place is doing something unique with their network. Every single charge point connected to a battery is monitored and controlled centrally. The rate of charge can be individually tailored. Better Place receives a minute by minute update from the Israeli electric grid on how much capacity there is to spare in the system. Better Place has a proprietary system to prioritize power delivery. A car with a 90% battery, charging at a place of work that won’t be needed for 6 hours (when it’s driver might only need 40% to get home) can have it’s charging current reduced or cut. A car that has 5% battery and is a 60 mile drive from the nearest battery switch can keep charging.

With this astonishing capability Better Place becomes a huge net benefit instead of a drain. All electric grids must run with surplus power all the time. As the number of cars in a Better Place network increases it becomes a massively distributed storage system for excess capacity the likes of which has never been seen. Once you understand this, prohibiting uncontrolled charging of electric cars in Israel makes more sense.

Of course there needs to be careful scrutiny of Better Place – they will be in the position of a monopoly-provider because there is no one else is even contemplating a competing system to completely bypass oil for transportation. It’s akin to the earliest roll out of mobile phone networks before anyone had fully understood how successful investment in network infrastructure would be. It certainly looks, on the face of it, grossly uncompetitive that Israel has effectively prohibited the use and import of Nissan’s Leaf all-electric car, or “range extended” electric cars like the plug in Prius or Chevy Volt (sold as the Opel/Vauxhall Ampera in Europe & UK). But we are at an early stage in infrastructure development where pioneers need to see some reward for risk-taking, without regulation killing an idea before it has a chance.

The next country scheduled for a roll-out after Israel is Denmark. Why Denmark? Denmark has invested heavily in wind power but, as with many forms of renewable energy, this unreliable power source has not allowed Denmark to reduce its fixed generating capacity as much as they had expected. Once they understood the Better Place network capability, they pursued Better Place.

A network of smartly-controlled electric vehicles can become a very useful energy storage system into which Denmark can load the peaks from their wind generation leaving more reliable fossil systems to carry the main fluctuating load. It’s never been economically viable to build hugely expensive banks of static lithium batteries just for this job, but when you split them up, put them in cars and sell subscriptions, suddenly you have a win-wind economic model.

About the Author: Brian of London regularly blogs at Israellycool.com about life in Israel, technology & business topics. He made aliyah from the UK to Israel in 2009, and owns and operates his own import company in Israel with more than 15 staff.


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Printed from: http://www.jewishpress.com/sections/businessfinance/is-it-a-car-is-it-a-network-no-its-both/2012/02/23/

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