Monday, July 9, 2007

Electricity, the New Alternative Transportation Fuel: Ford & SCE team up to accelerate commercialization of plug-in hybrid-electric vehicles

“We see electricity as itself an alternative fuel in support of transportation”

That was the statement made last week by John Bryson, chairman of Rosemead, Calif.-based Edison International (NYSE: EIX), parent company of Southern California Edison (SCE) as SCE and Ford Motor Company accelerate the commercialization of plug-in hybrid vehicles and rechargeable battery technologies.

To date, plug-in hybrid vehicles and advanced battery technologies have largely been laboratory scale demonstrations. Ford and SCE have teamed up to bring more real world experience and real world customer data to this promising technology and application. Together, SCE and Ford are seeking to test the viability of mass producing and mass deploying plug-in hybrid recharging technologies in the future. To get there, the companies will test up to 20 plug-in hybrid vehicles in the SCE electric service territory which serves 13 million people in central and coastal Southern California. SCE is providing the real-world test conditions and electric power grid and Ford is providing the plug-in hybrid vehicles. The partnership will test vehicle durability, driving range and overall reliability impacts on the power grid.

Talking about the new partnership with SCE, Susan M. Cischke, Ford senior vice president for sustainability, environment and safety engineering stated, “They [SCE] have the wire-side knowledge about the grid and all the issues there…By partnering with these two industries...we're hoping that it does accelerate the commercialization and certainly drive some of the cost issues down”.

Some proponents have criticized plug-in hybrid vehicles because they are recharged by from the power grid using electricity that may be generated from coal, oil or gas which still contributes to CO2 emissions and other greenhouse gases. In addition, plug-in hybrids may add additional power demand to an already constrained power grid potentially causing reliability issues. However, many advocates for plug-in hybrid technology note that vehicles can be recharged in the evenings when electric demand is lower. And, renewable energy technologies like wind can be utilized in the evening to provide clean electric power – thereby minimizing concern over additional climate change impact. Further, plug-in hybrids can be regional/localized sustainable mobility solutions. Offsetting localized emissions from the tailpipe is of high interest to many cities and regions nationwide. Plug-in hybrid technologies might just be one technological and infrastructure solution to mitigate localized pollution and air quality impacts.

Thinking about what makes a good social response leader, one that addresses near-term customer needs and expectations along side business growth goals, we view Ford and SCE’s partnership on plug-in hybrid vehicles a good sign of the future. The merger of old and new (existing electric infrastructure with newer mobility technologies) to create more sustainable solutions to transportation is a step in the right direction. As the concept and potential viability of electricity as a transportation fuel unfolds, we will look toward Ford’s and SCE’s outcomes with great interest and enthusiasm. As big time infrastructure and product leaders, the Ford and SCE partnership might just result in an innovative game changing technology for the energy, transportation and utility sectors.

Mark C. Coleman
Senior Associate, AHC Group, Inc.

Mark@ahcgroup.com

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