UK to fast-track vital grid connections


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UK Grid Connection Fast-Track would let the Energy Secretary instruct network operators and National Grid ESO to accelerate substation upgrades and transmission links for Tata's gigafactory, electric arc furnaces, and ready-to-build renewable projects.

 

Key Points

A UK plan letting the energy secretary fast-track grid connections via priority substation and transmission upgrades.

✅ Prioritizes substations and lines for strategic projects

✅ Supports Tata gigafactory and electric arc furnace conversions

✅ Complements Ofgem queue reforms and National Grid ESO changes

 

The UK energy secretary could be handed powers to fast-track connecting electricity-hungry projects, such as Jaguar Land Rover’s owner Tata’s planned electric battery factory, to the grid, under plans being discussed between government and regulators as part of the government’s green industrial revolution strategy.

Amid concerns about supply delays of up to 15 years in hooking up large schemes, the Guardian understands the move would allow Claire Coutinho to request that energy network companies accelerate upgrades to substations and power lines to connect specific new developments.

It is understood that the government and the regulator Ofgem have told National Grid’s electricity systems operator that they are “minded” to adopt its grid reform proposals to change the model for connections, which now moves at a pace set by each network operator.

A source said: “Foreign investors need assurances that, if these things are going to be built, then they can be hooked up quickly. There are physical assets, like substations and cross-Channel cables that transmission companies will need to build or upgrade.”

The government is belatedly attempting to tackle a logjam that has resulted in some developments facing a 10- to 15-year wait for a connection to the grid. Ofgem announced on Monday plans to remove “zombie” projects from the queue to connect up to speed up those ready to produce renewable power for the grid, with wind leading the power mix.

Although no equivalent queue exists for those looking to take power from the grid, ministers and officials are concerned that large projects could struggle to secure final investment and proceed without guarantees over their connection to the electricity supply.

Sources said changes to the rules had been proposed with several big projects in mind: Tata’s new £4bn electric battery factory, expected to be built in Somerset; and the switch to electric arc furnaces at Britain’s biggest steelworks at Port Talbot in south Wales, also owned by the Indian group.

The £1.25bn plan from British Steel, which is owned by China’s Jingye, to replace two blast furnaces at Scunthorpe steelworks, with an electric arc furnace at the north Lincolnshire plant and another at a site in Teesside, North Yorkshire, has also formed part of the proposals. Negotiations over the closure of blast furnaces at Port Talbot and Scunthorpe are expected to lead to thousands of job losses.

All three projects are likely to involve significant investment from the UK government, where a state-owned generation firm has been touted as a cost-saving option, alongside the companies’ overseas owners.

Britain has 10 distribution network operators, including National Grid and Northern Powergrid, which operate monopolies in their regions and handle transmission of power from the grid to end users.

Sources said the move could be announced as soon as this month, and may be included within the “connections action plan”, a broader overhaul of Britain’s network connections.

The plan, which is expected to be announced alongside the chancellor’s autumn statement next week, will rebalance the planning system to help speed up the connection of new solar and windfarms to the grid, as the biggest offshore windfarm begins UK supply this week.

 

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Battery energy storage system eyed near Woodstock

Oxford Battery Energy Storage Project will store surplus renewable power near South-West Oxford and Woodstock, improving grid stability, peak shaving, and reliability, pending IESO approval and Hydro One transmission interconnection in Ontario.

 

Key Points

A Boralex battery project in South-West Oxford storing surplus power for Woodstock at peak demand pending IESO approval.

✅ 2028 commercial operation target

✅ Connects to Hydro One transmission line

✅ Peak shaving to stabilize grid costs

 

A Quebec-based renewable energy company is proposing to build a battery energy storage system in Oxford County near Woodstock.

The Oxford battery energy storage project put forward by Boralex Inc., if granted approval, would be ready for commercial operation in 2028. The facility would be in the Township of South-West Oxford, but also would serve Woodstock businesses and residences, supported by provincial disconnect moratoriums for customers, due to the city’s proximity to the site.

Battery storage systems charge when energy sources produce more energy than customers need, and, complementing Ontario’s energy-efficiency programs across the province, discharge during peak demand to provide a reliable, steady supply of energy.

Darren Suarez, Boralex’s vice-president of public affairs and communications in North America, said, “The system we’re talking about is a very large battery that will help at times when the electric grid has too much energy on the system. We’ll be able to charge our batteries, and when there’s a need, we can discharge the batteries to match the needs of the electric grid.”

South-West Oxford is a region Boralex has pinpointed for a battery storage project. “We look at grid needs as a whole, and where there is a need for battery storage, and we’ve identified this location as being a real positive for the grid, to help with its stability, a priority underscored by the province’s nuclear alert investigation and public safety focus,” Suarez said.

Suarez could not provide an estimated cost for the proposed facility but said the project would add about 75 jobs during the construction phase, in a sector where the OPG credit rating remains stable. Once the site is operational, only one or two employees will be necessary to maintain the facility, he said.

Boralex requires approval from the Independent Electricity System Operator (IESO), the corporation that co-ordinates and integrates Ontario’s electricity system operations across the province, for the Oxford battery energy storage project.

Upon approval, the project will connect with an existing Hydro One transmission line located north of the proposed site. “[Hydro One] has a process to review the project and review the location and ensure we are following safety standards and protocols in terms of integrating the project into the grid, with broader policy considerations like Ottawa’s hydro heritage also in view, but they are not directly involved in the development of the project itself,” Suarez said.

The proposal has been presented to South-West Oxford council. South-West Oxford Mayor David Mayberry said, “(Council) is still waiting to see what permits are necessary to be addressed if the proposal moves forward.”

Mayberry said the Ministry of Natural Resources and Forestry also would be reviewing the proposed project.

Thornton Sand and Gravel, the location of the proposed facility, was viewed positively by Mayberry. “From a positive perspective, they’re not using farmland. There is a plus we’re not using farmland, but there is concern something could leak into the aquifer. These questions need to be answered before it can be to the satisfaction of the community,” Mayberry said.

An open house was held on Sept. 14 to provide information to residents. Suarez said about 50 people showed up and the response was positive. “Many people came out to see what we planned for the project and there was a lot of support for the location because of where it actually is, and how it integrates into the community. It’s considered good use of the land by many of the people that were able to join us on that day,” Suarez said.

The Quebec-based energy company has been operating in Ontario for nearly 15 years and has wind farms in the Niagara and Chatham-Kent regions.

Boralex also is involved in two other battery storage projects in Ontario. The Hagersville project is a 40-minute drive northwest of Hamilton, and the other is in Tilbury, a community in Chatham-Kent. Commercial operation for both sites is planned to begin in 2025.

South-West Oxford and Woodstock will see some financial benefits from the energy storage system, Suarez said.

“It will help to stabilize energy costs. It will contribute to really shaving the most expensive energy on the system off the system. They’re going to take electricity when it’s the least costly, taking advantage of Ontario’s ultra-low overnight pricing options and utilize that least costly energy and displace the most costly energy.”

 

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Climate change, not renewables, threaten grid

New Mexico Energy Transition Act advances renewable energy, battery storage, energy efficiency, and demand response to boost grid reliability during climate change-fueled heatwaves, reducing emissions while supporting solar and wind deployment.

 

Key Points

A state policy phasing out power emissions, scaling renewables and storage, bolstering grid reliability in extreme heat.

✅ Replaces coal generation with solar plus battery storage

✅ Enhances grid reliability during climate-driven heatwaves

✅ Promotes energy efficiency and demand response programs

 

While temperatures hit record highs across much of the West in recent weeks and California was forced to curb electricity service amid heat-driven grid strain that week, the power stayed on in New Mexico thanks to proactive energy efficiency and conservation measures.

Public Service Company of New Mexico on Aug. 19 did ask customers to cut back on power use during the peak demand time until 9 p.m., to offset energy supply issues due to the record-breaking heatwave that was one of the most severe to hit the West since 2006. But the Albuquerque Journal's Aug. 28 editorial, "PRC should see the light with record heat and blackouts," confuses the problem with the solution. Record temperatures fueled by climate change – not renewable energy – were to blame for the power challenges last month. And thanks to the Energy Transition Act, New Mexico is reducing climate change-causing pollution and better positioned to prevent the worst impacts of global warming.

During those August days, more than 80 million U.S. residents were under excessive heat warnings. As the Journal's editorial pointed out, California experienced blackouts on Aug. 14 and 15 as wildfires swept across the state and temperatures rose. In fact, a recent report by the University of Chicago's Climate Impact Lab found the world has experienced record heat this summer due to climate change, and heat-related deaths will continue to rise in the future.

As the recent California energy incidents show, climate change is a threat to a reliable electricity system and our health as soaring temperatures and heatwaves strain our grid, as seen in Texas grid challenges this year as well. Demand for electricity rises as people depend more on energy-intensive air conditioning. High temperatures also can decrease transmission line efficiency and cause power plant operators to scale back or even temporarily stop electricity generation.

Lobbyists for the fossil fuel industry may claim that the service interruptions and the conservation requests in New Mexico demonstrate the need for keeping fossil-fueled power generation for electricity reliability, echoing policy blame narratives in California that fault climate policies. But fossil fuel combustion still is subject to the factors that cause blackouts – while also driving climate change and making resulting heatwaves more common. After an investigation, California's own energy agencies found no substance to the claim that renewable energy use was a factor in the situation there, and it's not to blame in New Mexico, either.

New Mexico's Energy Transition Act is a bold, necessary step to limit the damage caused by climate change in the future. It creates a reasonable, cost-saving path to eliminating greenhouse gas emissions associated with generating electricity.

The New Mexico Public Regulation Commission properly applied this law when it recently voted unanimously to replace PNM's coal-fired generation at San Juan Generating Station with carbon-free solar energy and battery storage located in the Four Corners communities, a prudent step given California's looming electricity shortage warnings across the West. The development will create jobs and provide resources for the local school district and help ensure a stronger economy and a healthier future for the region.

As we expand solar and wind energy here in New Mexico, we can help ensure reliable electricity service by building out greater battery storage for renewable energy resources. Expanding regional energy markets that can dispatch the lowest-cost energy from across the region to places where it is needed most would make renewable energy more available and reduce costs, despite concerns over policy exports raised by some observers.

Energy efficiency and demand response are important when we are facing extraordinary conditions, and proven strategies to improve electricity reliability show how demand-side tools complement the grid, so it is unfortunate that the Albuquerque Journal made the unsubstantiated claim that a stray cloud will put out the lights. It was hot, supplies were tight on the electric grid, and in those moments, we should conserve. We should not use those moments to turn our back on progress.

 

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California looks to electric vehicles for grid stability

California EV V2G explores bi-directional charging, smart charging, and demand response to enhance grid reliability. CPUC, PG&E, and automakers test incentives aligning charging with solar and wind, helping prevent blackouts and curtailment.

 

Key Points

California EV V2G uses two-way charging and smart incentives to support grid reliability during peak demand.

✅ CPUC studies feasibility, timelines, and cost barriers to V2G

✅ Incentives shift charging to align with solar, wind, off-peak hours

✅ High-cost bidirectional chargers and warranties remain hurdles

 

California energy regulators are eyeing the power stored in electric vehicles as they hunt for ways to avoid blackouts caused by extreme weather.

While few EV and their charging ports are equipped to deliver electricity back into the grid during emergencies, the California Public Utilities Commission wants more data on it as the agency rules on steps utilities must take to ensure they have enough power for this summer and next year. A draft CPUC decision due to be discussed this week asks about the feasibility of reversing the charge when needed (Energywire, March 8).

“Very few [EVs], maybe a couple of thousand at the most, can give power to the grid, and even fewer are connected into a charger that can do it,” said Gil Tal, director of the Plug-in Hybrid & Electric Vehicle Research Center at the University of California, Davis. EVs that feature the ability “have it at a more experimental level.”

The issue arises as California, where about half of all U.S. EVs are purchased, examines what role the vehicles can play in keeping lights on and refrigerators running and how a much bigger grid will support them in the long term. Even if grid operators can’t pull from EV batteries en masse, experts say cash and other incentives can prompt drivers to shift charging times, boosting grid stability.

“What we can do is not charge the electric cars at times of high demand” such as during heat waves, Tal said.

The EV focus comes after California’s grid manager last summer imposed rolling blackouts when power supplies ran short during a record-shattering heat wave. State energy regulators across the U.S., as EVs challenge state grids, are also looking at their disaster preparedness as Texas recovers from a winter storm last month that cut off electricity for more than 4 million homes and businesses there.

California’s EV efforts can help other states as they add more renewable power to their grids, said Adam Langton, energy services manager at BMW of North America.

That automaker ran a pilot program with San Francisco-based utility Pacific Gas & Electric Co. (PG&E) looking at whether money and other incentives could prompt EV drivers to charge their cars at different times. The payments successfully shifted charging to the middle of the night, when wind power often is plentiful. It also moved some repowering to mornings and early afternoons, when there’s abundant solar energy.

“That can be a tool that the utilities can use to deal with supply issues,” Langton said. “What our research has shown is that vehicles can contribute to [conservation] needs and emergency supply by shifting their charging time.”

Such measures can also help states avoid having to curtail solar production on days when there’s more generation than needed. On many bright days, California has more solar power than it can use.

“As more states add more renewable energy, we think that they’re going to find that EVs complement that really well with smart charging, because grid coordination can get that charging to align with the renewable energy,” Langton said. “It allows to add more and more renewable energy.”

High-cost equipment a hurdle
The CPUC at a future workshop plans to collect information on leveraging EVs to head off power shortages at key times.

But Tal said it will probably take a decade to get enough EVs capable of exporting electricity back to utilities “in high numbers that can make an impact on the grid.”

Barriers to reaching such “vehicle to grid” integration are technical and economic, he said. EVs export direct current and need a device on the other side that can convert it to alternating current, similar to a solar power inverter for rooftop panels.

However, the equipment known as a V2G capable charger is costly. It ranges from $4,500 to $5,500, according to a 2017 National Renewable Energy Laboratory report.

PG&E and Los Angeles-based Southern California Edison already have “expressed doubt that short-term measures could be developed in time to expand EV participation by summer 2021” in V2G programs, the draft CPUC proposal said. The utilities suggested instead that the agency encourage EV owners to participate in initiatives where they’d get paid for reducing power consumption or sell electricity back to the grid when needed, known as demand response programs.

Still, almost all major EV automakers are looking at two-directional charging, Tal said.

“The incentive is you can get more value for the car,” he said. “The disincentive is you add more miles in a way on the car,” because an owner would be discharging to the grid and re-charging, and “the battery has limited life.”

And right now, discharging a vehicle to the grid would violate many warranties, he said. Car manufacturers would need to agree to change that and could call for compensation in return.

Meanwhile, San Diego Gas & Electric Co., a Sempra Energy subsidy, plans to launch a pilot looking at delivering power to the grid from electric school buses. The six buses in the pilot transport students in El Cajon, Calif., east of San Diego.

“The buses are perfect because of their big batteries and predictable schedule,” Jessica Packard, SDG&E spokesperson, said in an email. “Ultimately, we hope to scale up and deploy these kinds of innovations throughout our grid in the future.”

She declined to say how much power the buses could deliver because the project isn’t yet operating. It’s set to start later this year.

Mobility needs
While BMW and PG&E did not review vehicle-to-grid power transfers in their own 2017 research ending last year, one study in Delaware did. But it was in a university setting about eight years ago and didn’t look at actual drivers, said Langton with BMW.

In their own findings from the San Francisco Bay Area pilot program, BMW and PG&E found that incentives could quickly change driver behavior in terms of charging.

Technology helps: Most new EVs have timers that allow the driver to control when to charge and when to stop charging. Langton said the pilot program got drivers to have their cars charge from roughly 2 to 6 a.m., when electricity rates typically are lowest.

There can be a lot of solar energy during the day, but in summer, optimum charging times get more complicated in California, he said. People want to run their air conditioners during peak heat hours, so it’s important to be able to get EV drivers to shift to less congested times, he said.

With the right incentives or messaging, Langton said, the pilot persuaded drivers to move charging from 10 a.m. to 2 p.m. or noon to 4 p.m. BMW technology allowed for detailed information on battery charge level, ideal charging times and other EV data to be transmitted electronically after plugging in.

The findings are a good first step toward future vehicle-to-grid integration, Langton added.

“One of the things we really pay attention to when we do smart charging is, ‘How does the driver’s mobility needs figure into shifting their charging?'” he said. “We want to make sure that our customers can always do the driving that they need to do.”

The pilot included safeguards such as an opt-out button if the driver wanted to charge immediately. It also made sure the vehicle had a certain level of minimum charge — 15% to 20% — before the delayed smart charging kicked in.

Vehicle-to-grid technology would need to wrestle with the same concepts in a different way. If a car is getting discharged, the driver would want assurances its battery wouldn’t dip below a level that meets their mobility needs, Langton said.

“If that happened even once to a customer, they would probably not want to participate in these programs in the future,” he said.

One group adding charging stations across the country said it isn’t tweaking pricing based on when drivers charge. That’s to help grow EV purchases, said Robert Barrosa, senior director of sales and marketing at Volkswagen AG subsidiary Electrify America, which operates about 450 charging stations in 45 states.

The company has installed battery storage at more than 100 sites to make sure they can provide power at consistent prices even if California or another state calls for energy conservation.

“It’s very important for vehicle adoption that the customer have that,” Barrosa said.

The company could sell that battery storage back to the grid if there are shortfalls, but some market changes are needed first, particularly in California, he said. That’s because the company buys electricity on the retail side but would be sending it back into the wholesale market.

With that cost differential, Barrosa said, “it doesn’t make sense.”

 

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World renewable power on course to shatter more records

Global Renewable Capacity Additions 2023 surge on policy momentum, high fossil prices, and energy security, with solar PV and wind leading growth as grids expand and manufacturing scales across China, Europe, India, and the US.

 

Key Points

Record solar PV and wind growth from policy and energy security, adding 440+ GW toward 4,500 GW total capacity in 2024.

✅ Solar PV to supply two-thirds of additions; rooftop demand rising.

✅ Wind rebounds ~70% as delayed projects complete in China, EU, US.

✅ Grid upgrades and better permitting, auctions key for 2024 growth.

 

Global additions of renewable power capacity are expected to jump by a third this year as growing policy momentum, higher fossil fuel prices and energy security concerns drive strong deployment of solar PV and wind power, building on a record year for renewables in 2016, according to the latest update from the International Energy Agency.

The growth is set to continue next year with the world’s total renewable electricity capacity rising to 4 500 gigawatts (GW), equal to the total power output of China and the United States combined, and in the United States wind power has surged in the electricity mix, says the IEA’s new Renewable Energy Market Update, which was published today.

Global renewable capacity additions are set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023. The dynamic expansion is taking place across the world’s major markets. Renewables are at the forefront of Europe’s response to the energy crisis, accelerating their growth there. New policy measures are also helping drive significant increases in the United States, where solar and wind growth remains strong, and India over the next two years. China, meanwhile, is consolidating its leading position and is set to account for almost 55% of global additions of renewable power capacity in both 2023 and 2024.

“Solar and wind are leading the rapid expansion of the new global energy economy. This year, the world is set to add a record-breaking amount of renewables to electricity systems – more than the total power capacity of Germany and Spain combined,” said IEA Executive Director Fatih Birol. “The global energy crisis has shown renewables are critical for making energy supplies not just cleaner but also more secure and affordable – and governments are responding with efforts to deploy them faster. But achieving stronger growth means addressing some key challenges. Policies need to adapt to changing market conditions, and we need to upgrade and expand power grids to ensure we can take full advantage of solar and wind’s huge potential.”

Solar PV additions will account for two-thirds of this year’s increase in renewable power capacity and are expected to keep growing in 2024, according to the new report. The expansion of large-scale solar PV plants is being accompanied by the growth of smaller systems. Higher electricity prices are stimulating faster growth of rooftop solar PV, which is empowering consumers to slash their energy bills, and in the United States renewables' share is projected to approach one-fourth of electricity generation.

At the same time, manufacturing capacity for all solar PV production segments is expected to more than double to 1 000 GW by 2024, led by China's solar PV growth and increasing supply diversification in the United States, where wind, solar and battery projects dominate the 2023 pipeline, India and Europe. Based on those trends, the world will have enough solar PV manufacturing capacity in 2030 to comfortably meet the level of annual demand envisaged in the IEA’s Net Zero Emissions by 2050 Scenario.

Wind power additions are forecast to rebound sharply in 2023 growing by almost 70% year-on-year after a difficult couple of years in which growth was slugging, even as wind power still grew despite Covid-19 challenges. The faster growth is mainly due to the completion of projects that had been delayed by Covid-19 restrictions in China and by supply chain issues in Europe and the United States. However, further growth in 2024 will depend on whether governments can provide greater policy support to address challenges in terms of permitting and auction design. In contrast to solar PV, wind turbine supply chains are not growing fast enough to match accelerating demand over the medium-term. This is mainly due to rising commodity prices and supply chain challenges, which are reducing the profitability of manufacturers.

The forecast for renewable capacity additions in Europe has been revised upwards by 40% from before Russia’s invasion of Ukraine, which led many countries to boost solar and wind uptake to reduce their reliance on Russian natural gas. The growth is driven by high electricity prices that have made small-scale rooftop solar PV systems more financially attractive and by increased policy support in key European markets, especially in Germany, Italy and the Netherlands.

 

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GM, Ford Need Electric-Car Batteries, but Take Different Paths to Get Them

EV battery supply strategies weigh in-house cell manufacturing against supplier contracts, optimizing costs, scale, and supply-chain resilience for electric vehicles. Automakers like Tesla, GM-LG Chem, VW-Northvolt, and Ford balance gigafactories, joint ventures, and procurement risks.

 

Key Points

How automakers secure EV battery cells by balancing cost, scale, tech risk, and supply-chain control to meet demand.

✅ In-source cells via gigafactories, JVs, and proprietary chemistries

✅ Contract with LG Chem, Panasonic, CATL, SKI to diversify supply

✅ Manage costs, logistics, IP, and technology obsolescence risks

 

Auto makers, pumping billions of dollars into developing electric cars, are now facing a critical inflection point as they decide whether to get more involved with manufacturing the core batteries or buy them from others.

Batteries are one of an electric vehicle’s most expensive components, accounting for between a quarter and a third of the car’s value. Driving down their cost is key to profitability, executives say.

But whereas the internal combustion engine traditionally has been engineered and built by auto makers themselves, battery production for electric cars is dominated by Asian electronics and chemical firms, such as LG Chem Ltd. and Panasonic Corp. , and newcomers like China’s Contemporary Amperex Technology Co.

California, the U.S.’s largest car market, said last month it would end the sale of new gasoline- and diesel-powered passenger cars by 2035, putting pressure on the auto industry to accelerate its shift to electric vehicles in the coming years.

The race to lock in supplies for electric cars has auto makers taking varied paths, with growing Canada-U.S. collaboration across supply chains.

While most make the battery pack, a large metal enclosure often lining the bottom of the car, they also need the cells that are bundled together to form the core electricity storage.

Tesla several years ago opened its Gigafactory in Nevada to make batteries with Panasonic, which in the shared space would produce cells for the packs. The electric-car maker wanted to secure production specifically for its own models and lower manufacturing and logistics costs.

Now it is looking to in-source more of that production.

While Tesla will continue to buy cells from Panasonic and other suppliers, it is also working on its own cell technology and production capabilities, aiming for cheaper, more powerful batteries to ensure it can keep up with demand for its cars, said Chief Executive Elon Musk last month.

Following Tesla’s lead, General Motors Co. and South Korea’s LG Chem are putting $2.3 billion into a nearly 3-million-square-foot factory in Lordstown, Ohio, highlighting opportunities for Canada to capitalize on the U.S. EV pivot as supply chains evolve, which GM says will eventually produce enough battery cells to outfit hundreds of thousands of cars each year.

In Europe, Volkswagen AG is taking a similar path, investing about $1 billion in Swedish battery startup Northvolt AB, including some funding to build a cell-manufacturing plant in Salzgitter, Germany, as part of a joint venture, and in North America, EV assembly deals in Canada are putting it in the race as well.

Others like Ford Motor Co. and Daimler AG are steering clear of manufacturing their own cells, with executives saying they prefer contracting with specialized battery makers.

Supply-chain disruptions, including lithium shortages, have already challenged some new model launches and put projects at risk, auto makers say.

For instance, Ford and VW have agreements in place with SK Innovation to supply battery cells for future electric-vehicle models. The South Korean company is building a factory in Georgia to help meet this demand, but a fight over trade secrets has put the plant’s future in jeopardy and could disrupt new model launches, both auto makers have said in legal filings.

GM executives say the risk of relying on suppliers has pushed them to produce their own battery cells, albeit with LG Chem.

“We’ve got to be able to control our own destiny,” said Ken Morris, GM’s vice president of electric vehicles.

Bringing the manufacturing in house will give the company more control over the raw materials it purchases and the battery-cell chemistry, Mr. Morris said.

But establishing production, even in a joint venture, is a costly proposition, and it won’t necessarily ensure a timely supply of cells. There are also risks with making big investments on one battery technology because a breakthrough could make it obsolete.

Ford cites those factors in deciding against a similar investment for now.

The company sees the industry’s conventional model of contracting with independent suppliers to build parts as better suited to its battery-cell needs, Ford executive Hau Thai-Tang told analysts in August.

“We have the competitive tension with dealing with multiple suppliers, which allows us to drive the cost down,” Mr. Thai-Tang said, adding that the company expects to pay prices for cells in line with GM and Tesla.


Meanwhile, Ford can leave the capital-intensive task of conducting the research and setting up manufacturing facilities to the battery companies, Mr. Thai-Tang said.

Germany’s Daimler has tried both strategies.

The car company made its own lithium-ion cells through a subsidiary until 2015. But the capital required to scale up was better spent elsewhere, said Ola Källenius, Daimler’s chief executive officer.

The auto maker instead signed long-term supply agreements with Asian companies like Chinese battery-maker CATL and Farasis Energy (Ganzhou) Co., which Daimler invested in last year.

The company has said it is spending roughly $23.6 billion on purchase agreements but keeping its battery research in-house.

“Let’s rather put that capital into what we do best, cars,” Mr. Källenius said.

 

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Opinion | Why Electric Mail Trucks Are the Way of the Future

USPS Electric Mail Trucks promise zero-emission delivery, lower lifecycle and maintenance costs, and cleaner air. Congressional funding in Build Back Better would modernize the EV fleet and expand charging infrastructure, improving public health nationwide.

 

Key Points

USPS Electric Mail Trucks are zero-emission delivery vehicles that cut costs, reduce pollution, and improve health.

✅ Lower lifetime fuel and maintenance costs vs gas trucks

✅ Cuts greenhouse gas and NOx emissions in communities

✅ Expands charging infrastructure via federal investments

 

The U.S. Postal Service faces serious challenges, with billions of dollars in annual losses and total mail volume continuing to decline. Meanwhile, Congress is constantly hamstringing the agency.

But now lawmakers have an opportunity to invest in the Postal Service in a way that would pay dividends for years to come: By electrifying the postal fleet.

Tucked inside the massive social spending and climate package lumbering through the Senate is money for new, cleaner postal delivery trucks. There’s a lot to like about electric postal trucks. They’d significantly improve Americans’ health while also slowing climate change. And it just makes sense for taxpayers over the long term; the Postal Service’s private sector competitors have already made similar investments, as EV adoption reaches an EV inflection point in the market. As Democrats weigh potential areas to cut in President Joe Biden’s Build Back Better plan, this is one provision that should escape the knife.

To call the U.S. Postal Service’s current vehicles “clunkers” would be an understatement. These often decades-old trucks are famous for having no airbags, no air conditioning and a nasty habit of catching fire. So the Postal Service’s recent decision to buy 165,000 replacement trucks is basically a no-brainer. But the main question is whether they will run on electricity or gasoline.

Electric vehicles are newer to the market and still carry a higher sticker price, as seen with electric bus adoption in many cities. But that higher price buys concrete benefits, like lower lifetime fuel and maintenance costs and huge reductions in pollution. Government demand for electric trucks will also push private markets to create better, cheaper vehicles, directly benefiting consumers. So while buying electric postal trucks may be somewhat more costly at first, over the long term, failing to do so could be far costlier.

At some level, this is a straightforward business decision that the Postal Service’s competitors have already made. For instance, Amazon has already deployed some of the 100,000 electric vans it recently ordered, and FedEx has promised a fully electric ground fleet by 2040, while nonprofit investment in electric trucks is accelerating electrification at major ports. In a couple of decades, the Postal Service could be the only carrier still driving dirty gas guzzlers, buying expensive fuel and paying the higher maintenance costs that combustion engines routinely require. Consumers could flock to greener competitors.

Beyond these business advantages, zero-emission vehicles carry other big benefits for the public. The Postal Service recently calculated some of these benefits by estimating the climate harms that going all-electric would avoid, benefits that persist even where electricity generation still includes fossil-generated electricity in nearby grids. Its findings were telling: A fully electric fleet would prevent millions or tens of millions of dollars’ worth of climate-change-related harms to property and human health each year of the trucks’ lifetimes (and this is probably a considerable underestimate). The world leaders that recently gathered at the global climate summit in Glasgow encouraged exactly this type of transition toward low-carbon technologies.

A cleaner postal fleet would benefit Americans in many other important ways. In addition to warming the planet, tailpipe pollutants can have dire health consequences for the people who breathe in the fumes. Mail trucks traverse virtually every neighborhood in the country and often must idle in residential areas, so we all benefit when they stop emitting. And these localized harms are not distributed equally. Some parts of the country — too often, low-income communities of color — already have poor air quality. Removing pollution from dirty mail trucks will especially help these overburdened and underserved populations.

The government’s purchasing power also routinely inspires companies to devise better and cheaper ways to do business. Investments in aerospace technologies, for instance, have spilled over into consumer innovations, giving us GPS technologies and faster, more fuel-efficient passenger jets. Bulk demand for cleaner trucks could inspire similar innovations as companies clamor for government contracts, meaning we all could get cheaper and better green products like car batteries, and the American EV boom could further accelerate those gains.

Additionally, because postal trucks are virtually everywhere in the country, if they go electric, that would mean more charging stations and grid updates everywhere too, and better utility planning for truck fleets to ensure reliable service. Suddenly, that long road trip that discourages many would-be electric car buyers may be simpler, which could boost electric vehicle adoption.

White House climate adviser Gina McCarthy talks with EVgo CEO Cathy Zoi before the start of an event near an EVgo electric car charging station.
ENERGY

The case for electrifying the postal fleet is strong from both a business and a social standpoint. Indeed, even Postmaster General Louis DeJoy, who was appointed during the Trump administration, supports it. But getting there is not so simple. Most private businesses could just borrow the money they need for this investment and pay it back with the long-term savings they would enjoy. But not the Postal Service. Thanks to its byzantine funding structure, it cannot afford electric trucks’ upfront costs unless Congress either provides the money or lets it borrow more. This is the primary reason it has not committed to making more than 10 percent of its fleet electric.

And that returns us to the Build Back Better legislation. The version passed by the House sets aside $7 billion to help the Postal Service buy electric mail trucks — enough to electrify the vast majority of its fleet by the end of the decade.

Biden has made expanding the use of electric vehicles a top priority, setting an ambitious goal of 100 percent zero-emission federal vehicle acquisitions by 2035, and new EPA emission limits aim to accelerate EV adoption. But Sen. Joe Manchin has expressed resistance to some of the climate-related subsidies in the legislation and is also eager to keep costs down. This provision, however, is worthy of the West Virginia Democrat’s support.

Most Americans would see — and benefit from — these trucks on a daily basis. And for an operation that got its start under Benjamin Franklin, it’s a crucial way to keep the Postal Service relevant.

 

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