“Over the past five years, the UK’s gas importation
infrastructure has more than tripled and it already has capacity
to meet likely UK demand for the rest of the decade,” Chief
Financial Officer Ashley Almanza said at the CBI energy
conference in London.

In 2004, Britain switched to being a net importer of gas
from a net exporter, creating concerns over security of supply.
This was highlighted by the Russian gas crisis two winters ago
and an unexpected outage in Norwegian supply during an extreme
cold snap last winter.

But despite supply shocks, British gas prices have remained
relatively stable due to new import infrastructure, Almanza
said.

“The UK has enjoyed low and progressively less volatile gas
prices in recent years. The reasons for this are reasonably
clear and simple: timely investment in infrastructure and
diverse sources of supply,” Almanza said.

“This experience, I believe, provides a powerful lesson for
the future.”

The increase in Britain’s importation capacity includes the
commissioning of South Hook and Dragon liquefied natural gas
(LNG) terminals in south Wales last year. BG owns 50 percent of
Dragon LNG as well as North Sea oil and gas assets.

At the same conference, Britain’s energy minister Charles
Hendry said the government would help companies sign long-term
gas supply contracts with foreign suppliers to ensure security.

“For power generators, we think for them to sign up to
long-term contracts gives them more security of supply,” Hendry
said at the sidelines of the conference.

“If there are international agreements to be reached then
people can expect ministers to be a lot more active to secure
that. But the government shouldn’t determine what should be
done, consumers have to decide what is best for them.”
(Reporting by Kwok W. Wan; editing by Alison Birrane)

At the start of the 20th century, before the era of ubiquitous gas stations, drivers did just that as they tested the limits of cars like the Ford Model T, which ran on gasoline, kerosene or ethanol and could, if driven carefully, travel more than 150 miles on a full tank.

Now a new generation of drivers is set to embark on a similar kind of experiment. Until recently, most electric vehicles, or EVs as they are often known, have had a range of just a few dozen miles, limiting their usefulness and appeal. That’s a big reason the long-talked-about era of electric vehicles has been, well, talked and talked about for so long with little real-world progress.

Over the next couple of years, though, tens of thousands of electric cars will hit the laneways of Europe, the streets of the United States and the gleaming highways of Asia. These new battery-powered vehicles have much longer ranges than their predecessors — up to 250 miles in the case of the Tesla Roadster, but mostly about 100 miles — and are likely to be the first to sell in large numbers.

By 2020, says J.D.Power Automotive Forecasting, annual sales of EVs will reach 2 million. Banking giant HSBC is even more optimistic and puts the figure at 9 million. That’s still some way short of the 61 million petrol- and diesel-driven vehicles sold around the world in 2009 but a huge leap from the 5,000 or so EVs sold last year.

But even as these shiny new vehicles take to the road, serious questions remain about the infrastructure — or rather, the lack of infrastructure — to charge them. In an echo of last century’s battle over the best fuel source, the way in which the coming fleet of electric vehicles will be recharged has yet to be settled — and all the proposed models have flaws.

Some experts believe EVs should plug in at a driver’s home or workplace. Others back a global network of roadside recharging stations. One prominent company is pushing the idea of petrol station-like outlets where you can zip in and quickly switch your almost-dead battery for a fully charged one. Another group advocates avoiding “pure” EVs and the problem of charging infrastructure altogether, focusing on cars which use both electricity and gasoline.

The stakes are huge: the pace of the shift to electric vehicles, progress in the fight against climate change, and a market which HSBC bullishly forecast this week would grow 20-fold by 2020 to $473 billion — a fifth of the entire low-carbon economy.

Despite the hype, it’s almost impossible to predict the format or formats most likely to win the great electric vehicle infrastructure battle. Model T owners adopted petrol as their fuel of choice for reasons both obvious — the falling price of petrol — and unpredictable: prohibition in 1919 forced ethanol off the market.

The variables today — technology, political interference, the psychology of car-lovers — are similarly hard to pin down. “The introduction of electric vehicles is more than a financial matter,” says U.S. analyst Sam Jaffe, research manager at IDC Energy Insights. “It’s a big anthropological experiment. There’s no question that there are drawbacks, but there are also advantages. It requires a re-setting of mindsets and how that unfolds will decide who wins the race.”

ON YOUR MARKS, PLUG IN

The starting grid for the coming EV race is filling up quickly. Mitsubishi Motors Corp’s jelly bean-shaped i-MiEV has been on sale in Japan since April and will launch in the United States and Europe over the coming few months. The Japanese automaker is also making two versions of the car for French automaker PSA Peugeot Citroen.

Nissan is set to roll out its edgy-looking Leaf in December, while corporate partner Renault will start selling its mid-sized Fluence ZE (for zero emissions) in the first half of next year.

Europe’s biggest automaker Volkswagen, a late entrant in the competition, plans to launch all-electric vehicles in 2013, though it says zero-emission vehicles will account for 3 percent of sales by 2018.

These “pure” electric vehicles face competition from dual gasoline-electric cars. Sometimes called extended range cars, these vehicles can charge at a plug-in socket or switch over to gasoline, and include General Motors’ Chevrolet Volt, which goes on sale in the United States from this year for $41,000, and in Britain a year later.

Will the charging infrastructure be able to keep up with all those new cars? The question is critical. “If it’s too difficult to charge an electric vehicle, too inconvenient, the customers will not buy them,” says Christian Feisst, managing director of business development for smart grid at U.S. networking giant Cisco Systems. “Today a lot of the work is around battery technology and the behavior of customers. There is not a lot of work done around the charging technology, or the charging process itself, nor how to manage charging.”

A BATTERY PROPHET

One company that is sinking millions into technology is Better Place, a three-year-old California-based firm that has raised about $700 million from investors and imagines a vast global network of “switch stations”: gas station-like outlets where drivers can swap a spent battery with a fully charged one in a few minutes.

Led by soft-spoken Israeli-born founder Shai Agassi, a former executive at SAP, the company boasts of having built “the largest cleantech investment in history”. Last January, HSBC bought a 10 percent stake which valued Better Place at $1.25 billion.

Since earlier this year, the eco firm has been running a trial in Tokyo using three taxi cabs and will soon start testing a small network of stations in Israel, where it says it has deals with 92 corporate fleet owners. It expects a commercial launch in Israel and in Denmark in late 2011, and has plans in five other countries, including Australia, China and the United States.

The swap station model’s main selling point is speed. Charging an EV battery can take up to eight hours. By switching batteries instead, that wait is reduced to three to four minutes. The company says its business model — a subscription plan which covers the use of switch stations, the lease of a battery and the electricity used — cuts a large cost item, the battery, out of the upfront price tag for the car.

“The underlying assumption that we’re working by is that this is too big a market to do half solutions,” says Jason Wolf, head of Better Place North America. “You’re not going to get to mass adoption by people paying a premium because they want to be green or any other reason.”

Early adopters, he says, will always buy cars like the Nissan Leaf and the Tesla Roadster, which retail at about $33,000 and $109,000 respectively. Better Place will reach beyond that niche to the drivers — commuters, salespeople, small business owners — who put tens and even hundreds of thousands of miles a year on the clock. “There’s not a problem getting early adopters. That’s great, we need them and we support those types of vehicles, but really where the heart of the market lies is the third of drivers who are burning two thirds of the gasoline.”

CAN SWITCHING GET HIP?

But questions remain. In Israel, industry heavyweights including two of the country’s biggest car fleets have adopted a wait-and-see approach to Better Place’s trial. Eldan, a major leasing company whose cars are ubiquitous on Israeli roads, says it is in close contact with Better Place, but will not sign on until the electric-powered vehicles arrive and the technology is in place. “At that time we can determine its quality and will positively consider a relationship with the company,” Eldan said in a statement.

There’s also little sign that major automakers are ready to start producing cars with “switchable” batteries. The Israel and Denmark schemes both benefit from generous local tax breaks for non-polluting cars, and will use Renault’s Fluence ZE model. So far, Renault is the only carmaker to announce a switchable car. Renault’s decision was helped by Better Place guaranteeing a production run of 100,000.

With 57,000 soft orders for the car by July — most of them from fleet companies — interest in the Fluence ZE has been greater than expected, insists Better Place. Still, prospective customers have paid no deposit nor made any financial commitment to buy.

“Better Place was a catalyst for Renault to go mass market with the electric version of Fluence,” says a Renault spokeswoman, adding that it was “hard to say” whether the model would have seen daylight without that guarantee.

Wolf concedes that Better Place will have problems if it can’t convince other automakers to join the French carmaker in embracing “switchable” batteries. But “given where we are in discussions (with automakers) and the logic behind it that all of them see, I don’t see it as a major concern,” he says.

Perhaps. But even if Better Place can convince other automakers of the logic of its model, there’s still the question of what sort of batteries they would use. The electric vehicles on the road or in the works all use batteries of different types — nickel sodium chloride, lithium-ion, lithium-metal-polymer — and sizes.

Better Place says it expects to cater for about three different battery types — more would impose greater warehousing demands at its switch stations — and predicts other carmakers will eventually settle on one of those types.

“You may hold an inventory of two, three types at first and over time what’s going to happen is that pressures for OEMs (carmakers) to differentiate on batteries goes away, because you’re manufacturer number three, four, five and you haven’t already developed your own battery. At that point you’re just going to take the least-cost, or best product for the overall vehicle,” argues Wolf.

POWER-SHARING

Automakers, though, say standardized batteries are far from inevitable. The world’s biggest carmaker Toyota says it will continue to prioritize building cars for safety and performance, not to make it easy to get a battery in and out. There’s also the fact that auto owners and manufacturers will be unable to track a battery — where it’s been, the conditions it faced — which might make it difficult to diagnose problems in a car.

“It is hard to imagine,” says Toyota’s Managing Director in Europe Graham Smith, of standardized batteries. “What if a manufacturer feels like they can move faster?”

For now, Toyota and General Motors have both chosen a dual, plug-in electric-gasoline approach which by-passes the need for charging away from home.

Even carmakers focused on pure EVs are hesitant to sign up. “Every manufacturer has a different battery type, battery size, method for removing the battery,” says Andy Wertheim, general manager of environmental affairs at Mitsubishi in Britain. “Certainly at the moment we see that battery swapping is not relevant for us and for the foreseeable future.”

Nissan, which shares a CEO in its alliance with Renault, also has doubts, citing its own research that shows that people prefer to own rather than lease a battery. “There are different battery layouts, batteries are shaped differently. That means even between Nissan and Renault already there are two types of battery. So I just think: how do you store those?” asks Jerry Hardcastle, vice president of vehicle design and development at Nissan Motor Co’s technical center Europe. Nevertheless, he concedes the Better Place model might eventually work. “We’re watching very closely what’s going on in Israel.”

THE COMING NETWORK?

Better Place’s main competition will come from extended range cars or the myriad companies building and promoting charge spots or stations: parking meter-like posts on a street, in a car park or elsewhere into which you plug your car to top up its battery.

One such is California-based ECOtality, which has won $130 million funding from the U.S. Department of Energy to install and trial charge spots across the United States. The company expects to install 20,000 stations by May next year.

Other big players in the fast-growing market are U.S.-based Coulomb Technologies, which has about 850 vehicle charge spots installed, Britain’s Elektromotive, which has about 1,000, and AeroVironment, which has some 14,000 industrial chargers for the likes of fork lift trucks. Better Place also plans to install charge spots alongside its switch station hubs.

“We view this as like cellphone coverage: the person with the largest network is ultimately going to win,” says Jonathan Read, chief executive and president of ECOtality. “Better Place is going to take a long time and a lot of money to roll it out. We’re able to hit the ground and have a greater network distribution before they even start putting their first chargers in the ground.”

The Better Place battery swap model, he says, “is egregiously flawed -… the concept of vehicle manufacturers agreeing to any sort of common battery is like herding cats.”

Office buildings, utilities, local governments and car park operators are all likely customers for EV charging stations. ECOtality will soon announce a deal to install charge points in gas stations, whose owners are keen to entice EV drivers into their convenience stores.

Other retailers see the logic in the schemes. “Demand is not very high at the moment,” says Jack Cunningham, environmental affairs manager at British retailer Sainsbury, which offers free charging to customers. “We take a fairly long-term view that will increase.”

But building the huge networks of charge posts that many envisage as the future will not be cheap — and some experts question the economics of such schemes. In the UK, a single street-side charge post can cost up to 5,000 pounds ($7,700) to install. But with electricity providers making less than 2 pounds per charge, few see the business case for deploying them. “We calculated that the payback was more than 50 years at the current electricity cost in Spain,” says Jorge Sanchez Cifuentes, EV project manager at Endesa, a Spanish utility. British power providers voice similar concerns.

“Getting the capex back is a bit of a stumbling block,” concedes Calvey Taylor-Haw, founder of UK-based charge spot firm Elektromotive. “You’ve got to have lots of money from central government.”

Cisco’s Feisst says state subsidies are the only way to get the infrastructure in place. “If you want to make long-distance drives then you need a public charging infrastructure,” he says. “Utilities don’t make a lot of money with public charging infrastructure so there must be government support to develop that, especially in the initial years when penetration of EVs is not high.”

As governments cut spending in this age of austerity, though, such subsidies are likely to dry up, making a distant dream of plans for a network of systems that offer drivers universal charging with the cost billed back to a single provider.

CHARGE ME, QUICK

Then there’s the time factor. Recharging an EV can take up to eight hours, though that is coming down fast.

AeroVironment says it has devised a 50 kilowatt electric charger based on DC electricity which can power a Nissan Leaf in just 26 minutes, though each unit would cost $30-40,000. ECOtality says it can charge a Nissan Leaf to 80 percent full in 15 minutes using its 60 amp fast charger, which will cost $20-25,000 apiece. Better Place switch station hubs will cost about $500,000 to build.

“In my opinion we’re talking five to 10 years to have the right battery technology available that can make longer distances and allow faster charging,” says Cisco’s Feisst. “It’s critical to have a fast charging process at public charging stations, and then we don’t need to replace the batteries.”

Fast chargers have their own problems, according to IDC Energy Insights’ Sam Jaffe, potentially damaging batteries and creating intolerable power surges on the grid. “We are extremely skeptical about very-quick charge stations. It’s technically feasible but on a large scale it would be very damaging for the grid.”

ECOtotality calls that argument “fallacious”. But Better Place spokeswoman Julie Mullins agrees and says that’s why the swappable battery model will win out: “Our mission is to break dependence on oil and we can’t wait 10 years for a better battery.”

LESS MAY BE MORE

With all the uncertainty about battery-swap stations and recharging posts, it’s not surprising that a growing number of EV backers see a minimalist approach — charging at home or at the office — as the best way ahead.

Because of safety concerns around the long, continuous load required to power an EV, carmakers are expected to mandate a home-charging device with every vehicle they sell. Little wonder that companies like Elektromotive, one of Britain’s biggest manufacturers of public charging devices, have moved into home-charging stations.

Bethan Carver, Manager of Product Development at EDF Energy, the UK arm of French utility EDF, says the modest initial uptake of electric cars almost ensures most charging will be done at home. “It’s more important to develop charging solutions at home or at work. Our view is that only a small fraction of charging demand will take place on the street, a couple of percent ongoing.”

HELPING THE ANXIOUS

Of course home-charging won’t work for people who live in apartments and have no designated parking space. And there may be another, more curious reason why at least some roadside charge spots will be needed: to alleviate the “range anxiety” that many drivers of electric cars seem to suffer.

“People were really apprehensive to drive because there was nowhere to charge,” says Mitsubish’s Andy Wertheim, of a pilot project in Kanagawa, Japan. But with the addition of a GPS system and even a single quick charging post “it was amazing what happened with how much further people drove.”

Nissan has found similar results. People who charged their cars at home at first “go to the areas of Tokyo where there are quick charging points. But because we can track where they’re going, as a research activity, bizarrely when they get there they don’t charge their cars up. They go back home and recharge at home,” says Nissan’s Hardcastle.

A SPLIT SOLUTION

In the end, it may be that the electric car market splits in two: urban drivers and fleet operators happy with limited range at low cost in one group, and motorists who want to go further and buy an extended range car in the other. “For the next 20 years I think that will see us through,” says Paul Nieuwenhuis from Cardiff’s Center for Automotive Industry Research. “I don’t know if battery swap is the answer.”

“The fundamental problem of Better Place is it’s going to cost so much. Can they raise that amount of capital?” asks Jaffe, adding that he still sees “a lot of intelligence” in the model.

“For me it’s a question of timing,” says EDF Energy’s Bethan Carver. “A lot of the debate so far is on future possibilities.”

(With additional reporting by Ari Rabinovitch in Tel Aviv and Chang-Ran Kim in Tokyo; editing by Simon Robinson and Sara Ledwith)

At the start of the 20th century, before the era of ubiquitous gas stations, drivers did just that as they tested the limits of cars like the Ford Model T, which ran on gasoline, kerosene or ethanol and could, if driven carefully, travel more than 150 miles on a full tank.

Now a new generation of drivers is set to embark on a similar kind of experiment. Until recently, most electric vehicles, or EVs as they are often known, have had a range of just a few dozen miles, limiting their usefulness and appeal. That’s a big reason the long-talked-about era of electric vehicles has been, well, talked and talked about for so long with little real-world progress.

Over the next couple of years, though, tens of thousands of electric cars will hit the laneways of Europe, the streets of the United States and the gleaming highways of Asia. These new battery-powered vehicles have much longer ranges than their predecessors — up to 250 miles in the case of the Tesla Roadster, but mostly about 100 miles — and are likely to be the first to sell in large numbers.

By 2020, says J.D.Power Automotive Forecasting, annual sales of EVs will reach 2 million. Banking giant HSBC is even more optimistic and puts the figure at 9 million. That’s still some way short of the 61 million petrol- and diesel-driven vehicles sold around the world in 2009 but a huge leap from the 5,000 or so EVs sold last year.

But even as these shiny new vehicles take to the road, serious questions remain about the infrastructure — or rather, the lack of infrastructure — to charge them. In an echo of last century’s battle over the best fuel source, the way in which the coming fleet of electric vehicles will be recharged has yet to be settled — and all the proposed models have flaws.

Some experts believe EVs should plug in at a driver’s home or workplace. Others back a global network of roadside recharging stations. One prominent company is pushing the idea of petrol station-like outlets where you can zip in and quickly switch your almost-dead battery for a fully charged one. Another group advocates avoiding “pure” EVs and the problem of charging infrastructure altogether, focussing on cars which use both electricity and gasoline.

The stakes are huge: the pace of the shift to electric vehicles, progress in the fight against climate change, and a market which HSBC bullishly forecast this week would grow 20-fold by 2020 to $473 billion (£305.96 billion) — a fifth of the entire low-carbon economy.

Despite the hype, it’s almost impossible to predict the format or formats most likely to win the great electric vehicle infrastructure battle. Model T owners adopted petrol as their fuel of choice for reasons both obvious — the falling price of petrol — and unpredictable: prohibition in 1919 forced ethanol off the market.

The variables today — technology, political interference, the psychology of car-lovers — are similarly hard to pin down. “The introduction of electric vehicles is more than a financial matter,” says U.S. analyst Sam Jaffe, research manager at IDC Energy Insights. “It’s a big anthropological experiment. There’s no question that there are drawbacks, but there are also advantages. It requires a re-setting of mindsets and how that unfolds will decide who wins the race.”

ON YOUR MARKS, PLUG IN

The starting grid for the coming EV race is filling up quickly. Mitsubishi Motors Corp’s jelly bean-shaped i-MiEV has been on sale in Japan since April and will launch in the United States and Europe over the coming few months. The Japanese automaker is also making two versions of the car for French automaker PSA Peugeot Citroen.

Nissan is set to roll out its edgy-looking Leaf in December, while corporate partner Renault will start selling its mid-sized Fluence ZE (for zero emissions) in the first half of next year.

Europe’s biggest automaker Volkswagen, a late entrant in the competition, plans to launch all-electric vehicles in 2013, though it says zero-emission vehicles will account for 3 percent of sales by 2018.

These “pure” electric vehicles face competition from dual gasoline-electric cars. Sometimes called extended range cars, these vehicles can charge at a plug-in socket or switch over to gasoline, and include General Motors’ Chevrolet Volt, which goes on sale in the United States from this year for $41,000, and in Britain a year later.

Will the charging infrastructure be able to keep up with all those new cars? The question is critical. “If it’s too difficult to charge an electric vehicle, too inconvenient, the customers will not buy them,” says Christian Feisst, managing director of business development for smart grid at U.S. networking giant Cisco Systems. “Today a lot of the work is around battery technology and the behaviour of customers. There is not a lot of work done around the charging technology, or the charging process itself, nor how to manage charging.”

A BATTERY PROPHET

One company that is sinking millions into technology is Better Place, a three-year-old California-based firm that has raised about $700 million from investors and imagines a vast global network of “switch stations”: gas station-like outlets where drivers can swap a spent battery with a fully charged one in a few minutes.

Led by soft-spoken Israeli-born founder Shai Agassi, a former executive at SAP, the company boasts of having built “the largest cleantech investment in history”. Last January, HSBC bought a 10 percent stake which valued Better Place at $1.25 billion.

Since earlier this year, the eco firm has been running a trial in Tokyo using three taxi cabs and will soon start testing a small network of stations in Israel, where it says it has deals with 92 corporate fleet owners. It expects a commercial launch in Israel and in Denmark in late 2011, and has plans in five other countries, including Australia, China and the United States.

The swap station model’s main selling point is speed. Charging an EV battery can take up to eight hours. By switching batteries instead, that wait is reduced to three to four minutes. The company says its business model — a subscription plan which covers the use of switch stations, the lease of a battery and the electricity used — cuts a large cost item, the battery, out of the upfront price tag for the car.

“The underlying assumption that we’re working by is that this is too big a market to do half solutions,” says Jason Wolf, head of Better Place North America. “You’re not going to get to mass adoption by people paying a premium because they want to be green or any other reason.”

Early adopters, he says, will always buy cars like the Nissan Leaf and the Tesla Roadster, which retail at about $33,000 and $109,000 respectively. Better Place will reach beyond that niche to the drivers — commuters, salespeople, small business owners — who put tens and even hundreds of thousands of miles a year on the clock. “There’s not a problem getting early adopters. That’s great, we need them and we support those types of vehicles, but really where the heart of the market lies is the third of drivers who are burning two thirds of the gasoline.”

CAN SWITCHING GET HIP?

But questions remain. In Israel, industry heavyweights including two of the country’s biggest car fleets have adopted a wait-and-see approach to Better Place’s trial. Eldan, a major leasing company whose cars are ubiquitous on Israeli roads, says it is in close contact with Better Place, but will not sign on until the electric-powered vehicles arrive and the technology is in place. “At that time we can determine its quality and will positively consider a relationship with the company,” Eldan said in a statement.

There’s also little sign that major automakers are ready to start producing cars with “switchable” batteries. The Israel and Denmark schemes both benefit from generous local tax breaks for non-polluting cars, and will use Renault’s Fluence ZE model. So far, Renault is the only carmaker to announce a switchable car. Renault’s decision was helped by Better Place guaranteeing a production run of 100,000.

With 57,000 soft orders for the car by July — most of them from fleet companies — interest in the Fluence ZE has been greater than expected, insists Better Place. Still, prospective customers have paid no deposit nor made any financial commitment to buy.

“Better Place was a catalyst for Renault to go mass market with the electric version of Fluence,” says a Renault spokeswoman, adding that it was “hard to say” whether the model would have seen daylight without that guarantee.

Wolf concedes that Better Place will have problems if it can’t convince other automakers to join the French carmaker in embracing “switchable” batteries. But “given where we are in discussions (with automakers) and the logic behind it that all of them see, I don’t see it as a major concern,” he says.

Perhaps. But even if Better Place can convince other automakers of the logic of its model, there’s still the question of what sort of batteries they would use. The electric vehicles on the road or in the works all use batteries of different types — nickel sodium chloride, lithium-ion, lithium-metal-polymer — and sizes.

Better Place says it expects to cater for about three different battery types — more would impose greater warehousing demands at its switch stations — and predicts other carmakers will eventually settle on one of those types.

“You may hold an inventory of two, three types at first and over time what’s going to happen is that pressures for OEMs (carmakers) to differentiate on batteries goes away, because you’re manufacturer number three, four, five and you haven’t already developed your own battery. At that point you’re just going to take the least-cost, or best product for the overall vehicle,” argues Wolf.

POWER-SHARING

Automakers, though, say standardised batteries are far from inevitable. The world’s biggest carmaker Toyota says it will continue to prioritise building cars for safety and performance, not to make it easy to get a battery in and out. There’s also the fact that auto owners and manufacturers will be unable to track a battery — where it’s been, the conditions it faced — which might make it difficult to diagnose problems in a car.

“It is hard to imagine,” says Toyota’s Managing Director in Europe Graham Smith, of standardised batteries. “What if a manufacturer feels like they can move faster?”

For now, Toyota and General Motors have both chosen a dual, plug-in electric-gasoline approach which by-passes the need for charging away from home.

Even carmakers focussed on pure EVs are hesitant to sign up. “Every manufacturer has a different battery type, battery size, method for removing the battery,” says Andy Wertheim, general manager of environmental affairs at Mitsubishi in Britain. “Certainly at the moment we see that battery swapping is not relevant for us and for the foreseeable future.”

Nissan, which shares a CEO in its alliance with Renault, also has doubts, citing its own research that shows that people prefer to own rather than lease a battery. “There are different battery layouts, batteries are shaped differently. That means even between Nissan and Renault already there are two types of battery. So I just think: how do you store those?” asks Jerry Hardcastle, vice president of vehicle design and development at Nissan Motor Co’s technical centre Europe. Nevertheless, he concedes the Better Place model might eventually work. “We’re watching very closely what’s going on in Israel.”

THE COMING NETWORK?

Better Place’s main competition will come from extended range cars or the myriad companies building and promoting charge spots or stations: parking metre-like posts on a street, in a car park or elsewhere into which you plug your car to top up its battery.

One such is California-based ECOtality, which has won $130 million funding from the U.S. Department of Energy to install and trial charge spots across the United States. The company expects to install 20,000 stations by May next year.

Other big players in the fast-growing market are U.S.-based Coulomb Technologies, which has about 850 vehicle charge spots installed, Britain’s Elektromotive, which has about 1,000, and AeroVironment, which has some 14,000 industrial chargers for the likes of fork lift trucks. Better Place also plans to install charge spots alongside its switch station hubs.

“We view this as like cell phone coverage: the person with the largest network is ultimately going to win,” says Jonathan Read, chief executive and president of ECOtality. “Better Place is going to take a long time and a lot of money to roll it out. We’re able to hit the ground and have a greater network distribution before they even start putting their first chargers in the ground.”

The Better Place battery swap model, he says, “is egregiously flawed -… the concept of vehicle manufacturers agreeing to any sort of common battery is like herding cats.”

Office buildings, utilities, local governments and car park operators are all likely customers for EV charging stations. ECOtality will soon announce a deal to install charge points in gas stations, whose owners are keen to entice EV drivers into their convenience stores.

Other retailers see the logic in the schemes. “Demand is not very high at the moment,” says Jack Cunningham, environmental affairs manager at British retailer Sainsbury, which offers free charging to customers. “We take a fairly long-term view that will increase.”

But building the huge networks of charge posts that many envisage as the future will not be cheap — and some experts question the economics of such schemes. In the UK, a single street-side charge post can cost up to 5,000 pounds ($7,700) to install. But with electricity providers making less than 2 pounds per charge, few see the business case for deploying them. “We calculated that the payback was more than 50 years at the current electricity cost in Spain,” says Jorge Sanchez Cifuentes, EV project manager at Endesa, a Spanish utility. British power providers voice similar concerns.

“Getting the capex back is a bit of a stumbling block,” concedes Calvey Taylor-Haw, founder of UK-based charge spot firm Elektromotive. “You’ve got to have lots of money from central government.”

Cisco’s Feisst says state subsidies are the only way to get the infrastructure in place. “If you want to make long-distance drives then you need a public charging infrastructure,” he says. “Utilities don’t make a lot of money with public charging infrastructure so there must be government support to develop that, especially in the initial years when penetration of EVs is not high.”

As governments cut spending in this age of austerity, though, such subsidies are likely to dry up, making a distant dream of plans for a network of systems that offer drivers universal charging with the cost billed back to a single provider.

CHARGE ME, QUICK

Then there’s the time factor. Recharging an EV can take up to eight hours, though that is coming down fast.

AeroVironment says it has devised a 50 kilowatt electric charger based on DC electricity which can power a Nissan Leaf in just 26 minutes, though each unit would cost $30-40,000. ECOtality says it can charge a Nissan Leaf to 80 percent full in 15 minutes using its 60 amp fast charger, which will cost $20-25,000 apiece. Better Place switch station hubs will cost about $500,000 to build.

“In my opinion we’re talking five to 10 years to have the right battery technology available that can make longer distances and allow faster charging,” says Cisco’s Feisst. “It’s critical to have a fast charging process at public charging stations, and then we don’t need to replace the batteries.”

Fast chargers have their own problems, according to IDC Energy Insights’ Sam Jaffe, potentially damaging batteries and creating intolerable power surges on the grid. “We are extremely sceptical about very-quick charge stations. It’s technically feasible but on a large scale it would be very damaging for the grid.”

ECOtotality calls that argument “fallacious”. But Better Place spokeswoman Julie Mullins agrees and says that’s why the swappable battery model will win out: “Our mission is to break dependence on oil and we can’t wait 10 years for a better battery.”

LESS MAY BE MORE

With all the uncertainty about battery-swap stations and recharging posts, it’s not surprising that a growing number of EV backers see a minimalist approach — charging at home or at the office — as the best way ahead.

Because of safety concerns around the long, continuous load required to power an EV, carmakers are expected to mandate a home-charging device with every vehicle they sell. Little wonder that companies like Elektromotive, one of Britain’s biggest manufacturers of public charging devices, have moved into home-charging stations.

Bethan Carver, Manager of Product Development at EDF Energy, the UK arm of French utility EDF, says the modest initial uptake of electric cars almost ensures most charging will be done at home. “It’s more important to develop charging solutions at home or at work. Our view is that only a small fraction of charging demand will take place on the street, a couple of percent ongoing.”

HELPING THE ANXIOUS

Of course home-charging won’t work for people who live in apartments and have no designated parking space. And there may be another, more curious reason why at least some roadside charge spots will be needed: to alleviate the “range anxiety” that many drivers of electric cars seem to suffer.

“People were really apprehensive to drive because there was nowhere to charge,” says Mitsubish’s Andy Wertheim, of a pilot project in Kanagawa, Japan. But with the addition of a GPS system and even a single quick charging post “it was amazing what happened with how much further people drove.”

Nissan has found similar results. People who charged their cars at home at first “go to the areas of Tokyo where there are quick charging points. But because we can track where they’re going, as a research activity, bizarrely when they get there they don’t charge their cars up. They go back home and recharge at home,” says Nissan’s Hardcastle.

A SPLIT SOLUTION

In the end, it may be that the electric car market splits in two: urban drivers and fleet operators happy with limited range at low cost in one group, and motorists who want to go further and buy an extended range car in the other. “For the next 20 years I think that will see us through,” says Paul Nieuwenhuis from Cardiff’s Centre for Automotive Industry Research. “I don’t know if battery swap is the answer.”

“The fundamental problem of Better Place is it’s going to cost so much. Can they raise that amount of capital?” asks Jaffe, adding that he still sees “a lot of intelligence” in the model.

“For me it’s a question of timing,” says EDF Energy’s Bethan Carver. “A lot of the debate so far is on future possibilities.”

(With additional reporting by Ari Rabinovitch in Tel Aviv and Chang-Ran Kim in Tokyo; editing by Simon Robinson and Sara Ledwith)

At the start of the 20th century, before the era of
ubiquitous gas stations, drivers did just that as they tested
the limits of cars like the Ford Model T, which ran on gasoline,
kerosene or ethanol and could, if driven carefully, travel more
than 150 miles on a full tank.

Now a new generation of drivers is set to embark on a
similar kind of experiment. Until recently, most electric
vehicles, or EVs as they are often known, have had a range of
just a few dozen miles, limiting their usefulness and appeal.
That’s a big reason the long-talked-about era of electric
vehicles has been, well, talked and talked about for so long
with little real-world progress.

Over the next couple of years, though, tens of thousands of
electric cars will hit the laneways of Europe, the streets of
the United States and the gleaming highways of Asia. These new
battery-powered vehicles have much longer ranges than their
predecessors — up to 250 miles in the case of the Tesla
(TSLA.O: Quote, Profile, Research, Stock Buzz) Roadster, but mostly about 100 miles — and are likely
to be the first to sell in large numbers.

By 2020, says J.D.Power Automotive Forecasting, annual sales
of EVs will reach 2 million. Banking giant HSBC is even more
optimistic and puts the figure at 9 million. That’s still some
way short of the 61 million petrol- and diesel-driven vehicles
sold around the world in 2009 but a huge leap from the 5,000 or
so EVs sold last year.

But even as these shiny new vehicles take to the road,
serious questions remain about the infrastructure — or rather,
the lack of infrastructure — to charge them. In an echo of last
century’s battle over the best fuel source, the way in which the
coming fleet of electric vehicles will be recharged has yet to
be settled — and all the proposed models have flaws.

Some experts believe EVs should plug in at a driver’s home
or workplace. Others back a global network of roadside
recharging stations. One prominent company is pushing the idea
of petrol station-like outlets where you can zip in and quickly
switch your almost-dead battery for a fully charged one. Another
group advocates avoiding “pure” EVs and the problem of charging
infrastructure altogether, focusing on cars which use both
electricity and gasoline.

The stakes are huge: the pace of the shift to electric
vehicles, progress in the fight against climate change, and a
market which HSBC bullishly forecast this week would grow
20-fold by 2020 to $473 billion — a fifth of the entire
low-carbon economy. [ID:nLDE68511K]

Despite the hype, it’s almost impossible to predict the
format or formats most likely to win the great electric vehicle
infrastructure battle. Model T owners adopted petrol as their
fuel of choice for reasons both obvious — the falling price of
petrol — and unpredictable: prohibition in 1919 forced ethanol
off the market.

The variables today — technology, political interference,
the psychology of car-lovers — are similarly hard to pin down.
“The introduction of electric vehicles is more than a financial
matter,” says U.S. analyst Sam Jaffe, research manager at IDC
Energy Insights. “It’s a big anthropological experiment. There’s
no question that there are drawbacks, but there are also
advantages. It requires a re-setting of mindsets and how that
unfolds will decide who wins the race.”

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a chart showing sales projections for both plug-in
electric cars and non-plug-in hybrids:
r.reuters.com/tyc32p

For a factbox on charging infrastructure manufacturers:
[ID:nLDE6890OO]

For a story on Better Place’s Tokyo taxi experiment:
[ID:nLDE6880E5]

For a special report on Tesla Motors:
link.reuters.com/seb43n

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

ON YOUR MARKS, PLUG IN

The starting grid for the coming EV race is filling up
quickly. Mitsubishi Motors Corp’s (7211.T: Quote, Profile, Research, Stock Buzz) jelly bean-shaped
i-MiEV has been on sale in Japan since April and will launch in
the United States and Europe over the coming few months. The
Japanese automaker is also making two versions of the car for
French automaker PSA Peugeot Citroen (PEUP.PA: Quote, Profile, Research, Stock Buzz).

Nissan (7201.T: Quote, Profile, Research, Stock Buzz) is set to roll out its edgy-looking Leaf in
December, while corporate partner Renault (RENA.PA: Quote, Profile, Research, Stock Buzz) will start
selling its mid-sized Fluence ZE (for zero emissions) in the
first half of next year.

Europe’s biggest automaker Volkswagen (VOWG_p.DE: Quote, Profile, Research, Stock Buzz), a late
entrant in the competition, plans to launch all-electric
vehicles in 2013, though it says zero-emission vehicles will
account for 3 percent of sales by 2018.

These “pure” electric vehicles face competition from dual
gasoline-electric cars. Sometimes called extended range cars,
these vehicles can charge at a plug-in socket or switch over to
gasoline, and include General Motors’ Chevrolet Volt, which goes
on sale in the United States from this year for $41,000, and in
Britain a year later.

Will the charging infrastructure be able to keep up with all
those new cars? The question is critical. “If it’s too difficult
to charge an electric vehicle, too inconvenient, the customers
will not buy them,” says Christian Feisst, managing director of
business development for smart grid at U.S. networking giant
Cisco Systems. “Today a lot of the work is around battery
technology and the behaviour of customers. There is not a lot of
work done around the charging technology, or the charging
process itself, nor how to manage charging.”

A BATTERY PROPHET

One company that is sinking millions into technology is
Better Place, a three-year-old California-based firm that has
raised about $700 million from investors and imagines a vast
global network of “switch stations”: gas station-like outlets
where drivers can swap a spent battery with a fully charged one
in a few minutes.

Led by soft-spoken Israeli-born founder Shai Agassi, a
former executive at SAP, the company boasts of having built “the
largest cleantech investment in history”. Last January, HSBC
(HSBA.L: Quote, Profile, Research, Stock Buzz) bought a 10 percent stake which valued Better Place at
$1.25 billion.

Since earlier this year, the eco firm has been running a
trial in Tokyo using three taxi cabs [ID:LDE6880E5] and will
soon start testing a small network of stations in Israel, where
it says it has deals with 92 corporate fleet owners. It expects
a commercial launch in Israel and in Denmark in late 2011, and
has plans in five other countries, including Australia, China
and the United States.

Wingas, a joint venture between Germany’s Wintershall (BASF.DE: Quote, Profile, Research) and Russia’s Gazprom (GAZP.MM: Quote, Profile, Research), is expected to build 700 to 800 million cubic metres of gas storage, equivalent to two days of UK gas demand during winter.

Drilling and construction at Saltfleetby is expected to take 30 to 36 months, according to DECC, and the facility would be one of the largest in Britain.

“As the UK becomes increasingly dependent on imported gas, this Government has made it a priority to ensure secure gas supplies,” energy minister Charles Hendry said.

“We will introduce measures in the Energy Security and Green Economy Bill to encourage not only more gas storage, but greater gas import capacity to help ensure that our market will deliver gas when it is needed.”

The Saltfleetby storage facility is expected to take gas from the Theddlethorpe terminal and increase Britain’s gas storage capacity by 15 percent, DECC said.

Britain has a lower ratio of storage as a percentage of demand than France or Germany which can store about a quarter of their annual needs, prompting calls for more capacity to be built to buffer against unexpected supply cuts like those caused by a Russia-Ukraine gas dispute two winters ago.

“We are convinced that the UK needs more storage facilities, in particular seasonal storage, as UK gas production continues to decline,” Frank Tauchnitz, managing director of Wingas Storage UK, said.

“The existing storage facilities can cover just 4 percent of the annual gas requirements.”

Wingas expects to make a final investment decision on the project in a few months.

Centrica’s (CNA.L: Quote, Profile, Research) Rough is Britain’s largest gas storage facility at 3.3 billion cubic metres (bcm) with the country currently building an additional 1.49 bcm of capacity.

(Additional reporting by Daniel Fineren, editing by Anthony Barker)

Wingas, a joint venture between Germany’s Wintershall
(BASF.DE: Quote, Profile, Research) and Russia’s Gazprom (GAZP.MM: Quote, Profile, Research), is expected to build
700 to 800 million cubic metres of gas storage, equivalent to
two days of UK gas demand during winter.

Drilling and construction at Saltfleetby is expected to take
30 to 36 months, according to DECC, and the facility would be
one of the largest in Britain.
“As the UK becomes increasingly dependent on imported gas,
this Government has made it a priority to ensure secure gas
supplies,” energy minister Charles Hendry said.

“We will introduce measures in the Energy Security and Green
Economy Bill to encourage not only more gas storage, but greater
gas import capacity to help ensure that our market will deliver
gas when it is needed.”

The Saltfleetby storage facility is expected to take gas
from the Theddlethorpe terminal and increase Britain’s gas
storage capacity by 15 percent, DECC said.

Britain has a lower ratio of storage as a percentage of
demand than France or Germany which can store about a quarter of
their annual needs, prompting calls for more capacity to be
built to buffer against unexpected supply cuts like those caused
by a Russia-Ukraine gas dispute two winters ago. [ID:nLDE62F2DP]
“We are convinced that the UK needs more storage facilities,
in particular seasonal storage, as UK gas production continues
to decline,” Frank Tauchnitz, managing director of Wingas
Storage UK, said.

“The existing storage facilities can cover just 4 percent of
the annual gas requirements.”

Wingas expects to make a final investment decision on the
project in a few months.

Centrica’s (CNA.L: Quote, Profile, Research) Rough is Britain’s largest gas storage
facility at 3.3 billion cubic metres (bcm) with the country
currently building an additional 1.49 bcm of capacity.

For a table of UK gas storage projects click:
[ID:nLDE6871EV]
(Additional reporting by Daniel Fineren, editing by Anthony
Barker)

With consortium partners, B9 Coal plans to enter the new round of the government’s carbon capture and storage (CCS) competition. The B9 Coal project extracts hydrogen from coal to feed into fuel cells to convert into electricity, with the carbon removed at the hydrogen extraction stage.

“We feel it needs to be more inclusive of emerging technologies, which we have been relaying back to DECC (the Department of Energy and Climate Change). It needs to be open to small players as well as large power companies,” B9 Coal director Alisa Murphy said.

“The UK government has stated quite clearly that they want to show global leadership on CCS and we really feel that in order to do that, you have to have a world leading template project that has to have something different.”

The British government said that it was looking for three more CCS projects in addition to the first demonstration competition which E.ON’s (EONGn.DE: Quote, Profile, Research) Kingsnorth and Ibedrola (IBE.MC: Quote, Profile, Research) owned Scottish Power’s Longannet plants are still battling over.

Both Kingsnorth and Longannet are post-combustion — capturing the carbon after burning — while the B9 Coal project would be pre-combustion.

B9 Coal’s competition entry would involve underground coal gasification (UCG) to produce syngas, which would then be separated into hydrogen and carbon dioxide. The hydrogen would be use to generate power while the climate warming carbon could be transported away to be buried.

The B9 Coal consortium has selected Rio Tinto Alcan’s (RIO.L: Quote, Profile, Research) 500 megawatt Lynemouth coal-fired plant in north-east England for the site of its pre-combustion CCS project.

“I think we shouldn’t just band aid old dirty technologies and come forward with new emerging technologies that are built for the future,” Murphy said.

Along with its partners in the project UK engineering consultancy WSP Group, UK fuel cell maker AFC Energy, and an Australian UCG firm Linc Energy (LNC.AX: Quote, Profile, Research), B9 Coal said the project could remove 90 percent of the carbon while retaining 60 percent electricity output efficiency.

The cost of power production would be as low as four pence per kilowatt hour, which Murphy said would make it competitive with nuclear power.

CCS is seen a key technology to help Britain reach its legally binding targets to cut carbon emissions of at least 80 percent by 2050 compared with 1990 levels, as well as a creating green jobs for UK manufacturing.

(Editing by William Hardy)

With commercial operation to start next year on April 1, the one gigawatt (GW) Britned cable can import or export power between the two countries and could smooth out demand peaks if one market has extra supply, but could also import price spikes when both markets are tight.

“If UK margins were very tight then it could help to control major price spikes (by importing power),” Ian Parrett, market analyst at consultancy Inenco, said.

But because Dutch power prices are coupled with the French market, and when the two GW UK-France power interconnector is also factored into the equation, the UK prices could rise suddenly when supply margins on both sides are struggling.

“It could be that we import spikes into our own system,” a UK-based power trader at a bank said.

“If we’re not doing that great, and the Continent suddenly has massive supply issues and pulls three GW from us… that’s about six power plants and you know how the market gets worried when that number of plants go offline.”

But others question if the UK grid would be set up to create such a situation.

“It is certainly a possibility – I’m not sure how the systems would have to interact to result in a three GW call on the UK grid though,” Craig Lowrey, consultant at analysts JCRA Energy, said.

Traders also agreed that Britned’s capacity was significant enough to make a difference, if not price setting.

“Smoothing out the peak is what’s envisioned and people will be looking at the arbitrage opportunities. It’s a gigawatt coming into the UK so it will have some effect, but not a massive amount,” a UK power trader at a utility said.

Britned — a 600 million euro (493 million pound) joint venture between UK and Dutch grid operators National Grid and TenneT — is a small part in a larger European super grid ambition, which would link the major power markets across northwest Europe.

AUCTION ATTRACTION

Another aspect of Britned would be the capacity auction, which analysts believe could improve liquidity and bring new players to the over-the-counter (OTC) UK wholesale power market.

“By bringing the auction model to the UK market it could lend weight for calls for greater transparency and increased volumes on the wholesale markets,” Inenco’s Parrett said.

“More volume means greater liquidity which means more participants and should lead to more competitive pricing.”

The OTC UK power market is dominated by six big players and has been beset by low levels of trading for a number of years, with energy regulator Ofgem considering an intervention to try and fix this problem.

Cheung Kong Infrastructure (1038.HK: Quote, Profile, Research) (CKI) and Hongkong Electric (0006.HK: Quote, Profile, Research) (HKE) made a 5.8 billion pound offer for three power distribution grids and private power networks, paying big money for assets that need investment but have opportunities to turn smart.

“The price that’s being paid suggests the Chinese see the UK as an attractive and stable market to be in. It suggests how much capital is available to be deployed from Asia to the UK marketplace,” said Andy Cox, energy partner at consultancy KPMG.

“I think it’s bound to encourage other network owners to look across their portfolio and the returns they’re getting versus selling the assets and moving that investment elsewhere.”

European utilities are selling assets to plug huge debts stemming from takeovers and to invest in new power plants.

Regulators are keen to see the assets owned outside the rest of the power sector, and some of the networks no longer provide the returns expected.

The big price offered by CKI could speed up sales as other network owners look to cash in on hot Asian demand.

“I can’t think there could be any owner of distribution network assets in the UK that wouldn’t seek to sell their assets at this level,” Evolution Securities utilities analyst Lakis Athanasiou said.

“Maybe this is start of trend. We’ve seen it in oil and gas in Europe. This is the first one of real significance in the UK in recent times,” KPMG’s Cox said.

Britain’s other distribution networks holders include E.ON (EONGn.DE: Quote, Profile, Research), Scottish and Southern Energy (SSE.L: Quote, Profile, Research), Iberdrola’s (IBE.MC: Quote, Profile, Research) Scottish Power, CE Electric UK, Electricity North West, Western Power Distribution and NIE Energy, according to the UK energy network operator National Grid.

CKI is expected to look at improving the efficiency of the EDF network and the development of “smart grid” — which supplies real-time power usage data to consumers and demand information to network operators that can increase returns.

But analysts still see the price as steep.

“I think the offer is high value and I see CKI finding it very difficult to get value out of this,” Evolution Securities’ Athanasiou said.

Through the EDF network, CKI would gain 7.8 million British customers, adding to its UK Northern Gas Networks business which has around 2.6 million customers. CKI also owns the 1,140 megawatt Seabank Power station.

(Additional reporting by Victoria Bryan; editing by Michael Shields)

The nuclear plan issued by the previous Labour government was widely consulted on by the Department of Energy and Climate Change, but the new coalition government says it wants to look at it again in the autumn to see if it is sustainable.

“We have decided to take a further look at the Appraisal of Sustainability of our draft Energy Policy Statements to make sure that they are fit for purpose,” Energy Minister Charles Hendry said in a statement Thursday.

“Plans for the first new nuclear power station to begin generating electricity by 2018 remain on course,” he added.

At a meeting of ministers and the nuclear industry on Thursday, senior figures expressed surprise at the decision to consult again but said they were satisfied by the coalition’s commitment to the policy.

“People were surprised but they were reassured to hear what the causes were because this is a one-off. It’s not a systemic clip in the program because things haven’t been estimated correctly,” Tom Foulkes, director general of the Institute of Civil Engineers, who attended the meeting, told Reuters.

“I wouldn’t say they were shocked, there was no sort of jaw-dropping,” he added.

At the meeting, the government also said it expected the nuclear policy to be ratified in April 2011, Foulkes said.

Many of Britain’s ageing nuclear power plants are scheduled to shut over the next few years, with the Conservatives-Liberal Democrats coalition, which came to power in May, pushing private firms to build new ones as part of a low carbon power generation mix.

French utility EDF says it intends to build four reactors in Britain, while German utilities E.ON and RWE also plan to build new nuclear plants in the UK.

(Editing by James Jukwey)