Heavy-Duty Alternative Fuel Trucks

May 2015 Prepared for California Electric Transportation Coalition 1015 K Street, Suite 200 Sacramento, CA 95814

Prepared by ICF International 620 Folsom St, Suite 200 San Francisco, CA 94107 415.677.7100

Table of Contents Executive Summary............................................................................................................................1 Introduction ......................................................................................................................................1 Discussion..........................................................................................................................................2 Enhanced Utility of PHETs Relative to BETs ........................................................................................... 3 Reduced Vehicle and Fuel Costs ............................................................................................................. 4 Summary ...........................................................................................................................................6

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Abbreviations and Acronyms

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BET

Battery Electric Truck

BEV

Battery Electric Vehicle

CMAQ

Congestion Mitigation and Air Quality Improvement

CNG

Compressed Natural Gas

DGE

Diesel Gallon Equivalent

eVMT

Electric Vehicle Miles Traveled

FCV

Fuel Cell Vehicle

GGE

Gasoline Gallon Equivalent

GHG

Greenhouse Gas

GWh

Gigawatt Hours

H2

Hydrogen

kW

Kilowatt

kWh

Kilowatt-hour

LCFS

Low Carbon Fuel Standard

PEV

Plug-in Electric Vehicle

PHET

Pluggable Hybrid Electric Truck

RD&D

Research, Development and Demonstration

VMT

Vehicle Miles Traveled

ZET

Zero-Emission Truck

ZEV

Zero Emission Vehicle

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Executive Summary The California Air Resources Board (ARB) is in the process of developing a Sustainable Freight Strategy that is predicated on the goal of deploying zero emission technologies. Currently zero emission freight technologies and more specifically zero emission trucks (ZETs) are in their early development and demonstration phases. While these trucks move towards commercialization, it is important to keep all solutions on the table including plug-in hybrid electric trucks (PHETs). PHETs provide a lower cost per vehicle compared to ZETs (either battery or hydrogen) and thus potentially increased vehicles deployed for the same amount of funding. PHETs provide the same proving ground for zero emission technology that can potentially have more zero emission miles than full zero emission technologies. These potential benefits of PHETs can be fully captured by making sure funding is available for all near-zero emission, zero emission and advanced technology trucks as has been proposed in the Proposition 1B Staff Draft Concept Paper. 1

Introduction To achieve the near-term and long-term air quality standards and climate goals, criteria pollutant and greenhouse gas emission reductions are required in all sectors, especially heavy-duty vehicles and freight transport. The freight sector contributes about 50% of the diesel particulate matter (DPM), 45% of the oxides of nitrogen (NOx) and 6% of the greenhouse gas (GHG) emissions in California 2. ARB has developed a draft Sustainable Freight Strategy with pathways to move towards zero and nearzero emissions. These strategies include reducing combustion emissions from the current fleet of trucks, requiring the next generation of combustion technology to be near-zero (90% emission reductions compared to the current in-use trucks 3), and beginning a transition towards zero emission trucks. The near-zero emission trucks will most likely be natural gas engines and the zero emission trucks will either be full battery electric or hydrogen fuel cell vehicles. Infrastructure charging technologies including overhead catenary systems are being discussed for State Route 103, the I-710 and other freight corridors, but the timeframe for implementation is at least 10-20 years. Until that infrastructure and technology is ready for commercialization and large-scale deployment, it is important to bridge the gap with viable technologies that achieve further emission reductions and help enable ongoing technology improvement. The movement to near-zero and zero emission trucks spans all heavy-duty classes from Class 3-8, but the focus is on Class 7-8 heavy heavy-duty trucks because these are the biggest per vehicle polluters. 1

“Proposition 1B: Goods Movement Emission Reduction Program Update to Program Guidelines – Staff Draft Concept Paper,” California Air Resources Board, Release Date: April 15, 2015. http://www.arb.ca.gov/gmbond

2

“Discussion Draft: Sustainable Freight: Pathways to Zero and Near-Zero Emissions,” California Air Resources Board, April 2015. http://www.arb.ca.gov/gmp/sfti/sfti.htm

3

ARB has not yet defined what will qualify as a near-zero emission strategy. For the purposes of this white paper, ICF assumes that it means 90% emission reductions compared to the current emissions standards for trucks.

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Currently there are commercially available Class 4-6 battery electric trucks and delivery vans, and electric transit buses that have been deployed throughout California. While there are a few demonstrations underway for battery electric and fuel cell Class 7-8 trucks, there are no commercially available or lifecycle cost competitive models. Until there are reductions in battery and fuel cell costs and widespread electric charging stations that can support heavy-duty trucks, ARB should consider demonstrations and deployments of more cost competitive plug-in electric hybrids (using gasoline, diesel or natural gas fuel) that will be able to achieve all-electric zero emission miles. ARB’s heavy-duty truck technology assessment states: “Series hybrid heavy-duty applications could help to commercialize zero emission technologies, provide zero emission miles or activity in many applications, and serve as a pathway to help zero emission technologies mature in the heavy-duty sector.” 4 While ARB’s eventual goal is full zero-emission freight transport, it is important that funding programs like AB1204 5 and Proposition 1B (Prop 1B) 6 not only fund full battery electric and hydrogen fuel cell vehicles, but also support plug-in hybrid and any other technology or vehicle architecture that reduces emissions to zero or near-zero levels. The Staff Concept Paper for Prop 1B includes funding for full zero emission trucks in addition to funding for trucks with a MY2015+ engine hybrid trucks and hybrid zero emission trucks. 7

Discussion The main discussion points to justify providing funding for PHETs in addition to battery electric trucks (BETs) are: • •

Enhanced utility of PHETs compared to BETs Reduced vehicle and fuel costs

4

“Draft Heavy-Duty Technology and Fuels Assessment,” California Air Resources Board, April 2015. http://www.arb.ca.gov/msprog/tech/report.htm

5

http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_1201-1250/sb_1204_cfa_20140519_083025_sen_comm.html

6

http://www.arb.ca.gov/bonds/gmbond/gmbond.htm

7

“Proposition 1B: Goods Movement Emission Reduction Program Update to Program Guidelines: Staff Draft Concept Paper,” California Air Resources Board, April 15, 2015. http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goods_movement_program_staff_draft_concept_paper _april_2015.pdf

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Enhanced Utility of PHETs Relative to BETs CALSTART’s E-Truck Task Force found that 70-100 miles per day is the range at which electric trucks provide sufficient payback to warrant investment. 8 The lack of widespread recharging infrastructure would target PHET and BET to regional-haul, return to base fleet vehicles that drive 70-100 miles per day. Similar to the light-duty vehicles, BETs are susceptible to range anxiety criticism and concerns. Many trucking fleets use the same truck for multiple routes that vary in travel distance. The use of PHETs would allow for greater utility and acceptance of electric technology to continue development and cost reductions. The early experience from light-duty vehicles shows that plug-in hybrid electric vehicles (PHEVs) have more daily vehicle miles traveled (VMT) and more annual electric vehicle miles traveled (eVMT) than battery electric vehicles (BEVs). Table 1 below shows the data from the EV Project for the Chevy Volt (a PHEV with the capacity to travel 40 miles all-electric (PHEV40)) and the Nissan Leaf (a BEV with approximately 100 miles of electric range). Table 1. Light-Duty PHEV and BEV Daily and Annual VMT 9

Vehicle

Daily VMT

Annual VMT

Annual eVMT

PHEV40 (Chevy Volt)

41.0

14,965

11,169

BEV (Nissan Leaf)

29.5

10,768

10,768

Whether due to range anxiety and/or greater daily utility, the PHEV40 was driven more on a daily basis and also had more electric miles. Assuming that households owning the BEV made up the different in annual VMT with a conventional vehicle, the PHEV achieved greater emission reductions than the BEV. It is reasonable to expect that a similar relationship would hold true for trucks. For smaller fleets that cannot afford to purchase a BET for just one route or cycle, a PHET will allow the fleet to purchase one truck for multiple purposes. If opportunity charging can be combined with a PHET, it will maximize eVMT and decrease the vehicle payback period. In addition, a PHET could be an option to replace trucks that operate inside and outside non-attainment areas with extended daily mileage and still achieve eVMT within the non-attainment areas. Increased use of PHETs could prove an opportunity to learn more about zero emission technologies and a bridge to fill the void while BET technologies develop to full commercialization.

8

“Best Fleet Uses, Key Challenges and Early Business Case for E-Trucks: Findings and Recommendations of the ETruck Task Force,” CALSTART, 2012. http://www.calstart.org/Libraries/ETruck_Task_Force_Documents/Best_Fleet_Uses_Key_Challenges_and_the_Early_Business_Case_for_ETrucks_Findings_and_Recommendations_of_the_E-Truck_Task_Force.sflb.ashx

9

EV Project Data - http://www.theevproject.com/documents.php.

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Reduced Vehicle and Fuel Costs In addition to the potential for higher eVMT with PHET compared to BET, PHETs allow for a lower cost path to test electric technologies in Class 6-8 trucks due to significantly smaller (and consequently, cheaper) batteries. As stated above, the ideal range for battery electric trucks is 70-100 miles. If a PHET had a 40 mile battery, and if we assume fuel economies of 10 and 5 miles per diesel gallon equivalent (mi/dge) for Class 6 and Class 8 trucks, respectively, then Table 2 below shows a comparison of estimated battery prices for PHETs and BETs. Table 2. Approximate PHET and BET Battery and Powertrain Cost 10, 11

Approx. Mile Range

Class 6 (10 mi/dge)

Class 8 (5 mi/dge)

PHET, 40

$36,000 - $44,000

$73,000 - $87,000

BET, 70

$64,000 - $76,000

$127,000 - $153,000

BET, 100

$91,000 - $109,000

$182,000 - $218,000

Diesel Powertrain

$14,000 (150 kW)

$24,000 (350 kW)

Electric Powertrain 12

$9,000 (150 kW)

$21,000 (350kW)

Table 2 shows that PHETs utilizing a 40 mile battery are significantly cheaper than 70 or 100 mile range BETs even when taking into account a duplicate diesel and electric power train. The Class 6 PHET is $14,000 - $18,000 cheaper than the 70 mile BET and $41,000 - 51,000 cheaper than the 100 mile BET. The Class 8 PHET is $30,000 - $42,000 cheaper than the 70 mile BET and $85,000 - $107,000 cheaper than the 100 mile BET. A series-hybrid architecture with a downsized diesel engine could increase the cost savings compared to BETs. The cheaper PHETs would allow more vehicles to be deployed from the same amount of funding.

10

Battery prices of $500-$600/kWh (“Best Fleet Uses, Key Challenges and Early Business Case for E-Trucks: Findings and Recommendations of the E-Truck Task Force,” CALSTART, 2012), EER of 2.7 for HD BEVs from ARB LCFS, an 80% useful state of charge and 95% electrical to mechanical energy efficiency

11

den Boer, Eelco, et al, “Zero Emission Trucks – An Overview of State of the Art Technologies and Their Potential,” CE Delft, July 2013. http://www.theicct.org/sites/default/files/publications/CE_Delft_4841_Zero_emissions_trucks_Def.pdf

12

Includes motor plus additional required system (ARS) such as controllers and convertors. Does not include dynamic inductive or overhead catenary connection capability; dynamic inductive adds $12,000 and overhead catenary adds $53,000

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In addition, the current decline in diesel prices from the crash in crude prices has reduced the fuel savings from alternative fuel vehicles compared to diesel vehicles. The reduced fuel savings increase the payback period for these vehicles. The lower incremental cost from a PHET combined with the PHEV/BEV experience of higher eVMT could reduce the payback period for PHETs compared to BETs. Table 3 and Figure 1 below show a range of estimated per mile vehicle costs. The energy economy ratios (EERs) are from the Low Carbon Fuel Standard proposed regulation 13 and are used to convert the baseline diesel fuel. Table 3. Estimated $/mi Fuel Cost

Transportation Fuel

Fuel Cost

Fuel Economy

$/mi Fuel Cost

Electricity 14

$0.18-$0.32/kWh

13.5 mi/dge (2.7 EER)

$0.50-$0.88/mi

Diesel 15

$3-$5/dge

5 mi/dge

$0.60-$1.00/mi

CNG 16

$1.86 - $2.60/gge

5.55 mi/dge (0.9 EER)

$0.47-$0.65/mi

Hydrogen17

$9-$10/kg

9.5 mi/dge (1.9 EER)

$1.06-$1.18/mi

13

http://www.arb.ca.gov/regact/2015/lcfs2015/lcfs15appa.pdf

14

Electricity cost based on forklift commercial rates contained within California Transportation Electrification Assessment: Phase 1 Report, prepared for CalETC, September 2014

15

Diesel price based on current price of approximately $3/gallon and historic diesel high price http://fuelgaugereport.aaa.com/states/california/.

16

Based on surveying altfuelprices.com on 4/15/2015; gasoline gallon equivalent – gge.

17

Hydrogen prices based on H2A Model Developed by Argonne (http://www.hydrogen.energy.gov/h2a_delivery.html) and DOE Presentation (http://iphe.net/docs/Events/China_9-10/1-3_2010-9-21_IPHE_PDRD.pdf).

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Figure 1. Estimated Fuel Costs for Various Truck Technologies

Table 3 and Figure 1 show the narrow fuel cost benefit for electricity compared to diesel at the current prices. The smaller PHET battery has a lower incremental cost and a greater potential for a reasonable payback period.

Summary At this early stage in the ZET research, development and demonstration (RD&D) process, it is important to keep all solutions on the table. This can be done by making sure funding is available for all near-zero emission, zero emission and advanced technology trucks. The Proposition 1B Staff Draft Concept Paper 18 proposes funding for all of these options where existing funding does not recognize near-zero emission and plug-in hybrid trucks. Table 4 below shows the proposed funding values in Table 1 from the Concept Paper.

18

“Proposition 1B: Goods Movement Emission Reduction Program Update to Program Guidelines – Staff Draft Concept Paper,” California Air Resources Board, Release Date: April 15, 2015. http://www.arb.ca.gov/gmbond

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Table 4. Prop 1B Proposed Funding Concept for Trucks Eligible Equipment and Upgrade

A

Replace with new MY2015+ engine optional low-NOx truck (0.02 only). 19

B

Replace with MY2015+ engine hybrid truck.

C

Replace with new MY2015+ engine hybrid zero emission mile truck.

D

20, 22

Replace with new MY2015+ engine zero emission truck.

E

20,21

20, 23

Convert diesel engine to new MY2015+ zero emission engine.

23, 24

Proposed Funding

Existing Funding

Class 6

Class 7

Class 8

Class 6

Class 7

Class 8

$50,000

$100,000

$100,000

N/A

N/A

N/A

$45,000

$80,000

$80,000

$25,000

$35,000

$50,000

$65,000

$100,000

$100,000

N/A

N/A

N/A

$100,000

$200,000

$200,000

$25,000

$35,000

$50,000

$60,000

$80,000

$80,000

N/A

N/A

N/A

The Prop 1B concept paper’s proposal makes funding available for a wide range of emission reducing trucks. As the proposal suggests, funding should not be limited to only trucks achieving the final goal of full zero emission but also trucks that achieve emission reductions while full zero emission trucks become commercialized and cost-competitive.

19

This funding option requires a contract for renewable fuel.

20

Projects can be co-funded with Air Quality Improvement Program (AQIP) funds ($12,000 - $30,000 for hybrids and $90,000-$110,000 for zero emission).

21

Hybrid truck is defined as a vehicle with an electric drive system powered by an on-board generator and approved for funding by AQIP.

22

Hybrid zero emission mile truck is defined as a hybrid vehicle with some all-electric range.

23

Zero emission truck is defined as a vehicle that emits no criteria pollutant, toxic or greenhouse gas emissions at the tailpipe.

24

Conversion is defined as an ARB-approved aftermarket conversion of a diesel powered truck to a zero-emission truck. Engines must have ARB approval as an aftermarket conversion to be sold in California.

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