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Energy Trends and Scope: Mercedes-Benz CEO says the electric vehicle transition is a marathon

Updated: Aug 4, 2023

Welcome to Energy Scope and Trends, a weekly editorial that aims to keep you informed about the latest news and developments in the energy industry in bits.

In this week's energy news, Mercedes-Benz CEO emphasizes that the transition to electric vehicles is a marathon, not a sprint. Meanwhile, PG&E, Schneider Electric, and Microsoft join forces to launch a cloud-based energy management system, aimed at increasing efficiency and reducing costs for customers.

In China, petrol demand is expected to peak next year as EV sales soar, reflecting the country's shift towards cleaner transportation. In the US, the government launches rebate programs to encourage home energy efficiency, making it easier for households to adopt sustainable practices.

Finally, Toyota unveils its first liquid hydrogen-powered racing car, showcasing the company's commitment to exploring alternative fuel sources.

PG&E, Schneider Electric and Microsoft launch cloud-based energy management system

PG&E, a major utility company in California, has teamed up with Schneider Electric, a global leader in energy and automation solutions, and Microsoft, a technology giant, to deploy a cloud-based energy management system that can optimize the use of distributed energy resources (DER) such as electric vehicles, solar panels and battery storage.

The system, called EcoStruxure DERMS, runs on Microsoft Azure and allows PG&E to monitor, control and coordinate DER across its service area, which covers more than 16 million people and 70,000 square miles. The system aims to improve grid reliability, resilience and flexibility, especially during periods of extreme weather and high demand for electricity.

DER are small-scale power sources that can be connected to the grid or operate independently. They can provide clean, renewable and affordable energy to customers, as well as reduce greenhouse gas emissions and dependence on fossil fuels. However, they also pose challenges for grid operators, who need to balance supply and demand, maintain voltage and frequency stability, and prevent overloading and outages.

EcoStruxure DERMS helps PG&E address these challenges by providing real-time visibility into DER behaviour and capacity, enabling proactive management and dispatch of DER when and where they are needed most. For example, the system can leverage battery storage to provide backup power during emergencies or peak hours or use electric vehicles to send stored power back to the grid on high-demand days.

The system also supports PG&E’s efforts to accelerate customer adoption of DER and facilitate faster grid connections. PG&E has connected more than 700,000 customers with rooftop solar and more than 55,000 customers with battery storage to the grid. It also plans to power and support three million electric vehicles by 2030, with incentives for customers to participate in vehicle-to-grid integration initiatives.

The collaboration among PG&E, Schneider Electric and Microsoft is an example of how digital innovation can help deliver a future-ready, secure and agile grid that can meet the growing electricity needs of California and support its climate and clean energy goals.

The system is currently in operation and will be enhanced with additional features and use cases over the next few years.

China’s petrol demand to peak next year as EV sales soar

China, the world’s biggest polluter and second-largest oil consumer is likely to see its petrol demand peak as early as next year, as electric vehicle sales surge and the country shifts to cleaner energy sources, according to Reuters special report.

The International Energy Agency (IEA) and consultancy Rystad Energy have revised their forecasts of China’s peak petrol demand by about a year to 2024, while Chinese state oil majors PetroChina and Sinopec expect it to happen in 2025.

The earlier decline in petrol consumption in China will have significant implications for the global oil market and the environment. It will reduce China’s reliance on oil imports, increase its petrol exports to Asia, and lower its greenhouse gas emissions.

It will also pose a challenge for global refiners, who will have to adjust their output mix and find new markets for their surplus petrol. Some Chinese refiners are already shifting their focus to petrochemicals, which are used to make plastics and other products.

The main driver of China’s petrol demand peak is the rapid growth of electric vehicles (EVs), which are cheaper, cleaner and more efficient than petrol cars. In the first five months of this year, EVs accounted for 28% of China’s car market, up from 9% in the same period of 2021.

China is now aiming to boost EV adoption in rural areas by improving charging infrastructure and offering financial incentives. It also plans to phase out sales of new petrol cars by 2035, as part of its goal to become carbon-neutral by 2060.

China’s petrol demand peak is expected to precede that of other major oil consumers, such as the US, Europe and India, where EV penetration is still low and policy support is less strong. However, the global trend towards electrification and decarbonization is likely to accelerate in the coming years, as more countries and companies commit to reducing their emissions and fighting climate change.

US launches rebate programs for home energy efficiency

The US Department of Energy has announced that it is accepting applications from states and territories for $8.5 billion in rebate programs for upgrades in US homes that aim to lower energy bills and increase energy efficiency.

The rebates, which were funded by President Joe Biden’s Inflation Reduction Act passed last year, will cover the costs of items such as insulation, heat pumps, and efficient appliances for consumers who want to make their homes more comfortable and sustainable.

The rebate programs are expected to save up to $1 billion a year in energy costs and support about 50,000 jobs in construction, manufacturing and other sectors, the department said. They will also help reduce greenhouse gas emissions and improve grid reliability and resilience.

The department said it hopes that all states and territories will apply for and benefit from the programs, which will be available to consumers on a rolling basis starting from the end of this year. It said low-income families could save up to $14,000 with the rebates, which will not be taxed as income.

The programs are part of the Biden administration’s efforts to accelerate the transition to clean energy and combat climate change. The administration has also set ambitious targets to cut emissions by 50% by 2030 and achieve net-zero emissions by 2050.

Mercedes-Benz CEO says the electric vehicle transition is a marathon

The CEO of Germany’s Mercedes-Benz, Ola Kallenius, has said that the shift to zero-emission mobility should be viewed as a marathon, not a sprint, as the automaker reported strong earnings for the second quarter of this year.

Speaking to CNBC, Kallenius said that the transition to electric vehicles (EVs) was a long-term journey and that the company was investing heavily in new technologies and architectures to prepare for the future.

He said that Mercedes-Benz’s EVs had received a good reception so far and that the company had a whole host of first-generation electric models on the market, such as the EQA, EQB and the EQE SUV.

He also said that the company was flexible to produce both high-tech electrified combustion engines and electric vehicles, depending on customer demand and market conditions.

Mercedes-Benz Group reported earnings before interest and taxes of 5 billion euros, or roughly $5.48 billion, for the second quarter, an increase of 8% from the same period last year.

Its battery electric vehicle sales reached 61,211 compared to 31,259 in the second quarter of 2022, while its plug-in hybrid sales came in at 34,699, a slight increase from 32,335 last year.

The company said it was bullish on electric vehicles and zero-emission driving and that it was aiming to become carbon-neutral by 2039. It also said it was facing challenges such as supply chain disruptions, semiconductor shortages and rising raw material costs.

Toyota unveils first liquid hydrogen-powered racing car

Toyota, the world’s largest automaker, has developed the first racing car that runs on liquid hydrogen, a clean and powerful fuel that is mostly used in rockets.

The car called the LH2 Corolla, was driven for the first time in November 2022 at the Fuji Speedway in Japan. It is based on the gaseous hydrogen-powered H2 Corolla but uses innovative technologies to store and use liquid hydrogen, which has a higher energy density and lower pressurization than gaseous hydrogen.

Liquid hydrogen is an attractive fuel for several reasons:

  • It produces no greenhouse gases when burned, only water vapour.

  • It has the lowest molecular weight of any known substance, making it lighter than air.

  • It burns with extreme intensity at 5,500°F, providing high power and speed.

  • It yields the highest efficiency of any known rocket propellant when combined with an oxidizer, such as liquid oxygen.

However, liquid hydrogen also poses some challenges, such as:

  • It must be kept at -253°C, the temperature of liquefaction, requiring special insulation and cooling systems.

  • It requires trusted partnerships with innovative manufacturers who are willing to take risks and collaborate on new technologies.

  • It faces competition from other alternative fuels, such as electricity and biofuels.

Toyota said it undertook this effort to help create a hydrogen society and to demonstrate its commitment to carbon neutrality and environmental sustainability.

“We’re going to keep pushing the door open to a new future,” said Akio Toyoda, Chairman of Toyota.

Toyota is also working with leading universities in Japan to develop liquid hydrogen technologies and explore the possibilities of this fuel for various applications.

“As a driver myself, I want people to see hydrogen not as a danger but as our future,” Toyoda said.

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