Puget Sound Business Journal
September 1, 2008
Original link to op-ed
Shai Agassi is on a mission to make the world a better place. After helping to sell his family’s software business to the German enterprise software giant SAP for $400 million, he was on track to become its CEO. But after an inspiration about what he could do that would make a difference, not just money, he left SAP to follow a path he believes will transform transportation.
The company he formed, called “Better Place,” aims at replacing gas-powered cars with plug-in electric cars that will get at least 120 miles on a charge, and for longer trips drivers can exchange batteries at a service station in the time it takes to fill a gas tank.
Agassi is off to a fast start. So far he has persuaded the governments of Israel, (the company is based there and in Palo Alto) Denmark and Portugal to provide a framework to make his project work. He has also formed a partnership with Carlos Ghosn, CEO of Nissan and Renault, whose companies will make the cars. In the last month he testified before Congress and has been featured in articles from Thomas Friedman’s New York Times column to Wired magazine.
The essence of his project is to combine the car business with the utility business using advanced software and communications - a systems approach to transportation. Instead of buying an electric car and paying for the electricity separately, he envisions a system where a car buyer subscribes for miles -- like buying minutes with a cell phone plan.
Agassi’s company would take care of the battery and the recharging process, including battery swapping stations at key locations. Under one version, subscribers may receive the car for free or at a nominal cost, like some cell phone plans today.
Replacing gasoline and diesel in cars with electricity makes special sense in Israel, a country ultimately dependent on oil from hostile countries further enriched by every barrel sold on the world market. The domestic electricity to power the cars would come from a smart charging system supplemented with new solar power plants in the Negev desert.
Denmark, with its own domestic oil resources, had a different reason to support an electric car system. Its electric utility makes a higher percentage of wind power - nearly 20 percent - than any other county, but the wind doesn’t always blow. Denmark had reached a point where it could not add more without buying giant banks of expensive batteries to store excess wind power to use at times when there isn’t enough wind. With Agassi’s vision, electric car batteries would be a perfect way to store and distribute clean, renewable Danish wind power while replacing oil in transportation.
What lessons does Agassi’s project have for the United States? Could a similar systems approach cut the Gordian knot that stymies U.S. energy policy and keeps us dependent on oil for 97 percent of our transportation needs?
On Sept. 4 and 5, there will be a conference at the Microsoft campus where Agassi and other experts and policy makers will discuss how to move beyond oil and transform transportation. One focus will be on creating a national demonstration project that could test ways to take a systems approach to plug-in cars. In a way, the Northwest already has a head start on a new transportation model. The U.S. Department of Energy, through the Idaho National Laboratory (INL), has worked with several regional agencies, including the Puget Sound Clean Air Agency, the Port of Seattle, Seattle City Light, King County, the City of Seattle and Tacoma Power, to convert several Prius cars into plug-in versions. Another local company, V2Green, made the communications and software module for the INL conversions that will allow cars to communicate with local utilities running V2Green’s smart grid software, enabling efficient charging at off-peak times.
The Pacific Northwest National Lab, based in Richland, Washington, has reported on the effect of making the grid more efficient through smart plug-in vehicle charging. Energy Northwest, the Port of Chelan, Chelan PUD and others support a Northwest demonstration project. Portland General Electric just rolled out 12 new recharging stations in Portland. The Bonneville Power Administration recently discussed matching intermittent wind power with plug-in cars.
What is needed is a broader pilot project to demonstrate how a systems approach linking cars and utilities with advanced communications and software can work in the United States. It will require federal and state money to launch a test, but each day the U.S. spends nearly $2 billion to pay for imported oil. In Washington State alone we bought 3.6 billion gallons of gas in 2006, paying $9.3 billion, when oil was half the cost it is today. Washington spent more on oil than for K-12 education. We can’t afford not to invest in a system to replace imported oil with domestic electricity.
The Northwest may be the best place in the United States to test a Better Place idea.
STEVE MARSHALL is a nationally recognized expert on energy and transportation issues. BRUCE AGNEW is Policy Director of the Cascadia Center of Discovery Institute. Cascadia, Microsoft and the Idaho National Laboratory are co-sponsoring a conference on September 4-5 at the Microsoft Redmond campus on Beyond Oil: Transforming Transportation. For more detail see www.cascadiaproject.org