Big Oil, meet Big Electric.
Houston’s title as the world’s Energy Capital will gain a bit more luster when the city becomes home to the nation’s largest network of electric vehicle chargers.
Power plant operator NRG Energy will unveil plans today to install 150 charging stations within 25 miles of downtown Houston and offer monthly plans for in-home chargers as a way to ease consumers into the idea of buying one of the many new electric vehicles scheduled for production in the next few years.
The privately funded network will include chargers at local Walgreens, BestBuy and other stores, as well as near offices, allowing owners of electric vehicles — EVs — to shop or work while their rides charge up.
But it’s expected 80 percent to 90 percent of EV charging will occur at home. That’s why NRG is offering three monthly plans that include installation of 240-volt home charging systems. A high-end $89-per-month plan will cover all the electricity costs for charging both at home and at the public stations.
“It will be a comprehensive network so that when you need a charge you can find a charger quickly and conveniently,” said Arun Banskota, president of NRG EV Services, which operates out of a former Hummer dealership on the Katy Freeway.
NRG will install the units starting in February with plans for most of them to be in by the summer. The company plans a similar rollout in Dallas in early 2011 and is talking to the utilities in San Antonio and Austin about networks in the future.
Austin and San Antonio have city-owned electric utilities, so some aspects of creating charging networks there would be different, Banskota said.
NRG’s charging business likely will be a money-loser for several years. Relatively few EVs are on Houston-area roads now, the next generation of highway-ready EVs are being built in relatively small batches and their high price tags will limit their market.
But the $10 million in up-front cost for NRG is modest compared to the hundreds of millions the company spends on power plants, said CEO David Crane.
“It is a bit of a Field of Dreams strategy,” Crane said, referring to the ‘If you build it they will come’ mantra from the 1989 Kevin Costner film. “It will be several years before the investment pays off.”
Widespread use of electric vehicles has been promised repeatedly in the past, most recently in the mid-1990s when General Motors rolled out the EV1 in California. But EV advocates believe the promise is real this time for two reasons: better batteries and higher gasoline prices.
Today’s battery technology can carry passenger cars at highway speeds for up to 100 miles on a single charge. The average American commute is about 40 miles round-trip — 42 miles for downtown Houston workers, according to a 2009 study done by Central Houston, a nonprofit corporation that promotes downtown.
That means the new generation of EVs coming out in the next year could handle the weekday travel needs of most Americans.
During the 1990s gasoline was under $1 a gallon, but today the national average is $2.82, and it hit $4 during a surge in 2008.
The public chargers likely won’t be used much for the first couple of years, Banskota said, as car companies are rolling out new EVs on a limited basis. Chevrolet has plans for just 10,000 of its gasoline-electric Volts in the first year, for example.
“But you’ve got to have those chargers out there and visible to help drivers get over the issue of ‘range anxiety,’” says Banskota. “You need that insurance policy to drive EV purchases.”
The range anxiety issue is familiar to Crane, who has owned an all-electric Tesla for almost a year-and-a-half. The luxury EV roadster has a range of 200 miles on a single charge. But for the first few months he didn’t feel comfortable driving the 40 miles to the Philadelphia airport he uses most often to travel from NRG headquarters in Princeton, N.J.
“But that unwillingness was really like not driving your regular car once it got below two-thirds of a tank,” Crane said.
EVs have lower operating costs than gasoline powered vehicles because they require less maintenance and the per mile fuel costs are much less — as little as one-quarter of the cost per mile by some calculations.
But even with the service plans NRG is rolling out, electric vehicles won’t beat the costs of conventional vehicles because of significantly higher purchase prices. The Volt is priced at about $41,000, or $33,500 after a federal tax credit. The comparably sized Chevy Cruz costs about $19,000.
Dan Kish, senior vice president of policy for the Institute for Energy Research, a nonprofit think tank with close ties to the energy industry, estimates it would take 31 years for a Volt to match the cost of a Cruz, based on $4 gasoline and 15,000 miles of driving per year.
Matt Mattila, manager of Project Get Ready, an electric vehicle initiative by the left-leaning think tank the Rocky Mountain Institute, said the NRG initiative sounds different from most of the other efforts he’s seen in other cities.
“Some are experimenting with owning some infrastructure, but none, as far as I know, at this level of scale and service,” he said.
A recent ranking of cities on their “readiness” for electric vehicles done for the Rocky Mountain Institute put Houston in the second tier as an “aggressive follower.” Mattila said the NRG plans could change that ranking.
Peter Bishop, a professor of futures studies at the University of Houston who has studied how technology develops, says generally the only way widespread adoption of EVs will occur is through incremental steps over time.
“Short of a huge government mandate, it will require lots of baby steps by the private sector,” Bishop said. “Taking baby steps is what the private sector is good at.”