Divining the secret of Better Place

IDC Energy Industry Insights Community –

The players in the Plug-in Electric Vehicle (PEV) space are as diverse as an industry can get. Asian manufacturing conglomerates, global automakers, Silicon Valley start-ups and electric utilities are all racing each other to determine the right formula to succeed in this nascent market. One of the major players in this field is Better Place. The Palo Alto-based startup is all too often glibly summarized as "the battery switch guys". A slew of announcements this week, ranging from a new European standards project for switching components to the announcement of the pricing structures for customers in Denmark, wouldn't disabuse anyone's assumptions that Better Place is all about battery switching. But another announcement, which received comparatively less media attention, has a bigger story to tell about what is really behind the Better Place concept.

That announcement had to do with a pilot project in the Toronto area that involves no battery switch stations and a relatively small rollout of vehicles. It starts with six charge spots in the territories of two Ontario municipal utilities (Powerstream and Veridian Connections) as well as a customer experience center in the historic Evergreen Brick Works building. The charge spots will handle networked, managed charging of a small number of PEV's.

And that, in a nutshell, is what Better Place is about: a managed fleet of networked vehicles. The battery switch concept is an important element in the overall management of that fleet, but it is by no means the end of the story. Battery switching is merely a means to overcome the burden of range anxiety. But the real "secret sauce" behind Better Place's plans is the network management software and sophisticated interplay between the cars and the electricity system.

Each Ontario vehicle, when plugged into a Better Place charge spot, will report to a Network Operating Center back in Palo Alto on the state of its battery and an estimation of its upcoming range needs. The management software will then determine, based on the car's information and on the state of the electricity market, how much and how fast to charge the batteries. During peak hours when wholesale prices are high, for instance, the charge rate can be throttled back. At nighttime, the batteries can be quickly filled at full speed.

Battery switching is what Better Place has become known for. But the company should really be thought of as a manager of a network optimized for the needs of the car-owners and for optimization of electricity costs. The switch stations are a technologically impressive part of the overall system, but by no means the whole story.

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