March 13, 2013

NGVs in China – Want one? Buy a lotto ticket

Imagine having to enter a lottery to get access to a natural gas vehicle (NGV). That’s the situation in regions of China where demand is so high that names are drawn to determine who gets to convert their vehicles first.

“Last month in Hefei, capital of Anhui province, the local traffic administration held a lottery to select 3,000 cars - mostly privately owned - from more than 6,000 owners who want to use natural gas as an alternative fuel,” a March 11 article from the People’s Daily Online stated.

Husayn Anwar, President of Westport China, says lotteries are becoming more common in central China, where drivers of personal vehicles are eagerly looking to save money on fuel. He says it’s now common throughout the country for taxis to run on natural gas, and for buses it’s a “must-have.” The savings drivers get from switching are significant since natural gas is 50-70 per cent less than the price of gasoline and a third the price of diesel.

A Forbes article states that in the Southwest city of Chongqing, 85 per cent of taxis and 92 per cent of buses are using a natural gas engine. The rising choice of natural gas over gasoline and diesel is in no small part due to China’s government policy encouraging the switch. According to a Reuters article titled, China's natural gas drive may cut oil demand by a tenth, there is a Beijing-coordinated campaign to fuel more vehicles with natural gas to reduce oil imports and coal dependency.

The cost savings and the availability of fueling stations has translated into nearly 1.5 million natural gas vehicles on the road.

Anwar says that by 2015, there will be around 5,000 natural gas fueling stations across China, half with LNG capability. There are still some challenges due to what he describes as a market that is “too competitive.”

Good technologies are getting priced-out, especially in the smaller vehicle market, he says. Societal status pressures are also affecting sales. “On the coast, NGVs are seen as the poor man’s vehicle, so uptake has been slower.” 

The market is transforming rapidly and factors affecting it today will be moot in the near future.
“From economic, environmental and energy security perspectives it all makes sense,” Anwar says, “NGVs are now a force to be contended with.”

Which is why in central China, many drivers are buying tickets to win the NGV lotto.

Related reading:

No comments:

Post a Comment