Westport at Work on Incentives

Federal and state incentive programs, in the form of grants, rebates and tax credits are becoming a valuable tool to encourage fleets to purchase natural gas vehicles. 

Incentives help reduce the incremental cost of a natural gas vehicle, and decrease the payback time. We explored this topic in a previous blog post.

Westport works with its customers to guide them through the process of successfully applying for vehicle incentive funding.

Several programs are available to help fleets. Currently, California, Texas and Pennsylvania have the most robust incentive programs for both heavy haul and automotive sectors – many other states offer ongoing incentive programs through tax credits or vehicle rebates.

Valerie Parr, Westport’s Grants Analyst, helps customers complete grant applications in the state or province in which they operate. 

“Government agencies offering incentives are working to get older, less clean technology off the road,” she says. “These programs illustrate how deployment of natural gas vehicles and infrastructure build-out are being encouraged at the federal, state and provincial levels and ultimately propel the transportation industry towards cleaner opportunities.”

Grant applications are evaluated based on specific criteria, such as the age of the vehicle being replaced, expected distance travelled and emissions that will ultimately be reduced. Applications require some calculations and a plan demonstrating how fleets will save fuel and reduce emissions. Many programs have goals to reduce emissions within “non-attainment areas” – areas which have the worst emissions, often near ports or large cities.

Valerie says applications often require proof of how much time a fleet is spending in the designated non-attainment areas; reporting to the funding agency for a few years after the vehicle purchase is standard. Some programs are open for a limited time, often only eight weeks is provided to get applications in, while others are open for nine months.

The recently-announced New York Truck Voucher Incentive Program is designed as first-come, first-served until the total amount of funds is exhausted. Kate Muller, Director of Communications, says the goal of the program is to encourage the adoption of new cleaner technologies by reducing the cost to the consumer.

“These early sales help to reduce the price of future vehicles by creating economies of scale in production,” she says. “The New York State Energy Research and Development Authority (NYSERDA) estimates that this program could encourage the purchase or retrofit of up to 1,000 low-emission trucks in areas of the state with the poorest air quality.”

It includes six million in vouchers of up to $40,000 for the purchase or lease of an alternatively-fuelled vehicle, including a compressed natural gas (CNG) vehicle, in New York City.

Westport also works with agencies, such as the Texas Commission for Environmental Quality to ensure our vehicles meet specifications required to qualify for natural gas-related grants, rebates or tax credits. For certain state incentive programs, vehicles must meet EPA and CARB certification standards in order to qualify.

Andrea Morrow, spokesperson for The Texas Commission on Environmental Quality, says the program has been an effective way to encourage the transition to cleaner vehicles powered by alternative fuels.

“In the last ten years, the program awarded more than $858 million for the upgrade or replacement of 14,685 heavy-duty vehicles, locomotives, marine vessels, and pieces of equipment,” she says. Upgrades or replacements included natural gas and diesel.

Westport has a list of all the available incentives in North America, updated regularly to ensure up-to-date information, available here.

Renewable Natural Gas in the United States: Potential and Ambition

This is the fourth in a series of blog posts that highlight the market and environmental potential of renewable natural gas (RNG). 

Image courtesy of the European Commission.

In this post we turn from how renewable natural gas (RNG) supports sustainable transport in Europe to its role in the United States. Policy support for renewable and low-carbon fuel for transportation in the U.S. has concentrated on liquid biofuels. In the absence of similar policies for RNG, several firms across the U.S. have taken the lead to capture RNG and use it in their fleets.

RNG has vast potential across the U.S. The American Gas Foundation estimates that anaerobic digestion together with thermal gasification has the potential to replace 45 percent of the 38 billion gallons of diesel fuel consumed annually across the country.  Blended with current conventional natural gas resources, this volume of RNG can contribute to greenhouse gas (GHG) emission reduction targets and fuel security objectives.

Federally, the Environmental Protection Agency’s (EPA) historical focus on air quality impacts from biogas sources provides a foundation of experience for the development of RNG infrastructure. Landfills, dairy operations and municipal solid waste streams are the most promising commercial sources of biogas – EPA has long regulated such sources and required recovery and combustion of landfill gas to improve local air quality.   Increasingly, these sources are considered prime targets for methane capture and energy for transportation.

Beyond EPA requirements, Renewable Portfolio Standards (RPS) in various states typically encourages waste methane capture for electricity generation. However, without similar   transportation policies, much of the RNG potential in the U.S. remains just that: according to Energy Vision, of 541 landfill methane capture systems in place across the U.S., only five use the resulting gas for vehicle fuel, and EPA counts another 501 sites as viable methane capture opportunities. 1,500 waste water facilities recover biogas and another 2,000 are considered ideal candidates, and 186 farms have anaerobic digestion facilities, while a further 6,900 could economically produce renewable gas.

RNG’s potential contribution to environmental and climate goals is shown by California’s Low Carbon Fuel Standard (LCFS) for vehicle fuels. It sets standards for the overall carbon intensity allowed for all fuels sold in the state (a declining share over time) and gives fuel providers flexibility to use a range of alternatives - including conventional natural gas and RNG. Under California’s LCFS, waste feedstocks made up less than 1 percent of biofuel volumes in 2012, yet generated 10 percent of all biofuel credits due to their exceptionally low carbon intensity.  In other words, RNG made from wastes – which is nearly all sources currently suitable for transportation – helps fleets and fuel providers achieve tremendous progress toward meeting the standard.

Early adopters of RNG for transportation are often companies who already handle feedstocks and see the benefits of converting waste (which carries a cost) into a fuel that powers their businesses. Examples are:

• Fair Oaks Farms - a dairy producer in Indiana that generates 865 MMBtu or just under 5,900 Diesel Equivalent Gallons of RNG every day from their 11,000 cows, fueling 53 daily deliveries of milk, resulting in $2.5 million annual fuel savings, and GHG emissions reductions of more than 16,500 tonnes.

• The Altamont Landfill in California says it’s the largest RNG for transportation operation in the world, powering nearly 400 garbage trucks with fuel produced from the waste it hauls.  Operated by Waste Management, the facility has been recognized by the EPA, the U.S. Department of Energy and the State of California, among others, for their sustainability leadership.

• Similar projects include Rodefeld Landfill in Dane County, Wisconsin, which powers nearly 30 vehicles by waste-derived RNG, and the Janesville Wastewater Plant in   Wisconsin, which has produced biogas since 1970 and added a facility in 2011 to bring it to vehicle-quality standards. It plans to power over 40 vehicles by 2022.

These examples of “self-fuelling” systems show the many ways RNG can help firms reduce transport fuel costs, reduce their energy footprint, and make a substantial contribution to climate and environmental goals.

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[1] American Gas Association, “The Potential of Renewable Natural Gas: Biogas Derived from Biomass Feedstocks and Upgraded to Pipeline Quality” (2011).
[1]Environmental Protection Agency, “Landfill Methane Outreach Program” accessible via: http://www.epa.gov/lmop/faq/public.html. Directly venting methane has a more potent climate impact than carbon dioxide (converted through combustion and flaring).
[1] Energy Vision, “Renewable Natural Gas (RNG): The Solution to a Major Transportation Challenge” (2012).
[1] Sonia Yeh, “Status Review of California's Low Carbon Fuel Standard Spring 2013 (REVISED VERSION)”, UC Davis Institute of Transportation Studies Research Report (2013).
[1] 1 MMBTU of natural gas = 6.81 Diesel Equivalent Gallons
[1] Innovation Center for US Dairy, “Case Study: Dairy Power” available at http://www.usdairy.com/Public%20Communication%20Tools/DairyPowerCaseStudy_RenewableEnergy.pdf
[1] Energy Vision (2012).
[1] Waste Management, “Altamont Landfill”: http://altamontlandfill.wm.com/index.jsp
[1] Energy Vision (2012).

NGVs: What IS the payback time?

Natural gas is making headlines as the newest transportation fuel of choice. The New York Times and Bloomberg both recently reported on large companies, such as FedEx and AT&T Inc., switching to natural gas vehicles (NGVs) for their fleets.

Amidst this activity, there have also been varying estimates about the amount of time it takes to recoup the extra initial cost of purchasing an NGV from the savings gained from filling up with either compressed natural gas (CNG) or liquefied natural gas (LNG) as compared to diesel or gasoline.
Media outlets quote sources as saying it takes anywhere from six months to eight years. It’s worthwhile to consider payback times carefully, given it’s a key factor in the decision-making process to transition a fleet to natural gas.

Brad Edgelow, Westport’s Senior Director of North American Sales, outlines some of the key factors in determining how long and how much the payback will be for a company’s specific requirements:

• What is the differential in cost between the original fuel (gasoline or diesel) to the new fuel (CNG or LNG) in energy equivalent units?
• What is the incremental cost of buying a natural gas truck? This calculation can vary since some states or provinces offer tax incentives. The U.S. Department of Energy’s Alternative Fuels Data Centre is a great resource for determining tax incentives in the U.S.
• What is the total fuel consumed in one year? This calculation is based on miles driven and fuel economy. Note idle hours, if they exist in large amounts, should be converted to miles driven at the rate of 32 per hour for gasoline engines and 20 for diesel engines.

Edgelow says every customer has to assess what he/she currently pays for a diesel gallon and what they would pay for an LNG/CNG gallon based on their location since prices vary between stations, states and provinces. For instance, according to this Wisconsin State Journal article, average prices by state for CNG range from a low of $1.20 in Oklahoma to $3.34 in Connecticut.

Payback Calculation: Pickup Trucks

Let’s break it down:

• The upfront, additional cost of a CNG-powered pickup is $9,500.
• A truck driving 30,000 miles (48,000 kilometres) per year getting 15 miles (24 kms) per gallon (3.7 litres) on gasoline uses 2,000 gallons of fuel per year.
• Assumption: Gasoline price is $3.50 and CNG price is $1.50 
• $2 per gallon difference x 2000 gallons used = $4000 estimated per year in savings.  
• Estimated payback time = 28 months.

Here’s our payback calculator for the Westport WiNG™ Ford pick-up series of trucks where you can make your own calculations.

A Real Life Example: REV LNG

REV LNG is a Pennsylvania-based LNG distribution company that supplies on and off road customers with LNG. The company designs and implements LNG fueling systems for companies and hauls materials for the oil and gas sector. They own 17 Peterbilt 18-wheeler trucks that are fueled with LNG, purchased since 2011.

President and COO, Preston Hoopes says since they operate their trucks 24 hours a day, they are experiencing an 18 month payback time period. In his experience, the payback time has ranged from 18 months to three years, depending on how many hours a company runs its trucks.

“We thought we’d get ahead if we ordered natural gas trucks,” Hoopes says. “A lot of our clients have been calling and asking about how they can go green. Since we run our own fleet of LNG trucks, we can tell them exactly what it’s like.”

The company has over one million documented miles on natural gas tractors and was one of the first trucking operators to convert their traditional diesel fueled trucks to natural gas in Pennsylvania. They were operating a natural gas fleet before an LNG fuel station was commissioned in the state.

“We’re using the trucks ourselves, so when our clients ask us what it’s like to actually drive them, we can speak from experience,” Hoopes says.

Additional Resources:

Information about tax incentives for NGVs in North America

Fuel Cost Calculator from Cummins Westport:
http://www.cumminswestport.com/fuel-quality-calculator
A Map of North American On-Road Incentives:
http://www.cumminswestport.com/pdfs/general/North%20American%20Incentives%20Map_May%202013.pdf
http://www.cumminswestport.com/incentives
Clean Energy CNG/LNG Station Locator:
http://www.cnglngstations.com/
CNG Now Station Locator:
http://www.cngnow.com/stations/Pages/information.aspx

Route 66: California’s Roadmap to Cleaner Transportation

On March 26, over 100 people met in Sacramento to help design a draft ‘roadmap’ for California to meet its 2020 and 2050 climate protection, air pollution and energy security goals.

The forum, California’s Route 66 to Clean and Efficient Trucks, was organized by CalHEAT: the California Hybrid, Efficient and Advanced Truck Research Centre. CalHEAT is a project of CALSTART – a California, member-based organization of over 140 firms, agencies and fleets worldwide that supports a growing high-tech, clean transportation industry.

“During the day-long dialogue among the industry, funding providers and regulators, ideas and actions were presented as to how best go forward to meet the state’s environmental goals as they relate to medium and heavy duty vehicles,” said Fred Silver, CALSTART Vice President and CalHEAT Program Director. “The Forum and the CalHEAT Roadmap are just the beginning of the process with much more yet to accomplish.”

Westport’s Mark Dunn, Senior Director of Technology, attended the forum and said the roadmap shows how crucial it is for the heavy duty truck segment to effectively reduce carbon and nitrogen oxides.

In California, for instance, there are 175,000 on road tractors that comprise 12 per cent of the truck population and emit 38 per cent of the state’s carbon emissions.

“It was a broad-based look with many contributing participants,” Dunn said of the roadmap. “It highlights how important natural gas is to reducing emissions in the trucking sector.”

The roadmap suggests various technology strategies to reduce emissions, including optimized engines for alternative fuel, improved truck aerodynamics, more efficient drivelines and the use of longer, heavier single trucks to cut down the overall number of trucks on the road.

The draft roadmap states:

Natural gas is an enabling fuel for meeting lower nitrogen oxide emissions, and will become increasingly important as the Southern California and the Central California valleys endeavor to meet strict ozone standards driving us towards zero and near zero emission solutions. 

“It’s really interesting,” Dunn said, “ten years ago, you didn’t hear these types of discussions happening.”