Thursday, December 11, 2008

Making Earth a Better Place.

I came to know about Better Place through an article in today’s The Indian Express. When the price of crude had reached an all time high of more than $100 per barrel a few months back, I got interested in alternative technologies that are going to power our transportation in the times to come.

So, when I came across this The Indian Express article titled “We don’t need Detroit” by Thomas L. Friedman, I read it at once. In the article, Friedman argues how the recent attempts of the US Government to bail out the American automobile giants from bankruptcy might be a case of ‘pouring billions of dollars into improving typewriters on the eve of the birth of the PC.’ He points out towards Better Place, an Israeli start up, trying to create a transportation service model based on electric vehicles and robust enough to free the human kind of its dependency on oil.

The world is afraid both of its energy security (due to the fast depleting fossil fuel reserves) and worsening climatic conditions; and the transportation industry being one of the biggest culprits, the most workable solution is to shift to the vehicles powered by electricity (preferably generated from renewable resources like wind and sun, to which Better Place claims to be committed). While the vehicles and high power lithium based batteries already exist, it is the infrastructure required to support such transportation on a large scale that is lacking. So, while a person willing to reduce his carbon footprints may switch over to electric vehicles, he continues to depend on the conventional transportation, as his vehicle has a limited electricity storage capacity that cannot last after a certain distance, thus reducing his mobility.

It is here that Better Place comes into picture. Its business model is simple. In fact it already exists, but in a different sector - in the sector of mobile phones. The mission of Better Place is to modify and apply this business model in the field of transportation. It envisions a system where electric cars replace mobile phones, battery recharge stations replace cell towers and electric recharge grid replaces cellular networks. While in the mobile phone system, the consumer pays for the minute-by-minute access to cell towers connected together in cellular networks, in the Better Place model, he pays for miles.

There are basically two important ingredients in this business model –
i) Charging Spots, and
ii) Battery Exchange Stations.

Charging Spots:

Located all over the places such as parking garages, retail spaces, street curbs and the homes, these will keep the batteries topped off. All the vehicles in the BP network will have the same kinds of plug points. Vehicles that do not belong to the network will be allowed to charge themselves as guests with the help of suitable converters.

Battery Exchange Stations:

These are the replacements of Gas Stations (or Petrol Pumps) in the BP model. An electric vehicle will go to these Stations and exchange its exhausted battery with a fully recharged one and pay for the same, the driver all the while sitting comfortably in his driving seat. The company claims that the time needed for doing all this will be a flat 3 minutes.

The model obviously is not only good for the nations, who eventually free themselves from their dependency on oil (a large chunk of which comes from Middle East) and for the vehicle owners (as electric vehicles cost much less per mile than those run on fossil fuels), but also for the development of the non-renewable energy sector - Better Place envisions that all the vehicles under its fold will run on electricity generated from renewable resources and as the model expands in its reach, it will open up a vast market for the renewable energy, thus persuading the sector to find out more innovative and cheaper methods to produce the same.

International Collaborations:

Israel has fixed the year 2020 to free its economy of its dependency on oil, thus becoming the first country all over the world to set up such a target. While Israel and Denmark have become the first two country partners for Better Place, Australia, California and Hawaii (as Better Place site mentions) are also committed to deploy electric car networks. Moreover, very recently Japan also invited Better Place to build Battery Exchange Stations in the country and to participate in a government pilot project to encourage the use of green cars, thus making it the only foreign company invited to participate in the project in which major Japanese automobile giants are going to participate.

What India should do?:

India can also reach out to Better Place and ask it to start a similar pilot project here. We have a well developed electric vehicle segment that comprises not only four wheelers but also two wheelers. While the home grown Reva is the highest selling electric car all over the world (performing far better in European nations than in India due to the lack of adequate infrastructure and incentives here), even groups such as Ajanta (surprised?), one of India’s leading manufacturers of compact fluorescent lamps and vitrified tiles, besides large players such as Tatas, are also going to enter this segment not very far in the future. Moreover, India does need to get rid of its oil dependency not only because importing crude creates a huge hole in its foreign exchange (most of which comes from highly volatile and unreliable Middle East), but also because some of our cities are some of the most polluted the world over. Besides, why should we not tap aggressively into our highly abundant solar energy resources (Remember, we are a hot country with a great amount of sunshine) and wind power (of which we are one of largest producers the world over)?

Human race, it seems (if one believes the still highly debated scientific reports), has very less time left to battle the ever worsening climatic situations. There is not much time to experiment, but to start putting up all the available resources and working towards making our planet a more livable and Better Place. Initiatives like Better Place can help us tide over a lot of problems that are our own creations, given they get proper support and start operating profitably as soon as possible.

P.S. –

A. Jews and Israelis are no doubt one of the most brilliant races and have contributed a lot towards the development of Sciences and Human Knowledge. What is truly refreshing about this Indian Express article is that it appears at a time when India is still trying to chart out ways to deal with the new age terrors and the newspapers are still covered with news regarding the Mumbai Attack, in which Jews were specifically targeted.
B. The article also points to the fact that Israel is a country in the pursuit of Science and Scientific solutions to the problems of the human race, something which the rest of the Middle East seems to have completely abandoned. It may be one of the main reasons why Israel may succeed despite being in a perpetual state of war with its immediate neighbours.

Suggested Readings:

The Long Tailpipe – Blog of Shai Agassi (Founder and CEO, Better Place)
While Detroit Slept – This is the article published in The Indian Express (and published earlier in The New York Times). Since I could find it on The Indian Express website, I am providing the link of The New York Times.

Some Indian electric vehicle companies:

Ajanta Manufacturing Limited


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