It may soon be time to start thinking about German automobile manufacturer Volkswagen AG (OTCQX:VLKAY) in a brand new way.
For that matter, it may soon be time to think about Honda Motor (NYSE:HMC), Toyota Motor (NYSE:TM), Ford Motor (NYSE:F) and other car giants as more than just car and truck companies. If this happens, it will also be time to think about a major new threat to many traditional electric utility companies, as well as a major market expansion for natural gas providers and a major new reason to believe in the future of green power.
That’s a lot to think about, but when you analyze a new VW project in Germany, it’s not hard to imagine sweeping change in how household electricity, heat and hot water is provided throughout the developed world.
VW has teamed up with privately-held, independent German energy supplier Lichtblick on a project to supply combined heat and power (CHP) units to 100,000 German homes. Lichtblick’s “Ecoblue” CHP units will be driven by natural gas-fueled engines from VW. The units will supply power on demand, thereby providing the backup power that will help keep the world’s green power-connected grids stable when the sun isn’t shining and the wind isn’t blowing.
Altogether, those 100,000 EcoBlue’d homes reportedly will have the equivalent output of a huge 2,000-megawatt (MW) centralized power plant. But as a “virtual, decentralized” power plant, the EcoBlue units won’t cost as much. Also, since they’ll be fueled by natural gas, they won’t pose the environmental threat of a large coal-fired power plant. This network of CHP’ed homes also will provide a cost-effective alternative to large-scale battery and flywheel-based storage systems for preventing grid instability when 20% or more of everyone’s electricity comes from green power sources, as will be required in many countries and U.S. states within five to 10 years.
Another natural advantage of VW’s project is that CHP is far more efficient than centrally-dispatched power. Still another is that because these CHP units will also provide heat, they’ll reduce the need to heat with oil, which will help break the world’s “addiction” to oil. (They’ll also provide a handy source of electricity for plug-in vehicles, which also are going to reduce the world’s oil dependence.)
Honda, too, is powering ahead with a residential-sized home power unit, and it’s easy to see other technologically-attuned car companies jumping in as more electric vehicles come to market. This should increase natural gas usage at a time when the U.S. in particular has more to use.
The losers? Electric utility distribution companies that aren’t “combo” electric and natural gas deliverers could see a lot of ratepayers bolt