[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                      ENERGY STORAGE TECHNOLOGIES:
                        STATE OF DEVELOPMENT FOR
                        STATIONARY AND VEHICULAR
                              APPLICATIONS

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                              ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 3, 2007

                               __________

                           Serial No. 110-61

                               __________

     Printed for the use of the Committee on Science and Technology


     Available via the World Wide Web: http://www.science.house.gov

                                 ______


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                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                 HON. BART GORDON, Tennessee, Chairman
JERRY F. COSTELLO, Illinois          RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas         F. JAMES SENSENBRENNER JR., 
LYNN C. WOOLSEY, California              Wisconsin
MARK UDALL, Colorado                 LAMAR S. SMITH, Texas
DAVID WU, Oregon                     DANA ROHRABACHER, California
BRIAN BAIRD, Washington              ROSCOE G. BARTLETT, Maryland
BRAD MILLER, North Carolina          VERNON J. EHLERS, Michigan
DANIEL LIPINSKI, Illinois            FRANK D. LUCAS, Oklahoma
NICK LAMPSON, Texas                  JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
JERRY MCNERNEY, California           JO BONNER, Alabama
LAURA RICHARDSON, California         TOM FEENEY, Florida
PAUL KANJORSKI, Pennsylvania         RANDY NEUGEBAUER, Texas
DARLENE HOOLEY, Oregon               BOB INGLIS, South Carolina
STEVEN R. ROTHMAN, New Jersey        DAVID G. REICHERT, Washington
JIM MATHESON, Utah                   MICHAEL T. MCCAUL, Texas
MIKE ROSS, Arkansas                  MARIO DIAZ-BALART, Florida
BEN CHANDLER, Kentucky               PHIL GINGREY, Georgia
RUSS CARNAHAN, Missouri              BRIAN P. BILBRAY, California
CHARLIE MELANCON, Louisiana          ADRIAN SMITH, Nebraska
BARON P. HILL, Indiana               PAUL C. BROUN, Georgia
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
                                 ------                                

                 Subcommittee on Energy and Environment

                   HON. NICK LAMPSON, Texas, Chairman
JERRY F. COSTELLO, Illinois          BOB INGLIS, South Carolina
LYNN C. WOOLSEY, California          ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois            JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
JERRY MCNERNEY, California           RANDY NEUGEBAUER, Texas
MARK UDALL, Colorado                 MICHAEL T. MCCAUL, Texas
BRIAN BAIRD, Washington              MARIO DIAZ-BALART, Florida
PAUL KANJORSKI, Pennsylvania             
BART GORDON, Tennessee               RALPH M. HALL, Texas
                  JEAN FRUCI Democratic Staff Director
            CHRIS KING Democratic Professional Staff Member
        MICHELLE DALLAFIOR Democratic Professional Staff Member
         SHIMERE WILLIAMS Democratic Professional Staff Member
         ELAINE PAULIONIS Democratic Professional Staff Member
          ADAM ROSENBERG Democratic Professional Staff Member
          ELIZABETH STACK Republican Professional Staff Member
                    STACEY STEEP Research Assistant


                            C O N T E N T S

                            October 3, 2007

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Bart Gordon, Chairman, Committee on 
  Science and Technology, U.S. House of Representatives..........     8
    Written Statement............................................     9

Statement by Representative Nick Lampson, Chairman, Subcommittee 
  on Energy and Environment, Committee on Science and Technology, 
  U.S. House of Representatives..................................     6
    Written Statement............................................     7

Statement by Representative Bob Inglis, Ranking Minority Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................     7
    Written Statement............................................     8

Statement by Representative Jerry F. Costello, Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................    10

                                Panel I:

Ms. Patricia A. Hoffman, Deputy Director R&D, Office of 
  Electricity Delivery and Energy Reliability, Department of 
  Energy
    Oral Statement...............................................    10
    Written Statement............................................    12
    Biography....................................................    16

Mr. Bradford P. Roberts, Chairman, Electricity Storage 
  Association
    Oral Statement...............................................    16
    Written Statement............................................    18
    Biography....................................................    20

Mr. Larry Dickerman, Director, Distribution Engineering Services, 
  American Electric Power
    Oral Statement...............................................    20
    Written Statement............................................    21
    Biography....................................................    29

Mr. Thomas S. Key, Technical Leader, Renewables and Distributed 
  Generation, Electrical Power Research Institute
    Oral Statement...............................................    29
    Written Statement............................................    31
    Biography....................................................    33

Discussion
  Energy Storage to Reduce Electricity Congestion................    34
  Government Role in Energy Storage Deployment...................    35
  Grid Modernization.............................................    35
  Ancillary Power Services.......................................    35
  State Energy Storage Policies..................................    36
  Fuel Cells for Energy Storage..................................    36
  Ultracapacitors and Fuel Cells.................................    37
  Rating Storage Technology......................................    39
  Foreign Energy Storage.........................................    40
  NAS Battery Technology.........................................    41
  Preventing Others From Capitalizing on U.S. Inventions.........    41
  Deploying Technology in the U.S................................    42
  Alternative Energies...........................................    42
  Thermal Storage Technologies...................................    42
  Recycling Battery Technologies and Environmental Issues........    44
  Twenty in Ten Plan.............................................    45
  Solar Technology and Energy Trading............................    46
  Hybrid Electric Development Time...............................    47
  The Proposed Legislation.......................................    47
  Status of Battery Technology...................................    48

                               Panel II:

Ms. Lynda L. Ziegler, Senior Vice President, Customer Service, 
  Southern California Edison
    Oral Statement...............................................    49
    Written Statement............................................    51
    Biography....................................................    52

Ms. Denise Gray, Director, Hybrid Energy Storage Systems, General 
  Motors Corporation
    Oral Statement...............................................    53
    Written Statement............................................    54
    Biography....................................................    57

Ms. Mary Ann Wright, Vice President and General Manager, Hybrid 
  Systems for Johnson Controls; Leader, Johnson Controls-Saft 
  Advanced Power Solutions Joint Venture
    Oral Statement...............................................    58
    Written Statement............................................    59
    Biography....................................................    65

Discussion
  Government Accelerating Industrialization......................    65
  Government and Battery Manufacturer Partnerships...............    66
  Participants in Vehicle-related R&D............................    66
  Chevy Volt.....................................................    67
  GM Allocation of Resources.....................................    68
  Energy Storage Devices.........................................    68
  Simplifying Hybrid Systems.....................................    69
  Southern California Edison Partnerships........................    70
  Domestic Manufacturing of Batteries............................    70
  Purchasing Plug-in Hybrids.....................................    73
  Plug-in Hybrids for Consumers..................................    74
  Hybrid Emissions...............................................    74
  Raw Material Supplies for Batteries............................    75

              Appendix: Additional Material for the Record

Discussion Draft, October 1, 2007................................    78


 ENERGY STORAGE TECHNOLOGIES: STATE OF DEVELOPMENT FOR STATIONARY AND 
                         VEHICULAR APPLICATIONS

                              ----------                              


                       WEDNESDAY, OCTOBER 3, 2007

                  House of Representatives,
            Subcommittee on Energy and Environment,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:10 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Nick 
Lampson [Chairman of the Subcommittee] presiding.


                            hearing charter

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                     U.S. HOUSE OF REPRESENTATIVES

                      Energy Storage Technologies:

                        State of Development for

                        Stationary and Vehicular

                              Applications

                       wednesday, october 3, 2007
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

PURPOSE

    On Wednesday, October 3, 2007 the Subcommittee on Energy and 
Environment of the Committee on Science and Technology will hold a 
hearing to receive testimony on the state of developing competitive 
energy storage systems for both stationary and vehicular applications 
and the role for the Department of Energy's (DOE) research and 
development programs in supporting the development of these systems.
    There are significant economic and environmental benefits for 
improving the Nation's energy storage capability. Broad deployment of 
energy storage technologies can help to improve the operational 
efficiency and reliability of our electricity delivery system, and 
allow for more diversified electricity sources and vehicle models that 
utilize less conventional liquid fuel, have lower emissions, and 
address concerns about global climate change. However, there is concern 
that the U.S. is falling behind in the race to develop and manufacture 
a wide range of energy storage technologies, and a significant effort 
is underway to build up a domestic energy storage industry for both 
stationary and vehicular applications.
    The Subcommittee will hear testimony from two panels of witnesses. 
The first panel will focus primarily on stationary energy storage 
technologies, and the second panel will emphasize the state of storage 
technologies for applications in vehicles. The first panel will be 
comprised of representatives from the Department of Energy, the 
Electricity Storage Association, an electric utility, and the Electric 
Power Research Institute. The second panel will consist of 
representatives from the automobile and battery manufacturing 
industries, as well as a second electric utility witness who can speak 
to the potential for integrating the electricity and vehicles sectors.

WITNESSES

Panel One:

Ms. Patricia Hoffman, Deputy Director Research and Development, U.S. 
Department of Energy Office of Electricity Delivery and Energy 
Reliability. She will discuss the Department's programs to advance 
stationary electricity storage and how it relates to the electric grid. 
She will also provide information regarding the Department's activities 
on storage technologies for automobiles.

Mr. Brad Roberts, Chairman, Electricity Storage Association. He will 
discuss the state of stationary storage technologies and the various 
benefits of developing and commercializing storage technologies on a 
wider scale.

Mr. Larry Dickerman, Director Distribution Engineering Services for 
American Electric Power. He will speak to AEP's announcement to expand 
use of stationary electricity storage and the main benefits realized by 
storage investment.

Mr. Tom Key, Technical Leader, Renewable and Distributed Generations, 
Electric Power Research Institute. He will discuss the role that 
electric energy storage plays in the power delivery system today and in 
the future.

Panel Two:

Ms. Lynda Ziegler, Sr. Vice President for Customer Services, Southern 
California Edison. She will discuss the company's initiatives to 
advance electric vehicles in the marketplace.

Ms. Denise Gray, Director Hybrid Energy Storage Systems, General 
Motors. She will speak to the state of battery technology development 
for vehicles, as well as General Motors views as to how vehicle 
electrification fits into a portfolio of advanced vehicle technologies

Ms. Mary Ann Wright, Vice President and General Manager Hybrid Systems 
for Johnson Controls, Director of Advanced Power Solutions, a Johnson 
Controls and Saft joint venture. She will discuss the electrification 
of vehicles through advanced battery systems, and reducing their costs 
through advances in manufacturing technology, enhancing our domestic 
supply base, and establishing demonstration fleets.

BACKGROUND

Stationary Storage Technologies
    Today, electricity is generated as it is used, with very little 
electricity being stored for later use. While this system has worked 
for decades, it is not very efficient. Demand for power varies greatly 
throughout the day and throughout the year as demands for lighting, 
heating and cooling fluctuate through the seasons. Because the capacity 
for generation of power matches the consumption of power, the 
electricity supply system must be sized to generate enough electricity 
to meet the maximum anticipated demand, or peak demand. This 
inefficiency becomes more evident when considering that it is possible 
that the peak electricity demand for any given year could be for a very 
short period--a few days or even hours. Rather than maintain massive 
generation systems that are designed around a short-lived peak demand, 
energy storage technologies would provide a means to stockpile energy 
for later use and essentially reduce the need to generate more power 
during times of peak electricity demand. Generally, energy storage 
systems could be charged at night during off-peak consumption hours and 
then discharge the energy during peak demand. Using our generation 
capacity at night time to store energy for use during the day is more 
efficient, cheaper, and helps to equalize the demand load.
    The expanded use of energy storage would also help to avoid the 
need to upgrade transmission and distribution facilities as well as 
reduce the need to run certain generation plants that may have higher 
operating costs and/or have a poor emissions profile. Energy storage 
also can improve reliability by providing an alternate source of power 
during an outage of the primary power source.
    Advances in energy storage technologies are often regarded as key 
to increasing the reliability and widespread use of many renewable 
energy technologies. Renewables such as wind and solar produce 
electricity only when wind speeds are high enough and sunlight is 
bright enough to generate power. Strategically distributed storage 
would permit electricity from these renewable sources to be stored and 
used during times of high demand or low resource availability.
    Together, all of these potential benefits from broad deployment of 
energy storage technologies would help to improve our energy security. 
Because our economy relies heavily on an affordable and reliable 
electricity delivery system, the energy security benefits achieved from 
greater use of energy storage systems could be significant.
    There are a number of promising energy storage technologies being 
developed, but they are not all at the same stage of development and 
certain storage systems are better suited for specific purposes. 
Described below are some of the more promising technologies:

Pumped Hydropower--water is pumped into a storage reservoir at high 
elevation during times when electricity is in low demand and relatively 
inexpensive. When demand is high, the water is released and used to 
power hydroelectric turbines. It is well-suited for applications 
requiring large power levels and long discharge times.

Compressed Air Energy Storage--this technology uses high efficiency 
compressors to force air into underground reservoirs, such as mined 
caverns. When demand for energy is high, the stored air is allowed to 
expand to atmospheric pressure through turbines connected to electric 
generators that provide power to the grid. In Alabama and Germany, 
compressed air energy storage has dispatched power to meet load demands 
and keep frequency and voltage stable.

Batteries--there are different types of battery systems for energy 
storage. With conventional batteries, chemical reactions within the 
battery generate electrons that travel from the negative terminal 
through a wire to an application, thus providing electric power, and 
then return to its positive terminal. A different battery system such 
as flow batteries store electrolytes outside the battery and circulate 
them through the battery cells as needed. Batteries have great 
potential for use in a range of energy storage applications.

Flywheels--these energy storage systems consist of a rotating cylinder 
on a metal shaft which stores rotational kinetic energy. Flywheels are 
suitable for stabilizing voltage and frequency.

Electrochemical Capacitors--electrochemical capacitors store energy in 
the form of two oppositely charged electrodes separated by an ionic 
solution. They are suitable for fast-response, short-duration 
applications such as backup power during brief outages.

Power Electronics--power conversion systems are not explicitly a 
storage device, but are a critical component of any electricity storage 
system as they serve as the communication device between the storage 
system and the electric grid.

    Smaller energy storage systems may also be deployed in stationary 
applications, such as a residence or in a neighborhood, in order to 
supply back-up energy and level the load on the electric grid. Advances 
in smaller energy storage systems, specifically batteries, may also 
allow for entirely new vehicles such as plug-in hybrid vehicle 
technologies to enter the mass market.

Energy Storage Technologies for Vehicles

    Concerns about energy independence and climate change have caused a 
renewed interest in enhancing the role of electricity in the 
transportation sector. The benefits of this have been seen to some 
degree in the rise in popularity of Hybrid Electric Vehicles (HEV) 
because of their high fuel efficiency and lower emissions. Switching 
vehicles' primary energy source from petroleum-based fuels to electric 
batteries reduces overall consumption of conventional liquid fuels. 
Additionally, several recent studies\1\ have shown that, regardless of 
its source, electricity used as a vehicle fuel reduces greenhouse gas 
emissions. However, greater electrification of the vehicles sector is 
constrained by the technological limits of energy storage technologies 
used in conventional hybrids, specifically the Nickel Metal Hydride 
(NiMH) batteries.
---------------------------------------------------------------------------
    \1\ Pacific Northwest National Lab--Impacts Assessment of Plug-in 
Hybrid Vehicles on Electric Utilities and Regional U.S. Power Grids, 
http://www.pnl.gov/energy/eed/etd/pdfs/
phev-feasibility-analysis-combined.pdf

  Electric Power Research Institute and Natural Resources Defense 
Council--Environmental Assessment of Plug-in Hybrid Vehicles, http://
www.epri-reports.org
    Plug-In Hybrid Electric Vehicles (PHEV's) are seen by some as the 
next logical step towards greater electrification of the transportation 
sector, and the eventual move towards market acceptance of all-electric 
drive vehicles. PHEV's allow for electricity to be used as an 
additional or even primary source of power for a vehicle, with a 
secondary role for the gasoline engine as a back-up power system. 
Advocates claim that 100 miles per gallon would be reasonable for 
PHEV's, approximately twice the gasoline mileage of today's hybrids. 
However, current NiMH batteries for conventional hybrids are not 
optimal for this application.
    While significant technological advances are still likely in NiMH, 
and even the ubiquitous Lead Acid batteries, many in the industry 
believe the future of PHEV's depends on breakthroughs in new battery 
technologies, such as the lithium ion (Li-Ion) batteries. To expand the 
use of electricity in the vehicles sector batteries must be smaller, 
lighter, more powerful, higher energy and cheaper--all of which require 
considerable research and development. Achieving these needed 
breakthroughs will require meaningful federal support and public-
private partnerships with a range of stakeholders.
    Chairman Lampson. This hearing will now come to order, and 
I want to wish you a good morning, and welcome to our 
subcommittee's hearing on one of the oldest and most important 
energy technologies available, advanced batteries and other 
storage devices.
    As long as people have been gathering energy or generating 
energy, we have had an interest in storing it, because so often 
the rate at which we produce energy doesn't match the rate at 
which we use it. Also, there are times when we need portable 
power. We would not be able to converse on cellular telephones, 
work remotely on laptop computers or shine a flashlight where 
we needed it without batteries.
    As our distinguished panel of witnesses will discuss today, 
batteries are not only the technology for energy storage. There 
are others that are not as commonplace, but have the potential 
to help us achieve a better match between energy production and 
energy consumption.
    Why is this important? Because renewable energy, like wind 
and solar, do not produce energy on a continuous basis. These 
sources will become more viable if we can store the excess 
energy produced during times of peak wind and sun and release 
it as needed.
    Better energy storage technologies will also enable us to 
operate electric utilities in a more flexible and efficient 
manner. Energy storage can also help us respond to power 
outages more efficiently, providing greater electricity 
reliability. This could be vital for maintaining operations at 
critical facilities, such as hospitals, during a natural 
disaster.
    We are all aware of the high costs and delicate 
negotiations involved when building new electric generating 
capacity or transmission lines, especially when plants must be 
built to meet the power requirements of peak demand. With 
better energy storage options, we can expand our options for 
new electricity generation and transmission.
    Energy efficiency is the key to progress on three important 
goals: economic growth, energy independence, and a cleaner, 
healthier environment. New hybrid engines for vehicles have 
demonstrated how greater use of battery power can reduce fuel 
consumption and emissions.
    We can gain further fuel efficiencies and emission 
reductions, but this requires advances in better technology and 
manufacturing far beyond what we see today, even in 
conventional hybrids. This would also allow for more advanced 
vehicles, such as Plug-in Hybrid Electric Vehicles to enter the 
market and finally bridge the gap between the electricity and 
transportation sector.
    With both stationary and mobile energy storage, we cannot 
let an opportunity to establish a domestic manufacturing base 
for these technologies pass us by. And unfortunately, we may 
already be losing that race. New R&D activities with the 
Department of Energy are critical to advancing energy storage 
technologies, and we should pursue this aggressively to ensure 
U.S. participation in this field.
    Chairman Gordon is working on legislation to support these 
programs at DOE, and the witnesses have been provided a copy of 
the discussion draft of that legislation. I look forward to 
their comments and suggestions to strengthen this bill and to 
accelerate our progress in energy storage technology.
    [The prepared statement of Chairman Lampson follows:]
              Prepared Statement of Chairman Nick Lampson
    Good afternoon and welcome to our subcommittee's hearing on one of 
the oldest and most important energy technologies available--advanced 
batteries and other storage devices. As long as people have been 
generating energy we have had an interest in storing it because so 
often, the rate at which we produce energy doesn't match the rate at 
which we use it. Also, there are times when we need portable power. We 
would not be able to converse on cellular telephones, work remotely on 
laptop computers, or shine a flashlight where we needed it without 
batteries.
    As our distinguished panel of witnesses will discuss today, 
batteries are not the only technology for energy storage. There are 
others that are not as commonplace, but have the potential to help us 
achieve a better match between energy production and consumption.
    Why is this important? Because renewable energy sources--wind and 
solar--do not produce energy on a continuous basis. These sources will 
become more viable if we can store the excess energy produced during 
times of peak wind and sun and release it as needed.
    Better energy storage technologies will also enable us to operate 
electric utilities in a more flexible and efficient manner. Energy 
storage can also help us respond to power outages more efficiently, 
providing greater electricity reliability. This could be vital for 
maintaining operations at critical facilities such as hospitals during 
a natural disaster.
    We are all aware of the high costs and delicate negotiations 
involved when building new electric generating capacity or transmission 
lines, especially when plants must be built to meet the power 
requirements of peak demand. With better energy storage options, we can 
expand our options for new electricity generation and transmission.
    Energy efficiency is the key to progress on three important goals--
economic growth, energy independence, and a cleaner, healthier 
environment. New hybrid engines for vehicles have demonstrated how 
greater use of battery power can reduce fuel consumption and emissions.
    We can gain further fuel efficiencies and emission reductions, but 
this requires advances in battery technology and manufacturing far 
beyond what we see today even in conventional hybrids. This would also 
allow for more advanced vehicles such as Plug-In Hybrid Electric 
Vehicles to enter the market, and finally bridge the gap between the 
electricity and transportation sectors.
    With both stationary and mobile energy storage, we cannot let an 
opportunity to establish a domestic manufacturing base for these 
technologies pass us by. And unfortunately, we may already be losing 
this race. New R&D activities with the Department of Energy are 
critical to advancing energy storage technologies, and we should pursue 
this aggressively to ensure U.S. participation in this field.
    Chairman Gordon and Ranking Member Hall are working on legislation 
to support these programs at DOE, and the witnesses have been provided 
a copy of the discussion draft. I look forward to their comments and 
suggestions to strengthen this bill and accelerate our progress in 
energy storage technology.

    Chairman Lampson. At this time, I would like to recognize 
our distinguished Ranking Member, Mr. Inglis, of South 
Carolina, for his opening statement.
    Mr. Inglis. Thank you Mr. Chairman, and thank you for 
holding this hearing on the status of technologies that can 
accelerate the arrival of clean, renewable energy.
    General Electric manufactures wind turbines in South 
Carolina's Fourth District. Inside that facility, as soon as 
one of the nacelles is finished, it is put on a truck and 
shipped out. GE tells me that the production line isn't slowing 
down. In fact, they are trying to add production capacity to 
meet increased demand, which is a very good thing for 
Greenville, South Carolina.
    These wind turbines and other technologies, such as solar 
panels and vehicle batteries, can speed the growth of our 
renewable energy sector, but the energy storage question is a 
significant hurdle that stands in the way. There is no doubt 
that we can cross that hurdle, and there is no question that it 
will just--that it will be worth it. Getting over the hurdle 
means not just clean exhaust from our cars, but consistent and 
stable energy supply to the grid, even when the sun isn't 
shining and the wind isn't blowing. That kind of reliability is 
what is necessary before these sources become commercially 
viable as alternatives to oil and gas, both at our power plants 
and in our cars and trucks.
    I am looking forward to learning from these two expert 
panels about how the Federal Government can help clear that 
energy storage hurdle. In addition, I am also interested in 
fuel cells as batteries, and I shall return to that in question 
time.
    Thank you, Mr. Chairman, for this hearing, and I look 
forward to hearing from our witnesses.
    [The prepared statement of Mr. Inglis follows:]
            Prepared Statement of Representative Bob Inglis
    Good morning. Thank you, Mr. Chairman, for holding this hearing on 
the status of technologies that can accelerate the arrival of clean, 
renewable energy.
    General Electric manufactures wind turbines in South Carolina's 
Fourth District. Inside the facility, as soon as one of these nacelles 
is finished, it's put on a truck and shipped out. GE tells me that that 
production line isn't slowing down. In fact, they're trying to add 
production capacity to meet increased demand.
    These wind turbines, and other technologies, such as solar panels 
and vehicle batteries, can speed the growth of our renewable energy 
sector. But the energy storage question is a significant hurdle that 
stands in the way. There's no doubt that we can cross that hurdle, and 
there's no question that it will be worth it. Getting over that hurdle 
means not just clean exhaust from our cars, but consistent and stable 
energy supply to the grid, even when the sun isn't shining and the wind 
isn't blowing. That kind of reliability is what is necessary before 
these sources become a commercially viable alternative to oil and gas, 
both at our power plants, and in our cars and trucks.
    I'm looking forward to learning from these two expert panels how 
the Federal Government can help clear the energy storage hurdle.
    In addition, I'm also interested in fuel cells as ``batteries.'' 
I'll return to that in my questions.
    Thank you again, Mr. Chairman and I look forward to hearing from 
our witnesses.

    Chairman Lampson. Thank you, Mr. Inglis. And now, I am 
honored to recognize the author of this legislation, Chairman 
Bart Gordon, for his opening statement.
    Mr. Gordon.
    Chairman Gordon. Thank you, Chairman Lampson. I want to 
really congratulate you and Ranking Member Inglis. We have had 
almost a forced march the first part of this year. Our Ranking, 
as well as Majority, staff have done an excellent job. You have 
turned out good legislation, and I hope that this could maybe 
be one more element that we can put on the menu for an energy 
bill for the future. And so again, I thank you for your past 
work, and I thank you for holding this hearing, ensuring that 
the United States is competitive in energy storage 
technologies.
    And I understand the witnesses have seen a discussion draft 
of the legislation I am working on to accelerate the Department 
of Energy's energy storage programs, and I look forward to your 
comments.
    Many of us here agree that energy storage technologies 
offer significant economic, environmental, and security 
benefits.
    A recent study from Lawrence Berkley National Laboratory 
determined that the short-term power interruptions cost the 
United States economy over $50 billion annually.
    Strategic deployment of energy storage systems could 
increase reliability of the grid and reduce the impact of these 
outages. Energy storage systems can also enhance the use of 
renewable energy sources, diversify our energy mix, and lower 
emissions.
    Broad deployment of energy storage technologies also can 
improve overall efficiency of the energy grid--or the electric 
grid. Storing low cost energy generated at nighttime for houses 
during high demand in the daytime makes sense.
    Energy storage is also critical for the next generation of 
vehicles, which will help reduce our dependency on foreign oil 
and lower greenhouse gas emissions.
    There is more work to be done to ensure batteries for 
electric cars are lighter, more powerful, and less costly.
    I also think that public-private partnerships can improve 
the production process for advanced vehicle components so the 
U.S. becomes a leader in manufacturing these breakthrough 
technologies.
    With so many benefits of energy storage technologies, I 
think additional federal investment to research, test, and 
advance these systems should be a priority, and I am very 
pleased that Ranking Member Hall has also been interested in 
these issues, and we look forward to working with him to 
accommodate his interests in getting a good bill together.
    And again, I thank the witnesses for joining us today.
    [The prepared statement of Chairman Gordon follows:]
               Prepared Statement of Chairman Bart Gordon
    Thank you Chairman Lampson. I am very pleased that the Energy and 
Environment Subcommittee is holding this hearing today to receive 
testimony on what I view to be a critical objective--ensuring the 
United States is competitive in energy storage technologies.
    I understand the witnesses have seen a discussion draft of 
legislation I am working on to accelerate the Department of Energy's 
energy storage programs, and I look forward to your comments.
    Many of us here agree that energy storage technologies offer 
significant economic, environmental and security benefits.
    A recent study from Lawrence Berkeley National Laboratory 
determined that short term power interruptions cost the U.S. economy 
over 50 billion dollars annually.
    Strategic deployment of energy storage systems could increase the 
reliability of the grid and reduce the impact of these outages. Energy 
storage systems also can enhance the use of renewable energy sources, 
diversifying our energy mix and lowering emissions.
    Broad deployment of energy storage technologies also can improve 
overall efficiency of the electric grid. Storing low cost energy 
generated at nighttime for use during high demand in the daytime makes 
sense.
    Energy storage is also critical for the next generation of 
vehicles, which will help reduce our dependence on foreign oil and 
lower greenhouse gas emissions.
    There is more work to be done to ensure batteries for electric cars 
are lighter, more powerful and less costly.
    I also think public-private partnerships can improve the production 
process for advanced vehicle components so that the U.S. becomes a 
leader in manufacturing these breakthrough technologies.
    With so many benefits of energy storage technologies, I think 
additional federal investment to research, test and advance these 
systems should be a priority.
    I thank the witnesses for testifying today and I look forward to 
your comments on the draft legislation.

    Chairman Lampson. Thank you, Chairman Gordon. I acknowledge 
the presence of a number of other Members of the Committee, and 
I ask unanimous consent that all additional opening statements 
submitted by Subcommittee Members be included in the record. 
Without object, so ordered.
    [The prepared statement of Mr. Costello follows:]
         Prepared Statement of Representative Jerry F. Costello
    Good morning. Mr. Chairman, thank you for calling this important 
hearing to examine the benefits and challenges of energy storage 
systems and to identify necessary research to overcome the challenges 
of commercialization and deployment of such systems.
    The potential impacts of insufficient power storage range from 
simply inconvenience to life-threatening, and affect individuals, 
businesses, and industries. Today's electricity generation system has 
little ability to store electricity on the grid. Because of this, the 
electric power system must constantly be adjusted to ensure that the 
generation of power matches the consumption of power. I believe it is 
vital for the Congress, the Department of Energy, utilities and the 
private sector to work on a comprehensive solution to upgrade the 
electricity grid that will meet the electricity needs of today as well 
as the future to reduce our dependence on foreign resources and 
maintain our environment and economy.
    When looking at potential options for energy storage, we must 
realize that no option will replace fuel generated electricity, which 
is primarily produced from coal. In fact, nine out of every ten tons of 
coal mined in the United States today is used to generate electricity, 
and about 56 percent of the electricity used in this country is coal-
generated electricity. Therefore, I firmly believe it is imperative to 
continue our efforts to develop clean coal technologies as part of the 
solution to achieving U.S. energy dependence, continued economic 
prosperity and improved environmental stewardship. We must also 
continue to work on a diverse energy portfolio and recognize the 
technology that exists today so that we can utilize this technology 
while developing energy solutions for the future.
    Again, I look forward to hearing from our witnesses on these 
issues.

    Chairman Lampson. Now, it is my pleasure to introduce our 
first panel of witnesses we have here with us. First is Ms. 
Patricia Hoffman, who is the Deputy Director for Research and 
Development and the Acting Chief Operating Officer at the 
Office of Electricity Delivery and Energy Reliability at the 
U.S. Department of Energy--long title. Mr. Brad Roberts is the 
Chairman of the Electricity Storage Association. Mr. Larry 
Dickerman is the Director of Distribution Engineering Services 
at American Electric Power, and Mr. Thomas Key is the technical 
leader for the Renewables and Distributed Generation at the 
Electric Power Research Institute. Welcome each and every one 
of you.
    Now, you will each have five minutes for your spoken 
testimony. Your written testimony will be included in the 
record for the hearing. When all four of you have completed 
your testimony, we will then begin questioning. Each Member 
will have five minutes to question the panel.
    Ms. Hoffman, we will begin with you.

                                Panel I:

  STATEMENT OF MS. PATRICIA A. HOFFMAN, DEPUTY DIRECTOR R&D, 
    OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY, 
                      DEPARTMENT OF ENERGY

    Ms. Hoffman. Mr. Chairman and Members of the Subcommittee, 
thank you for this opportunity to testify on behalf of the 
Department of Energy on energy storage technologies.
    The Department of Energy places great emphasis on the 
promise of energy storage and is researching a variety of 
storage technologies. Within DOE, applied research into energy 
storage technology primary occurs within two offices, the 
Office of Energy Efficiency and Renewable Energy (EERE), and 
the Office of Electricity Delivery and Energy Reliability (OE). 
The Department is committed to developing technologies that can 
help advance President Bush's Twenty in Ten Plan, a legislative 
proposal to displace 20 percent of expected gasoline usage in 
2017 through the greater use of clean, renewable fuels and 
increased vehicle efficiency. The development and use of Plug-
in Hybrid Electric Vehicles (PHEVs) will help us work toward 
the goal of this Plan. PHEVs present a unique opportunity for 
the Nation to transition from using exclusively oil, much of 
which comes from foreign sources, to fueling our vehicles, in 
part, with domestically produced electricity from the grid.
    High energy density batteries are key to the successful 
commercial deployment and development of these vehicles. Thus, 
EERE is researching lithium ion batteries, which have two to 
three times the energy density compared to the nickel-metal 
hydride batteries currently in use for todays hybrid electric 
vehicles.
    It is clear that Plug-in Hybrid Electric Vehicles will have 
impacts far beyond the transportation sector and become an 
integral, although not always connected, element of our 
``stationary'' electric system. When considering the potential 
impact of widespread use of PHEVs on our nation's energy 
demand, it is essential to understand and address broader 
electric system impacts. For example, although ample generation 
capacity may exist on an aggregate scale to meet charging 
needs, how would PHEVs impact voltage-regulation requirements? 
Or, how would that generation capacity vary by region? 
Preparing answers today to questions such as these will allow 
PHEVs to successfully evolve from functioning solely as 
``people-movers'' to becoming ``stationary power'' sources for 
residential customers to level the load and ultimately be a 
resource for the local utility.
    Stationary storage systems provide energy management, 
complement renewable resources, and can improve power quality 
and reliability. This includes ``ride-through'' of power 
quality events such as voltage sags that range in length from 
cycles to seconds, often seen as the dimming or flickering of 
lights. Additionally, energy storage can be an uninterrupted 
power source, providing minutes to hours of electricity, and as 
such, can be viewed as ``insurance coverage,'' mitigating risk.
    Whether an energy storage device is paired with a renewable 
technology or simply installed alone at a residential, 
commercial, or industrial site, it can serve a number of 
valuable functions: acting as a balancing technology to solve 
intermittence issues, serving as an uninterruptible power 
supply, or leveling consumers' demand. Energy storage and 
photovoltaic (PV) hybrid systems, for example, would provide 
customers the flexibility to charge their storage device and 
charge their stored power in combination with the PV system to 
satisfy their peak demand requirement.
    To date, large-scale utilitarian applications of energy 
storage in the electric system have not been extensive. Roughly 
2.5 percent of the total electric power currently delivered in 
the United States passes through energy storage devices, and is 
primarily limited to pumped hydroelectric storage. The 
percentages are somewhat greater in Europe and Japan, at 10 and 
15 percent respectively. The strategic placement of energy 
storage systems could provide load leveling within a regional 
control area, reduced transmission congestion, and provide 
ancillary services such as spinning reserve, voltage, and 
frequency regulation.
    Energy storage is just one way to increase the reliability 
and resiliency of the electric grid. When storage devices are 
paired with so-called ``intelligent'' smart grid technologies, 
the grid could fully take advantage of renewable technologies, 
allow for an increased number of PHEVs, and enable demand 
response. Like storage, smart grid technologies could have a 
revolutionary impact on our electric system. Smart grid 
technologies include smart appliance chips, advanced meters, 
and energy management systems located at the customer's site. 
Intelligent agents and controls on the distribution system and 
wide-area system monitoring on the transmission system are also 
considered smart grid technologies.
    The Department also recognizes that fundamental, basic 
research into the future of energy storage materials and 
systems is still required and can be a critical asset that 
accelerates our progress. One key opportunity the Department is 
pursuing is a new approach combining theory and synthesis of 
nanostructured materials, which have been identified as a key 
to enabling the design of radically improved electrode 
architecture for superior power and energy densities and 
increased lifetimes of energy storage systems.
    Portable electronic devices, which are enabled by 
batteries, are a form of energy storage now ubiquitous 
throughout society. When considering how widely accepted these 
devices have become in a relatively short period of time, one 
can only imagine the potential for storing energy at a much 
larger scale. Energy storage has the capability to reshape the 
way we fuel our cars, power our homes, and impact our nation's 
economic future. Federal investment and research in the 
development and deployment of energy storage technologies in 
combination with innovative policies and infrastructure 
investment, has the potential to improve grid performance, 
reduce our dependence on oil, and promote our energy security, 
economic competitiveness, and environmental well-being.
    I am privileged to contribute to these research efforts, 
and thank you for the opportunity to testify today. This 
concludes my statement, Mr. Chairman, and I look forward to 
answering any questions you and your colleagues may have.
    [The prepared statement of Ms. Hoffman follows:]
               Prepared Statement of Patricia A. Hoffman
    Mr. Chairman and Members of the Subcommittee thank you for this 
opportunity to testify on behalf of the Department of Energy (DOE) on 
``Energy Storage Technologies: State of Development for Stationary and 
Vehicular Applications.''
    The Department of Energy places great emphasis on the promise of 
energy storage and is researching a variety of storage technologies. 
Within DOE, applied research into energy storage technologies primarily 
occurs within two offices: the Office of Energy Efficiency and 
Renewable Energy (EERE) and the Office of Electricity Delivery and 
Energy Reliability (OE). EERE supports the Advanced Energy Initiative 
by advancing technologies such as biomass and biofuels, solar power, 
wind power, advanced vehicles, and hydrogen fuel cells. Moreover, OE 
performs research and development, and conducts demonstrations on 
stationary storage applications related to the electric system. OE 
leads national efforts to modernize the electricity delivery system; 
enhance the security and reliability of America's energy 
infrastructure; and facilitate recovery from disruptions to energy 
supply. Additionally, basic research supported by the Office of Science 
can lead to solutions to technology challenges and enhance the energy, 
power, shelf life, cycle life, cost, and reliability of energy storage 
systems. These functions can help DOE achieve its strategic goal of 
promoting a diverse supply and delivery of reliable, affordable, and 
environmentally responsible energy.

Vehicular Storage

    The Department is committed to developing technologies that can 
help advance President Bush's Twenty in Ten Plan, a legislative 
proposal to displace twenty percent of expected gasoline usage in 2017 
through greater use of clean, renewable fuels and increased vehicle 
efficiency. The development and use of Plug-in Hybrid Electric Vehicles 
(PHEVs) will help us work toward the goal of this Plan. PHEVs present a 
unique opportunity for the Nation to transition from using exclusively 
oil, much of which comes from foreign sources, to fueling our vehicles, 
in part, with domestically-produced electricity from the grid. High 
energy-density batteries are key to the successful commercial 
development and deployment of these vehicles. PHEVs have the potential 
to displace a large amount of gasoline if they deliver up to 40 miles 
of electric range without recharging--a distance that would include 
most daily round-trip commutes, since more than 70 percent of Americans 
drive less than 40 miles per day. That is why EERE is increasing its 
investment in this technology. Propulsion over a 40, or even a 20-mile 
range, will require storage technologies with high specific power and 
energy, deep discharge, and long cycle life. Thus, EERE is researching 
lithium ion batteries, which have two to three times the energy density 
(300-400 kWh/L) compared to the nickel-metal hydride batteries 
currently in use for today's hybrid electric vehicles.
    The Department has also made progress on the issue of safety in 
lithium ion batteries for automobiles; however, other interrelated 
factors such as durability, power density, and cost must also be 
addressed before the technology can become commercially viable. 
Currently, the program is focusing on researching materials and non-
flammable electrolytes so future lithium ion technologies will become 
more tolerant to abuse. The FY 2008 Congressional Budget includes $42 
million to support advanced battery R&D, compared to $41 million in the 
FY07 operating plan.
    Over the next three years, pending appropriations from Congress, 
DOE plans to invest $17.2 million in PHEV battery development projects 
that aim to address critical barriers to the commercialization of 
PHEVs, specifically battery cost and battery life. Five projects were 
recently selected for negotiation of awards under DOE's collaboration 
with the United States Advanced Battery Consortium. DOE will also spend 
nearly $2 million on a study exploring the future of PHEVs. The study 
will: evaluate how PHEVs would share the power grid with our nation's 
other energy needs; monitor the American public's evolving view of 
PHEVs; and provide the first national-level empirical data on how 
driving behavior differs with these vehicles compared to conventional 
gasoline, diesel, and hybrid vehicles. It will also assess a possible 
reduction of greenhouse gas emissions with the increased use of PHEVs 
and identify how automakers could optimize PHEV design to increase 
performance while also reducing cost. As part of the study, researchers 
and auto industry partners will build a simulation model to test 
different PHEV design concepts.
    The possibility of increasingly providing fuel for the Nation's 
cars and light trucks with domestically-produced electricity and 
reducing the use of oil, much of which is imported, is very exciting. A 
previous study from DOE's Pacific Northwest National Laboratory 
suggests that up to 84 percent of U.S. cars, pickup trucks, and sport 
utility trucks could be powered by plugging into the existing 
electricity infrastructure and by utilizing this battery capacity to 
level loads.
    It is clear that PHEVs will have impacts far beyond the 
transportation sector and become an integral, although not always 
connected, element of our ``stationary'' electric system.
    When considering the potential impact of widespread use of PHEVs on 
our Nation's energy demand, it is essential to understand and address 
broader electric system impacts. For example, although ample generation 
capacity may exist on an aggregate scale to meet charging needs, how 
would PHEVs impact voltage regulation requirements? Or, how would that 
generation capacity vary by region? Preparing answers today to 
questions such as these will allow PHEVs to successfully evolve from 
functioning solely as ``people movers'' to becoming ``stationary'' 
power sources for residential consumers that can also support 
utilities.
    Further studies will be conducted in partnership with the 
automotive manufacturers, national laboratories, utilities, and 
universities to define PHEV battery requirements; consumer behavior for 
charging vehicles and managing residential loads; grid interface and 
interconnection requirements; and the effects PHEVs would have on the 
grid. The Department is expecting preliminary results from these 
studies in the summer of 2008.
    Finally, through Executive Order 13423 Strengthening Federal 
Environmental and Energy Management, the President has committed the 
Federal Government to add PHEVs to its own fleet as the vehicles become 
commercially available at a cost reasonably comparable, on the basis of 
life cycle cost, to non-PHEVs.

Stationary Storage

    Stationary storage systems provide energy management, complement 
renewable resources, and can improve power quality and reliability. 
This includes ``ride-through'' of power quality events such as voltage 
sags that range in length from cycles to seconds to providing minutes 
to hours of electricity as an uninterruptible power source. A study by 
the Electric Power Research Institute found that 98 percent of power 
quality events last less than 15 seconds. Power quality problems are 
defined as subtle deviations in the quality of delivered electricity 
(sometimes lasting only tens of milliseconds in length), often seen as 
the dimming or flickering of lights. Short-term events lasting up to 
five minutes can cause hours of downtime in operations. A detailed 
survey of cost and outage data throughout the U.S. conducted by 
Lawrence Berkeley National Laboratory estimates the cost of such 
outages to be some $53 billion annually (LBNL 55718). Energy storage 
can be drawn upon to mitigate power quality problems and prevent 
momentary outages, and as such, can be viewed as ``insurance 
coverage,'' mitigating risk. Stationary storage systems that are 
currently being used include conventional batteries (Ni-Cd, lead acid), 
compressed air, pumped hydro, flow batteries, sodium sulfur and metal-
air batteries, fly wheels, and capacitors. These systems are critical 
bridging technologies whose applications including load balancing and 
improving overall system performance.

Stationary Storage--Residential, Commercial or Industrial Applications

    Varying storage technologies can be used in residential, 
commercial, or industrial applications. Whether an energy storage 
device is paired with a renewable technology or simply installed alone 
at a customer's site, it can serve a number of valuable functions: 
acting as a balancing technology to solve intermittence issues, serving 
as an uninterruptible power supply (UPS), or leveling consumer's 
demand. Energy storage and photovoltaic (PV) hybrid systems, for 
example, would provide customers the flexibility to charge their 
storage device and discharge their stored power in combination with the 
PV system to satisfy their peak demand requirement. This system can 
begin to address power quality issues.
    Many demonstrations are ongoing. The Department, in partnership 
with New York State Energy Research and Development Agency (NYSERDA), 
has funded a residential energy storage and propane fuel cell 
demonstration project that uses an 11kW, 20 kWh Gaia Power Technologies 
``PowerTower'' energy storage system in conjunction with a Plug Power 
``GenSys'' propane fuel cell. The demonstration illustrated demand 
reduction 1) when the ``PowerTower'' provides an energy boost if the 
user load exceeds a preset threshold and 2) when the PlugPower propane 
fuel cell becomes a primary electricity source in conjunction with the 
PowerTower. This system was in operation from January 2006 to July 
2006. The partners include the Delaware County Electric Cooperative, 
Gaia Power Technologies and EnerNex Corporation.
    Another project being funded by DOE and NYSERDA is the ongoing 
Flywheel-Based Frequency Regulation Demonstration project (FESS), 
located at an industrial site in Amsterdam, New York. It regulates grid 
frequency by utilizing a high-energy flywheel storage system consisting 
of seven Beacon Power flywheels that have been adapted to operate on 
the National Grid (formerly Niagara Mohawk) distribution system. This 
system will be capable of providing 100 kW of power for frequency 
regulation, about one-tenth the scale of the needed final product. 
Frequency regulation can serve to balance the ever-changing differences 
between electricity generation and load. Using flywheels to provide 
frequency regulation will allow demand to be met quickly and will allow 
generators to operate at higher output for optimum efficiency and lower 
emissions.

Stationary Storage--Utility Applications

    As it exists today, the U.S. electric utility infrastructure 
consists of a vast network of power plants and transmission and 
distribution lines that span the entire continent. This system requires 
that the generation and consumption of electric energy be 
instantaneously balanced. As the load changes, generators must ramp up 
or down to meet demand for electricity. Yet an equipment failure can 
cause an instantaneous imbalance between generation and load, which 
could potentially lead to other system damage or a power outage. Using 
advanced storage technologies to compensate for changes in demand for 
electricity could improve grid reliability and stability.
    To date, large-scale applications of energy storage to the electric 
system have not been extensive. Roughly 2.5 percent of the total 
electric power currently delivered in the United States passes through 
energy storage devices, and it is primarily limited to pumped 
hydroelectric storage. The percentages are somewhat greater in Europe 
and Japan, at 10 percent and 15 percent, respectively. The strategic 
placement of electricity storage systems could provide: 1) load 
leveling (within a regional control area), allowing generators to 
operate closer to their optimum economical and environmental set 
points; 2) reduce electric transmission congestion; 3) provide 
stabilizing energy to minimize disturbances on the transmission and 
distribution system; and 4) provide ancillary services such as spinning 
reserve, voltage, and frequency regulation.
    The Department has also invested in several storage demonstrations 
for utility applications. For example, in partnership with the 
California Energy Commission and ZBB Energy Corporation (Menomonee 
Falls, Wisconsin), DOE is planning to demonstrate a 2MW, 2MWh zinc-
bromine battery at a Pacific Gas & Electric substation that reduces 
distribution system congestion. The battery installation operates in 
stand-by mode to supply extra power when the substation reaches 
overload conditions. The installation will be mobile so that it can be 
deployed to wherever the most serious peaking loads occur.
    In partnership with Palmdale Water District (Palmdale, California), 
the Department is demonstrating a 450 kW supercapacitor device that 
will minimize the impact of variable winds on a 950 MW wind turbine 
attached to the microgrid for the Palmdale, California, Water 
District's treatment plant. During power outages, this energy storage 
will also provide ride-through for critical loads until emergency 
generation can be brought online. In addition to providing reliable 
energy for the microgrid, the project will also help reduce 
transmission and distribution congestion in the area.
    Energy storage is just one way to increase the reliability and 
resiliency of the electric grid. When storage devices are paired with 
so-called ``intelligent'' smart grid technologies, the grid could fully 
take advantage of renewable technologies, allow for increased numbers 
of PHEVs, and enable demand response. Like storage, smart grid 
technologies could have a revolutionary impact on our electric system. 
The result will be new innovative tools and techniques, better sensors, 
improved diagnostics, and enhanced equipment design and operation that 
will increase energy efficiency, system utilization, reliability, and 
security. Smart grid technologies such as smart appliance chips, 
advanced meters, and energy management systems would be located at the 
customer level. The distribution system would have to include smart 
grid technology through intelligent agents and controls and the 
transmission system would have to incorporate wide area system 
monitoring.

Collaboration with the Office of Science

    The Department recognizes that fundamental, basic research into the 
future of energy storage materials and systems is still required and 
can be a critical asset that accelerates our progress. We still seek: a 
greater understanding of storage device performance degradation and 
failure mechanisms; the achievement of higher power density and longer 
life; enhanced energy density; new electrolytes for high-efficiency and 
high-current operation; and safety and abuse tolerance. Developing 
solutions to these technology challenges could enhance the energy, 
power, shelf life, cycle life, cost, and reliability of energy storage 
systems.
    Thus, the OE and EERE continue to coordinate with the Office of 
Science in several research areas, including storage, to ensure the 
transfer of basic research to applied R&D. OE would like to expand this 
coordination in target materials research for electrical energy storage 
(EES). This R&D focus area was the subject of an Office of Basic Energy 
Sciences workshop held by EERE, OE, and the Office of Science during 
April 2-4, 2007, to explore research needs and opportunities. The 
findings, which noted that revolutionary breakthroughs in EES have been 
singled out as perhaps the most crucial need for the Nation's secure 
energy future, can be found in the workshop report, Basic Research 
Energy Needs for Electrical Energy Storage.
    The proposed coordinated basic-applied EES research effort aims to 
underpin the applied technology research with transformational basic 
sciences, while at the same time energizing the basic research with 
insights and opportunities that come from advances in applied research 
programs. This process will be initiated in FY 2008 and result in 
designated research projects in FY 2009. The goal is to facilitate the 
successful translation of breakthrough knowledge gained in basic 
research to applied technologies, and to cultivate the U.S. 
capabilities to maintain a global leadership in energy storage systems 
for transportation and electricity transmission and distribution.
    One key opportunity DOE's Office of Science is pursuing is a new 
approach combining theory and synthesis of nanostructured materials, 
which have been identified as key to enabling the design of radically 
improved electrode architectures for superior power and energy 
densities and increased lifetimes of energy storage systems.
    An essential part of this integrated research activity is the 
development of methods of analysis that will help elucidate structure 
activity relationships that serve as the underpinning for predictive 
model development and validation. Basic research will provide proof of 
novel concepts, which will lead to module level applied research for 
successful approaches. Introduction of promising concepts to industry 
will enable advances in manufacturing, cost and commercial perspective 
to continued development of commercially viable EES technologies.

CONCLUSION

    Portable electronic devices, which are enabled by batteries, a form 
of energy storage, are now ubiquitous throughout society. When 
considering how widely accepted these devices have become in a 
relatively short period of time, one can imagine the potential inherent 
in storing energy at a much larger scale. Energy storage has the 
capability to reshape the way we fuel our cars, power our homes, and 
impact our Nation's economic future. Federal investment in the 
research, development, and deployment of energy storage technologies in 
combination with innovative policies and infrastructure investment, has 
the potential to improve grid performance, reduce our dependence on 
oil, and promote our energy security, economic competitiveness, and 
environmental well-being. I am privileged to contribute to these 
research efforts and thank you for the opportunity to testify today.
    This concludes my statement, Mr. Chairman. I look forward to 
answering any questions you and your colleagues may have.

                   Biography for Patricia A. Hoffman
    Patricia Hoffman is the Deputy Director for R&D and the acting 
Chief Operating Officer for the Office of Electricity Delivery and 
Energy Reliability at the U.S. Department of Energy. The Office of 
Electricity Delivery and Energy Reliability leads the Department of 
Energy's (DOE) efforts to modernize the electric grid through the 
development and implementation of national policy pertaining to 
electric grid reliability and the management of research, development, 
and demonstration activities for ``next generation'' electric grid 
infrastructure technologies.
    As Deputy Director for R&D, Patricia Hoffman responsible for 
developing and implementing a long-term research strategy for 
modernizing and improving the resiliency of the electric grid. Patricia 
directs research on visualization and controls, energy storage and 
power electronics, high temperature superconductivity and renewable/
distributed systems integration.
    As the acting Chief Operating Officer, Patricia Hoffman is 
responsible for the business management of the office including human 
resources, budget development, financial execution, and performance 
management.
    Before joining the Office of Electricity Delivery and Energy 
Reliability, Patricia Hoffman was the Program Director for the Federal 
Energy Management Program which implements efficiency measures in the 
federal sector and the Program Manager for the Distributed Energy 
Program that developed advanced natural gas power generation and 
combined heat and power systems.
    Before this, Patricia managed the Advanced Turbine System program 
resulting in Solar Turbine Incorporated's Mercury 50 industrial gas 
turbine product.
    Patricia holds a Bachelor of Science and a Master of Science in 
Ceramic Science and Engineering from Penn State University.

    Chairman Lampson. Thank you, Ms. Hoffman.
    Mr. Roberts.

  STATEMENT OF MR. BRADFORD P. ROBERTS, CHAIRMAN, ELECTRICITY 
                      STORAGE ASSOCIATION

    Mr. Roberts. Good morning, Mr. Chairman and Members of this 
subcommittee. It is a privilege to be invited here today and be 
given the opportunity to offer views and perspectives of the 
Electricity Storage Association on the value of deploying 
energy storage in the electrical grid of the United States.
    My name is Bradford Roberts, and I am the current Chairman 
of the Board of the Electricity Storage Association. The ESA 
was founded from the Utility Battery Group, a utility group 
focusing on the benefits of using large-scale storage in their 
systems. ESA memberships currently number approximately 100 
member organizations, which includes most of the major utility 
companies in the U.S., leading manufacturers of energy storage 
systems around the world, technologies from academia, at 
engineering firms, plus potential investors in energy storage.
    Over this period, ESA has worked very closely with DOE's 
Energy Storage Program, Sandia National Labs, and various state 
agencies, such as the California Energy Commission, the New 
State Energy research and development authority, and the 
Electric Power Research Institute that is here today. ESA 
members have contributed key advancement to electricity storage 
technology using the very limited funds that have been 
available from DOE in the past. These activities have helped 
build a strong foundation for meeting the needs of a growing 
electric grid that must now capitalize on the use of renewable 
sources and become more reliable, take advantage of smart-grid 
technology and be more resilient to threats of any kind.
    This brochure that was in the package that was given to you 
shows examples of storage projects done around the world by ESA 
members. Studies and projects funded by DOE and state agencies 
have helped define the most significant use of energy storage. 
The most compelling are: help control power cost volatility, 
make more efficient use of fossil fuels like natural gas and 
oil to reduce dependency on foreign sources; benefit the 
performance of the transmission and distribution system, 
nationwide; enhance the use of renewable energy sources and 
make them more dispatchable; help improve the overall 
performance of combined heat and power systems; improve the 
grid's stability, reliability, and security.
    Very large-scale systems like pumped hydro have been 
successful in providing bulk storage for the overall grid for 
some time. But only recently, in the last few years, have 
practical and affordable distributed energy systems begun to 
appear. Storage systems can capture low-cost energy at night 
and discharge it during peak daytime periods to help control 
price volatility. Storage systems can peak shave at the 
substation level and defer system upgrades. Small fast-acting 
dynamic energy storage systems such as flywheels can provide 
vital ancillary services to the grid such as spinning reserve 
and frequency control. Wind energy generation at night can be 
transported on lightly loaded transmission systems to load 
centers and discharged at peak times the next day.
    Other great amounts of electrical storage in the grid can 
provide protective power to vital assets in the community, such 
as hospitals, airports, critical industries, such as data 
centers, communications facilities and so on. As the amount of 
storage grows and these resources become more widely 
distributed, the entire grid will become more secure and less 
vulnerable to manmade or natural disasters. Storage has been 
identified as a critical component for the future of smart 
grids and will play a vital role in demand side management 
programs and make them work more effectively.
    The groundwork developed by ESA members working with DOE 
and Sandia has identified what we can realize with an expanded 
incentive program at this time. Many technologies have the 
proof-of-concept stage and are ready for commercial application 
and will provide real benefits to the grid.
    Some of the recommendations we make are: expand the scope 
and size of government funding for storage programs that 
interact with the grid; provide incentives to national 
producers of storage systems and key sub-entities of those 
systems; provide funding to demonstrate the benefit of both 
large-scale and short-term balancing effect on wind power; 
provide funds to demonstrate the advanced storage to provide 
reliability enhancement for the grid; develop legislation to 
treat energy storage as a necessary component of renewable 
sources and provide federal financial support to incent end-
users to develop and deploy storage systems; also ask FERC to 
require independent system operators to allow new energy-store 
technologies to compete in the commercial markets and take 
advantage of their faster response.
    Thank you for this opportunity to be here, and I look 
forward to your questions.
    [The prepared statement of Mr. Roberts follows:]
               Prepared Statement of Bradford P. Roberts
    Good morning, Mr. Chairman and distinguished Members of the 
Subcommittee on Energy and Environment. It is a privilege to be invited 
here today and be given the opportunity to offer views and perspectives 
of the Electricity Storage Association (ESA) on the value of deploying 
energy storage in the electrical grid of the United States.
    My name is Bradford Roberts, and I am the current Chairman of the 
Board of the Electricity Storage Association (ESA). The ESA is a trade 
organization founded 17 years ago to promote the value of electrical 
energy storage in our nation's grid and other electrical systems around 
the world. The ESA was founded from the Utility Battery Group (UBG), a 
utility group focusing on the benefits of using large-scale storage in 
their systems. ESA membership currently numbers approximately 100 
member organizations encompassing most of the major utility companies 
in the U.S., leading manufacturers of energy storage systems around the 
world and leading technologists from academic and engineering firms 
with interest in designing storage applications.
    Over the last 17 years the ESA has worked closely with the 
Department of Energy's Energy Storage Program, Sandia National 
Laboratories and various State agencies such as the California Energy 
Commission (CEC), the New York State Energy Research and Development 
Authority (NYSERDA) and the Electric Power Research Institute (EPRI).
    ESA members have contributed key advancements to electricity 
storage technologies using the very limited funds in the DOE Energy 
Storage program. These activities have helped build a strong foundation 
for meeting the needs for the growing electricity grid that must now 
capitalize on the use of renewable energy sources, become more 
reliable, take advantage of smart grid technology and be resilient to 
threats of any kind. Storage of electricity is able to address these 
needs by reducing the need for fossil fuels, reducing cost of 
electricity and at the same time increase the reliability and 
robustness of the electric power system.

Primary Benefits of Storage in the Grid

    Studies and projects funded by the DOE Energy Storage Program have 
helped define the most significant uses of electric energy storage. The 
most compelling of these uses are:

          Control power cost volatility

          Make more efficient use of fossil fuels like natural 
        gas and oil to reduce dependency on foreign sources

          Benefit the transmission and distribution systems

          Enhance the use of renewable energy sources

          Improve the overall performance of combined heat and 
        power systems

          Improve the grid's stability, reliability and 
        security.

    Very large-scale systems like pumped hydro plants have been 
successful in providing bulk storage for the overall grid's use but 
only in the last few years have practical and affordable distributed 
storage systems begun to appear. Other smaller electricity storage 
technologies, many of them marketed and deployed by our members, offer 
more flexibility in deployment on a distributed basis throughout the 
grid. These technologies offer a variety of benefits to the key items 
mentioned above.
    Storage systems can capture low-cost energy at night and discharge 
it during peak daytime periods to control price volatility. Some 
storage systems can peak shave at the substation level and defer system 
upgrades. These large systems and smaller fast-acting dynamic energy 
systems such as flywheels can provide vital ancillary services to the 
grid such as spinning reserve and frequency regulation. Wind energy 
generated at night can be transported on a lightly loaded transmission 
system to load centers and discharged at peak times. Excess electricity 
from combined heat and power (CHP) systems can be used to charge local 
storage systems and further improve total grid efficiency. Further, 
greater amounts of stored electrical energy in the grid can provide 
protected power to vital assets in the community such as hospitals, 
airports and critical industries such as data centers and 
communications facilities. As the amount of storage grows and these 
resources become more widely distributed, the entire grid will become 
more secure and less vulnerable to man-made or natural disasters. 
Storage has been identified as a critical component in all projected 
and studied future power systems including smart grids and will also 
play a vital role in enabling demand-side management schemes without 
compromising end-users' interest.

ESA Recommendations for an Expanded Electricity Storage Program

    The groundwork developed by ESA member companies working with the 
DOE and Sandia National Labs energy storage program has identified the 
value that can be realized with an expanded incentive program at this 
time. Many technologies have passed the ``proof-of-concept'' stage and 
are ready for commercial applications that will provide real benefit to 
the grid. At a time of growing concern for the environment, expanded 
storage applications can begin to pay dividends. The following 
recommendations are made:

        1.  Expand the scope and size of government funding of storage 
        programs that will interact with the grid at all levels from 
        residential to substation sizes.

        2.  Provide incentives for national producers of storage 
        systems and key subcomponents.

        3.  Provide funding to demonstrate the benefits of both large-
        scale storage and short-term balancing of wind energy to 
        improve overall system performance.

        4.  Provide funding to demonstrate the use of advanced storage 
        to provide reliability enhancement of grid power to critical 
        load customers (hospitals, data centers, critical process 
        manufacturers).

        5.  Develop legislation to treat energy storage as a necessary 
        component of renewable generation source and provide federal 
        financial support to incent end-users and utilities to develop 
        and deploy electricity storage systems. This should be a tax 
        credit on a significant portion of total storage system 
        investment to help deploy more installations nationwide.

        6.  Ask FERC to require Independent System Operators (ISOs) to 
        update Market Rules to allow newer energy storage technologies 
        to compete in commercial energy markets and take advantage of 
        the faster response these systems can offer.

Summary

    The Electricity Storage Association appreciates the efforts of the 
Energy Storage Programs at DOE and Sandia Labs. Our members remain 
committed to accelerating the application of storage at all levels to 
benefit the environment and improve our lives as we learn to use 
electricity more efficiently and responsibly in the 21st century.

                          Bradford P. Roberts
    Brad Roberts is employed as the Power Quality Systems Director for 
the Power Quality Products Division of S&C Electric Company which 
specializes in low and medium voltage power protection systems.
    Brad has over 35 years experience in the design and operation of 
critical power systems, ranging from single phase UPS systems to medium 
voltage applications. He began his engineering work as a systems 
reliability engineer in the Apollo Lunar Module Program at Cape 
Kennedy. He held senior management positions in two of the major UPS 
manufacturers during his career. Brad is a senior member of IEEE and 
has published over 40 technical papers and journal articles on critical 
power system design and energy storage technology.
    Brad is a registered professional engineer and has a BSEE (Bachelor 
of Science in Electrical Engineering) degree from the University of 
Florida. He is Past-Chairman of the IEEE Power Engineering Society's 
Emerging Technologies Committee and Chairman of the Board of Directors 
for the Electricity Storage Association. He has been a member of the 
ESA Board for 10 years.
    Brad is the 2004 recipient of the John Mungenast International 
Power Quality Award.

    Chairman Lampson. Thank you, Mr. Roberts. Mr. Dickerman, 
you may proceed.

   STATEMENT OF MR. LARRY DICKERMAN, DIRECTOR, DISTRIBUTION 
         ENGINEERING SERVICES, AMERICAN ELECTRIC POWER

    Mr. Dickerman. Good morning Mr. Chairman and distinguished 
Members of this subcommittee. Thank you for inviting me here 
today. And also, I thank you for the opportunity to provide the 
views of American Electric Power (AEP) on the significance of 
deploying energy storage to improve security, reliability and 
performance of America's electricity infrastructure.
    My name is Larry Dickerman. I am the director of 
distribution engineering services for American Electric Power. 
American Electric Power is a 5,000,000-customer utility in 11 
states. We are one of the largest generators in the country, 
having 38,000 megawatts of capacity. We are the largest 
transmission utility in the country with 39,000 miles of 
transmission line. We are the largest distribution company in 
the country with 207,000 miles of distribution.
    But of particular importance for the Committee Members here 
today, AEP is leading the utility in U.S. deployment of large-
scale energy storage. Of particular note is a success: AEP 
installed the first-ever megawatt-sized scale NAS battery, 
sodium sulfide battery, in the Western Hemisphere in 2006. 
Based on our experience, AEP believes that storage has an 
important role in the grid of the future in that it can defer 
capital projects by improving the utilization of existing 
assets. It can improve security and reliability. It can be 
deployed quickly, and it can work well with renewable resources 
such as wind.
    As we believe storage should be incented through mechanisms 
such as a federal tax credit in the range of 30 percent, to 
accelerate widespread deployment. Over the last 100 years, AEP 
has been an industry leader in development, advancing and 
deploying new technology, and has always recognized the value 
of storage, as is evidenced by our Smith Mountain Pump-Hydro 
Facility. Over the last decade, AEP tested and evaluated the 
feasibility of new battery and super-capacitor technologies in 
our engineering laboratories. Based on those tests, AEP decided 
to move it from the laboratory and into further prototype 
testing with the sodium sulfide batteries for distributed 
energy storage system to support our grid.
    The major actors in selecting the NAS technologies over 
alternative technologies were its safe and reliable commercial 
operation experience in Japan, compact footprint, about the 
size of a double-decker bus, high efficiency and zero 
emissions, and you can relocate it if you need to.
    Based on successful laboratory and demonstration 
projections, AEP worked with NGK and with S&C Electric Company 
to deploy AEP's first commercial one-megawatt NAS battery in 
2006 on a 12-kv distribution feeder in Charleston, West 
Virginia. This battery can provide enough energy for about 600 
homes for seven hours.
    As a next step, AEP also recently announced a new 
initiative to deploy more energy storage on its system, and 
this initiative includes six megawatts of additional NAS-based 
energy storage by the end of next year, at least 25 megawatts 
of NAS-battery capacity by the end of the decade, and adding 
another 10,000 megawatts of advanced storage technology in the 
decade after that.
    The aim of these initiatives is to achieve many benefits, 
including reducing peak load on lines and equipment, providing 
backup energy to improve security and reliability, offering 
shorter deployment time versus traditional solutions, 
complimenting the modern grid concept, and enhancing the use of 
wind generation at peak demand.
    Although this technology, in most cases, rests on the 
distribution side--that is physically where it is at on a 
distribution system--other benefits of energy storage extend to 
all parts of the electricity infrastructure, including helping 
to optimize generation.
    The Department of Energy played a critical role in helping 
to deploy AEP's project in West Virginia, by covering the one-
time engineering costs that were needed for this first-of-a-
kind installation in the Western Hemisphere. The partnership of 
DOE and AEP to deploy the first ever megawatt sized battery 
facility in the United States was an ideal way of taking a new 
technology from research and development to real-world 
operation to accomplish something for a utility like AEP.
    Given the benefits of storage, AEP supports the continuous 
development of storage technology and the adoption of 
incentives such as a 30 percent federal tax credit for 
deployment of distributed energy storage to accelerate the 
widespread use of storage to improve security, reliability, and 
performance of the United States' electric grid infrastructure.
    Again, thank you for inviting me here today.
    [The prepared statement of Mr. Dickerman follows:]
                 Prepared Statement of Larry Dickerman

Summary

    American Electric Power is one of the largest electric utilities in 
the United States, delivering electricity to more than five million 
customers in 11 states. AEP ranks among the Nation's largest generators 
of electricity, owning more than 38,000 megawatts of generating 
capacity in the U.S. AEP also owns the Nation's largest electricity 
transmission system, a nearly 39,000-mile network that includes more 
765 kilovolt extra-high voltage transmission lines than all other U.S. 
transmission systems combined. AEP's utility units operate as AEP Ohio, 
AEP Texas, Appalachian Power (Virginia, West Virginia), AEP Appalachian 
Power (Tennessee), Indiana Michigan Power, Kentucky Power, Public 
Service Company of Oklahoma and Southwestern Electric Power Company 
(Arkansas, Louisiana and east Texas). Combined, these utility units 
operate and maintain over 207,000 miles of distribution lines in 
service territory covering approximately 197,500 square miles.

    AEP is the leader among U.S. utilities for deployment of large-
scale battery-based energy storage. Over the last 100 years, AEP has 
been an industry leader in developing, advancing and deploying new 
technologies and has always recognized the value of energy storage. In 
1965, AEP's Smith Mountain, a 600MW pumped hydro energy storage 
facility in Virginia, came on line with the ability to provide peaking 
power within minutes and thereby better utilize the company's existing 
generation and transmission assets.
    Over the last decade, AEP tested and evaluated the feasibility of 
new battery and supercapacitor technologies in its engineering 
laboratories. Based on those tests, AEP decided to use sodium sulfide 
(NAS) batteries for a distributed energy storage system to support its 
distribution grid. The major factors in selecting the NAS technology 
over the alternative storage technologies were its commercial operation 
experience, compact footprint, high efficiency, zero emissions and 
relocation ability.
    Based on successful laboratory and demonstration projects, AEP 
worked with NGK Insulators and S&C Electric Company to deploy AEP's 
first commercial 1MW NAS battery in 2006 on a 12kV distribution feeder 
in Charleston, WV, and recently announced a new initiative to deploy 
more energy storage on its system including 6MW of additional NAS-based 
energy storage by the end of 2008; at least 25MW of NAS battery 
capacity in place by the end of this decade and adding another 1,000MW 
of advanced storage technology in the next decade.
    Energy storage technologies, such as the NAS battery, offer many 
benefits to improve the reliability and performance of the distribution 
system. These benefits include reducing peak load, providing backup 
energy and offering shorter deployment. In addition, energy storage 
also complements the ``modern grid'' concept. Although this technology 
in most cases rests on the distribution side, other benefits of energy 
storage extend to all parts of the electric utility infrastructure, 
including helping to optimize generation.
    The Department of Energy (DOE) played a critical role in helping 
deploy AEP's project in West Virginia by covering the non-repeat 
engineering costs that were needed for this first-of-a-kind 
installation in North America.

    AEP supports the adoption of incentives for deployment of 
distributed stationary energy to improve security, reliability and 
performance of the United States electric grid infrastructure.

    Good morning Mr. Chairman and distinguished Members of the House 
Committee on Science and Technology. Thank you for inviting me here 
today. Also, thank you for this opportunity to offer the views of 
American Electric Power (AEP) and for soliciting the views of our 
industry and others on the significance of deploying energy storage for 
improvement in security, reliability and performance of America's 
electricity infrastructure.
    My name is Larry Dickerman, and I am the Director of Distribution 
Engineering Services of American Electric Power (AEP). Headquartered in 
Columbus, Ohio, we are one of the Nation's largest electricity 
generators--with over 38,000 megawatts of generating capacity--and 
serve more than five million retail consumers in 11 states in the 
Midwest and south central regions of our nation. In addition, AEP also 
owns the Nation's largest electricity transmission system, a nearly 
39,000-mile network that includes more 765 kilovolt extra-high voltage 
transmission lines than all other U.S. transmission systems combined. 
We also operate and maintain over 207,000 miles of distribution lines 
in a service territory covering approximately 197,500 square miles. But 
of particular importance for the Committee Members here today, AEP is 
the leading utility in the U.S. for deployment of large-scale energy 
storage, which improves the security, reliability and performance of 
our distribution grid. Of particular note, AEP installed the first-
ever, megawatt (MW)-scale NAS battery in the Western hemisphere in 
2006.
    Over the last 100 years, AEP has been an industry leader in 
developing, advancing and deploying new technologies and has always 
recognized the value of energy storage. In 1965, for example, AEP's 
Smith Mountain, a 600MW pumped hydro energy storage facility in 
Virginia, came on line with the ability to provide peaking power within 
minutes, thereby reducing peak demand and better utilizing the 
company's generation and transmission assets.

Grid Modernization and Energy Storage

    In many respects, the distribution grid of 2007 is not much 
different than the grid of 1965. Consequently, many associated with the 
electric utility industry are talking about developing a ``smart 
grid,'' ``modern grid'' or ``the grid of the future.'' I first want to 
address what is meant by these terms and how energy storage fits into 
the concept of a ``modern grid.'' One clear analogy is the progress 
that has been made with automobiles since 1965. In 1965, automobile 
builders compromised on components so cars could meet a variety of 
demands such as acceleration and steady state driving. In addition, the 
components could not communicate and had limited adaptability to meet 
different demands. An automobile built in 2007 is far different in that 
a communication system provides information to on-board computers and 
components have the ability to adapt how they operate based on input 
about varying conditions. Consequently, a modern car performs better, 
stops better, pollutes far less and gets better gas mileage. More 
recently, this dynamic optimization has been taken a step further with 
on board batteries in Hybrid Electric Vehicles. The on-board batteries 
provide further opportunities to size the engine for steady state 
conditions, while the battery provides power for acceleration and other 
peak demands.
    The utility grid in the United States is an enormously complex 
system that like automobiles can benefit from a modern communication 
infrastructure, interconnected computers, devices that can dynamically 
change and store energy. To achieve dynamic optimization similar to 
what has been achieved in the automotive industry, the ``modern grid'' 
will require:

          Inexpensive communication systems that work over 
        large areas;

          Computer protocols determining how each connects/
        communicates with various pieces of equipment;

          Equipment from suppliers that can receive 
        communication and dynamically adapt; and

          Electricity storage devices to optimize use of assets 
        and improve reliability.

    A ``modern grid'' using this technology would improve reliability, 
improve the utilization of existing assets, move demand off peak, help 
customers reduce usage, and help with the integration of distributed 
resources.

AEP Efforts to Deploy Energy Storage

    A key component of the ``modern grid'' and of particular interest 
today is energy storage. Over the last decade, AEP tested and evaluated 
the feasibility of new battery and supercapacitor technologies in its 
engineering laboratories. Based on those tests, AEP decided to use 
sodium sulfide (NAS) batteries for a distributed energy storage system 
to support its distribution grid. The major factors in selecting the 
NAS technology over the alternative storage technologies were:

          15 years of commercial operational experience in 
        Japan at sizes over 1MW (1MW produces enough energy to power 
        600 homes).

          The ability to have high energy and power density in 
        a compact footprint the size of a double-decker bus.

          High efficiency through the charge/discharge cycle.

          No emissions, vibrations or noise concerns.

          Ability to economically relocate and recycle.

    AEP first tested a small 12.5kW module (enough power to feed seven 
homes) in our laboratories and installed a 100kW demonstration unit 
(enough power to feed 60 homes) for peak shaving and backup power to 
one of our office buildings in 2002. As a next step, AEP worked with 
NGK Insulators (manufacturer of NAS batteries) and S&C Electric Company 
(manufacturer of the system to connect DC battery to an AC power grid) 
to deploy its first commercial 1MW, 7.2MWh\1\ NAS battery in 2006 on a 
12kV distribution feeder in Charleston, WV. This site was chosen to 
alleviate overloading of an existing distribution transformer. By 
installing the battery, AEP was able to reduce its daily peak load and, 
therefore, defer substantial capital investment on a new distribution 
substation. Department of Energy (DOE) played a critical role in this 
project by covering the non-repeat engineering costs that were needed 
for this first-of-a-kind deployment in North America and we deeply 
appreciate their assistance.
---------------------------------------------------------------------------
    \1\ 7.2MWh can feed 1MW of electricity for 7.2 hours.
---------------------------------------------------------------------------
    Following the successful operation of the NAS battery in West 
Virginia, AEP recently announced a new initiative to deploy more energy 
storage on its system including (see the attached press release):

          An additional 6MW added of NAS-based energy storage 
        by the end of 2008.

          At least 25MW of NAS battery capacity in place by the 
        end of this decade.

          Adding another 1,000MW of advanced storage technology 
        in the next decade.

    AEP, NGK and S&C are now in the process of further developing NAS 
battery technology by implementing an ``islanding'' feature to improve 
distribution reliability. With ``islanding,'' the battery can be 
deployed at the end of a long remote distribution line and provide 
power even when the normal feed is interrupted. AEP will demonstrate 
the ``islanding'' technology with four megawatts of the six megawatts 
planned for 2008. The islanding feature will also demonstrate the use 
of communication and control systems necessary for the deployment of a 
``modern grid.''
    The other two megawatts scheduled for 2008 will be deployed at a 
site near wind generation that will help AEP understand how electrical 
storage can enhance wind generation. NAS batteries can help by storing 
energy whenever the wind does blow and giving the energy back when 
needed most during times of peak demand. NAS batteries can be utilized 
with wind and all forms of generation today, but likely will become 
even more attractive as the price for NAS batteries decreases through 
greater volumes and the need increases due to a greater number of wind 
generators.

Electricity Storage Benefits

    Energy storage technologies, such as the NAS battery, offer many 
benefits to improve the reliability and performance of the distribution 
system. Although this technology in most cases rests on the 
distribution side, other benefits of energy storage extend to all parts 
of the electric utility infrastructure, including helping to optimize 
generation. A list of benefits of energy storage includes but is not 
limited to the following:.

          Improving service reliability and power quality by 
        being a backup energy source (``islanding'') during outages.

          Reducing peak load (or lead leveling) and hence 
        reducing the need for other local capacity upgrades in 
        distribution.

          Complementing ``smart grid'' or ``modern grid'' 
        benefits by taking advantage of the distribution grid's 
        communication and control features.

          Much shorter deployment time than most conventional 
        solutions to address many immediate grid problems.

          Enhancing the use of wind generation during periods 
        of peak demand.

    Most importantly, in a given application, many of these benefits 
can be achieved at the same time.

AEP Perspective on a Federal Energy Storage Research, Development and 
                    Deployment Program

    In the past, the United States led the world in pure research on 
energy storage. For example, the concept of the NAS battery was 
pioneered in the United States in 1965 for electric vehicle 
applications. Others in the U.S. and Europe continued to advance the 
technology. However, in the mid 1980s, the Tokyo Electric Power Company 
and NGK, with support from the Japanese government, launched a 
development and demonstration program that successfully commercialized 
the technology for utility-scale applications. Because of this, AEP 
would suggest and strongly support a federal energy storage research, 
development and deployment program that would join technology experts 
with end-users of energy storage to actively develop, guide, and 
implement a government-supported storage program. To do this, federal 
funding needs to be balanced between research and ``real world'' 
applications to advance the technology. A few sample projects could 
include:

          Implementing large scale battery ``islanding'' 
        capability to improve reliability in rural areas.

          Developing a ``smart'' or ``modern grid'' 
        installation and integrate energy storage.

          Using energy storage to improve security to critical 
        infrastructure that includes police, fire stations, water pumps 
        and hospitals.

          Exploring greater benefits of the technology on the 
        entire energy infrastructure, including distribution, 
        transmission and generation.

    Legislation to establish federal financial support is needed to 
encourage end-users to overcome their respective entry costs to deploy 
large-scale energy storage systems. For example, an investment tax 
credit in the range of 30 percent of the initial investment in an 
energy storage facility would help accelerate deployment across the 
industry. (Note that in Japan, the government has subsidized early end-
users of energy storage for grid support and currently covers one third 
of the cost of energy storage facilities that support the deployment of 
wind power systems.)

AEP Perspective on Renewable Resources

    AEP strongly supports the increased use of renewable energy sources 
and believes that further technological advances and commercial 
deployment of energy storage technologies will significantly increase 
the use of renewable energy sources. Today, we have 467MW of wind 
generation under purchased power agreements, but we intend and fully 
expect to increase our renewable portfolio into the future. That said, 
we oppose the federal Renewable Portfolio Standard (RPS) recently 
adopted by the House (and similar measures) as a costly and unnecessary 
government mandate.
    The RPS adopted by the House, for example, will likely cost 
electricity consumers billions of dollars in higher electricity cost 
without the development of significant additional renewable generation 
or, more importantly, without any technological advances. Simply put, 
many retail electric suppliers will be unable to meet the RPS through 
their own generation and will purchase renewable energy credits. As a 
result, AEP anticipates a wealth transfer from electric consumers in 
states with little or no renewable resources to those states with 
abundant renewable resources (which would likely be developed without a 
federal mandate) and/or the Federal Government. In fact, we calculate 
that this proposal, if implemented, would cost our customers 
approximately between $6-$8 billion dollars (with some purchases of 
credits) in total cumulative costs by 2020.
    Rather than focusing on an RPS, the Congress should promote 
technologies to the degree where economic and environmental benefits 
are optimized. For example, combining energy storage and wind 
generation will in the long run increase the availability of this 
resource and may meet the definition of economic and environmental 
optimization. Unfortunately, this combination would not help AEP meet 
the RPS mandate adopted by the House beyond the original addition of 
the wind generation. In short, mandates may be well intentioned, but 
are not always the most effective way to proceed from both an economic 
and environmental perspective.

Conclusion

    In conclusion, energy storage is an important technology for the 
transformation of the existing electricity grid in the United States. A 
strong and cooperative partnership of industry and government can and 
will promote research and development and, ultimately, commercial 
deployment. AEP is committed to being a part of this important process, 
and helping you achieve the best outcome at the most reasonable cost as 
quickly as practicable. Thank you again for this opportunity to share 
these views with you.









                     Biography for Larry Dickerman
    Larry Dickerman is the Director of Distribution Engineering 
Services. Prior to his present position, Larry led various 
organizations for AEP including Distribution Dispatch & Emergency 
Restoration Planning, Distribution Asset Management and Operations 
Improvement. Larry is a 32-year employee with AEP.
    Larry graduated from N.C. State University in 1974 with a BSEE and 
is a registered professional engineer in Virginia. Larry now resides in 
the Columbus, Ohio area.

    Chairman Lampson. Thank you very much. Mr. Key.

 STATEMENT OF MR. THOMAS S. KEY, TECHNICAL LEADER, RENEWABLES 
AND DISTRIBUTED GENERATION, ELECTRICAL POWER RESEARCH INSTITUTE

    Mr. Key. Thank you, and good morning, Mr. Chairman and 
distinguished Members. I am representing the Electric Power 
Research Institute. I shall focus on the role energy storage 
plays in the electric grid, both today and in the future.
    As a starting point, I want to recognize that electric 
energy storage is both valuable and expensive. Consider your 
retail electric rates at home that are around $.10 per kilowatt 
hour, yet most of us will gladly pay dollars when we replace a 
battery in a flashlight or cars or a portable appliance. We 
think it is worth it, and it is much the same way in the 
electric power grid. We are generally willing to pay more to 
store kilowatt hours of electricity than it costs us to make 
them by conventional means. The key is to have the energy in 
the right place at the right time, and this is an investment 
that we are willing to make.
    Today, our electric energy system delivers about 4,000 
terawatt hours, and it runs with very little storage. I would 
like to explain this. We are getting by without much storage 
because of the ingenious system of interconnecting many 
generators and consumers, by forecasting demand, scheduling 
supply, and maintaining reserve generation as backup. If the 
electric load turns off in one place, another one turns on 
somewhere else. In effect, we are running a massive just-in-
time delivery system, and as we have seen, it can be tricky to 
keep this system balanced.
    We depend heavily on natural gas, to both regulate up and 
down and to cover peak period. Gas currently accounts for 47 
percent of our supply capacity. Pump storage, our only 
significant method for electric storage, accounts for a little 
over two percent. In the future, we expect this situation to 
change. It will be increasingly difficult to operate this grid 
without additional energy storage. This change is our response 
to reducing carbon emissions, higher fossil fuel prices and to 
enable more diversified ways of generating and using 
electricity.
    We need more energy storage to support the new mix of 
lower-emitting and less-controllable electric supply, including 
solar and wind, but also nuclear and clean coal. We shall need 
energy storage to enable a more effective participation by 
customers in managing their own use of electricity. One way 
storage can benefit the grid is to improve our use of the 
generators, the transformers, and the power lines. Currently, 
our utilization of these assets is below 50 percent. This is 
because of large variations in the electricity demand, day to 
night and seasonally, and because of our practice of just-in-
time delivery.
    To find large-scale storage options, EPRI is looking at new 
ideas in compressed air systems to supplement existing hydro. 
This will allow us to use existing transmission lines much more 
effectively. On a smaller scale, distributed storage, using 
batteries, pumped water, or compressed air can improve grid 
asset utilization closer to the point of use. This is at a 
substation or feeder level. EPRI is working on a future, smart 
distribution grid using distributed resources, including 
storage, to help manage electricity use. With more cost-
effective storage technologies, we can increase efficiency and 
interact better with other new technologies such as rooftop 
photovoltaic and plug-in hybrid vehicles. These new storage 
technologies will be needed to enable future solar and wind, by 
giving our operators more options in balancing renewable supply 
and demand.
    Cases are already documented where wind has challenged 
operators in New Mexico, California, and Hawaii. In all of 
these cases, storage is considered as part of the solution.
    I would like to point out some challenges for electric 
storage, related to economics and risk. Costs are very high and 
siting and permitting can be difficult for large-scale storage. 
This is illustrated by the very modest amount of pumped hydro 
in the U.S. today. Energy storage by its nature, creates value 
streams for several different stakeholders. With the 
regulation, it is difficult to aggregate the value and secure 
financing. This was illustrated by a compressed air plant that 
was not built to support West Texas Wind in 2002.
    Distributed energy storage will require significant 
investment for development and demonstration. The utility 
industry is usually in a position to make this investment. We 
believe that the DOE programs are on the right track to address 
the utilities interest, but there are many more opportunities 
in the future to partner on first-of-a-kind applications in 
different regions and under different grid-operating condition.
    In the future, EPRI shall continue to work with its members 
and the Department of Energy to help realize the untapped 
benefit of new energy storage technologies in the electric 
grid.
    We believe that the expanded use of energy storage is 
important to improving the efficiency, reliability, and 
security of the electric power network. Energy storage 
application in both the transmission and distribution grid will 
be essential to meet the growing demand for electricity using 
low emitting technologies and gaining the full value of end-use 
energy management. Thank you, sir.
    [The prepared statement of Mr. Key follows:]
                  Prepared Statement of Thomas S. Key
    Thank you, Mr. Chairman and Members of the Subcommittee. I am 
Thomas Key, Technical Leader, Renewable and Hydropower Generation for 
the Electric Power Research Institute (EPRI), a non-profit, 
collaborative organization conducting electricity related R&D in the 
public interest. EPRI has been supported voluntarily by the electric 
industry since our founding in 1973. Our members, public and private, 
account for more than 90 percent of the kilowatt hours sold in the 
U.S., and we now serve more than 1,000 energy and governmental 
organizations in more that 40 countries.
    We appreciate the opportunity to provide testimony on ``Energy 
Storage Technologies: State of Development for Stationary and Vehicular 
Applications.'' My testimony today comes from the viewpoint of the 
electric power system and focuses on the role that electric energy 
storage plays in the power delivery system of today and in the future.
    Today the power delivery system is a complex network of over 
450,000 miles of transmission, five million miles of distribution, and 
22,000 substations that tie together electricity supply and demand. At 
EPRI we partner with our members to ensure that this existing grid 
infrastructure is working reliably and safely, and that new 
technologies are available to meet future requirements. The power 
delivery system of the future, in a carbon constrained world, will be 
required to support both a new generation mix, with lower emissions, 
and a more effective participation by consumers in managing their 
efficient use of electricity. We believe that the ability to cost-
effectively store electric energy will be an important part of this 
delivery system of the future.
    Before I discuss the benefits of energy storage, I feel it would be 
worthwhile to explain how we operate the electric power system with 
only a small amount of electric energy storage today, and why this will 
change in the future.
    The existing grid has operated for nearly a century as a massive 
just-in-time delivery system, providing electricity to meet demand 
practically as soon as it is generated and without storing in 
inventory. This is made possible by the size and diversity of the power 
grid, which allows system operators to ignore the small fluctuations 
associated with individual electrical load changes. When an electrical 
load turns on in one place, the effect is reduced by another turning 
off somewhere else. This characteristic allows system operators to 
follow load changes by throttling only a few generators. Large shifts 
in load occur daily over a period of hours and can generally be 
forecast, giving system operators the chance to schedule, dispatch and 
gradually ramp generation up and down according to the demand for 
electricity. Natural gas fueled turbines are the primary generation 
resources used to meet peak demands. Reserve generation, some actually 
spinning, is required to maintain reliability and to meet system 
contingencies.
    This just-in-time electric delivery system requires that 
generation, transmission and distribution capacity are large enough to 
serve the maximum load that can occur at any point in time. The maximum 
load, for example on the hottest days in summer, can be significantly 
larger than the average load on the system, but may occur only once or 
twice a year. One consequence of the large variation in electricity 
demand and just-in-time delivery is that the power system assets are 
often under underutilized, such as at night and during temperate 
seasons. The overall utilization of electric generation in 2006, 
according to EIA data, was 48 percent. Utilization of the power 
delivery system in this traditional power system model is less than 
generation. Natural gas fueled turbines are the primary generation 
sources used to meet peak demands, and these plants remain idol most of 
the time. In effect natural gas also allows us to operate with only 
about two percent pumped hydro storage, a significantly lower supply 
than in Europe and Japan.
    We believe that this traditional model will not work as well in the 
future as it has in the past. Our growing economy and rising standard 
of living continue to push the demand for electrical power upwards, but 
social, economic, and environmental reasons have made the construction 
of new generation, transmission, and distribution assets unattractive, 
particularly when those assets are underutilized. Even so new electric 
generation and related transmission resources will be needed. The 
changing nature of these resources will increase the need for energy 
storage on both the supply and demand sides. New electric energy 
storage technologies coupled with energy efficiency measures are keys 
to a better utilization of existing and future power system assets.
    The large scale adoption of renewable energy technologies, with 
today's wind at the transmission level and future roof top solar at the 
distribution level, change the way utilities and grid operators will 
manage power delivery. Unlike conventional generation systems, which 
can be controlled by adjusting the fuel input, renewable energy 
technologies generate only when the wind is blowing or when the sun is 
shining. They cannot be controlled to meet demand and may provide 
insufficient energy to the grid when it is needed or too much energy to 
the grid when it is not needed. Specific cases are already documented 
where wind has challenged system operators in New Mexico, California 
and the Big Island of Hawaii. In all of these cases energy storage is 
being considered as a solution.
    Another important factor related to the need for storage is the 
increasing cost of fossil fuels that has made their efficient use more 
vital than ever before. This is particularly true with the use of oil 
in the transportation industry. One important method of actualizing 
this improved efficiency is electrification with technologies such as 
the plug-in hybrid electric vehicle (PHEV). Energy storage technologies 
developed for PHEV applications, and made available via the smart 
electric distribution grid of the future, can provide grid support in 
the electric distribution system. In this application energy storage 
directly improves energy efficiency and reduces our dependence on 
foreign oil, with related advantages to security and society.
    In the future cost effective energy storage will be needed to 
increase utility system asset utilization, support energy efficiency 
measures and allow the increased use of renewable energy sources, 
reducing the carbon intensity of the American economy. EPRI has 
identified several specific benefits to the expanded use of energy 
storage technologies in the electric grid, including the following:

          Enable integration of renewable energy such as wind 
        and solar with the existing electric power delivery system;

          Improve reliability and security of the electric 
        power delivery system by proving grid support both at 
        transmission level and close to the point of use;

          Increase asset utilization of existing power delivery 
        infrastructure, as well as potential deferment of the 
        construction of new assets, by shaving peaks;

          Improve utilization of primary fuels and reduce 
        domestic consumption of petroleum through the electrification 
        of transportation; and

          Provide needed load following and regulation services 
        to electricity markets.

    A number of different energy storage technologies are being 
considered to bring these benefits to fruition. Each technology has 
advantages and disadvantages, which make it suitable for certain 
applications. For instance, sodium-sulfur batteries have made strong 
inroads in distribution level peak shaving applications, and lithium 
ion batteries are considered the energy storage technology of choice 
for plug-in hybrid electric vehicles. For utility-scale load leveling 
and storage of wind energy, pumped hydro has been the workhorse for the 
industry. However, suitable locations for new pumped hydro are 
considered to be limited, suggesting a promising opportunity for large-
scale compressed air energy storage (CAES) that can be sited in many 
areas.
    In a CAES system, electrical energy is used to compress air, which 
is then stored in a pressurized reservoir. The compressed air can later 
be used to generate electricity by passing it through an expansion 
turbine with heat input. The heat input is often delivered through the 
combustion of natural gas. Although natural gas is burned in these 
systems, the stored heat energy allows efficiencies that are more than 
double those of conventional gas turbines, with correspondingly low 
carbon intensity. CAES systems are usually designed on large scales, 
with power ratings in the hundreds of megawatts, and the capability to 
deliver that power for hours. Large underground caverns, salt domes or 
aquifers are used to store the compressed air. Two such systems have 
been built, one in Germany and the other in the U.S., with at least 
three others proposed in the U.S. to date.
    The hurdles in bringing needed energy storage technologies on line 
are related primarily to economics and risk. Specific challenges are 
different for large scale central systems and for smaller, more 
distributed, energy storage technology options:

Hurdles to deployment of large-scale, transmission-connected energy 
                    storage:

    Construction of proven large scale technologies, such as pumped 
hydro and CAES, would immediately assist operators in the integration 
of wind and nuclear energy. However, the costs of implementing these 
technologies can be unreasonably large. For example a 200MW compressed 
air energy storage plant capable of storing 800MWh of energy can be 
expected to cost $200 to $250 million, not including the cost of siting 
and permitting.
    The very modest amount of pumped hydro built in the U.S. 
illustrates this issue. Today there are 38 pumped hydro plants with a 
summer peaking generating capacity of 21GW. Fifteen years ago FERC had 
license applications for 18GW of new pumped storage (42 plants total, 
with 31 in the west). However, deregulation, relatively cheap natural 
gas, and risk adverse private investors led nearly all developers to 
back out of construction. Only one large plant was build, the 800MW 
Rocky Mountain facility commissioned in 1995 in Northern Georgia.
    Another hurdle is the aggregation of energy storage benefits, which 
are spread across a number of stakeholders. While there is little doubt 
that the net social benefits of these large storage plants are 
positive, the benefits are distributed among power produces, system 
operators, distribution companies, end-users, and society at large. The 
decision to build a plant, however, must be made by a single entity, 
and it is often unclear how that entity can capture enough benefit to 
justify the investment. A specific case in point is a CAES plant 
proposed to support wind development in West Texas in 2002. In a study 
commissioned by the Lower Colorado River Authority the sum total of all 
benefits for this large scale plant were clearly shown to exceed the 
cost. However, benefits were shared by wind plant operators, local 
power distributors, an independent system operator and rate payers. Not 
any single value stream, by itself, could secure financing.
    Also impeding investment in large scale energy storage is that 
current situation where electric storage is not clearly defined as 
either a generation or a T&D asset in most jurisdictions. This presents 
a problem for deregulated utilities who would like to invest in 
storage. If a transmission utility invests in a system, and a ruling 
subsequently classifies that system as generation, the utility will 
have made a large investment it cannot recover.

Hurdles to deployment of smaller-scale, distributed electric energy 
                    storage:

    Distributed energy storage holds great promise for improving 
utilization of distribution assets and enabling a future grid with 
PHEV, roof top solar and distributed power system communication and 
control (``smart grid''). The actualization of this potential requires 
significant investment to develop, demonstrate and deploy new 
technologies. The utility industry is generally not in a position to 
make this initial investment, although there is high interest for 
trying out promising grid-connected technologies. Department of Energy 
programs to develop, test, and demonstrate energy storage technologies 
are believed to be right on target regarding utility industry interests 
in the distributed systems. More opportunities to partner on first-of-
a-kind applications in different regions, and under different grid 
operating conditions, will be welcomed.
    In the future EPRI will continue to work with its members and the 
Department of Energy to help realize the untapped benefit of new energy 
storage technologies in the electric power industry. We believe that 
the expanded use of energy storage is important to improving the 
efficiency, reliability and security of the electric power delivery 
network. Energy storage applications in both the transmission and 
distribution grid will be essential to meet the growing demand for 
electricity, using low emitting generation technologies, and gaining 
the full value of end-use energy management.

                      Biography for Thomas S. Key
    Mr. Key directs R&D in the Renewable Program at EPRI.

Experience

    A nationally recognized leader in electric power system research, 
application of distributed generation and energy storage, and related 
testing, Mr. Key is credited as the father of the ``CBEMA'' curve for 
compatibility of electronic equipment. He has been a catalyst and major 
contributor IEEE standards for compatible interface of end-use 
equipment and distributed power systems.
    Prior to joining EPRI he was a member of the technical staff at 
Sandia National Laboratory in Albuquerque where he pioneered some of 
the early work on grid integration of distributed solar electric 
systems. This included design and testing of photovoltaic power 
systems, development of grid-connected inverters for conditioning and 
control of distributed energy sources, and creation of power system 
design practices for grounding, and protection.
    Since joining EPRI in 1990 he has developed criteria for a utility 
grid-compatible interface, characterized high-performance dc/ac 
inverters and electronic appliances, analyzed effects of power 
disturbances on sensitive electronic equipment, and developed design 
criteria and recommended practices for cost-effective application of 
power-enhancement equipment.
    He is the author of more than 100 professional papers, reports, and 
technical articles.

Professional Affiliations and Activities

          Institute of Electrical and Electronics Engineers 
        (IEEE)

          Proposed and chaired the first IEEE Recommended 
        Practice for Powering and Grounding of Sensitive Electronic 
        Equipment

          Initiated IEEE Standards Coordinating Committee for 
        Power Quality

          Lecturer for Univ. of Wisc., EPRI, and IEEE Standards 
        Board Seminars

          United States Navy, Civil Engineer Corps (Seabees), 
        Retired

Achievements

          IEEE Fellow for Advancements in the field of Electric 
        Power Quality

          John Mungenast International Power Quality Award 
        distinguished power quality research.

          IEEE Outstanding Engineer Award, Region 3

          Originated and directed the EPRI Power System 
        Compatibility Research Program

Education

          Master of Science in Electrical Power Engineering and 
        Management, Rensselaer Polytechnic Institute, 1974

          Bachelor of Science in Electrical Engineering, 
        University of New Mexico, 1970

                               Discussion

    Chairman Lampson. Thank you. I appreciate the testimony, 
and we will now enter into periods of questioning by Members. I 
shall recognize myself, as Chairman, for the first five 
minutes, and I would like to start with Mr. Roberts.

            Energy Storage to Reduce Electricity Congestion

    The Department of Energy has designated two national-
interest electric-transmission corridors, the Mid-Atlantic Area 
and the Southwest Area. They include areas of growing 
population and growing electricity congestion. These 
designations have not been without controversy.
    Do you think that advanced energy storage systems could 
help reduce some or much of the need to build more electric 
generation and transmission lines?
    Mr. Roberts. Thank you, Mr. Chairman.
    I think it is essential that storage be applied in the load 
centers in the larger cities in those regions. It will help 
relieve that congestion in the peak periods and will be very 
essential in making that happen and hopefully delaying those 
upgrades for a long period of time, hopefully.

              Government Role in Energy Storage Deployment

    Chairman Lampson. Mr. Key, in your testimony you state that 
another hurdle to energy storage deployment is the fact that 
the benefits are spread across a number of stakeholders, 
including power producers, system operators, distribution 
companies, end-users, and society at large. Is there a role for 
the Federal Government to help bring stakeholders together to 
encourage investment in energy storage systems so the 
investment burden doesn't lie with one entity?
    Mr. Key. I think we need help in these areas. I haven't 
prepared any recommendation related to how the Federal 
Government might help, but it is very difficult to build large 
plants, and there are clearly benefits, aggregate benefits to 
the public to do this, and we have seen that with our few 
existing plants that are still valuable today, and we are going 
to need more in the future.

                           Grid Modernization

    Chairman Lampson. Mr. Dickerman, in your testimony, you 
discussed what is needed to modernize the grid, including 
electricity-storage devices and communication systems. In your 
opinion, do we need a new government body dedicated to 
facilitating or overseeing the modernization of the electric 
grid?
    Mr. Dickerman. I think that, clearly, what is needed in 
this whole area is some clear thinking about how all of it fits 
together. If I might take a minute, I think the kind of 
transition we are talking about here is very much like what 
happened with vehicles, where a vehicle in 1985 and one today 
is very different, and there is a lot of communication 
protocol, and there is a lot of computer capability, and there 
is a lot of control of various devices that have optimized an 
automobile today.
    Now, we are talking this afternoon about the importance of 
storage and further optimization. It is a very complex thing 
that we are talking about doing in an automobile. And electric 
utility grid is far more complex in many respects that there is 
so much of it, and it all operates together, and it operates in 
real time. So we can improve the operation of the electric 
utility grid substantially with communication and with control 
and with dynamic optimization and storage. But to do all of 
that, there are a lot of technologies that have to come 
together, and they have to come together in a way that is 
common across the entire nation, and so I do think that there 
needs to be some kind of group that comes together to really 
work through what does this look like and how do the 
technologies work together?

                        Ancillary Power Services

    Chairman Lampson. Thank you. And for Mr. Roberts and Ms. 
Hoffman, several questions: as you know power generators 
provide a number of ancillary services to the grid to help it 
meet reliability and operating standards. You both mentioned 
spinning reserves and frequency regulations in your testimony. 
Ms. Hoffman also describes the Department's frequency 
demonstration project in New York. In the future, do either of 
you anticipate energy storage systems playing a large role in 
providing vital ancillary services to the grid?
    Ms. Hoffman. Mr. Chairman, yes, I agree that storage 
systems will provide a large source for frequency voltage 
regulation and expanding reserves in the future.
    Mr. Roberts. Mr. Chairman, I agree. One of the issues at 
stake here is, today, the response time for the generating 
systems to respond to frequency-regulation signals can be three 
or four minutes. Whereas fast-acting storage systems could 
respond in cycles, which would be more beneficial. It is 
stressful on many large plants to do this up-and-down 
regulation, and I think the power electronics that go with 
these types of systems adds R-control, which is reactive-power 
control as a side benefit of providing real power, so there is 
a real opportunity here, I think, to take care of these devices 
to do these functions.

                     State Energy Storage Policies

    Chairman Lampson. I shall ask these last two things, and 
you can all just comment on them: outside of the Department of 
Energy's demonstration projects, are states or regions adopting 
policies to encourage the use of energy storage systems to 
provide ancillary services to the grid, and are there benefits 
to broad adoption of policies that encourage the use of them?
    Ms. Hoffman. Both New York and the California Energy 
Commission have strong programs looking at energy storage 
demonstration projects as well as some of the demonstration 
projects that you have heard here from AEP and the Electric 
Power Research Institute. I believe those are very strong 
programs in looking at the strategy for appropriate placement 
of energy storage systems.
    Mr. Roberts. I would agree with her comments. Those two 
states have taken a leadership role in this. I think other 
states are looking at how they might get involved, and I think 
the message is starting to spread around that there is real 
benefit here at the state level at the operation of the grids 
in those regions, and it is going to improve.
    Chairman Lampson. Thank you very much. I shall now 
recognize Mr. Inglis for five minutes.

                     Fuel Cells for Energy Storage

    Mr. Inglis. Thank you, Mr. Chairman. I am particularly 
interested in the storage of energy for transportation 
purposes, and in the discussion draft we have before us of the 
bill that we may be marking up soon, we talk about research on 
ultra-capacitor, flywheels, batteries and battery systems, 
including flow batteries, compressed air energy systems, power 
conditioning electronics, manufacturing technologies for energy 
storage systems and thermal management systems. I wonder if 
fuel cells are appropriately in that list. Ms. Hoffman, do you 
think so? Is a fuel cell appropriately in a list of batteries? 
Is it essentially a battery, you just put something in it and 
then it runs through and creates electricity. Should it be on 
the list?

                     Ultracapacitors and Fuel Cells

    Ms. Hoffman. A fuel cell is a type of exchange, so for 
storing energy, it does use hydrogen as part of the fuel cell 
component. I shall have to get back to you on that.
    [The information follows:]
                       Information for the Record
    Fuel cells are not really an energy storage system. They can be 
considered generators that produce energy similar to solar energy, wind 
energy, and other distributed generation. Research on fuel cells is 
conducted by other DOE programs.

    Mr. Inglis. I just wonder if it might appropriately be in 
there. It is--of course, I have talked a lot about hydrogen and 
I am very excited about its potential applications to 
transportation. It is also true that batteries could be the 
competitor that wins the race to the car of the future. You 
know, if you have a really good battery, then perhaps you don't 
need hydrogen, either burning in an internal combustion engine 
like BMW wants to do it, or in a fuel cell, like General Motors 
wants to do it. And I was very interested in this story 
recently about Lynn Motor Company using an ultra-capacitor. I 
think they are based in Austin, Texas, and maybe manufacture in 
Canada--I saw the story, but they say that they have an 
ultracapacitors kind of concept that will enable a battery to 
be recharged in five minutes and to take a car 500 miles on a 
charge. Are you familiar with that or--I read the article and I 
thought, wow, this could be fabulous, and then I saw some 
questions about whether it would really work. Do you have any 
thoughts about that?
    Ms. Hoffman. I don't have any comments on your specific 
example. I shall have to get back to you for the record on that 
specific example, but with respect to your comments on the 
types of vehicles and what horse is going to win the race, I 
think that versatility is an important aspect of having for our 
vehicle fleet as well as our stationary sources, and I believe 
that in that diversity, there are options for fuel cell cars as 
well as plug-in hybrid electric vehicles in providing the 
diversity that the country needs.
    [The information follows:]
                       Information for the Record
    Zenn Motor Company, a Toronto-based producer of battery powered 
cars, has a technology agreement with EEstore, Inc. of Austin, TX and 
holds an exclusive license for EEstore batteries. The device, which is 
a type of supercapacitor, is not yet in production. EEstore claims that 
their batteries, when inserted in the Zenn motor Company's 25mph 
vehicle, would allow a range of 500 miles and would recharge in five 
minutes. Sandia National Laboratories, acting for DOE's Energy Storage 
Program, has requested a sample product and offered to test their 
device in order to verify these claims. The company has declined to 
provide a sample. The Department is not aware that any authoritative 
experts have verified the claims of the device.

    Mr. Inglis. And certainly, it really doesn't much matter 
who wins the race, does it? I mean as long as we can get away 
from what we have got now which is a terrible way to get 
around, in terms of the environmental benefits and national 
security risk that we are running, and the job creation 
opportunity by creating these new technologies. So do you think 
that--I don't know if anybody else wants to comment on whether 
they have seen that--or looked at the ultracapacitor technology 
involving that car. Mr. Roberts, have you seen that?
    Mr. Roberts. Congressman, I have done some research, my 
company has done some research on that particular thing you 
read about in that article, and a lot of money has been 
invested in waiting to see when a prototype is finally 
delivered to see if these claims can be met, because they are 
pretty broad.
    Mr. Inglis. Yes.
    Mr. Roberts. And so it is kind of stretching the boundaries 
right now, but until some demonstration is done to see, we 
won't really know.
    I have a comment on the fuel-cell usage in stationary 
application. Fuel cells are--work very well, but they have no 
energy behind them. They have no punch. To make a stationary 
fuel cell really work effectively, you need to add some from of 
storage to it to give it the immediate energy it needs if there 
is a sudden load change or something, if you are applying it in 
an office building or something and the air conditioning turns 
on, a fuel cell can't deliver that surge of energy, and so 
storage actually enables fuel cells to work better.
    Mr. Keys. We have tested ultracapacitors and applied them, 
and I would just say that to drive a vehicle 500 miles, there 
must be some other fuel involved. There is just not energy, I 
think, today, although the research is very interesting in this 
area--and in fact, we have done a lot of it. Regarding fuel 
cells, I don't think they are really treated as a battery or as 
a storage system. The storage, of course is the hydrogen--or 
the natural gas or the fuel that goes into the hydrogen. So I 
think one problem with treating a fuel cell, because it uses 
hydrogen as energy storage, it is like we have used hydrogen in 
internal-combustion engines from a tank of hydrogen, so there 
is a bit of a problem, I think, if you go down that route.
    Mr. Dickerman. I might offer a couple of comments as well. 
AEP has been involved with supercapacitors, and we have not 
seen results anything close to that, but what we have seen is 
that they have a real advantage in the fact that they can go 
through a lot of charge-discharge cycles, and we don't even 
know the limits yet. We have not been able to wear one out, so 
it is very positive in that regard.
    In terms of fuel cells, I think fuel cells in storage, as 
Brad Roberts was alluding to, are a really great marriage, 
because we are also working with fuel-cell technology with 
Rolls Royce, one-megawatt-sized fuel cells for deployment on a 
utility grid. And the thing about the fuel cell is that it 
really likes to run flat out. In other words, you turn it on, 
and you run it at a megawatt, and it doesn't want to vary. If 
you put a storage device with it, then you can take up all of 
the variation and load with the storage device, so a two-
megawatt unit--one megawatt, a fuel cell; a megawatt of 
storage--and then you have got something that can sort of 
follow the load and the efficiency of the fuel cell is very 
high. So I think it is an important technology related to this, 
and it is a technology that benefits from this.
    Mr. Inglis. Thank you.
    Chairman Lampson. I would recognize Chairman Gordon at this 
time. He has stepped out, but in the interest of time, Mr. 
McNerney for five minutes.

                       Rating Storage Technology

    Mr. McNerney. Thank you, Mr. Chairman. I want to thank the 
panel for coming in today with your testimony. Storage is, I 
think, critical to global warning issues because storage is 
going to allow us to utilize wind energy, solar energy, and 
other forms of intermittent renewable energies on a large 
scale. Right now, we are not able to do that because of the 
intermittency problems. So I want to see what we can do in 
terms of the Federal Government encouraging this type of 
research.
    Mr. Dickerman, you mentioned--well, I would like to know 
how you rate storage. Now, there are two ways to rate, by the 
installed capacity so to speak, how much power it can generate 
and how much energy it can store, and then how would you use 
that to--how would you use that, economically, to decide 
whether a storage technology is viable for a particular 
application?
    Mr. Dickerman. That is a great question. I think one of the 
issues with a technology like storage is that it is a fairly 
complex set of economics, because you are talking about 
multiple benefits at the same time, so we can deploy a storage 
device to just shave a peak, so essentially what that gives you 
is about enough energy to serve 600 homes for seven hours, if 
it is a megawatt. We are probably going to tend to be deploying 
more in the two megawatt size, so about 12,000 homes for about 
seven hours. So that is the basic grading. You can use it for 
just peak shaving, and in that case, it might defer capital 
like a new station transformer or line upgrades or things of 
that nature.
    But we are also working now to island the technology, that 
is to make it such that if you lose the feed to an area--
imagine a remote rural area with relatively poor reliability, 
single-feed. You lose the feed because a tree comes across a 
line. Then, the battery can continue to feed that area. So that 
has a value as well. And then there is this value that is much 
harder for us to get our arms around that we were talking 
about. As it sits, there are regulation values for generation 
and that type of thing, so there are several things happening 
at the same time in terms of building up the value, so each of 
the projects we are looking at, we are sort of tailoring the 
economics and saying how much do we save in terms of differing 
capital because it reduces the load of peak. What is the value 
of the reliability that we are gaining? And basically, those 
are the two factors. We are not really yet to the point of 
trying to decide what is the value of some of those other 
aspects that might benefit generation.
    Mr. McNerney. Well, that is right. With wind energy, which 
I am familiar, you have, say, $1,500 a kilowatt installed, and 
then you have $.05 to $.06 per kilowatt hour produced. And I 
don't have a clear idea of how storage impacts those economics.
    Mr. Dickerman. Specifically on wind generation?
    Mr. McNerney. Well, wind, but it would be, you know, 
certainly the analysis would be transferable, I am sure.
    Mr. Dickerman. Well, in the case of wind, for example, wind 
can probably be best thought of as a negative load. So load is 
something that you can predict somewhat, and you can follow 
load with the generation that you have got. But the generation 
that we are used to dispatching, you know what it is. You know 
you can dispatch it. If it is 100 megawatts, you know it is 
available; you turn it on, and it meets the need. Wind 
generation, you don't know if it is going to be there, because 
you don't know when the wind is going to blow, so there is an 
uncertainty. So it is uncertain in the same way that load is 
uncertain, and you have to follow load, and you also have to 
follow wind generation because you don't know what is going to 
happen. What the battery does is it enables you to store it and 
then make it available on peak when it means the most to you. 
And obviously, the price--the real price of producing energy 
goes up as the demand goes up throughout the day.

                         Foreign Energy Storage

    Mr. McNerney. Ms. Hoffman, you had said something that 
peaked my interested, that we have--2.5 percent of our energy 
in this country goes through storage, and 10 to 15 percent goes 
in Europe. What are the technologies they use in Europe that 
allow that high a percent of their electric power to go through 
storage? How economic is that?
    Ms. Hoffman. I believe I had mentioned Japan. Japan did the 
first sodium-sulfur battery, so they do have--it is the same 
suite of storage technologies that we are talking about here 
for the United States.
    And I am sorry. I missed the other part of your question.
    Mr. McNerney. Well, what is the economics of that? How much 
do they pay, premium, for that storage capacity.
    Ms. Hoffman. I shall have to get back to you on that for 
the record.
    [The information follows:]
                       Information for the Record
    The primary storage technology in Japan, as in the U.S., is pumped 
hydro. However, as Japanese government mandates increasingly require 
more storage to offset intermittent wind generation, sodium-sulfur 
storage systems are being widely deployed there. Due to the success of 
this technology in Japan, U.S. companies such as American Electric 
Power and the NY Power Authority have chosen to install pioneering 
field tests in the U.S. The Department supports these tests through 
collaboration on facility design, monitoring, and economic analysis of 
the systems.
    At approximately $1,500/kWh, the price of NAS batteries is about 
three times that of conventional lead acid batteries. However, because 
their lifetime is considerably longer, the cost per cycle is only a 
third of the cost for lead acid batteries. Maintenance costs are also 
considerably lower for NAS batteries.

    Mr. McNerney. Thank you. Thank you, Mr. Chairman.
    Mr. Key. Well, the storage in Japan and in Europe is pump 
storage, sir. There is very little battery storage, you know, 
that would add up to that percentage in the world.
    Mr. McNerney. Thank you, Mr. Chairman.
    Chairman Lampson. Thank you, Mr. McNerney. Ms. Biggert, 
five minutes.

                         NAS Battery Technology

    Ms. Biggert. Thank you, Mr. Chairman. Ms. Hoffman, what are 
the origins of the NAS battery technology? I thought that this 
technology was developed in the United States. And did the 
government play a role in that development?
    Ms. Hoffman. I am going to defer to Mr. Dickerman for that.
    Mr. Dickerman. The NAS battery technology was developed in 
1965 and Ford Motor Company was involved, and it was a 
technology that was, of course, considered at that time as 
having possible application in vehicles. It was taken to a 
certain extent, and basically the technology, then, was picked 
up by the Japanese and a combination of NGK with support of 
Tokyo Electric, the Japanese government continued to develop it 
and brought it to the kind of maturity to where it could be 
used in the Japanese electric-grid infrastructure.
    Ms. Biggert. Was it ever used by the government, do you 
know, or Department of Energy had any research on that?
    Mr. Dickerman. That, I don't know.

         Preventing Others From Capitalizing on U.S. Inventions

    Ms. Biggert. I guess I am just wondering because it seems 
like this is another example where technology was developed in 
the U.S., and then commercialized and deployed by foreign 
companies and governments. Just like we have developed the 
nuclear technologies, particularly the recycling, and then it 
has been commercialized by France, and now they are selling 
this back to the United States, so--and we are having to buy 
from overseas because we have failed to capitalize on the 
inventions and the technology here, so do you have--anybody 
have any ideas about how to prevent this? How we can make 
sure--Mr. Roberts?
    Mr. Roberts. I would like to comment on that. That part is 
true, but taking that battery energy and delivering it into the 
grid requires very sophisticated power electronic equipment, 
and we are in a leadership position in that field in the United 
States, and we have been very fortunate that we have developed 
that marketplace. And we are one of the leaders, my company is 
one of the leaders in that arena. And our initial developments 
and all of our work are a very good example of DOE programs 
that go back about ten years ago, so----
    Ms. Biggert. Mr. Dickerman.
    Mr. Dickerman. Yes, I think there is really four stages to 
development of any technology. There is the basic research, and 
quite often that involves academic institutions, pure-research 
kind of programs in various places around the country. And then 
there is applied research, where you start thinking about what 
you can do with it. Then, I think where things tend to break 
down is there is a need for demonstration projects, and at that 
point, you have to take the technology from something that is 
applied research, like we did with this NAS battery, or like we 
are doing with the islanding aspect of the NAS battery, and 
actually do something that has to work and actually serve a 
useful purpose. And at that point, there needs to be a greater 
collaboration between industry and between the organizations 
that are doing the research and understand the technology to 
create the real handoff as to how can you use this technology 
in a real way to accomplish a real purpose. And then, once that 
happens, I think there has to be incentives for widespread use, 
and what happens is, quite often, the technology, initially, 
even if it works, is at a price point where it really isn't 
competitive yet, and it needs an incubation period through some 
type of incentive. So basic research, applied research, 
demonstration projects, incentives for widespread use: I think 
that is what is needed, and where things break down is in the 
demonstration project phase with industry, I think.

                    Deploying Technology in the U.S.

    Ms. Biggert. Well, why did AEP, then, need DOE's help 
when--deploying that technology here when it has been in use 
for 15 years in Japan.
    Mr. Dickerman. Because it had not been employed on a U.S. 
infrastructure, and the U.S. infrastructure had some 
fundamental differences in the power electronics that Brad 
Roberts was talking about, and our vision from the start was to 
take it to a different level. So in Japan, the technology just 
sits there and peak shaves. And to even do that, we needed to 
develop the technology further to apply it on a U.S. system. 
The thing that hasn't been done anywhere in the world is to 
island this kind of technology so that it can improve 
reliability and function with no connection to the electrical 
grid. That we are doing for the first time in the United States 
anywhere in the world.

                          Alternative Energies

    Ms. Biggert. And Ms. Hoffman, in your testimony, you talked 
about replacing imported oil to use domestically produced fuel 
electricity to fuel our cars. But if we continue to, in this 
country--a trend I am not encouraging--gas or coal or nuclear 
for energy and not allowing drilling for natural gas on the 
outer continental shelf or in ANWAR, don't we run the risk of 
being more dependent on foreign gas? It seems like so much of 
this is based on natural gas which is really a commodity that 
we will run out of, and I think we need to keep it for, you 
know, the things that are really--plastics and fertilizers and 
things.
    Ms. Hoffman. Thank you, Congresswoman. The Department is 
looking at advancing all of the generation types that I think 
the United States is going to acquire in the future to meet 
that demand for electricity, and we will continue to look at 
clean coal concepts, advanced nuclear, and renewable technology 
to the maximum extent possible. Thank you.
    Ms. Biggert. Thank you, Mr. Chairman.
    Chairman Lampson. You are welcome. The Chair now recognizes 
Ms. Giffords for five minutes.

                      Thermal Storage Technologies

    Ms. Giffords. Thank you, Mr. Chairman, and thank you to our 
panelists who have come in today to talk about energy storage 
technologies. I am exited, Mr. Chairman, about this topic, 
because when I think about the challenges that we face as a 
nation and that the world faces, I think a lot of the solution 
to our energy needs can be talked about here in this room and 
hopefully put into action in terms of policy.
    This technology is important, not just because of global 
warming, but because of our dependency on foreign oil. As you 
know, figuring this piece of the puzzle out is going to be 
critical. I am also really concerned, and Congresswoman Biggert 
talked about it, is this competitiveness issue that we are 
facing. We put money into research and development here in the 
United States, and then we see that technology furthered in 
other places, and that has got to change, and hopefully this 
Congress can be part of making that a reality.
    A couple of questions: I am from Arizona, and everybody 
here on this committee knows because I always talk about 
Arizona. I am very proud of my state, and one of the beauties 
that we have in this state, of course, is our abundant supply 
of sunshine. We have over 350 days of sunshine every year. So 
it is really solar energy that has the greatest potential for 
renewable energy in Arizona. I noticed, Ms. Hoffman in your 
written testimony, and even in the testimony provided by the 
other panelists that there was no mention of thermal storage 
technologies, and that is obviously going to be critical for 
the development of solar power. So I was hoping that you would 
talk about this form of technology, what the Department of 
Energy is doing, and in each of your individual, respective 
area, where you see thermal storage development coming from and 
whether or not these applications can be used in other areas 
beside the concentration of solar power, which we are seeing 
developed out in areas like Arizona.
    Ms. Hoffman. Thank you, Congresswoman. Thermal storage is 
an opportunity but the Department does not currently have any 
research programs in the area of thermal storage that I am 
aware of. I shall check on that and get back to you for the 
record. But it does have potential for residential usage for 
thermal storage, and it can provide a balance with your 
photovoltaic system.
    Ms. Giffords. Ms. Hoffman, let me clarify, so you are not 
aware of DOE having any research or any development into this 
area?
    Ms. Hoffman. At this time. I shall check for the record, 
yes.
    [The information follows:]
                       Information for the Record
    The Department of Energy is investing in the use of thermal storage 
with solar technology applications through a number of projects. The 
storage of solar energy in this manner removes the intermittency of 
sunlight, enabling concentrating solar power (CSP) systems to provide 
energy to homes and businesses day or night.
    In the mid-1990s, the Department retrofitted the 10-megawatt Solar 
One Power Tower in Barstow, California with molten salt storage to 
demonstrate the functionality of solar power. That project, ``Solar 
Two,'' succeeded in proving the viability of molten salt storage, at 
one point producing power around the clock for 150 hours in one test.
    The Department strongly supports development of technology that 
dramatically reduces the cost of CSP power and emphasizes the 
development of storage technologies. Toward that end, the Department 
recently announced that it had selected twelve projects for further 
negotiations to enable DOE to invest up to $5.2 million to energize the 
U.S. market for CSP systems with a major focus on thermal storage. 
Also, both Sandia National Laboratories and the National Renewable 
Energy Laboratory are working to develop more efficient and lower cost 
thermal energy storage technologies for parabolic trough and advanced 
higher-temperature CSP systems.
    Even though solar technologies are largely load following, as peak 
power production coincides with peak air conditioning loads in the 
southwest, without thermal storage the capacity factor is only about 25 
percent. However, with storage, CSP technology can reach capacity 
factors exceeding 65 percent, making this a highly attractive power 
option for utilities looking for reliable renewable power to meet their 
intermediate and even baseload power needs. The Department's goals in 
the area of CSP include reducing the cost of solar power to be 
regularly available at less than 10 cents per kilowatt-hour by 2015.

    Mr. Roberts. A comment on solar energy and storage: 
typically, around the county, solar energy peaks two to three 
hours before the load peaks, and if you apply storage, you can 
extend--capture all of that energy and extend it into the 
evening and take advantage of that sunshine that was shining 
brightly in the afternoon when everybody was still at work, and 
so that is one of the areas storage can level out, solar 
energy, and extend that peak period to meet the peak period of 
the actual load itself.
    Mr. Key. Thermal storage is of great interest to a number 
of our Members in the west because of concentrated 
photovoltaic. In fact, we expect as much as five gigawats of 
that type of generation, and the thermal storage is a very 
natural part of a power tower, and it is also being looked at 
and tried out for the trough technology. It is limited, pretty 
much to the Southwest. It is great, and it will be a big help 
with solar, and in fact, with just balancing the Western system 
which has such long distances and issues with stability.
    Ms. Hoffman. Congresswoman, I shall clarify that there is a 
thermal storage program with concentrating solar power in our 
Energy Efficiency Office. I shall have to get back to you with 
more details on that program.
    Ms. Giffords. Please because, you know, here, again, in 
Arizona, you have an area with large tracks of lands, terrific 
sunlight, and also the scientist at the University of Arizona 
and other research institutions as well. The University of 
Arizona just announced a specific program that is going to go 
for building a center for solar excellence, and I think if we 
use that technology and we use the resources we have, we are 
able not just to help the fastest growing in the Nation, but 
also export that energy as well.

        Recycling Battery Technologies and Environmental Issues

    Let me just switch to another topic really quickly, which 
is the environmental impact of the storage in general and 
batteries in particular. You know, as we try to develop more 
and more of this technology, and again, in a state like Arizona 
where we have a lot of hard rock mining and a lot of the 
environmental impacts, I was just hoping that the panel could 
address the ability to recycle this technology and also the 
increased demand for some of these precious and rare metals 
that are going to go into the storage capacity.
    Mr. Roberts. I shall start the responses, Congresswoman. 
All of the technologies, the battery technologies that are 
being used today are based on 100 percent recycling taking 
place at end of life in those technologies. That is something 
that is very important. The sodium-sulfur battery is a 
medically sealed box, so there is no emissions associated with 
it, and at the end of its life, it is totally recycled.
    Mr. Dickerman. And for the years of operation in Japan, 
there haven't been any environmental or safety issues. Most of 
what is in that big box the size of a double-decker bus is 
sand, and that is most of the weight, but there really aren't 
any environmental issues that we have seen, and as I said, at 
the end of life, we expect to recycle the components.
    Chairman Lampson. I recognize Mr. Bartlett.

                           Twenty in Ten Plan

    Mr. Bartlett. With 10 kids, 16 grandkids, and two great-
grandkids, I ask what I think is a rational question to those 
who would like to drill in ANWAR and offshore. If you could 
pump ANWAR and the offshore tomorrow, what would you do the day 
after tomorrow? And there will be a day after tomorrow. 
Wantonly consuming the small additional reserves that we have 
is not a prescription of security for tomorrow.
    Mr. Key mentioned the challenge we have in getting 
batteries for cars that will get us very far, and that, of 
course, is because of the incredible energy density in our 
fossil fuels. One gallon of gasoline, it is a little, still 
cheaper than water in the grocery store, carries my Prius car 
50 miles. How long would it take me to pull my Prius car 50 
miles? This is incredible energy density. And to provide that--
even anything approaching that energy density in batteries is a 
horrendous challenge, and that is why this is such a difficult 
challenge.
    You know, in our aspiration for the future, we really need 
to be rational, and Twenty in Ten is not rational. There isn't 
even a prayer unless we have a devastating worldwide depression 
with demand destruction that we can even come close to 
displacing 20 percent of our gasoline in ten years. That is not 
going to happen if all of our corn was used for ethanol and 
just countered for fossil fuel input, it would displace 2.4 
percent of our gasoline. If all of our soybeans were converted 
to diesel fuel, they would displace 2.9 percent of our 
gasoline. Those aren't my numbers. Those are National Academy 
of Science numbers. And if we use all of our wastelands to 
plant a mixture of grasses and use the cellulosic ethanol, that 
might produce as much displacement of fossil fuels as all of 
our corn. So you add up these three things, and you are way 
short of even ten percent.
    You know, I am all for doing something rational, but you 
know, this is an impossible dream, and I don't want to set us 
up for disappointment. We are going to be enormously 
disappointed if we think we can even come close to displacing 
20 percent of our gasoline in ten years. We can certainly 
reduce by far more than 20 percent of consumption of gasoline 
in 10 years by conservation. I was in France at the last 
election--and by the way, it is interesting that the new French 
president is the son of a Hungarian immigrant. He is doing a 
pretty good job, isn't he? And I looked there for people riding 
in a pickup truck as personal transportation. I saw not one, 
and I looked for people riding in an SUV. The only SUV I saw in 
Paris was parked behind a church. I did not see one on the 
street. If we really want to reduce our consumption of 
gasoline, we need to approach it rationally, not with some 
impossible dream, and continue to drive these huge SUVs and 
pickup trucks, one person in them, for personal transportation 
and displace 20 percent of our gasoline in ten years. Am I 
wrong?
    Mr. Roberts. I would like to, Congressman, make one 
comment. I think everybody agrees that conservation and 
changing our ways has to take place. Along that way to that 
process, we need to use the energy resources we have much more 
efficiently--we are adding a lot of wind into the system--and 
to try to utilize it more effectively as quickly as we can. 
These programs that are listed in this bill, I think, would go 
a long way to helping that, but the real problem is, I think, 
as you suggested, that things have to change and attitudes have 
to change.
    Mr. Bartlett. I am a huge fan of wind and solar. I have an 
off-grid home. All of my electricity is produced by wind and 
solar, and I have a big bank of batteries to supply. But you 
must be very frugal in the way you use electricity if you are 
providing for yourself. There is nothing that will make you a 
better convert to conservation than producing your own 
electricity with wind machines and solar panels and watching 
how quickly that disappears if you are at all proliferate.
    Thank you all very much for your testimony and your helping 
to move us forward. Thank you, Mr. Chairman, I yield back.
    Chairman Lampson. Thank you, Mr. Bartlett. The Chair now 
recognizes Mr. McCaul for five minutes.

                  Solar Technology and Energy Trading

    Mr. McCaul. Thank you, Mr. Chairman. Roscoe, I want to 
congratulate you on ten children. I have five children, but you 
manage to double the amount that I have. That is an incredible 
accomplishment.
    I want to pick on an issue that was discussed earlier, and 
that is solar. My home state of Texas also has a lot of 
sunshine. Applied Materials in my district is working on solar 
panels, making great progress with those, and the real issue is 
storage, as you know. They tell me that the power grid can be 
used to--or their theory where they are going with all of this 
is to store the solar energy from the panels into the power 
grid, and then be able to draw upon the power grid, in other 
words, sort of getting credits for that. Is that a realistic 
technology? Anybody can answer.
    Mr. Dickerman. Well, I think that is. What we were saying 
to complement storage and wind is that you simply are taking it 
from something where you can't be sure when it is available, 
and you are storing it an making it available on peak, which 
clearly has a value. It sounds like that is exactly what they 
are talking about doing with the solar, and so it is the same 
value proportions. Simply making sure that it is available and 
dispatchable resource on peak when needed most.
    Mr. McCaul. Mr. Key.
    Mr. Key. The point that we will use the electric grid to 
buy and sell and trade solar and wind energy is critical. As I 
described in my testimony, we are limited, I think, in doing 
that, especially as we take our regulation-type generation, 
natural gas, and we try to move toward more nuclear and clean 
coal, and we add wind, and then it is going to be more 
difficult to do this trading and keep this system in balance. 
So I think it is a correct statement, but it is a matter of how 
long we can continue to do that as these renewable resources 
come into play.
    Mr. McCaul. And Ms. Hoffman, as I recall, in your 
testimony, you are not aware of any thermal storage research 
and development programs at the Department of Energy.
    Ms. Hoffman. Congressman, I was actually thinking of ice 
storage and some of those technologies when we were talking 
about thermal storage. We do have a concentrating solar power 
program that is tied with thermal storage, but I shall have to 
get back, for the record, on details of that program.

                    Hybrid Electric Development Time

    Mr. McCaul. One more, I have limited time. The hybrid plug-
ins, you know, we have hybrid vehicles, we have batteries, 
why--just explain to me--I am not a scientist--why it takes so 
long to get a hybrid plug-in vehicle that could be available to 
the average consumer, if anybody knows the answer to that one.
    Ms. Hoffman. The next panel may be able to address that 
with----
    Mr. McCaul. Ms. Hoffman, you would probably be the best 
person to try to venture at that. I won't be around for the 
next panel.
    Ms. Hoffman. From the Department's perspective, in 
developing a vehicle, there is a development cycle that the 
manufacturers have to put plans for future vehicles, and I 
understand that cycle is somewhere around eight years to ten 
years, and so they are looking now for technologies that they 
will introduce in the marketplace at a later time. For the 
record, I can find more on the cycle development for 
introducing new technologies into vehicle application.
    Mr. McCaul. I know we sponsored legislations for tax 
credits for that. It just seems to me that should be more in 
the short-term than in the long-term.

                        The Proposed Legislation

    And finally, Ms. Hoffman, have you had a chance to look at 
the proposed legislation here before us? There are two 
sections, section 6 and 7, that deal with demonstration 
projects at the Department of Energy. Can you comment on these 
two sections and also whether there is any duplication between 
these two programs?
    Ms. Hoffman. From a technical perspective on the content of 
that, I think it is very synergistic to where the Department is 
heading, where the states are heading, and where other research 
programs are going for this type of demonstration project. So 
for an area of completeness, I think the bill does capture both 
of those aspects.
    Mr. McCaul. So you see them as complementing and not 
duplicating. Is that fair?
    Ms. Hoffman. Yes, sir.
    Mr. McCaul. And then, finally, intellectual property is 
going to be a real issue if advanced technologies are 
discovered through these joint activities. Do you have anything 
in place to protect intellectual property?
    Ms. Hoffman. The Department does, and I would have to get 
back to you for the record on that one.
    [The information follows:]
                       Information for the Record
    Protecting intellectual property rights (IP) is a matter of high 
priority for DOE. The policy and procedures for protecting IP in DOE's 
Research, Development and Demonstration Program is well developed and 
in accord with applicable statutes and the practices followed by all 
government agencies. First, a private partner's preexisting IP is 
respected and under the terms of any award, the preexisting private 
partner's IP remains owned by the private partner. Next, while the 
government retains some rights to new inventions that are created 
through DOE awards, such as a government use license, the Bayh-Dole Act 
(35 U.S.C. 200 et seq.) permits small business and nonprofit 
organizations to retain ownership of their new inventions. Pursuant to 
a statutory procedure, other organizations can petition DOE to retain 
ownership of their new inventions and such petitions are usually 
granted subject to the government obtaining some rights. Finally, while 
technical data first produced under an award is normally required to be 
publicly disseminated, in appropriate circumstances DOE may grant up to 
five years of protection from public release of some data from a 
research award at the discretion of the DOE program office.

    Mr. McCaul. Okay, that will be fine. Thank you, Mr. 
Chairman.
    Chairman Lampson. Mr. Akin, I recognize you for five 
minutes.

                      Status of Battery Technology

    Mr. Akin. Thank you, Mr. Chairman. Just--I didn't know of 
the different witnesses, do we have anybody that is on top of 
where we are in terms of battery technology and that 
developmental process? My background is in engineering. My 
sense is that maybe one of the shortest paths to solving some 
of the dependence on foreign oil is using the off-peak power 
from the--whether it is coal or nuclear generation, and being 
able to put that right into a car. It also has the added 
benefit of not paying any fuel tax, which I like. But anyway, 
what is the status of battery technology? I understand, 
basically, the answer to my friend's question is that it is too 
expensive. The batteries are too expensive. They don't last too 
long, and just, economically, it is cheaper to burn gas. But 
the question is where is that technology, because certainly, it 
has come a long way in ten years. I mean I remember when they 
came out with that first electric-powered, you know, screw gun 
or drill, and the thing was not much power. Now, they have got, 
you know, these big hammer-drills are running on batteries. Is 
that continuing to move or not?
    Mr. Roberts. Congressman, unfortunately, in the afternoon 
session, there is a battery manufacturer that is here that 
could address that probably a little better, but there is a lot 
of activity and research and development of advanced batteries, 
particularly for vehicle application, going on in this country 
right now, and----
    Mr. Akin. But that is not your expertise, particularly.
    Mr. Roberts. No.
    Mr. Akin. Well, that is all I had for questions. Thank you, 
Mr. Chairman.
    Chairman Lampson. You are welcome. I think everyone has had 
an opportunity to ask questions, and we do have a second panel. 
We want to thank you very much for coming. I shall, in closing, 
ask are any of you aware of anything that has to do with 
wireless transmission of energy, and if so, I would like to 
talk with you. And again, I thank you all for coming. We will 
take a short break. We shall be in recess before our next panel 
comes up.
    [Recess].
    Chairman Lampson. Come back to order, and we will now hear 
from our second panel. That includes Ms. Lynda Ziegler who is 
the senior vice president for customer services at Southern 
California Edison; Ms. Denise Gray, who is the director for 
hybrid energy storage systems at General Motors; Mary Ann 
Wright is the vice president and general manager for Hybrid 
Systems Power Solutions at Johnson Controls. You will each have 
five minutes for your spoken testimony. Your written testimony 
will be included in the record for the hearing, and when all 
three of you have completed your testimony, we will begin with 
questions. Each Member will have five minutes to question the 
panel.
    Ms. Zeigler, we will begin with you.

                               Panel II:

   STATEMENT OF MS. LYNDA L. ZIEGLER, SENIOR VICE PRESIDENT, 
          CUSTOMER SERVICE, SOUTHERN CALIFORNIA EDISON

    Ms. Zeigler. At Southern California Edison, we are the 
largest purchaser of wind. We purchase over 2,700 megawatts, 
and we also purchase 90 percent of the solar generation in the 
country. My company has been committed to the electrification 
of transportation for 20 years. We operate the Nation's largest 
and most successful fleet of electric vehicles, a fleet that 
has traveled nearly 15 million miles on electric power. Our 
Electrical Vehicle Technical Center, unique in the utility 
industry is one of only several facilities recognized by the 
Department of Energy to evaluate all form of electro-drive 
technology. We have ongoing research collaborations with major 
automakers, battery suppliers and both the Federal and State 
governments. We believe that with continued engineering 
advances and appropriate public-policy support, the widespread 
use of advanced batteries in plug-in vehicles and in stationary 
storage will become one of the Nation's most effective 
strategies in the broader effort to address energy security, 
reduce greenhouse gas emission, and reduce air pollutant.
    In fact, the Electric Power Research Institute, which we 
heard form earlier, and the Natural Resources Defense Council 
recently partnered to publish one of the most comprehensive 
studies to date on Plug-in Hybrid Electric Vehicles. One key 
finding was that widespread adoption of plug-in hybrids could 
reduce annual emissions of greenhouse gases by more than 450 
million metric tons by 2050, or the equivalent of removing 82 
million passenger cars form the road. That kind of reduction is 
obviously a long way off, but it provides all the more 
incentive for us to begin today.
    Electricity is virtually petroleum free, is about 25 to 50 
percent of the cost of a gasoline equivalent and is the only 
alternative transportation fuel today with a national 
infrastructure already in place. A recent study by the U.S. 
Department of Energy estimates that a little over 70 percent of 
the light-duty cars and trucks on the road today could be 
fueled by the excess off-peak capacity that exists in the 
electricity system, without building a single new power plant.
    For utilities such as Southern California Edison, the 
challenge and the opportunity is to integrate electric 
transportation and their advanced batteries into a total energy 
system.
    In the near-term, the advanced high-energy battery in a 
plug-in vehicle could serve as a source of temporary energy 
power for the home, or to occasionally help customers avoid 
high electricity costs during peak pricing time. We call this 
vehicle-to-home. These same advanced high-energy batteries 
could also be used in stationary applications. Home owners 
could fill a home energy battery at night using lower cost 
electricity and then draw from it during the high-cost part of 
the day to help lower the monthly utility bill.
    In the mid-term, as plug-in vehicles increase in volume, 
using the grid's off-peak capacity at night to charge these 
vehicles may actually help lower customer's rates by increasing 
the utilization of our generating plants. In effect, utilities 
would spread their fixed costs over more kilowatt-hour sales.
    We evaluate new business models on these and other 
applications. Edison recently launched a partnership with Ford 
Motor Company to demonstrate and evaluate purpose built plug-in 
hybrid Ford Escapes. Our goal is to explore the future customer 
values believed through plug-in vehicles and stationary energy 
storage.
    At the same time as the emergence of plug-in vehicles and 
home energy storage is the advance of advanced utility meters. 
Over the next five years, Southern California Edison will 
install five million next-generation advanced meters called 
Edison SmartConnect in the home of every customer in our 
service territory. These meters will offer our customers better 
information and enhanced control over their electricity usage. 
Our Electric Vehicle Technical Center is working with industry 
stakeholders to integrate the vehicles and the home and the 
advanced meter.
    Finally, in the long-term, we can imagine the potential of 
so-called vehicle-to-grid systems, or the ability to move 
stored energy from many plug-in vehicles back to the grid. The 
potential, however, for vehicle-to-grid is many years away and 
will depend on the development of all new control technologies 
as par of the smart grid of the future.
    Is that anything I should worry about?
    Now, let me conclude with our view on the important role 
the Federal Government can play to bring the promise of 
electric transportation closer to reality. In our opinion, 
large-scale domestic manufacturing capacity for high energy 
advanced batteries is crucial to the expansion of plug-in 
hybrid vehicle application and complementary stationary energy 
storage uses. There currently exists no such capacity on a 
significant scale in the United States today. The Federal 
Government should provide near-term incentives to help nurture 
U.S. production of this critical technology.
    And earlier this year, H.R. 670, the DRIVE Act, included 
important measures to support research, development, and 
demonstration of advanced batteries in plug-in hybrids, battery 
EVs and stationary applications, as well as R&D for other 
aspects of electric drive technology. This language was then 
improved this summer by battery makers, automakers and other 
stakeholders and now passed the Senate as H.R. 6, and part of 
the DRIVE Act have passed the House as H.R. 3221.
    We support this language and look forward to working with 
your committee to explore other effective national 
manufacturing and consumer incentives to set the stage for the 
breakthrough of plug-in vehicles and energy storage in the U.S. 
marketplace.
    Mr. Chairman and Members of the Committee, we stand 
committed to partnering with all automakers, battery suppliers, 
stakeholders and government to help realize the vision I have 
laid out for you today. Thank you very much.
    [The prepared statement of Ms. Ziegler follows:]
                 Prepared Statement of Lynda L. Ziegler
    Thank you Mr. Chairman (Lampson) and Ranking Member Inglis.
    My name is Lynda Ziegler and I am Senior Vice President of Customer 
Service at Southern California Edison. Thank you for the opportunity to 
lend our support today to your important efforts to promote advanced 
battery technology.
    My company has been committed to the electrification of 
transportation for twenty years. We operate the Nation's largest and 
most successful fleet of electric vehicles, a fleet that has traveled 
nearly 15 million miles on electric power. Our Electric Vehicle 
Technical Center, unique in the utility industry, is one of only 
several facilities recognized by the Department of Energy to evaluate 
all forms of electro-drive technology. We have ongoing research 
collaborations with major auto makers, battery suppliers, and both the 
Federal and State governments.
    We believe that with continued engineering advances and appropriate 
public policy support, the widespread use of advanced batteries in 
plug-in vehicles and in stationary storage applications will become one 
of the Nation's most effective strategies in the broader effort to 
address energy security, reduce greenhouse gas emissions and reduce air 
pollutants.
    In fact, the Electric Power Research Institute and the Natural 
Resources Defense Council recently partnered to publish one of the most 
comprehensive studies to date on plug-in hybrid electric vehicles. One 
key finding was that widespread adoption of plug-in hybrids could 
reduce annual emissions of greenhouse gases by more than 450 million 
metric tons by 2050, or the equivalent of removing 82 million passenger 
cars from the road. That kind of reduction is obviously a long way off, 
but it provides all the more incentive for us to begin today.
    Electricity is virtually petroleum free, is about 25-50 percent the 
cost of a gallon of gasoline equivalent and is the only alternative 
transportation fuel today with a national infrastructure already in 
place. A recent study by the U.S. Department of Energy estimated that a 
little over 70 percent of the light duty cars and trucks on the road 
today could be fueled by the excess off-peak capacity that exists in 
the electricity system--without building a single new power plant.
    For utilities such as Southern California Edison, the challenge and 
the opportunity is to integrate electric transportation and their 
advanced batteries into a total energy system.

Near-term

    In the near-term, the advanced high-energy battery in a plug-in 
vehicle could serve as a source of temporary emergency power for the 
home, or to occasionally help customers avoid high electricity costs 
during peak pricing times. We call this ``vehicle-to-home.''
    These same advanced high-energy batteries could also be used in 
stationary applications. Home owners could fill a home energy battery 
at night using low-cost electricity and then draw from it during the 
high-cost part of the day to help lower their monthly utility bill.

Mid-term

    In the mid-term as plug-in vehicles increase in volume, using the 
grid's off-peak capacity at night to charge these vehicles may actually 
help lower customer rates by increasing the utilization of our 
generating plants--in effect utilities would spread their fixed costs 
over more kilowatt hour sales.
    To evaluate new business models on these and other applications, 
Edison recently launched a partnership with Ford Motor Company to 
demonstrate and evaluate ``purpose built'' plug-in-hybrid Ford Escapes. 
Our goal is to explore the future customer values delivered through 
plug-in vehicles and stationary energy storage.
    At the same time as the emergence of plug-in vehicles and home 
energy storage is the advent of advanced utility meters. Over the next 
five years SCE will install five million ``next generation'' advanced 
meters called Edison SmartConnect in the home of every customer in our 
service territory. These meters will offer our customers better 
information and enhanced control over their electricity usage. Our 
Electric Vehicle Technical Center is working with industry stakeholders 
to integrate the vehicle and the home and the advanced meter.

Long-term

    Finally, in the long-term we can imagine the potential of so-called 
``vehicle-to-grid'' systems or the ability to move stored energy from 
many plug-in vehicles back up to the grid. The potential however of 
vehicle-to-grid is many years away and will depend on the development 
of all-new control technologies as part of the ``smart grid'' of the 
future.

The Role of the Federal Government

    Now let me conclude with our view on the important role the Federal 
Government can play to bring the promise of electric transportation 
closer to reality.
    In our opinion, large-scale domestic manufacturing capacity for 
high-energy advanced batteries is critical to the expansion of plug-in 
hybrid vehicle applications and complementary stationary energy storage 
uses. There currently exists no such capacity on a significant scale in 
the United States today. The Federal Government should provide near-
term incentives to help nurture U.S. production of this critical 
technology.
    And earlier this year H.R. 670, the DRIVE Act, included important 
measures to support research, development and demonstration of advanced 
batteries in plug-in hybrids, battery EVs and stationary applications, 
as well as R&D for other aspects of electric drive technology. This 
language was then improved this summer by battery makers, automakers 
and other stakeholders, and has now passed the Senate as H.R. 6, and 
parts of the DRIVE Act have passed the House as H.R. 3221.
    We support this language and look forward to working with your 
committee to explore other effective national manufacturing and 
consumer incentives to set the stage for the breakthrough of plug-in 
vehicles and energy storage in the U.S. marketplace.
    Mr. Chairman and Members of the Committee, we stand committed to 
partnering with all automakers, battery suppliers, stakeholders and 
government to help realize the vision I have laid out before you today.
    Thank You.

                     Biography for Lynda L. Ziegler
    Lynda Ziegler is Senior Vice President of the Customer Service 
business unit of Southern California Edison (SCE), one of the Nation's 
largest investor-owned electric utilities. She is responsible for 
customer services to SCE's 4.7 million customers, including customer 
experience, industry-leading demand-side management programs and 
advanced metering, as well as customer-facing operations, phone center 
activities, field services, account management, and local public 
affairs. She was elected to the position on March 1, 2006.
    Ziegler began her career at SCE in 1981 as a conservation-planning 
consultant. She held a variety of positions including service planner 
and manager of energy efficiency, customer service and major accounts. 
She was most recently the Director of the Customer Programs and 
Services Division until she was elected as Vice President of Customer 
Service on May 1, 2005.
    Ziegler is a member of the EEI Customer and Energy Services 
Executives Advisory Committee, and is a member of the Marketing 
Executives Conference. Ziegler also serves on the board of directors of 
Leadership California, an organization dedicated to educating high-
level women on the issues in California and encouraging women's 
leadership in policy and public office. She also serves as Secretary on 
the board of Partners in Care Foundation, an organization dedicated to 
improving health care policy through demonstrating success.
    She received her M.B.A. at California State University, Fullerton, 
and her Bachelor of Science degree in marketing from California State 
University, Long Beach. In addition, she has participated in two 
special management development programs at Southern California Edison.

    Chairman Lampson. You are welcome and thank you. For those 
of you who don't know, those were our equivalent in the Science 
Committee for bells for votes, so we will have votes in just a 
few minutes. We shall proceed on until we have to leave, and we 
will be watching the number of people for those votes.
    So at this time, we will call on Ms. Gray for five minutes.

 STATEMENT OF MS. DENISE GRAY, DIRECTOR, HYBRID ENERGY STORAGE 
              SYSTEMS, GENERAL MOTORS CORPORATION

    Ms. Gray. Mr. Chairman and Members of the Committee, thank 
you for the opportunity to testify today on behalf of General 
Motors. I am Denise Gray, director of the Hybrid Energy Storage 
Systems Department. I direct the development and the production 
of energy storage systems for GM, with a focus on developing 
and qualifying new battery-technology solutions.
    For 100 years, the global automotive industry has run 
almost exclusively on oil. Tomorrow's industry will not. The 
solution: alternative sources of energy, along with new 
technology to allow automobiles to run on tomorrow's fuels. But 
what fuels? And what technology?
    At GM, we believe that no one solution is right for part of 
the world, or even every consumer in any given market, so our 
approach is simple: offer as many choices to as many consumers 
as possible everywhere we do business, while offering the best 
possible fuel economy for whatever type of vehicles our 
customers choose.
    Our vision moving forward is to reduce petroleum dependency 
and greenhouse gas emissions by displacing oil with biofuels 
and electricity as well as enhancing vehicle efficiencies. And 
we have developed a comprehensive advance-prolusion strategy to 
meet these challenges. We are continuing to make incremental 
improvements in the efficiency of conventional vehicles. We are 
continuing to expand the portfolio of flex-fuel vehicles, 
ramping up to 50 percent by 2012, provided the fuel 
infrastructure and supplies are available.
    We are continuing to expand the portfolio of hybrids we 
offer with five hybrid offers available this year, and more 
coming next year.
    Most relevant to this hearing, we have started a plug-in 
program for our Saturn VUE Greenline two-mode hybrid, followed 
by the introduction of our Chevrolet Volt concept vehicle.
    And finally, we are continuing to develop hydrogen-powered 
fuel-cell vehicles and the infrastructure needed to support 
such vehicles with the largest market test of fuel-cell 
vehicles today, beginning later this month.
    As I mentioned earlier, this year brought the announcement 
of a game-changing Chevy Volt, our first demonstration of an 
innovative new GM propulsion system called E-Flex. The ``E'' 
stands for electric because all of the E-Flex vehicles will run 
on electricity. The ``Flex'' in E-Flex is flexible because the 
electricity can come from many different sources. GM E-Flex 
system is simpler than hybrids, because it is purely 
electrically driven. Electricity is stored in the battery pack, 
and used with electric motors to drive the car, with the 
electricity from the battery obtained in two different ways. 
First, you can plug in your vehicle in your common electrical 
outlet to recharge the battery. This allows the vehicle to 
operate as a battery-electric vehicle. Second, once the battery 
charge from the electric utility grid is depleted, the battery 
can also be recharged by a simple engine generator set or fuel 
cells. This allows you to extend your vehicle's electric 
driving range to several hundred miles.
    Let me turn to our battery technologies. There are really 
two types of batteries that we require. The one most people are 
familiar with is charge depletion. Think of this as a 
flashlight that depletes its energy when used. And then you can 
either dispose of it, or you can recharge it. It is the 
rechargeable version of this battery that we are most 
interested in for plug-in hybrids. This is a new area of focus 
for the U.S. Advanced Battery Consortia (USABC).
    The other type of battery is known as charge sustaining. 
These batteries are designed to accept and deliver power while 
maintaining a constant state of charge. They never deplete. 
Charge sustaining batteries are used in hybrids on the roads 
today, such as our Saturn Aura hybrid. They store up energy 
captured during breaking and reapply it to help the vehicle 
accelerate. Charge sustaining batteries have progressed to the 
point where many OEMs are able to offer these hybrid vehicles. 
We owe much of this success to the work of DOE and USABC with 
the supplier community.
    For plug-in vehicles, what we really need are high-energy 
charge-depletion batteries that also have power, so we are 
looking for both of those attributes. To bring these new hybrid 
batteries to market, GM is using a multi-phase process that 
starts with qualifying these lithium ion cells. Then we develop 
these, and we go through a number of different tests as a 
battery pack, with performance attributes such as life, 
durability, reliability, and finally we work through our 
vehicle integration process to make sure that these batteries 
can live in our vehicles.
    Again, I must make sure that with these points in mind, we 
have to follow the various concepts, if you will, that are 
outlined in our various plans. Again, with this, I stop and 
look forward to your questions. Thank you so very much.
    [The prepared statement of Ms. Gray follows:]
                   Prepared Statement of Denise Gray
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today on behalf of General Motors. I am Denise 
Gray, director of Hybrid Energy Storage Systems. I direct Development 
of Hybrid Energy Storage Systems for GM with a focus on developing and 
qualifying new battery technology solutions. It's a daunting task for 
our team (and all of us as an industry) to develop and produce vehicles 
with these advanced battery systems in a robust and timely manner.
    For 100 years, the global auto industry has run almost exclusively 
on oil. Tomorrow's industry will not. The solution: alternative sources 
of energy, along with new technology to allow automobiles to run on 
tomorrow's fuels. But what fuels? And what technology?
    At GM, we believe that no one solution is right for every part of 
the world, or even every consumer in any given market. So our approach 
is simple: offer as many choices as possible, to as many consumers as 
possible, everywhere we do business. And regardless of the fuel, 
regardless of the technology, our goal remains the same--the best 
possible fuel economy for whatever type of vehicle our customers 
choose. That's why we offer more cars that get 30 mpg highway than any 
other automaker.
    Our vision moving forward is to reduce petroleum dependency and 
greenhouse gas emissions by displacing oil with biofuels and 
electricity, as well as enhancing vehicle efficiencies. Over time, the 
goal is to reduce vehicle emissions to zero and make personal mobility 
truly sustainable, but it will take a variety of powertrain and fuel 
technologies to get there. And we have developed a comprehensive 
advanced propulsion strategy to meet these challenges.
    First, we're continuing to make incremental improvements in the 
conventional vehicles that we produce (e.g., six-speed transmissions, 
active fuel management). Currently, we have over two and one-half 
million flex fuel vehicles ``FFVs'' on the road today with 16 FFV 
offerings in the 2007 model year. We're continuing to expand the 
portfolio of FFVs, ramping up to over two million vehicles a year by 
2012--provided the fuel infrastructure and supplies are available.
    Second, we're continuing to expand the portfolio of hybrid vehicles 
that we offer. For 2007, GM hybrids include: the Saturn VUE Green Line, 
and Saturn Aura Green Line and beginning next month, the Chevy Malibu, 
the Chevrolet Tahoe and GMC Yukon will offer hybrid models using our 
advanced two-mode system. For 2008, the two-mode hybrid system will be 
added to the Chevrolet Silverado and GMC Sierra pickup trucks and to 
the Cadillac Escalade. The Saturn Vue Green Line will also get the 
advanced two-mode hybrid system.
    And third, beginning with the Los Angeles and Detroit auto shows, 
we created quite a stir with the announcement that we have started a 
plug-in program for the Saturn VUE Green Line two-mode Hybrid, followed 
by the introduction of the Chevrolet Volt concept car.
    We're also continuing to develop the fuel cell capabilities needed 
to produce hydrogen powered fuel cell vehicles and the infrastructure 
needed to support such vehicles. Later this month, we will roll out the 
first of a fleet of 100 Chevy Equinoxes for Project Driveway, the 
largest market test of fuel cell vehicles to date.

The E-Flex Architecture

    The Volt is our first demonstration of an innovative new GM 
propulsion system called ``E-Flex.'' The ``E'' stands for ``electric,'' 
because all E-Flex vehicles will run on electricity. And E-Flex is 
``flexible'' because the electricity can come from many different 
sources. The Volt is designed as a flex fuel vehicle capable of running 
on gasoline or E-85 ethanol. In Shanghai, we showed the fuel cell 
variant of E-Flex in a fuel cell Volt. And most recently, in Frankfurt, 
we showed the bio-diesel variant of E-Flex in the new ``Flextreme'' 
concept car. By offering a system that drives vehicles with any of 
these fuels, E-Flex will provide our customers around the globe with a 
single elegant solution to tomorrow's energy future.
    E-Flex consists of a common drivetrain that uses electricity 
created and stored on board the vehicle in a variety of ways. This 
includes creating electricity with a simple engine and generator, 
creating electricity from a hydrogen fuel cell, and storing electricity 
in an advanced battery by plugging the car into the electric utility 
grid. E-Flex enables energy diversity because electricity and hydrogen 
can be generated from a wide range of energy sources.
    GM's E-Flex system is simpler than a hybrid because it is purely 
electrically driven. Electricity is stored in a battery pack and used 
with electric motors to drive the car, with the electricity for the 
battery obtained in two ways. First, you can plug the car into a common 
electrical outlet to recharge the battery. This allows the vehicle to 
operate as a battery-electric vehicle. Second, once the battery charge 
from the electric utility grid is depleted, the battery can also be 
recharged by a simple engine/generator set. This allows you to extend 
your vehicle's electric driving range to several hundred miles.

Battery Technology

    There are really two types of batteries that we require. The one 
most people are familiar with is called ``charge depletion.'' Think of 
this as a flashlight battery that depletes it energy with use, and then 
is either disposed of or recharged. It is the rechargeable version of 
this battery that we are interested in for plug-in hybrids. This is a 
new area of focus for USABC.
    In addition to charge depletion, there is another type of battery 
known as ``charge sustaining.'' These batteries are designed to accept 
and delivery power while maintaining a constant state of charge--they 
never deplete. These charge sustaining batteries are in use in hybrid 
vehicles on the road today, such as our Chevy Malibu and Saturn Aura 
hybrids. They store up the high power energy captured during braking 
and reapply that energy to help the vehicle accelerate. Although charge 
sustaining batteries have not yet met their cost and durability targets 
as defined by USABC, they have progressed to the point where many OEMs 
are able to offer a limited number of hybrid vehicles. We owe much of 
this success to the work of DOE and USABC with the supplier community.
    For the future, what we really need are high energy ``charge 
depletion'' batteries necessary for plug-ins that also have the 
``power'' of charge sustaining batteries to handle the re-generative 
braking and other high power situations of conventional hybrid 
vehicles.
    To bring these new energy hybrid batteries to market GM is using a 
multi-phase process which starts at qualifying Lithium Ion cells, 
proving out key performance cycle life, power, calendar life, and then 
developing and testing battery packs to evaluate system performance 
attributes. Finally we work through important integration issues at the 
vehicle level such as thermal, interaction with hybrid controls, and 
durability.
    All this work is necessary as a precursor to declaring a solution 
``implementation ready'' and planning it into a production program. 
While this is a sequential process with some overlap it can take up to 
five years. Currently, our challenge is to parallel path key work 
streams to develop the battery solutions and vehicle in a faster 
timeframe.
    In a traditional hybrid, the battery provides electric vehicle 
operation at low speeds, recharges only while driving, and is designed 
for very limited electric only drive. A plug in version of a 
traditional hybrid, such as our design for the Saturn VUE two-mode 
hybrid would need to provide over 10 miles all electric drive, charges 
while driving and when plugged in. In our design for the Volt Range 
Extended Electric Vehicle, the battery would provide at least 40 miles 
in city driving. It would be charged through and on-board generator, 
regenerative braking and when plugged in. Each of these carries a very 
challenging goal of being ``life of vehicle'' solutions.
    For example, the discharge power for two-mode plug in hybrid is 
marginally higher than for a traditional hybrid. However, the Volt 
would require roughly three times more than traditional hybrids. In 
terms of energy, the difference is even more drastic. Range Extended 
Electric Vehicles like the Volt require significantly more energy than 
traditional hybrids.
    Currently, NiMH batteries typically provide about 70 whrs/kg. 
Lithium-ion batteries represent a significant improvement over NiMH in 
terms of both power and energy. Energy formulations of Lith-Ion can 
provide higher specific energy, but lower power. Range Extended EVs, 
like the Volt, would need a more optimized balance of power and energy. 
Big challenges also remain in terms of thermal management & life.
    GM has awarded advanced battery development contracts to two 
suppliers to design and test lithium-ion batteries for use in the VUE 
plug-in hybrid: the first to Johnson Controls and Saft Advanced Power 
Solutions, and a second to Cobasys and A123Systems. Both teams are 
being challenged to prove the durability, reliability and potential 
cost at mass volumes of their technology. The two test batteries will 
be evaluated in the prototype VUE plug-in hybrid beginning later this 
year.
    In developing advanced batteries, OEMs and component suppliers have 
many similar objectives and needs. Auto OEMs need to determine which 
technologies and pack solutions are most promising. We need to develop 
strategies that maximize bill of materials reuse and move toward more 
plug and play solutions. As technology evolves, suppliers are looking 
for revenue stream quickly, reducing the amount of OEM specific work 
and not have to burden the entire risk of introducing new battery 
technology in the market. Both OEMs and suppliers should focus on the 
things they are good at and leverage others for things they are not.
    Qualification of design solutions is the first big hurdle to enable 
both charge sustaining and charge depleting hybrids with Lithium Ion 
batteries. Once these solutions have met ``design readiness'' we need 
to quickly and in parallel, move toward high reliability and high 
volume battery ``manufacturing readiness'' as a parallel path that 
needs significant focus and funding support. Many of the leading 
battery suppliers have shared that it takes up to two years to ramp up 
high volume production once the high volume manufacturing process and 
equipment have been developed.
    As an automotive industry, we are reliant on these rapid 
advancements in order to consider scaling to high volume the vehicle 
solutions that will use these batteries.

Legislation

    As we assess pending legislation, we believe that as a general 
matter Congress should support initiatives that will accelerate the 
process and industrialization needed to ramp to high volume Lithium Ion 
battery manufacturing and subsequent access to these developed products 
that will help us together bring to life the sustainable mobility 
vision for our industry and for our nation. The additional funding for 
energy battery development that Congress has provided DOE and USABC is 
a good start. It will help our suppliers develop near-term battery 
chemistries required if we are going to be commercially successful in 
the next few years. However, as an industry, we also recommend last 
November in response to a White House request that Congress provide 
funding support for manufacturing and facilities development for 
potential U.S. suppliers. This will be essential if these new battery 
chemistries are to be manufactured in the U.S. at a cost and 
reliability level that will enable more than just niche market success 
sooner than would others be possible.
    We also recommended that more funding be provide for long-term 
research into new, novel approaches to batteries. The potential of 
lithium-ion appears to be limited to plug-ins and other short all-
battery operation mode vehicles. We will need all new batteries 
approaches if we want to extend the range of vehicles to the point 
where an internal combustion engine or fuel cell generator would not be 
required.
    With these points in mind, we have the following comments on the 
Discussion Draft you provided us for review. First, we support the 
overall authorization levels for both basis and applied research into 
energy storage. If fully funded at these levels, the proposed research 
program could materially speed up the development of advanced 
batteries. Second, the direction to conduct demonstrations of advanced 
energy storage systems could make a valuable addition to the 
development of plug in vehicles, although funding is not specified in 
the bill.
    One issue that is not clear from the draft is the relationship 
between this research program and ongoing DOE battery research 
programs, and the roles of USCAR and USABC in the new program. In 
general, we believe new legislation should build on the existing DOE 
structure and not seek to create a parallel research program.
    Another issue is the scale of any demonstration programs. We 
believe that in the 2009-2014 timeframe, demonstration programs should 
be of limited size. As with fuel cells, we learn most of what we need 
to know with relatively few vehicles involved--placing thousands of 
vehicles in a demonstration program yields limited marginal returns. 
Within this time window, we look beyond demonstration programs to early 
purchase programs where federal procurement of early vehicles--
realizing that they will be more expensive than today's vehicle 
technology.
    We suggest that the Committee consider transitioning from 
demonstration programs to buy-down programs to reduce the cost of 
cutting edge technologies to federal and State agencies. Sections 782 
and 783 of the Energy Policy Act of 2005, dealing with early federal 
and state purchases of fuel cells, may offer a model for plug-in 
vehicles.
    Thank you.

                       Biography for Denise Gray
    Employed by General Motors since September 1980.
    Current assignment is Director Hybrid Energy Storage Systems. 
Position responsibility consists of advance development, design, 
release, validation of battery system solutions for GM Hybrid and Range 
Extender vehicles.
    Previous assignments include the following.
    Director of Transmission Controls. Responsible for design and 
release of Transmission Algorithms and Calibrations, Electromechanical 
devices, and Torque Converters for four-speed, five-speed, and six-
speed transmissions. These transmissions are integrated into GM 
conventional powertrains as well as hybrid powertrains.
    Director of Engine and Transmission Controller Systems Integration 
and Director of Engine and Transmission Software Engineering. Both 
positions engineered controller hardware and algorithm/software 
solutions into GM vehicles worldwide. The job elements contained 
design, development, and verification of complex engine and 
transmission controls systems to meet worldwide emissions and safety 
standards while meeting customer driveability requirements.
    GM Vehicle Engineering experiences include electrical systems 
development and validation. Some of the electrical systems include 
instrument clusters, entertainment systems, lighting systems, and anti-
lock braking systems. Assignment locations also included GM's 
manufacturing and assembly facilities.
    Educational accomplishments include BS Electrical Engineering from 
Kettering University (formally GMI) in 1986 and MS Engineering 
Science--Management of Technology from Rensselaer Polytechnic Institute 
in 2000.
    Proud wife and mother of two sons.

    Chairman Lampson. Thank you, Ms. Gray. Ms. Wright, you are 
recognized for five minutes, and at the conclusion of that, we 
do have three votes, and we will be in recess long enough for 
us to make those votes, probably half an hour.

 STATEMENT OF MS. MARY ANN WRIGHT, VICE PRESIDENT AND GENERAL 
 MANAGER, HYBRID SYSTEMS FOR JOHNSON CONTROLS; LEADER, JOHNSON 
      CONTROLS-SAFT ADVANCED POWER SOLUTIONS JOINT VENTURE

    Ms. Wright. Very good. Thank you, Mr. Chairman and Members 
of the Subcommittee. It is a pleasure to be here. And my hope 
is when we all walk out of this room for you to go vote that 
you will have a better understanding of what the state of play 
is for battery technology and how we are applying that battery 
technology into the various hybrid applications.
    Before joining Johnson Controls, I was with Ford most of my 
career, where I was the chief engineer of the Escape Hybrid. 
And Mr. Inglis, I was also the chief engineer for the fuel cell 
program and the hydrogen internal combustion program. So I am 
going to do two things today. One is what is the state of play 
of hybrid battery technology, and what is going on relative to 
putting that technology into the vehicle.
    As Denise said, on the road today, we have a lot of 
hybrids. They are powered by nickel-metal hydride batteries. 
And I have to tell you that in the industry we have done a 
really good job of creating acceptance and confidence in the 
technology. They are reliable. They perform well. They are 
safe, and they deliver really good fuel economy and lower 
emissions. But like anybody's technology, your iPod or anything 
else, technology continues to move forward.
    Now, what we are doing is you are seeing this journey go on 
from nickel-metal hydride to lithium ion. And it is the right 
step: they are smaller; they are more powerful; they are 
lighter; they are equally safe. And the exception, obviously, 
is the economic benefits are going to come along with them as 
well, and along with those benefits, you get better fuel 
economy, better emissions performance because they are lighter. 
Weight is the evil in a vehicle for fuel economy.
    Now, not all hybrids are alike. At the break, we had an 
interesting discussion, and one of the things I want everybody 
to understand is there are several different types of hybrids. 
We have hybrids that are on the road today, readily available 
for all of us to purchase and drive. Mr. Bartlett drives his 
Prius. I have an Escape. Starting with the stuff that is here 
today, we have micro-hybrids. Those are basic start-stop 
function hybrids. They are widely available in Europe. In fact, 
Johnson control will put over 400,000 of these batteries in 
vehicles this year over in Europe. And they have a pretty good 
efficiency rating of about 10 percent fuel economy and CO2 
reduction benefits.
    Moving up the spectrum, we have mild hybrids. That you 
would probably think of as a Honda Accord. It delivers about 30 
percent improved fuel economy and emissions and provides a bit 
more functionality, as Denise said, regenerative capability.
    And then, finally, we have the full hybrid, and an Escape 
hybrid and a Toyota Prius are a full hybrid. You can power the 
vehicle on electric power alone, which clearly would provide 
increased economy relative to fuel consumption, as well as 
reducing CO2 emissions.
    All of these are on the road and available today. In fact, 
Johnson Controls, next year, will be putting our first lithium 
ion batteries in the Mercedes S-Class, which will go on sale in 
the United States in 2009. And they are also ready to go into 
the full hybrid.
    If you take the journey a bit further, now we are talking 
about plug-ins and pure EVs and there is an awful lot of, 
deservedly so, excitement about the opportunity with plug-ins. 
They are very promising, significant improved fuel economy and 
emissions. I mean literally, you can have zero emissions and a 
very, very high fuel economy rating. Lithium ion, clearly, is 
the enabler, just because of the physics of the battery--they 
are smaller and lighter--because of all of the energy that is 
going to be required to be able to propel these vehicles.
    Just as the lithium ion is the enabler, it is also the 
biggest technical challenge that we have on the table, and it 
is working with my customers, such as Denise, to try and 
overcome these challenges as an industry. Now, in Johnson 
Controls, we have a lot of partnerships in play right now, with 
GM on the Saturn VUE, with Southern Cal, with Ford Motor 
Company on a plug-in fleet, and clearly all of the great work 
that is going on with USABC as well as the Chrysler Sprinter 
Vans that are going on sale next year.
    We are going to solve these technical problems. I am 
absolutely convinced of that because I sat in this seat about 
four years ago, talking about hybrids and just getting them on 
the road. But then, what you are faced with is what are you 
going to do about the cost and the economics? We have got to 
get this scale up. We have to get standard. We have to put a 
recycling infrastructure in place. We need domestic 
manufacturing capability. We have to establish a diverse supply 
base outside of Asia.
    So in conclusion, we are confident we are going to be able 
to get to commercialization by solving the technology and 
working towards these cost drives. But it is going to take 
Federal Government assistance. We are going to need to continue 
to fund research, and not for just the stuff we are doing 
today. Clearly, we need that, and we need demonstration fleets. 
We also need to fund the next great breakthrough, because just 
like lithium ion was a breakthrough, next is going to be 
something else. The consumer and manufacturing incentives are 
sure enablers to help us with this. Funding manufacturing 
investment and infrastructure and supply-base development, we 
have to facilitate collaboration between the industry, our 
government labs, the automakers and the utilities to see this 
all come to fruition in a way that we can see mass 
commercialization.
    So in summary, recognizing that you all need to go and 
vote, thank you very much, and I look forward to answering your 
questions.
    [The prepared statement of Ms. Wright follows:]
                 Prepared Statement of Mary Ann Wright
    Mr. Chairman and Members of the Subcommittee, my name is Mary Ann 
Wright. I am the Vice President and General Manager of the Hybrid 
Battery Systems business at Johnson Controls, headquartered in 
Milwaukee, WI. I also serve as the Chief Executive Officer of the 
Johnson-Controls Saft Advanced Power Solutions (JCS) joint venture. JCS 
was formed in January of 2006 specifically to address our customers' 
needs for advanced battery systems for hybrid vehicles, plug-in hybrid 
vehicles, and electric vehicles. In addition, I serve on the Board of 
Directors of the Electric Drive Transportation Association (EDTA).
    I greatly appreciate the opportunity to discuss with you today the 
options and challenges that America faces as it moves down the road 
towards the goal of a sustainable transportation future. I am honored 
that you have asked me to speak before you today on a topic so critical 
to the security, economic vitality, and environmental stability of our 
country and planet.

Electrification of Vehicles

    Clearly, the United States is at a crossroads. We face a double-
edge sword: the world's supply of crude oil is approaching maximum 
output while the specter of an environmental future compromised by 
green house gas-induced global warming continues to grow. As President 
Bush stated in his 2006 State of the Union speech we must change the 
way we power our buildings, homes, and vehicles. Today, I would like to 
discuss specifically what can be done on the vehicle side of the 
ledger.
    The focus of my discussion will be vehicles with electrified 
drivetrains, powered by advanced battery systems. A key to this 
discussion will be differentiating hybrid battery applications in the 
range of micro to full hybrids, that have been proven using NiMH 
chemistry and are in the final validation phase using Li-Ion, from 
battery applications which have not yet been fully validated for 
functional performance and life; plug-in hybrids and pure electric 
vehicles. However, first I would like to comment on other credible 
powertrain technologies that can help us transform the way we power our 
automobiles, trucks, and buses. Given the continuing upward trend in 
vehicle miles driven annually in the United States, incremental 
increases in spark (gasoline/ethanol) and compression (diesel) ignition 
engine efficiency, while desirable and attainable, will not be 
sufficient to substantially reduce America's dependence on crude oil. 
Increased production and use of biomass derived motor fuels (e.g., 
ethanol) are important from an energy security standpoint, and have the 
potential to significantly advance progress towards the President's 20 
in 10 goal. Affordable Fuel Cell (H2) vehicles and an 
infrastructure to produce and distribute hydrogen are many years away 
from commercial viability.
    I passionately believe that electrification of the vehicle 
powertrain in part or in whole can make a dominant contribution to 
America's energy security and transportation sustainability. Electric 
powertrains by nature are incredibly more efficient than their internal 
combustions counterparts. This efficiency prowess is the foundation of 
the hybrid advantage. The additional benefit of electrified powertrains 
is that they can be used as complementary technology to internal 
combustion engine drivetrains or as stand-alone technology, e.g., pure 
electric vehicles. Despite the proven benefits in terms of fuel economy 
and emissions, we face substantial challenges to widespread adoption of 
hybrid vehicles in the United States. Currently, neither the domestic 
market-pull nor the domestic manufacturing technology-push is 
sufficient to drive a sustainable electrified powertrain vehicle 
industry. Contrary to a popular notion, battery performance is NOT the 
barrier to widespread adoption of standard hybrid vehicles. In fact, 
Johnson Controls is the leading supplier of advanced lead-acid battery 
technology, called AGM, for use in micro hybrid automobiles as well as 
hybrid transit buses. Next year Johnson Controls will launch its first 
production Li-Ion battery system for the Mercedes-Benz S-Class mild 
hybrid. You may be familiar with Nickel-metal hydride (NiMH) batteries. 
NiMH battery technology is a proven, mature technology that to date has 
captured nearly 100 percent of the HEV battery market. Yet Li-Ion, due 
to its lower mass, reduced volume, higher power and energy, faster 
recharging, and lower cost potential is expected to overtake NiMH as 
the battery technology of choice by 2012. From 1988 to 2005, I worked 
for Ford Motor Company. I was the Chief Engineer for the Escape Hybrid 
SUV, the first domestic hybrid which was successfully launched in 2004. 
Since then total global sales for the hybrid Escape and it sister 
vehicle, the Mercury Mariner hybrid, have exceeded 59,000 units. The 
Escape hybrid utilizes NiMH battery technology. I also led the team 
that launched the first hydrogen fuel cell demonstration fleet. These 
vehicles also use the same NiMH battery technology as in the Ford 
Escape. Please see Figure 1 on page four for a comparison of the NiMH 
and Li-Ion technologies.



    Rather than battery technology, the major issues impeding broader 
acceptance of HEVs in the United States are:

        1)  Relative insensitivity to motor fuel prices on the part of 
        the American consumer, thus inhibiting the desire to purchase a 
        hybrid vehicle at a cost premium.

        2)  An underdeveloped domestic industry for manufacturing raw 
        materials and key components necessary to produce hybrid 
        powertrains.

    To better understand the domestic factors currently suppressing 
hybrid vehicle sales, it is helpful to look at the hybrid advantage 
from a global perspective. In Europe, the vehicle manufacturers are 
aggressively pursuing the spectrum of near-term hybrid technologies--
micro, mild, and full, while continuing to improve the diesel engine 
technology that has traditionally enjoyed tremendous popularity. 
Because of the high fuel prices and CO2 reduction targets 
self-imposed by European OEMs, the incremental costs of hybrid 
technology is less daunting to would-be purchasers. In Asia, and 
particularly China, there is a tremendous amount of activity focused on 
the rapid development of hybrid and fuel cell vehicles. In the People's 
Republic of China, the government has set very aggressive goals for the 
introduction and proliferation of ultra-efficient and clean vehicle 
technologies.
    The United States is somewhat unique in that our relatively low 
motor fuel prices and current lack of CO2 emissions 
reduction mandates also contribute to stunted demand for high 
efficiency vehicles such as hybrids. Fortunately, there is a remedy, 
but it will require a phased-technology plan and government assistance 
at the federal and perhaps State and local levels as well.

Phased Technology--A Journey

    I see the development of a strong hybrid vehicle industry and 
market in the U.S. as a journey, not just a destination. As is the case 
with most journeys there are key achievements points or milestones 
along the way. Figure 2 illustrates the Hybrid Journey--a technology 
evolution that builds on hybrid technologies available today--yes, 
today. I urge the Congress to implement policies that accelerate the 
commercialization of micro, mild and full hybrid vehicles in the United 
States.



    The plug-in hybrid concept has garnered substantial attention over 
the last 18 months and deservedly so. Congress has heard testimony 
extolling the virtues of plug-ins and their promise to eradicate our 
energy and environmental problems. Without question, plug-in hybrids 
are a promising technology. The plug-in approach has the potential to 
double vehicle fuel economy while displacing imported oil with 
domestically produced electricity. The environmental benefits could be 
massive, particularly if recharging is done using predominantly 
renewable energy sources for electricity generation. Demonstration 
vehicles, like those being operated by Sacramento Municipal Utility 
District are registering fuel economy over 90 mpg. The key tasks needed 
to make PHEVs a reality are: 1) accelerated technology, particularly 
the Li-Ion battery development; and 2) further assessment of the 
commercial opportunities and issues by the public and private sectors. 
The assessment phase should include a plan for the development of a 
recharging infrastructure throughout the country to ensure that the 
benefits of PHEVs could be maximized. Also, because PHEVs by definition 
will at times be ``on the grid,'' it is imperative that all 
stakeholders, but in particular, the vehicle OEMs, the supply base and 
the utility industry, engage in frank discussions about the cost/
benefits that will be encountered. Unlike the case for micro, mild, and 
full hybrids, there are significant battery technology barriers to the 
commercialization of PHEVs. A strong partnership between the public and 
private sectors will be needed to tear down these barriers. A 
successful outcome from this endeavor would serve as a giant step 
forward in achieving the ultimate embodiment of highly efficient and 
environmentally responsible transportation--the pure electric vehicle.
    Johnson Controls has a development contract with General Motors to 
furnish PHEV battery systems technology for the Saturn Vue Green Line 
vehicle. We are also partners with Southern California Edison and Ford 
to deliver PHEV demonstration fleets. Earlier this year, Johnson 
Controls announced a partnership with Daimler and Chrysler to provide 
Li-Ion batteries for Sprinter van demonstration fleets. In addition, 
the Department of Energy announced on September 25th that Johnson 
Controls will be awarded a PHEV battery development contract for 10 
mile and 40 mile electric range vehicles. We are proud to continue our 
mutually beneficial relationship with DOE and the United States 
Advanced Battery Consortium, and look forward to accelerating the 
development of commercially feasible technologies for PHEV battery 
systems. Next, I'd like to concentrate on two words from the previous 
sentence--commercially feasible.

Reducing the Cost of Battery Systems

    During my stint as Chief Engineer for the Escape hybrid SUV my team 
had to focus on the same acceptance criteria demanded by purchasers of 
conventional automobiles: style, performance, comfort, convenience, 
reliability, quality, serviceability, safety, and last but not least, 
cost. There is certainly a place early in the product development cycle 
for demonstration vehicles produced with recognition that costs will be 
high, but the bottom line is this: A successful HEV (all types of HEVs) 
vehicle industry and market in the United States must be based on 
satisfying these required criteria. These requirements are demanded by 
our customers and/or mandated by the government and they must be 
delivered at an affordable cost and acceptable market price.
    So, although the battery technology is in the final validation 
phase to drive forward the market for micro, mild, and full hybrid, 
other elements needed for marketplace success, notably cost, are in a 
very early stage of development. The resolution path to ensure a long-
term economically successful HEV industry in the United States must 
elevate cost reduction to the highest priority. Johnson Controls is 
confident that there are no insurmountable technical issues prohibiting 
the eventual widespread use of Li-Ion battery technology as the heart 
of standard hybrid vehicle drivetrains. Other issues separating it from 
commercial viability are:

          insufficient field experience,

          lack of domestic manufacturing infrastructure

          adequate sales volume to achieve economies of scale

          supply base diversity beyond Asia

          technical standards to drive common architectures

    These challenges can be overcome in a compressed timeframe with 
sufficient federal assistance. Specifically, we propose a partnership 
between the appropriate Federal Government agencies, the battery 
manufacturers, and the lower Tier supply chain companies to drive down 
costs by focusing on the three following elements: 1) Material and 
component manufacturing and supply base development, 2) Process 
development and recycling, and 3) Equipment development.

1. Material and Component Manufacturing and Supply Base

    Currently, we obtain almost all of our critical battery materials 
and system components from Asia. We need to develop a North American 
supply base for:

          Cell materials

                  Oxides

                  Carbonaceous and graphitic additives

                  Separators

                  Electrolyte

                  Roll stock aluminum and copper

    Although the battery system is central to this discussion, other 
HEV system components are of similar concern from the standpoint of an 
insufficient domestic manufacturing base including:

          Power electronics

          Drivetrain electromechanical devices

          A secure supply of strategic materials, e.g., lithium 
        ore

2. Process Development and Recycling

    Another cost reduction opportunity is in the processes used to 
convert the basic battery materials and components into finished 
products. For example, today the electrode manufacturing process is 
time intensive, energy intensive, and environmentally challenging. A 
new electrode manufacturing process can be developed that would be a 
lower cost process, which is more environmentally friendly, saves 
energy and could potentially enhance battery life. Also, significant 
economic and environmental advantages can be realized through recycling 
spent battery systems. This can involve both re-use of certain 
components and re-processing of components containing strategic 
materials; e.g., nickel and lithium. Currently, over 97 percent of all 
lead-acid automotive batteries are recovered for recycling. Although 
recycling processes exist today for NiMH and Li-Ion batteries, 
technology development programs aimed at cost-reductions goals should 
include recycling.

3. Manufacturing Equipment Development

    To achieve an optimal balance between product cost and creation of 
a sustainable domestic manufacturing base we must also focus on the 
equipment needed to execute the advanced processes discussed above. We 
need to work with domestic equipment manufacturers to develop large, 
production-scale equipment with a high degree of automation capable of 
obtaining higher speeds compared to the smaller prototyping and 
development-scale equipment currently in use.
    There is also a large cost savings potential in improving the 
design of the cell for manufacturing. Identifying a design change might 
save several steps in the manufacturing process, thereby saving time 
and cost. In addition to the electrochemical cells, the battery system 
requires additional components and subsystems to provide critical 
functions, such as thermal management. Domestic manufacturing of non-
cell componentry should also be factored into policy-enabled mechanisms 
to advance the commercial viability of hybrid vehicle technologies. A 
high level listing of the barriers to sustainable commercialization of 
hybrids in the United States and proposed enabling countermeasures are 
shown below in Figure 3.



    We would urge Congress to consider legislation to stimulate 
advanced battery development, including the following detailed 
provisions:

          Research and development programs to maintain our 
        nation's competitive advantage in the basic and applied areas 
        of energy storage R&D

          Demonstration programs to accelerate the development 
        of batteries and battery systems

          Demonstration programs to accelerate the development 
        of advanced manufacturing technologies to reduce production 
        costs

          Loan guarantees for capital investment

          Battery industry and supply chain programs to secure 
        a low cost economically competitive industrial base in the 
        United States

          Strategies to secure long-term critical material 
        supplies

          Fleet programs to prove-out advanced technologies

          Tax incentives for micro, mild, and full hybrids

                  Automotive manufacturer incentives to drive domestic 
                production and supply of hybrid systems

                  Consumer purchase incentives

          Carbon-based fuel efficiency regulations (miles per 
        carbon content rather than liquid volume)

          Increased role of the battery manufacturers in 
        determining the goals and technical direction for development 
        programs including more direct interaction with national 
        laboratories and institutions of higher learning

          Integrated activities involving all stakeholders:

                  OEMs

                  Battery manufacturers

                  Federal Government agencies

                  Consumers

                  Electric Power industry

                  Fuels industry

                  Labs

                  Academia

    In closing, I would like express my gratitude to this committee for 
taking the time to hear my testimony. I hope that you consider my 
comments in the spirit of cooperation guided by the goal to secure the 
economic and environmental future of the United States.
    Johnson Controls looks forward to taking the hybrid journey with 
Congress. We are energized and ready to go.
    Thank you for your time and attention.

                     Biography for Mary Ann Wright
    Mary Ann Wright is the Vice President and General Manager, Hybrid 
Systems for Johnson Controls, and also leads the Johnson Controls-Saft 
Advanced Power Solutions joint venture. Wright joined the company in 
March 2007.
    Wright is responsible for accelerating the growth and executing the 
launch of hybrid, plug-in hybrid and electric vehicle battery programs 
with emphasis on state of the art technology, manufacturing and 
electronics integration.
    Prior to joining the company, Wright most recently served as 
Executive Vice President Engineering, Product Development, Commercial 
and Program Management for Collins & Aikman Corporation since February 
2006. Prior to joining Collins & Aikman, she served as Director, 
Sustainable Mobility Technologies and Hybrid Vehicle Programs at Ford 
Motor Company. In this capacity she was responsible for all hybrid, 
fuel cell and alternative fuel technology development. Wright also 
served as Chief Engineer of the 2005 Ford Escape Hybrid, the industry's 
first full hybrid SUV. She began her career at Ford in 1988, holding a 
variety of positions in finance, product and business planning, and 
engineering. She also played a major role in the launch of multiple 
vehicles at Ford including the initial Mercury Villager and Nissan 
Quest, and successive versions of the Ford Taurus and Mercury Sable.
    Wright has been recognized by Automotive News as one of the 
``Leading 100 Women in the Automotive Industry.''
    She earned a Bachelor's degree in Economics and International 
Business from the University of Michigan, a Master of Science degree in 
Engineering from the University of Michigan and a Master of Business 
Administration degree from Wayne State University.

    Chairman Lampson. Thank you very much. We shall stand in 
recess for our votes. See you shortly.
    [Recess].

                               Discussion

               Government Accelerating Industrialization

    Chairman Lampson. The automobile industry practically 
invented high-volume manufacturing. Why is the Federal 
Government needed to accelerate industrialization in this area, 
and what can DOE do that the industry cannot do? Either of you?
    Ms. Wright. Well, actually, I came with a whole list of 
specific projects that I would go and talk to my friends at DOE 
about relative to high volume manufacturing. We are presently 
completing the construction of our first lithium ion facility 
in Nersac, France. I wish I could say it was Nersac, Maryland 
or something. And one of the things that we are learning is 
that we have good capability to produce good quality hybrid 
cells, but it is not at the level that we need to be producing 
them in the qualities and at the cost levels that you do for 
cell phones and for laptop computers. We know very well the 
kind of help that we need, that we need help from the 
government labs, DOE and other federal resources, and I would 
be delighted to share those specific projects with you that 
would, indeed, enable us, here in the United States, to be able 
to get a leg up on the high-volume manufacturing at affordable 
costs.

            Government and Battery Manufacturer Partnerships

    Chairman Lampson. To drive down costs and to spur 
development of advanced batteries in the U.S., you propose a 
partnership, Ms. Wright, between federal agencies and the 
battery manufacturer's lower tier suppliers. Let me ask you 
three questions. Do these partnerships not already exist in the 
forms like the U.S. Advanced Battery Coalition? Does the DOE 
partner directly with the battery manufacturers and lower-tier 
suppliers in R&D projects, or is it mostly conducted through 
partnerships with automobile manufacturers? Or is there a need 
for diversifying the pool of participants in federal vehicle-
related R&D?
    Ms. Wright. You know, clearly we do have partnerships that 
are established, and they are good partnerships. Through DOE 
funding, USABC freedom card--those are all great forums. But I 
would suggest to you that what we need now is to really look at 
it in two pieces in terms of improving our partnership.
    One is being able to take the technology that is ready to 
go forward and be commercialized in high volumes at affordable 
costs and support that as an industry with the automotive 
manufacturers, the battery suppliers, and the Federal 
Government, including the labs, who can help us with the 
intellectual-property generation, and get those into 
demonstration fleets to absolutely build the confidence and the 
capability to do it on a high volume.
    The second piece--and this is where I don't think that we 
have the emphasis that we need--that is the what comes next. We 
tend to focus too much on getting through a specific project 
rather than we will solve this, but what is going to come after 
that? Because I assure you everybody else in the world is 
already thinking about that. And I think, in terms of--the 
partnerships really are through the USABC in terms of our day-
to-day interaction, so the direct work really comes through the 
USABC at the direction of DOE. I would encourage more direct 
interaction between DOE, the automotive manufacturer, the 
industry, as well as the suppliers.
    And then, finally, I think you had a question on 
diversification of who should be involved?

                  Participants in Vehicle-related R&D

    Chairman Lampson. Who are the participants in vehicle-
related R&D?
    Ms. Wright. I think, you know, we are actually in fairly 
good shape relative to who is participating, you know, in these 
established forums, and I think, clearly, if you take a look at 
how the automotive manufacturers are partnering up, they are 
taking advantage of everything that is available to them. 
Unfortunately, there are only a few of us that are based, here, 
in the United States.
    Ms. Gray. If I could add in that area as well, I think 
USABC and DOE have done an excellent job, thus far, to getting 
us to where we are. But our product is still high cost. Our 
product still doesn't have a quality it needs to go. We need to 
take a step change in allowing us to understand more, 
apparently, how these applications are going to work, learning 
cycles. We can stay in the research, we can stay in the what-if 
kind of mode for awhile, but in order to really get to a 
commercialization of where this has to go, you have got to have 
demonstrations. You have got to manufacture the production, and 
you have got to have exercising activities from a learning 
perspective. And the cost of these energy storage systems, 
these batteries, are high in the beginning, and you have got to 
have means by which you get some quick learning cycles, and 
then you have go to have a means for the customer to be able to 
buy these kinds of things. So they've got to have some 
incentives to bring it down so the customers don't assume all 
of the cost, but then, rapidly, at the same very time, you have 
got to build up your manufacturing capacity in the States in 
order to continue and sustain that cost curve, because if you 
don't do that, you will end up having one system that works, 
and all of a sudden, it is gone away, and technology has passed 
you up.
    Chairman Lampson. I shall call on Mr. Inglis, and then I 
shall come back and ask a second.

                               Chevy Volt

    Mr. Inglis. Thank you, Mr. Chairman. We are here at the 
Science Committee, and you know, we are very excited about 
science. It is also true it can be a science project until the 
market sort of drives things along. And so the goal being to 
break our dependence on foreign oil, the goal being to create 
jobs by inventing new technologies, and the goal being to clean 
up the air, I think it is very helpful testimony you are giving 
because it is about the market. And so, Ms. Gray, maybe you 
could talk a little bit about General Motors hope of either--is 
it hydrogen or is it volt? Or is it, it doesn't matter, either 
one works for General Motors? As a manufacturer here, what do 
you see as the market's acceptance of those? And help us move 
from a science project into something that is really going to 
transform the fleet.
    Ms. Gray. You know, when we put out the Chevy Volt earlier 
this year, I think that was a means to bring these kinds of 
things together, because number one, we have got a battery, a 
high-voltage storage device, that allows you to mate that up 
with an internal-combustion engine so that when the battery 
gets depleted, you can use the internal-combustion engine in 
order to replenish the battery, but you can also use a fuel 
cell in that same configuration, if you will, in order to 
provide power, if you will, energy for that battery to store 
and to use appropriately.
    It really was a way that we pulled all of these 
technologies together, so it is not an either-or, but an and, 
in order to allow us to have diversification, if you will, from 
petroleum. So really there is a place for both us them, 
depending upon the needs and the use and the accessibility of 
the various energy devices.

                       GM Allocation of Resources

    Mr. Inglis. That said, capital is generally limited. In 
other words, you have got to allocate resources within a 
company, so you think you will be allocating them--where do you 
think you will be allocating them? Don't tell me anything you 
have got to shoot me after you tell me or anything or call the 
SCU lawyers if you have got to before you answer, but I guess 
it is a public forum so you can probably tell me.
    Ms. Gray. Allocation of resources have been applied for 
both areas, quite frankly, and for all of the areas. I was 
telling one of the constituents a little while ago, back in the 
early '90s, I worked on ethanol. Currently, I am working on 
energy storage devices in fuel cells, and I am coming up with 
requirements for fuel cell vehicles with an energy storage 
device, and I am also coming up with requirements for an 
internal-combustion engine, again, to replenish the battery 
when needed, so we have resources allocated in all of those 
areas. I was also trying to advertise that we are still hiring, 
because for some reason, people think that we are not adding 
resources in these particular areas, but that is so, so 
incorrect. We have been hiring over the last ten years in areas 
that allow us to increase our fuel economy through regular, 
conventional vehicle efficiencies as well as diversification.
    If you looked at where GM has been hiring, if you will, 
over the last ten years, it has been in those areas so that we 
can meet the need of where we have to go, so the answer is all 
of the above.

                         Energy Storage Devices

    Mr. Inglis. Ms. Wright, do you got a prediction about which 
one is going to win?
    Ms. Wright. Well, I was going to ask you if I could make a 
comment if you didn't invite me. I think it is really important 
for everybody to understand that one is a journey so you are 
going to learn and we are going to increase hybridization, 
increase electrification, and there is going to come a point 
where it is not going to matter what is actually providing the 
fuel. You will always, always, always have an energy storage 
device. So I am employable for a long time, because you are 
always going to need an energy storage device.
    Now, what shape and form it takes, what the chemistry is, 
who knows? What is really exciting about that, though, is we've 
done--and it used to be called a science project at Ford with 
the hybrids and with the fuel cells. We are now seeing the 
convergence, and exactly what GM is doing, and that is 
regardless of what the power plant that Denise is told to 
provide an energy storage for, she doesn't care. She is going 
to be able to provide an energy storage device that will fuel 
anything. And so as we get better and smarter with ethanol and 
internal combustion engines and diesels and fuel cells and pure 
electrification, it is all a journey that we are going to drive 
standards, drive the cost down, and eventually, we will have a 
whole portfolio of stuff that we will be able to.
    So I didn't answer your question. I would be a good 
politician, wouldn't I? I don't think there is winner. I think 
the winner is the battery, clearly.

                       Simplifying Hybrid Systems

    Mr. Inglis. That is helpful. Now, I have heard from some 
people that hydrogen is the future--or a pure electric would be 
far more simple to manufacture than a hybrid. I have heard the 
objection to hybrids that they are actually very complicated 
systems. In fact, I have seen it laid out how many pieces are 
in a hybrid as opposed to how many pieces would be in a fuel 
cell vehicle, and it is really an interesting layout. And the 
idea being, you know, you put all of that complexity into a 
vehicle, and you drive it a couple of hundred thousand miles, a 
lot of those things are going to break, and so the simpler, the 
better, right?
    So I agree, you have got to have a storage mechanism, but 
you want to get it as simple as possible, right, and cut out 
that--some part of that so you can get the simplicity?
    Ms. Wright. Well, I do agree with you, and if you take a 
look at the complexity of a hybrid system, you have essentially 
nine intelligence systems that are trying to play nicely in the 
sandbox, right, and operate as a cohesive system. But what you 
have to take--and this is where we get into Lynda's expertise--
is you are right. Denise said EVs are inherently more simple, 
but then you have to take a look at the total picture, and that 
is how clean is the energy source from which you are driving 
that electric vehicle. So I mean we get outside of the 
fundamental technology of the vehicle, and then you have to 
start looking at it more globally, so I would suggest to you, 
yeah, we want to drive to electrification of vehicles and with 
or without a fuel cell. You know, we can debate that. But I do 
think, then, we have to examine and say how are we doing, to 
ensure that the energy sources aren't worse than the cure of 
those vehicles of which we are propelling them.
    Mr. Inglis. Ms. Ziegler.
    Mr. Ziegler. Yes, I just did want to add the study that was 
done by EPRI and NRDC, when they look specifically at plug-in 
hybrids, in all scenarios, even with the current mix of 
generation, which doesn't include any, you know, coal 
gasification or anything like that, there was greenhouse gas 
benefits in all cases. And then if you look at, as the 
electricity industry moves to, you know, lower carbon 
generation, you get much more greenhouse gas savings. So even 
with--and this was studied on the plug-in hybrids, not pure 
electric vehicles. But in all cases, with the current mix of 
generation, there was benefits for greenhouse gas.
    Ms. Gray. The only comment that I would like to make, if I 
may, as we talked about simplicity, I agree that as we move 
towards our Chevy Volt for example, or E-Flex system, it does 
get more simple when it comes to the control system. But we 
need the technology breakthroughs in order to realize that 
simplicity, and that is why we have to keep focusing on 
ensuring that we have got that technology breakthrough in our 
advanced battery technology area. So I like the end-game, but 
we have got to make sure that we take the appropriate steps as 
we move forward, and providing some additional support in the 
advancement of batteries will allow us to get to that very more 
simplistic end-game.

                Southern California Edison Partnerships

    Chairman Lampson. Ms. Ziegler, Southern California Edison 
is leading the charge to develop plug-in hybrid vehicles, and 
you signed some employment partnerships in this area with 
companies like Ford and Johnson Controls. What are the next 
steps in using these partnerships to advanced technologies?
    Ms. Ziegler. I think what we will get out of these 
partnerships is exactly what my two colleagues were talking 
about, which is getting vehicles tested with real people, out 
in real circumstances, so when we get the Ford vehicles 
delivered to us, we will put them in our fleet, we will put 
them out with some customers, and we will test them in real 
circumstances, looking at the recharging cycles and the 
discharge.
    So the benefit of that is getting cars in the fleet, 
getting them tested. The other things that we are working on, 
and you have heard talk to day of this smart grid of the 
future--it is looking at what are the kind of standards and 
controls that you are going to want to have. When we talk about 
that the electricity grid can charge most of these vehicles, 
you need to charge them off peak. We have excess capacity on 
the grid for California that is typically at night. So what you 
want to have is the intelligence, either in the car, in the 
smart meter, or in the grid, that can tell the car that you 
only want it to charge at night. So another benefit of these 
partnerships is really looking at what are the kinds of 
standards and controls that we need to develop between all of 
the industries to make that happen and use the electric grid to 
the benefit, as opposed more on big load by charging the 
vehicles.
    Chairman Lampson. What is the timeline to do so?
    Ms. Ziegler. The timeline for the first, which is the 
demonstration, we will get some vehicles next year and begin 
demonstrating those. I hesitate to speculate on the timeline 
for the smart grid. I think we are experimenting now with one 
circuit, which we call our Avante circuit, which is a test of a 
smart grid, and so we need to test that and see the results, 
and then you are looking at a huge infrastructure across the 
United States. So to replace that infrastructure with a smart 
grid technology is at least a couple of decades, I would think, 
if not more, to really replace all of the electric grid with 
the smart-grid capability.

                  Domestic Manufacturing of Batteries

    Chairman Lampson. All of you to comment on, we talked about 
the importance of building up a domestic manufacturing base for 
an advanced-battery industry, but what does this really mean 
for your respective sectors and the United States as a whole? 
Why should domestic auto-manufacturers not outsource part of 
the industry to Asia and buy cheap components from an 
established battery sector?
    Ms. Gray. If I could start?
    Chairman Lampson. Please.
    Ms. Gray. Every single program that we have, we made up 
with a supplier, and there is learning that happened. And that 
learning on how does the customer use their vehicle--and as 
every one of us is in here, there are those many different 
means by which a person drives a vehicle. And that learning 
loop is so important, and how we characterize it, how we 
standardize those driving operations, and then give that to a 
supplier to make your system, they are learning from you. And 
every time they do that, they are getting better and better at 
doing that. If we do that with all of our non-domestic 
companies, they become smart. They will stay smart, and we will 
continue to send information that way.
    I think it is very important that we establish within our 
own country that learning opportunity, the learning opportunity 
to make energy storage devices, the technology to build the 
manufacturing tools. There are toolmakers out there that are 
all outside of the United States. There are chemists. There are 
companies that make all kinds of powers and things like that 
for energy storage devices. And they are all outside of the 
United States. If we don't retain that knowledge here, every 
single vehicle that we build, all of the knowledge on how we 
operate and how we advanced that technology goes away and does 
not stay here in the United States. So I think it is extremely 
important that we establish that capability, that competence, 
here in the States, so that we can retain that knowledge, so 
that we can have jobs here for our folks, instead of sending 
information or sending parts the other way.
    So it is extremely important that we, as OEMs, partner up 
with companies and have the ability to have that knowledge 
here, and we can only get it by increasing our focus on 
manufacturing of energy storage devices, high-tech systems here 
in the States, because it is an art, and it is also a science.
    Ms. Wright. In terms of--and let us talk about hybrids 
first. The market is and is going to continue to stay here in 
the United States. We are the largest consumers of hybrid 
vehicles in the world, and it is projected that we are going to 
continue to be doing that. So if you start with that premise, 
it seems to make sense that you want to make the jobs here, 
where you are going to be assembling them. We can assemble them 
here; we can manufacture them here; and we can sell them here.
    I would also let you know that hybrid vehicle technology 
originated here in the United States, and if you take look at 
what happened, we are absolutely getting decimated in the 
marketplace with technology that we invented here. And I am not 
going to repeat what Denise said, but I think she summed it up 
exactly right. We have an opportunity here to take advantage of 
a market that wants hybrids and will accept them, with some 
help from the government, of course. We can create jobs. We can 
create the infrastructure. We can pull, through our 
universities, and through our schools, a desire and a sexiness 
for kids to embrace science and technology instead of becoming 
day traders. We can then become exactly what we are seeing 
happen everywhere else in the world where we have to go and 
export. And from a purely practical standpoint, every time we 
do a hybrid vehicle right now, we have to go to Japan, China, 
or Europe to get all of our components. It takes a lot longer 
for us to get a vehicle on the road if we are traveling all 
over the world to get these components, you know, engineered 
and manufacture----
    Chairman Lampson. Well, what is the state of the 
development of a domestic supply chain for the battery----
    Ms. Wright. We don't have one.
    Chairman Lampson. Period?
    Ms. Wright. We don't have one, and I would--I don't think 
you know this, but this facility that I have in Milwaukee, the 
Johnson Control facility, is the only facility outside of Japan 
that has complete capability to do cell research, cell 
prototype manufacturing and systems engineering. It is the only 
one outside of Asia. That is a real commentary on what has 
happened to our ability to not only have the basic science, but 
the capability to produce. We do not have a single supplier 
here in the United States.
    Chairman Lampson. Ms. Ziegler, would you like to comment?
    Ms. Ziegler. I would just add one thing. I think, as we 
talked about earlier, we are looking at plug-in hybrids and 
this technology to really get ourselves off of imported oil, so 
doesn't it make sense to try to use United States manufactures 
to make the replacement for imported oil. And I would really 
preach, as well, we as the United States really need to have 
good jobs for our people that provide good wages, and I think 
being able to manufacture technology in the United States is 
critically important.
    Chairman Lampson. What are other countries doing to 
increase their own capabilities that as we, perhaps, develop 
that, they will stay competitive. What kind of comment would 
you have on that?
    Ms. Wright. Well, I think it starts first in the structure 
of the society. If you take a look anywhere but in the United 
States, they encourage science and technology in the school 
systems. They are supportive from a government level, the 
industries as well as the universities, to advance their 
technology. So I think there is just a fundamental 
infrastructure inside of these countries that we just don't 
have here to encourage the building up that capability.
    And if you take a look at what is happening--let us just 
use Europe as an example. They have a plethora of activity 
going on, not only in diesels, but in hybrids, because they 
know for the 2012 Kyoto protocol, diesels, alone, are not going 
to get them to the levels they need to be at. So what they are 
going to do--and we will produce the batteries--sell the 
vehicles over here. We shall make sure that it is accepted, and 
we will get the technology, and they are going to take it back 
over there. And that is what is happening in the world right 
now.
    Ms. Gray. Just to add another comment, I think we need a 
more focused effort between government and industry here in the 
United States in order to advance that technology. You are 
absolutely right. We have efforts in place, DOE, USABC. We have 
been doing some thing thus far, but if we are going to stay in 
this league, we are going to have to make a step change in our 
efforts, in our funding efforts, in our focus efforts.
    As we, industry, come together--and it's amazing how GM has 
a collaboration with Ford and Chrysler. We also have 
collaborations with BMW as well as DCX because the answer is 
everybody sees this is what we have to do. We have to advance 
the technology in this area, and collaborations are occurring. 
I think, from a government perspective, we need to step up our 
game in that area as well. Japan has a huge step up in this 
where they have combined, very effectively, their government, 
their industry, as well as their universities in development, 
not just nickel-metal hydride, but also lithium and the next 
generation lithium, because the answer isn't just with one. You 
have got to have that business plan to allow you to continue to 
sustain that to understand what the next one is and the next 
one is in order to bring the cost down, because if you stay in 
the startup mode, which I feel we are in at this point. We are 
still at that infancy of being able to bring advanced-battery 
technology to fruition. If we just stay there, the cost will 
never be there, and we will be left behind.
    And then, again, the cost is going to be high in the 
beginning, and collectively, with government, we are going to 
have to lower that so that we can get more product out there in 
the real consumers' hands so that we can learn more and then 
bring those costs down.
    Chairman Lampson. Mr. Inglis, I have well overstayed my 
welcome.

                       Purchasing Plug-in Hybrids

    Mr. Inglis. Thank you, Mr. Chairman. I don't know that I 
shall use all of the five minutes, but here is the--if I wanted 
to go from here to buy a plug-in hybrid, can I get one? Who 
would I call?
    Ms. Gray. You can't get one from an OEM today that has been 
completely integrated, that has been completely tested, that 
will last the expectation, ten years, you won't have to service 
it. We are not ready yet. There is still a lot of work to get 
done.
    You can buy demonstration kinds of things where it is in 
there; it won't last forever; but yet it allows you to have 
some demonstration opportunity.
    Ms. Inglis. So I could get a kit, right, for a Prius? I 
guess I could buy that? I could go online and find a kit----
    Ms. Gray. Well, I am not advertising----
    Ms. Wright. I shall take care of that one Denise. Yes, 
there are what we call garage-conversions. I would just caution 
you, however, if you are personally thinking about that, one, 
you invalidate your automotive warranty, and number two, Denise 
is absolutely right, the standard and the validation that we 
have to undergo as an industry are beyond anything anybody, 
except for if you are in that industry, understands. And so 
these conversions do not or are not intended to meet those 
validations, useful life, reliability, and potentially 
unintended consequences. So I would just encourage you to wait 
because she is going to be out very soon with one.
    Mr. Inglis. So it will be soon?
    Ms. Gray. Yeah, we are currently working on a plug-in 
hybrid, right now, for Saturn VUE. Johnson Controls staff is 
one of the advanced technology suppliers that we are working 
collectively on, but we have got to make sure that under all 
kinds of conditions, this vehicle is safe, in a crash 
condition, that the occupant is not hurt.
    We have got to make sure that it lives and lasts. You don't 
want to go and replace your battery every 600 miles because we 
have failed. So we are working towards coming up a with a real, 
certified plug-in vehicle that will allow us to, again, sell it 
to the customer, and it meets your needs.
    Mr. Inglis. And when is the projected delivery?
    Mr. Gray. We haven't put a production date on that we can 
announce to the public, although internally, I got a production 
date that I have to make sure that I line everything up and 
work as hard as I possibly can to uncover and to deal with all 
of those engineering issues in order to make this program 
feasible.

                     Plug-in Hybrids for Consumers

    Mr. Inglis. You encourage me that it is that, it is 
engineering of standards. It is not the price of gasoline. Is 
that right? Or is it also some concern about whether the price 
of gasoline goes down, and then when it goes down, do I really 
want to buy one, or do I just decide I shall keep on driving 
what I got?
    Ms. Gray. As an OEM, I wish I could predict which vehicles 
you will buy and at what price you will buy them. I can't do 
that, but my obligation is to get the technology out there, 
certified, so that you can have the opportunity in order to 
accomplish that.
    Ms. Wright. And you know what we have to do is, in absence 
of mandates, we have to drive the market pull. And I think 
Denise said it very well that it is going to be a 
collaboration. We have to have continued and continued improved 
collaboration with government. The vision is, at some point, 
hopefully in the next couple of years, you are going to go to 
the dealership, and when you choose whether you want leather or 
your recyclable seats, you can then check off a plug-in option 
or another hybrid option, and it will be some reasonable 
incremental cost, that you see the value being there and that 
Denise's and my industry can have a profitable growth plan.
    That is what we are working towards, but we can't do it at 
the volumes that we are at now, the lack of standards, and the 
lack of real collaboration in terms of driving scale and 
infrastructure here in the United States.
    Mr. Inglis. So if we really wanted to drive this, mandates 
may be a good idea? In other words, fuel efficiency standards 
might be a good idea?
    Ms. Wright. You can address it in a number of ways. It 
could be fuel efficiency, or I would--certainly the shift in 
discussion to carbon mandates.

                            Hybrid Emissions

    Mr. Inglis. Which is helpful in your chart that you had 
both of those, either carbon kind of systems or a fuel 
efficiency standard. I mean it is a good argument that perhaps 
that might really get us going?
    Ms. Wright. Without a doubt, and what you saw in that chart 
represented CO2. When you add in all of the other 
forms of greenhouse gasses, it only gets better as you increase 
your level of hybridization. So just to refresh your memory, I 
would very much encourage that we continue to exploit the 
technology that we have available today that we can put on the 
road today, but we are not in the volumes, as well as continue 
to invest in what is hopefully going to be near-term plug-in 
capability and eventually EV.

                  Raw Material Supplies for Batteries

    Mr. Inglis. And one last question: the--I have used all of 
the time, Mr. Chairman. We have got enough raw materials to do 
these batteries, right? It is not like there are made out of 
platinum, and there is only so much in the world, and that 
means that we really can't use these or--it is not a resource 
problem, right?
    Ms. Wright. That is correct.
    Mr. Inglis. There is enough Lithium there is enough----
    Ms. Wright. We can't divulge the recipes because that is 
our intellectual property, but clearly the materials are always 
a concern, but as Denise said, when you look at nickel-metal 
hydride versus a lithium ion, first because it is 50 percent 
lighter, you are using--consuming less materials. And one of 
the areas that I would encourage additional research beyond 
where we are today is alternate materials that take all of the 
variability in terms of market spikes as well as availability. 
And they are there. They are on the horizon, and we are working 
with them. So we are going to continue to experiment with our 
recipes to ensure that we meet all of the requirements from our 
automotive manufactures, but I think there are a lot of 
opportunities for us to continue to take that volatility out 
and still deliver all of the performance.
    Mr. Inglis. All right, thank you. Thank you, Mr. Chairman.
    Chairman Lampson. You are welcome. I would like to go 
another 20 minutes. It is fascinating, and you all have been 
great. Thank you very, very much. We appreciate you appearing 
before our subcommittee, and under the rules of this committee, 
the record will be held open for two weeks for Members to 
submit additional statements and any additional question that 
they might have for the witnesses. We shall send them to you. 
This hearing is now adjourned. Thank you.
    [Whereupon, at 1:20 p.m., the Subcommittee was adjourned.]
                               Appendix:

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                   Additional Material for the Record



















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