Clean energy technology still pricey for truckers, fleets

| Thursday, September 15, 2011

As the United States continues to pursue alternative fuel technologies to power its medium and heavy-duty trucks, clean energy companies have been cropping up around the country at record pace.

Recently, Sasol Ltd., a South African company, announced a feasibility study to possibly build a gas-to-liquids facility in Calcasieu Parish, LA. If built, the GTL plant would be the first of its kind in the U.S., converting gas and coal into liquid fuels. 

And while truck engine manufacturers and clean energy companies are banking on the trucking industry to embrace alternative fuels – and soon, the cost to buy the equipment is still prohibitive for many small-business trucking operations, as well as fleets.

David Hurst, senior analyst at Pike Research, told Land Line Now recently that only 530 hybrid class 7 and 8 trucks are expected to be purchased in the U.S. in 2011. Approximately 1,890 are expected to be purchased by 2017, according to Pike’s forecast.

Sales are projected to be much higher for medium-duty trucks as 1,500 are predicted to be purchased in 2011, but that number is expected to grow to around 12,700 by 2017, according to Hurst.

“Basically, hybrid trucks cost anywhere up to 50 percent more than a regular diesel truck,” Hurst said. “So the challenge comes as fleets are putting together their budgets. The simple fact is if they need 10 trucks … and in terms of hybrids, they may be able to only afford seven or eight trucks, obviously they are not going to be able to buy all hybrids.”

He said incentives are helping trucking operations purchase equipment and are “definitely critical to maintain that,” but that “fuel costs are still relatively low in comparison to other regions of the world,” which makes diesel still the main fuel source.

“Until we have higher sustained fuel costs, the cost recovery on the hybrid system is still taking several years,” Hurst said.

The payback at current diesel prices for a hybrid truck over a truck that runs on diesel is about 9.4 years, according to Hurst.

“Obviously, depending on how long they keep the truck, there is a potential that they’ll never recoup that cost,” he said.

However, Hurst added that fleets are typically keeping a truck for 10 to 12 years, so they will eventually recover that cost.

“The challenges that most fleet managers have is that they are looking for a payback somewhere in a two to four-year range so obviously we are not meeting that at this point,” he said.

Battery-electric delivery trucks could be cost-effective for fleet managers of companies that have delivery services with dedicated routes.

“If the fleet operates a delivery service, (like) Fed Ex, they have a set route and know their mileage. … Then the costs of that truck, while it’s almost double the cost of the traditional delivery truck, because electricity is so much less expensive, the payback can be a lot faster than we often see with hybrid trucks,” Hurst said.

Reed Black, Land Line Now staff reporter, contributed to this report.

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