Hitachi Energy is using its expertise to bridge gap between transportation fleets and utilities to ease the transition to electrification

During a recent live virtual event on LinkedIn, the Head of Hitachi Energy North America, Anthony Allard, and Hitachi America Chairman and CEO, Hicham Abdessamad, spoke on the global technology company’s focus on promoting sustainability throughout all its segments. As a climate change innovator, Hitachi’s executives point out the impending challenges the transportation sector faces, and outline solutions the company provides to commercial fleets and the transportation sector, calling for the collaboration of leaders in both private and public sectors.

Hitachi Energy North America

Hitachi, Ltd. is a global, multinational technology company based in Tokyo, Japan with over 370,000 employees and $82.9 billion in revenue (for fiscal year 2020). The conglomerate is focused on multiple sectors including transportation, energy, healthcare, IT, and industrial manufacturing, and digital technology, sustainability and innovation drive environmental, social and economic value for customers while delivering social innovation for society.

Hitachi Energy serves customers in the utility, industry, and infrastructure sectors, with the goal of advancing the global energy systems to become more sustainable – all while retaining environmental and economic value.

The company began as Hitachi ABB Power Grids, announcing a rebranding to Hitachi Energy in January of 2021. Since last October, Hitachi Energy has emerged and is focused on advancing the world’s energy system to become more sustainable, flexible and secure, while promoting a sustainable energy future for all –including in the area of more sustainable transportation.

The rise of EVs and their imminent demand on the grid

The increased adoption of EVs will help lower carbon emissions around the globe, but the transition toward electrification will not come without its own challenges. The US electric grid will face tremendous demand from the growing number of EVs on roads that will drive higher energy use.

More specifically, the adoption of commercial electrified vehicles is accelerating, including delivery and maintenance vehicles, and public transportation. Hicham Abdessamad, Chairman and CEO of Hitachi America, Ltd., described the transportation sector as “low hanging fruit” during the LinkedIn Live event, because there are so many opportunities to reduce carbon emissions.

Hitachi Energy looks to promote sustainability in all aspects of transportation and believes a shift to electricity as the backbone of the sector’s energy system will be vital. However, as owners of commercial fleets transition from internal combustion engine (ICE) vehicles to electric vehicles (EV), there are a host of new factors they must consider, understand, and implement. Operating ICE vehicles in parallel with an EV fleet will require a comprehensive strategy and a strong digital solution that allows fleet owners to operate, manage and maintain those distinct fleets and needs at the same time.

In terms of the electric grid, a U.S. Department of Energy study found that increased electrification could boost national consumption of electricity by as much as 38% by 2050, in large part due to the increase in electric vehicles.1 Overall power capacity and shifts in peak demand could have significant impacts on electric utility planning, grid operations, reliability assessments, and electricity markets, according to the report. While demand management will be critical to helping to flatten load peaks, it’s clear that many utilities will need to upgrade their infrastructure to support the transition to electrified transportation. That’s where Hitachi Energy hopes to assist other businesses. Abdessamad elaborates:

Utility companies have no idea if three… five… six percent of all the vehicles become EVs, especially commercial, what it will do to the grid. No idea. While they’re excited, they’re also hesitant, so they want to get as much data as possible in terms of how you’re charging and how you’re using the grid as well. Working with a company that understands the grid and energy know-how and comes from that space – a company that’s got digital capabilities, and a company that is also going to be here a long time and is very committed to sustainability, is going to be key.

Transitioning the US toward sustainable transportation

Hardening the US electrical grid is just one aspect of successfully electrifying commercial transportation, and Hitachi recognizes that while it has the technology, experience, and partners to help guide companies toward successful EV adoption, a collaborative and comprehensive approach will be necessary for the transformational change that will be required to combat the climate crisis and meet aggressive carbon emissions goals.

During the recent livestream event on LinkedIn, both Allard and Abdessamad offered their insights into some of the significant issues the nation faces as it hits the accelerator on EVs.

“Friction points”

For example, there are often multiple inhibitors or “friction points” for electrification for commercial fleets. A successful transition to electrification in the current market would require fleet operators to work with numerous partners in a rapidly shifting market. This includes original equipment manufacturers (OEMs) to obtain electric vehicles, battery manufacturers, fleet depot developers, charging equipment suppliers, charging network operators and utility companies to ensure they have access to the needed charging capacity from the grid. For fleet owners who have dealt with an ICE environment up to now, the EV environment can be complex and daunting.

Additionally, Anthony Allard points out that, historically speaking, fleet owners and utility companies have not worked together and don’t necessarily “speak the same language” to understand what each side needs from the other.

Hitachi Energy’s expertise and deep relationships in the energy sector can help facilitate partnerships for these commercial customers, from answering questions to smoothing those electrification friction points. Currently, the technology company sees the US electric grid, and the need to ensure that they can meet fast-growing demand, as the largest friction point and wants to assist in consolidating all the other mandatory processes required to support an EV fleet. Allard elaborates:

We come in and we have those conversations where we try to understand the charging needs of the fleet owner and have the conversation with the utility (company) to understand, ‘ok, how’s that going to work? Are we going to be able to connect the charging infrastructure right away, or do we need to look at other solutions?’ So that’s a very important point.

Hitachi Energy as the intermediary for transportation fleets

A main takeaway from the virtual event is Hitachi’s desire to help companies navigate the complex ecosystem involved with conversion to an EV fleet. Hitachi recognizes the operational, economic and planning impact of EV conversion, and the necessity of having a phased approach while managing dual or hybrid fleet types.

To answer this question, Hitachi has built an intelligent digital solution that tracks and promotes EV charging, manages EV deployment and maintenance, and optimizes charging frequency, speed, range and routes capacity fusing AI and analytics.

Fleets can optimize their charging to reduce operational risks and maximize efficiency, providing further business value by means of battery storage, renewables, and bi-directional charging.

But what about those batteries?

With its deep experience in the transportation and energy sectors, its broad partner ecosystem and an AI-driven digital platform Hitachi recognizes that the capital and operational costs of electrification can seem prohibitive for many fleet owners.

Generally, the total cost of EV ownership (TCO) can initially be higher compared to ICE vehicles. This is due almost entirely to the high cost of EV batteries. Abdessamad once again spoke:

Battery life is probably the biggest enigma in this whole equation. When you’re looking at residual values for batteries, that’s a big unknown. How do you extend the life of the battery asset? You have to understand all the elements that affect battery life and charging. From the grid all the way to the plug – but also optimizing the routes and how you drive. There’s a lot to take in here, so let’s work with partners who understand the transition and the journey to transitioning, who understand the grid side of things.

In collaboration with its finance partners, Hitachi has created an array of adaptable financing programs that provide a variety of financing options for EVs and charging infrastructure needs. Additionally, adapting current business strategies to battery use could help alleviate high costs for customers, such as EVs as a service (EVaaS), Charging as a Service (CaaS), or Batteries as a Service (BaaS).

Transportation decarbonization requires collaboration

While Hitachi Energy intends to leverage its innovation capabilities and resources to support sustainability in the transportation sector, it recognizes that collaboration with both public and private sectors will be key to success.

The recent bipartisan infrastructure law passed in the United States includes $39B to modernize public transportation, including $7.5 billion in funding support to implement 500,000 electric vehicle chargers nationally. In addition to public funding, collaboration between federal, state and local governments, as well as support from the public and private sector will be imperative to helping meet national and global carbon emissions goals in the years to come.

Watch the full live stream from Hitachi Energy

To learn more about Hitachi Energy and the efforts it’s taking to help alleviate some of the initial friction points for commercial fleets and the transportation sector in the US, you can view the full 40-minute livestream recording here.

1 Department of Energy National Renewable Energy Laboratory – Electrification Futures Study: Scenarios of Electric Technology Adoption and Power Consumption for the United States