Westport's High Pressure Direct Injection System - GAS Doctor, GPL ...

Westport's High Pressure Direct Injection System —
Technology and European Certification
March 30, 2010

A Global Leader in Alternative Fuel
Transportation Technologies
• Technology developed at the University of British
Columbia, Vancouver, Canada
• Westport founded in 1995
• A world leader in heavy-duty gaseous fuel engine
technology (natural gas, hydrogen, LPG, biogas)
– Over 25,000 engines sold to customers in 35 countries
– More than 60 OEM vehicle manufacturers in 20 countries
offer our engines/fuel systems
• > Over 200 employees worldwide
• $122 million F2009 revenue
• Publicly-traded TSX:WPT, NASDAQ:WPRT
• $630 million market capitalization
• Global partnerships in China, Europe, USA
2

Recognized Leadership
3
3

Westport‘s Market Segments
Segment & Westport
Business Unit
Light Duty
1 – 5 litre
Products
Partners
Mid-Range
5.9 – 10 litre
60 bus and truck
OEM partners
world-wide
Heavy Duty
11 – 16 litre
4
4

Westport‘s High Pressure Direct
Injection (HPDI) Philosophy
Keep the engine…
• Rudolf Diesel‘s concept: Direct injection, diffusion
combustion
– At high load, no danger of knock:
• High compression ratio Efficiency same or better than diesel
(lower fuel costs, lower CO 2 emissions)
• Highly boosted operation High performance (true heavyduty
applications, fully match the torque curve)
– At low load, no problems with the lean flammability limit:
• Direct injection Leanest air-fuel ratios possible High
efficiency
• No throttling High efficiency
– Other benefits:
• Direct injection Responsive performance
• Diesel pilot No spark plugs to worry about
• Diesel pilot An extremely robust ignition source
• Only air, no fuel, is compressed on compression stroke Low
engine-out CH 4 emissions
…but change the fuel
• Shift to natural gas
– Environment: Lowest-carbon hydrocarbon fuel Lower GHGs
– Energy security: Vast (and rapidly increasing) natural supply, more uniform
distribution globally, larger supplies in western countries Energy security
– Economics: Lower cost fuel Operating cost savings
5

The HPDI Fuel System
• A complete natural gas fuel system for
heavy-duty engines, with dieselequivalent
performance and efficiency
• Capable of independently injecting
diesel and gas at up to 300 bar
• The diesel quantity is approximately
constant at all conditions, just enough
to provide energy for robust ignition;
the gas quantity is controlled to vary
the engine power
more information is available at
www.westport.com and www.westport-hd.com
• The HPDI injector is not designed to
allow diesel-only operation (other than
low-torque operation for a few minutes
to drive off the railway track or move
around in the repair shop)
• This has regulatory benefits in some
jurisdictions that want to ensure that
their natural gas engines actually are
running on natural gas
6
6

Hundreds of Kenworth Trucks with HPDI
Engines are in Commercial Service
CONFIDENTIAL
7

Crude oil price [US$/barrel]
Diesel and natural gas fuel prices [US$/gallon]
Economics:
Vehicle Fuel Price History
Fuel Price History for Crude Oil, Diesel Fuel, and Vehicular CNG in The USA
$160
$120
$80
World crude oil spot price (EIA)
Retail diesel fuel (EIA)
Retail diesel fuel (CCAFPR)
Retail CNG (CCAFPR)
data sources: US DOE
Energy Information Administration
(EIA) and Clean Cities Alternative Fuel
Price Report (CCAFPR)
$5.00
$4.50
$4.00
$3.50
$3.00
$5.00
$4.50
$4.00
$3.50
$3.00
R 2 = 0.9688
R 2 = 0.9782
diesel-CNG
price gap
$2.50
$2.50
R 2 = 0.7163
$40
$2.00
$2.00
$-
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
last update Mar 11, 2010
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
$1.50
$1.00
$1.50
$1.00
Retail diesel fuel (EIA)
Retail diesel fuel (CCAFPR)
Retail CNG (CCAFPR)
$- $20 $40 $60 $80 $100 $120 $140 $160
Crude oil price [US$/barrel]
• Diesel fuel prices rise and fall with crude oil prices – there‘s a high degree of correlation
• Natural gas prices also correlate with crude oil prices (although less strongly)
• As oil prices rise, the diesel-natural gas price gap widens, increasing HPDI‘s fuel cost savings
8

Crude oil price [US$/barrel]
Diesel and natural gas fuel prices [US$/gallon]
Economics:
Vehicle Fuel Price Projections
$200
$160
Fuel Price History and Projections for Crude Oil, Diesel Fuel, and Vehicular CNG in The USA
World crude oil spot price (EIA)
EIA projections to 2035, Crude oil [$/bbl]
Retail diesel fuel (EIA)
Retail diesel fuel (CCAFPR)
Retail CNG (CCAFPR)
EIA projections to 2035, CNG for vehicles [$/DEG]
EIA projections to 2035, Diesel fuel [$/gal]
$7.00
$6.00
$5.00
$7.00
$6.00
$5.00
Retail diesel fuel (EIA)
Retail diesel fuel (CCAFPR)
Retail CNG (CCAFPR)
EIA projections to 2035, Diesel fuel [$/gal]
EIA projections to 2035, CNG for vehicles [$/DEG]
data sources: US DOE Energy Information
Administration (EIA) and Clean Cities Alternative Fuel
Price Report (CCAFPR); projections from "Annual
Energy Outlook 2010 Early Release"
$120
$80
diesel-CNG
price gap
$4.00
$3.00
$4.00
$3.00
diesel-CNG
price gap
2030
2035
$40
$2.00 $2.00
last update Mar 11, 2010 2015
2020
2025
$-
history
EIA projections
2000 2005 2010 2015 2020 2025 2030 2035
$1.00
• The US Energy Information Administration (EIA)‘s projections to 2035 show the same
relationships among prices of crude oil, diesel fuel, and natural gas
• The price gap will continually widen every year, approximately in line with historical trends
• Recently, large quantities of ―shale gas‖ have greatly increased US natural gas reserves
$1.00
$- $50 $100 $150 $200
Crude oil price [US$/barrel]
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Environment:
Heavy-duty Trucks Are Important
• According to NASA‘s Goddard Institute for
Space Studies, on-road transportation is the
largest driver of climate change, and CO 2 is
the most important chemical species
• Fuel use translates directly to CO 2 emissions,
and according to the US Department of Energy,
heavy-duty trucks are one of the largest
consumers of petroleum fuels, with Class 8
(>15t) trucks accounting for nearly 70% of that
Climatic Forcing by Economic Sector
source: Research and
Development Opportunities for
Heavy Trucks, US DOE, June 2009.
source: Unger et al, Attribution of climate forcing to economic sectors,
Proceedings of the National Academy of Sciences, PNAS 2010 107 (8) 3382-
3387, www.pnas.org/cgi/doi/10.1073/pnas.0906548107
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Tank-to-wheels BSGHG (CO2eq) [g/kW.h]
Environment:
CO 2 and GHG Benefits of HPDI
700
600
500
400
300
200
100
0
Illustrative GHG Emissions at Euro VI
Assume HPDI just meets ETC PI CH 4 limits
Diesel
Westport HPDI
source: Westport estimates
Engine efficiencies depend on engine duty cycle
BSGHG from CH4 (=25*BSCH4) [g/kW.h]
BSCO2 emissions [g/kW.h]
~ 22%
reduction
• Diesel engines are the most efficient
engines in common use, but diesel fuel
contains a lot of carbon
• Natural gas has the lowest carbon content
of any hydrocarbon fuel
• Westport‘s HPDI philosophy: ―keep the
engine but change the fuel‖
– HPDI‘s efficiency is the same as or better
than a diesel engine‘s
– HPDI uses low-carbon natural gas fuel to
provide ~ 94% of the energy on average (~
97% at maximum power)
– So HPDI reduces CO 2 emissions by ~ 24%
– Even adding the low CH 4 emissions
permitted for ―gas engines‖ under European
regulations (0.5 g/kW.h at Euro VI), HPDI
would reduce total GHG (=CO 2 +25*CH 4 )
emissions by ~ 22%
• Regulation of CO 2 or total GHGs
(=CO 2 +25*CH 4 ) would benefit most gas
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engines

Environment: First Global Carbon
Finance Program for Transportation
• Monetizing CO 2 reductions is a challenge for truck
fleets
– Cost: A project is cost-prohibitive for all but the largest
fleets
– Regulatory uncertainty: Will transportation be included?
– Quantification and verification: More difficult for mobile
sources
– Complexity: IPCC defaults and actual EPA results
– How to price the CO 2 ?
• Westport recently announced the world‘s first CO 2 finance program for transportation, to be
registered to the Voluntary Carbon Standard (VCS)
• The Westport Carbon Project allows truck operators to realize additional financial value
from the decision to purchase a natural gas vehicle via rebate cheques from Westport
• All voluntary carbon units (VCU) are real, measurable, permanent, additional, conservative,
independently verified, unique, and transparent
• Westport will bundle CO 2 reductions from truck operators that use our engines and re-sell
CO 2 offsets to those wishing to buy them
• This validates the emissions reduction of Westport engines and further supports the
economic and environmental value proposition we offer to customers
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HPDI Certification:
USA & Australia (1)
• HPDI offers environmental and cost benefits, but how to emissions-certify it?
• Many ―alternative fuels‖ technologies are retro-fits, but HPDI is not a retro-fit, it is a
new-OEM product offered as a factory option in Kenworth and Peterbilt trucks
• Recognizing the value of HPDI and its uncertain regulatory situation, California
crafted a definition that would allow HPDI to certify, without any special emissions
exemptions and that is technology-neutral and fuel-neutral
‗"Heavy-duty pilot ignition
engine" means an engine
designed to operate using an
alternative fuel, except that
diesel fuel is used for pilot
ignition at an average ratio of
no more than one part diesel
fuel to ten parts total fuel on
an energy equivalent basis. An
engine that can operate or idle
solely on diesel fuel at any
time does not meet this
definition.‘
The definition applies to alternative-fuel engines
but is technology-neutral and fuel-neutral (natural
gas is not mentioned)
Diesel fuel is allowed but restricted to pilot
ignition only
Fuel substitution is specifically restricted to a high
average value on an energy-equivalent basis
Operation (even idling) on diesel only is
specifically prohibited
source: California Code of Regulations, Title 13, Section 2020
13

HPDI Certification:
USA & Australia (2)
• USA
– HPDI is emissions-certified in the USA to below
EPA 2007 and in California to below CARB 2007
• HPDI: NOx 0.8 g/bhp-hr (1.07 g/kW.h), PM 0.01 g/bhp-hr (0.013 g/kW.h)
– Certification to 2010 standards expected soon
• NOx 0.2 g/bhp-hr (0.268 g/kW.h), PM 0.01 g/bhp-hr (0.013 g/kW.h)
• Australia
– HPDI is emissions-certified in Australia to Australian
Design Rules (ADR) 80/02 (= Euro 4 or US04)
– Certification to ADR80/03 (= Euro 5 or US07) is
coming in 2011
14

Certification Regulations:
Europe (1)
• UN/ECE Regulation 115
– UN/ECE Regulation 115 applies specifically to retro-fits and CNG
– HPDI is not a retro-fit product
• New-OEM type approval
– HPDI is a new-OEM product, offered today in Kenworth and Peterbilt
trucks as factory options
– Work is in progress with Volvo, Weichai, and others
– HPDI engines derive ~ 94% of their energy from natural gas (~ 97% at
maximum power)—they are clearly gas engines
– Under new-OEM regulations:
• ‗gas engine‘ means an engine which is fuelled with natural gas (NG) or liquid
petroleum gas (LPG) (Directive 2005/55/EC);
• but this definition was amended in Commission Directive 2005/78/EC: ―gas
engine‖ means a positive-ignition engine which is fuelled with natural gas
(NG) or liquefied petroleum gas (LPG);
• (there seems to be no legislative definition of ―positive-ignition‖?)
15

Certification Regulations:
Europe (2)
• Possible approaches for Europe:
– The Euro VI emissions limits have already been set in Regulation (EC)
No 595/2009; these appear more amenable to alternative fuels: ―It is
appropriate to encourage the introduction of alternative fuel vehicles‖
– And include the definition that ―alternative fuel vehicle‘ means a
vehicle designed to be capable of running on at least one type of fuel
that is either gaseous at atmospheric temperature and pressure, or
substantially non-mineral oil derived;‖
– But most of the Euro VI definitions have not been published yet
– One approach could be to revise the definition of ―gas engine‖ to
include something similar to that used by California
– Another approach could perhaps add a new definition of a ―pilotignited
gas engine‖ as a new type of ―gas engine‖, again similar to that
used by California
– A third approach might be to clarify ―diesel pilot ignition‖ as a form of
―positive ignition‖, again similar to California, since ―positive ignition‖
seems not to be specifically defined
16

Summary
• Westport‘s HPDI technology offers significant environmental, energy security,
and economic benefits
• But emissions regulations were written, naturally enough, with standard
technologies in mind
• Westport has overcome uncertainties in certification in other jurisdictions by
demonstrating HPDI‘s benefits and working with regulators to address their
concerns
• California‘s successful approach may be a good model:
– Create a new definition, probably easier and faster than a whole new set of
emissions limits
– Design the definition to
• permit two fuels, but restrict diesel fuel to ―pilot ignition‖ only
• require a high percentage of fuel substitution (of natural gas, in our case)
• prohibit diesel-only operation (another option would be to allow diesel-only operation but
require the engine to meet diesel emissions limits when operating in diesel-only mode)
– No special emissions exemptions, technology-neutral, and fuel-neutral
• Possible approaches for Europe:
– While the emissions limits for Euro VI have already been set, most of the definitions
have not
– As in California, the best approach might be to work on the definitions
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