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Fuel savings and greenhouse gas emission reductions with Permo Drive
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SUCCESS STORYPermo-Drive Technologies Pty Ltd
R&D the key to a new aquaculture industry
Permo-Drive’s major competitive advantage is that the
system isn’t limited to new vehicle manufacture; it can
also be retrofitted in existing vehicles. It’s this that
attracted the attention of the United States military,
with an existing fleet of 246,000 tactical vehicles and a
target to reduce fuel consumption by 75 per cent by the
year 2010. The result for Permo-Drive has been a rare
Cooperative R&D Agreement with the National
Automotive Centre (NAC) to develop the system for
use in tactical vehicles.
The road to success started, quite literally, as a hilly
one. Research began with a working group of three
travelling back and forth between Sydney and
Brisbane in a semi-trailer, armed with a stopwatch
and a spreadsheet measuring the ratio of ‘down hills’
to ‘up hills’and the potential of the terrain for energy
regeneration. Things got a little easier with the
development of an electronic device to collect the
data necessary to build a convincing case.
When a client approached Allan Rush, now Permo-
Drive Technologies’Director of Research, in late 1997
to investigate a means of storing and harnessing the
energy normally wasted in the heavy transport industry,
it was a challenge he couldn’t resist. Today the solution
– an innovative hydraulic regenerative braking and
propulsion system for heavy vehicles – is set to become
a standard feature in United States military vehicles
as well as civilian heavy transport all over the world.
In simple terms, the Permo-Drive system stores the
braking energy of a vehicle and allows it to be
released later when required; for example, a truck
descending a hill or braking can store energy and use
it later to accelerate, climb, or change gears. In terms
of reductions in fuel costs and brake and drive-line
wear, the benefits are impressive, but even more so are
the environmental implications. Projected reductions
in fuel and greenhouse gas emissions are as high as
40 per cent for vehicles in urban driving conditions.
An R&D Start grant helps Permo-Drive climb to the top of the hill.
A cleaner, greener energy solution for heavy transport
SAE World Congress, Detroit Michigan, 2003: L–R at back: Ken Deylami (National Automotive Centre US Army) and Allan Rush.L–R in front: Permo-Drive CEO Max Bosotti, Simon Basely (Dana Corporation) and Jim Borovac (Permo-Drive).
SUCCESS STORYPermo-Drive Technologies Pty Ltd
APRIL 2003 ITR 2003/031
For further information on R&D Startor the range of AusIndustryinnovation programs contact:
AusIndustry Hotline 13 28 46
Any of AusIndustry’s State andTerritory Offices
Or visit the AusIndustry website atwww.ausindustry.gov.au
The R&D Start Program is a competitive, merit-based program which provides
grants and loans to assist companies to undertake R&D and its commercialisation.
Through R&D Start the Commonwealth Government will provide approximately
$1.7 billion to June 2006 in direct support for business research, development and
commercialisation through the Backing Australia’s Ability initiative.
Non-tax exempt companies incorporated in Australia, who conduct research and
development activities or early commercialisation in Australia, are eligible for
support under the program.
R&D Start
United States military contributing
funding and two tactical trucks for
use in the test evaluations.
With leading truck manufacturers
in the United States, Europe and
Asia also showing considerable
interest in the system, the
pressure for the company to ‘go
global’has been irresistible.
Hence, the March 2002
appointment of Max Bosotti as
Permo-Drive’s new CEO, bringing
with him the global company
expertise needed to take Permo-
Drive to new heights.
For Permo-Drive it’s becoming
a great view from the top of the hill!
Contact
Allan Rush
Executive Director – Research
Max Bosotti
CEO and Managing Director
Permo-Drive Technologies Pty Ltd
203 Southern Cross Drive
Ballina
New South Wales 2478
Tel: 02 6686 1100
Fax: 02 6686 1199
Email: [email protected]
Web: www.permo-drive.com
locally, which was oversubscribed.
Says Allan, “The AusIndustry
support combined with the
investment funds enabled us to
really forge ahead, developing the
system into an efficient functional
model and undertaking independent
performance trials.”
When the Ford Motor Company
announced in 2001 that it had
developed a similar system for
sports utility vehicles, Permo-Drive
was spurred into action. Allan and
Permo-Drive’s Marketing Manager,
Greg Beaver, embarked on a
whirlwind tour of nine US states,
a chance meeting with a United
States military representative en
route leading them to the Executive
Director of the NAC. Now Permo-
Drive is well on its way to finalising
specific evaluation criteria for the
military’s requirements, with the
A‘proof of concept’working model
launched in 1998 received an
enthusiastic reception, but the system
still needed to be tested in a working
environment. That’s when a staunch
supporter handed the group the keys
to a brand new truck – and the
means to put theory into practice. In
September 1998 the trio established
H.B.P. Permo-Drive Pty Ltd, and
applied for patents for the concept.
With support from the Department of
State and Regional Development and
a small grant for feasibility studies
the company pressed on, officially
becoming Permo-Drive Technologies
Ltd (an unlisted public company)
on 1 July 2000. Accepted to the
Australian Technology Showcase
in 2000, the system was radically
redesigned to simplify and improve
the overall efficiency, the reworked
concept attracting even greater
interest than before.
After receiving a Commonwealth
R&D Start grant of $920,000 in
May 2000, the company issued an
Unlisted Prospectus for $5 million
From: “Colin Dunstan” <[email protected]>To: “John Hannaford" <[email protected]>
Sent: Thursday, 30 October 2008 3:16 PM
Subject: Save Our Technology feedback
John,
I have sent a letter to the ACT bus fleet operator, recommending it evaluates Permo-Drive units, and have sent a copy to "Save Our Technologies". Hope all goes well.
Best wishes,
Colin Dunstan
Colin Dunstan
Tuesday, 28 October 2008
Ph: Mob:
Email: [email protected]
Mr Tom ElliottGeneral ManagerACTIONPO Box 158Canberra City ACT 2601
Email: [email protected]
cc: ChairmanSave Our Technology Inc12 Carrington StBALLINA N.S.W. 2478
Dear Mr Elliott, Cost-Effectiveness of Permo-Drive for ACTION
A few years ago the ABC TV made a documentary on a New South Wales engineering business developing a braking energy recovery device for heavy vehicles. See the AusIndustry Report, “SUCCESS STORY, Permo-Drive Technologies Pty Ltd, A cleaner, greener energy solution for heavy transport”, April 2003:
“In simple terms, the Permo-Drive system stores the braking energy of a vehicle and allows it to be released later when required; for example, a truck descending a hill or braking can store energy and use it later to accelerate, climb, or change gears. In terms of reductions in fuel costs and brake and drive-line wear, the benefits are impressive, but even more so are the environmental implications. Projected reductions in fuel and greenhouse gas emissions are as high as 40 per cent for vehicles in urban driving conditions.”
Recently I wanted to obtain some engineering advice on engine management technology and, recalling the expertise of the business that was the subject of that ABC TV documentary, I searched for contact details on the internet. As a result, I was able to find the business, which trades as Permo-Drive, and also learned that it was at risk of going into receivership as it had been unable to successfully market its product in any significant numbers.
I had a look over the information that Permo-Drive has made available. Either the current design of their product is priced too high to give purchasers a sufficient fuel saving to justify the expenditure, or alternately, the business, that clearly possesses a lot of engineering expertise, may simply not have identified the correct market segment and savings their product will provide to potential customers.
A website discussing Permo-Drive’s future mentions the possibility of orders being placed by trucking companies. It seems to me that drivers of heavy vehicles cruising down the Hume Highway will rarely need to touch their brakes, and the potential
fuel savings from a device designed to recover the energy of braking a heavy vehicle will be insignificant in this market segment.
However, the situation is quite different for large buses in urban transport roles – like those of the ACTION bus fleet – that are constantly stopping and starting. If Permo-Drive’s product at its current design price has any chance of commercial success, then it has to measure up in the economic realities of ACTION’s bus fleet operations.
I have found a copy of ACTION Authority’s Annual Report 2005-2006 and have attempted to estimate the annual fuel usage and fuel costs per bus in the ACTION bus fleet based on some information in that report.
The objective is to find the price at which Permo-Drive’s device becomes cost-effective. I am forwarding a copy of this letter to the Chairman of the shareholder organisation that is considering further investments to keep Permo-Drive in business; The hope is that this information may assist both Permo-Drive - to determine if Permo-Drive has any prospects of commercial success - and ACTION – to determine if Permo-Drive’s product offers a cost-effective solution with which to cut the fuel consumption and running costs of its bus fleet.
My estimates are based on an interpretation of the limited information I have found to date, that is, the ACTION Authority’s Annual Report 2005-2006, and should only be considered as a starting point. These estimates can be refined with more recent information from ACTION and from Permo-Drive.
Passenger Fleet and Special Fleet (from Table 1, page 12) 2004-05 2005-06
Number of buses 391 387Kilometres Travelled (000) 23,339 23,450
Operating expenses (from Note 10, page 86) 2004-05 2005-06
Bus running expenses ($,000) 9,135 10,367
My Estimates per Bus 2004-05 2005-06Bus Running Expenses per bus ($) $23,363 $26,788Kilometres Travelled per bus 59,691 60,594
Using the following two assumptions:1. “Bus Running Expenses per bus” in 2005-06 (of $26,788) represents the cost of
fuel, and 2. Actual average fuel savings from fitting the Permo-Drive device to any bus
are only 20% (this is a very conservative assumption. I have chosen just half the figure of 40 per cent given as a high estimate for fuel savings in the 2003 AusIndustry report quoted in the opening paragraph of this letter), -
the savings per bus would be more than $5,000- each year, or $25,000- over 5 years. Thus, if the Permo-Drive devices cost $25,000- each, then the payback period would be just 5 years: The fuel savings in 5 years would recoup the outlay on the Permo-Drive devices.
At face value, if the above assumptions are reasonable, there are potentially significant benefits for both ACTION and Permo-Drive Technologies that could be explored.
2
I am not sure of the procedure to be followed to take this analysis further. The final step, I think, following a preliminary feasibility assessment by ACTION, might be a publicly advertised request for tender (RFT) from potential suppliers of fuel-saving measures that are suitable for retro-fitting to ACTION’s existing buses – and in response to this RFT Permo-Drive Technologies could offer to supply its devices in competition with other suppliers (if any?) of devices that provide similar fuel savings.
I hope this information may assist the business objectives of both ACTION and Permo-Drive Technologies.
Yours sincerely,
Colin Dunstan
3
Link to ACTION Authority Co-Operative Agreement under Greenhouse Challenge Plus http://www.climatechange.gov.au/cgi-bin/challenge/dbsearch.pl?page=agree_detail;aid=4038
ACTION Authority2005 ACTION Authority
The ACTION Authority was created in January 2002 with a view to emphasising its commercial operations. It provides scheduled route, school and specialist bus transport to the people of Canberra and has service as its principal priority.
Company OperationsACTION's operating environment is unique in that Canberra has the highest average income and single and two car ownership in Australia, and a very large "Y" shaped geographical area with minimal traffic congestion, abundant cheap parking and low density housing. ACTION's challenge is to provide travel times that are competitive with a car and at a cost less than parking.
To meet this challenge ACTION has 374 buses, 677 staff, two depots, a corporate office and four interchanges to provide 3,000+ services a day to carry 16.3 million passengers over 22.5 million kms a year. ACTION has a fleet of 374 route buses, including 69 accessible buses, and 16 mini buses that are used for special needs transport.
The Authority has commenced the process for the construction of a CNG fuelling facility for the fuelling of its new CNG buses. The facility is expected to be commissioned by October 2004.
Emissions UpdateThe ACT Government committed to $23.4 million to purchase 62 low floor easy access buses to replace older buses in the fleet. Twenty of these new buses are diesel powered, using low sulphur fuel, and have already been incorporated into the ACTION fleet. The remaining 42 buses, run on compressed natural gas (CNG), are being introduced progressively into the fleet over the next two years. The CNG buses promise equivalent performance to diesel for less harmful emissions, including noise and lower long-term costs.The new buses are low floor with easy access with fold out wheelchair ramps. Each bus has the capacity to carry 2 wheelchairs.
Action PlanACTION Authority will continue to raise awareness to all staff regarding its environmental performance. The Authority will also continue to actively participate in research and development of alternative fuels for its buses.
From: “Richard Matto” <[email protected]> To: “Colin Dunstan” <[email protected]>
Sent: Thursday, November 06, 2008 7:41 AM
Subject: Climate Change & Sustainability
Colin
ACTION is no longer an authority, ACTION since 2007 is an ACT Government Department Enterprise, & as such our administrative environment has changed significantly.
Action as a Government Enterprise has commenced with a procurement process for a Consultancy for the next stage of ACTION’s Climate Change & Sustainability Strategy.
I can certainly make mention of Permo-Drive Technology to the winning tenderer for this consultancy, the time frame for this project is approx 6 months, as it is a whole of ACTION project.
One avenue for Permo-Drive could be to locate venture capital from the Carbon Emissions Market, Investors would purchase the Permo-Drive units for installation into the transport industry, Fleet Operators could reap the fuel savings & the investor could receive the carbon credits.
Regards
Richard Matto CMILTFleet Services ManagerDepartment of Territory & Municipal ServicesAustralian Capital Territory Internal Omnibus Network
T 02 6205 4821F 02 6207 8056M 0427 261 720E [email protected]
From: “Colin Dunstan” <[email protected]>To: “John Hannaford" <[email protected]>
Sent: Thursday, 6 November 2008 5:16 PM
Subject: Fw: Climate Change & Sustainability - Permo Drive and ACTION Buses
To: John HannafordSave Our TechnologyBallina NSW 2478
Hi John,
Sorry not to get much joy from my approach to ACTION buses on Permo-Drive. At least we got an acknowledgement of the potential benefits, and hopefully some goodwill towards your organisation's efforts.
I am forwarding some further information from Richard Matto, ACTION's Fleet Services Manager, with a positive suggestion for an alternate approach to secure funding for Permo-Drive.
…
Once again, sorry I couldn't be of more help.
Best wishes and good luck with Save Our Technology,
Colin Dunstan
From: “John Hannaford" <[email protected]>To: “Colin Dunstan” <[email protected]>
Sent: Friday, 7 November 2008 9:08 AM
Subject: Permo-Drive
Colin
Thanks for all your work. It has been a long haul with still no end in sight yet. The contacts I had seem to have all dried up now in the current economic crisis.
I have put my nomination in for the board to see what else I can from that angle.
We should be getting a notice of the AGM very soon as it should happen before the end of this month.
Best Regards
John Hannaford