HITEC’S SOLUTION
Hitec Dual Fuel HD Truck Conversion Systems
Hitec’s dual fuel conversion system is an aftermarket conversion kit that allows diesel engines to run on a blend of natural gas and diesel (more detailed available in Appendix D).
Based on customer feedback and Hitec’s research, this technology has three main competitive advantages:
1. Post turbo sequential injection reduces methane bypass
Unlike pre turbo systems, post turbo sequential injection systems inject natural gas just prior to the combustion chamber to eliminate unspent natural gas build up in the engine’s intercooler and methane release. This reduces the risk of explosion due to gas build up. Based on an analysis of competitor’s technology, Hitec’s conversion system is the only system in the North American market that runs on a post turbo system.
2. Proprietary software controls diesel-natural gas fuel blend to increase diesel displacement and calibrate for lesser emissions
Hitec’s proprietary system software is installed on a client’s laptop to configure and control the setup of each vehicle. The software creates a 3D fueling table that measures and adjusts the fuel blend with data fed from the engine’s factory sensors. In comparison, Hitec's competitors only offer 2D fuel maps, which result in less control over vehicle performance and emissions reduction.
Hitec’s software does not override the OEM’s sensory system, but fully integrates with the OEM system across the full RPM (revolutions per minute) range. If any issues arise, the customer can access its truck’s system instantly through the computer software.
3. Engine agnostic – system can be installed in various engine models and makes, and
transferred to another diesel engine at any time
Hitec’s conversion system does not modify the engine design; therefore, it does not void OEM
warranty.
Competitors’ outdated technology limit conversions to only CNG and older diesel engines, most competitive systems are incompatible with newer diesel engines and can only run on CNG. Most competitors also require their customers to replace their trucks and purchase a glider kit, which is a new truck without the major powertrain components.
· Parts failure – Hitec mitigates this risk by installing standard readily available parts. Any parts failure can by addressed by a regular diesel technician. · Natural gas engine shut down if the engine temperature reaches above 1200°C or overrevs. The Hitec’s software system constantly monitors the critical engine parameters and performance, and will automatically switch to 100% diesel within 3 seconds if any engine anomalies outside of operating specifications are detected.Interviews with current users of Hitec’s technology have demonstrated that they have not experienced any additional maintenance beyond what is expected of a standard diesel engine. Two potential issues are:
VALUE PROPOSITION
Hitec’s conversion technology creates three (3) main benefits for their customers:
1. Fuel cost savings
Hitec’s technology can displace 50 to 70% diesel when driven at optimal levels, resulting in a 25 to 40% reduction in fuel bills and a payback period of less than a year. For example, if an average carrier operates 12 hours a day at 100km/hour, the truck driver will cover 1,200km in a day. Primary research interviews with trucking companies have shown that an average diesel truck currently covers 4.5 miles per gallon (7.2km/3.79L), while natural gas trucks can cover 6.5 miles per gallon (10.4 km/3.79L). Using December 2015 diesel and natural gas prices in Edmonton, we calculate the following fuel savings:
According to the calculations above and fuel costs in December 2015, Hitec’s technology can help companies save approximately 0 per day per truck using natural gas. This adds up to at least ,000 in savings per truck each year. Companies with trucks that operate with two drivers and operate 24 hours a day will save more.
2. Operational cost reduction
Based on primary research, trucking companies spend ,000 to ,000 a year on diesel particulate filters (DPF) for each truck for the after treatment of diesel exhaust. This maintenance cannot be ignored as a build-up of particulates in the filter creates a backpressure, which decreases the efficiency and output of the engine. According to interviews with trucking companies, natural gas eliminates this cost because after treatment is no longer needed. For example, a diesel engine will hit 4.5 miles/gallon with a DPF, but with natural gas, it can go 6.5 miles/gallon without a DPF, which is a 44% increase in fuel economy. The ,000 spent per truck per year is half the cost to install a Hitec conversion kit without considering the added fuel savings.
3. GHG emissions reduction
Based on user fuel logs, Hitec’s technology reduces 20 to 25% of GHG emissions through its natural gas capabilities. Hitec’s post turbo sequential injections minimize the amount of methane emissions typically produced by pre turbo natural gas engines. For example, if Hitec can convert 10% of the market, there will be a reduction of 5.1 MT CO2e, the equivalent of 274,000 passenger vehicles taken off the road.
Table 4 shows data on five trucks operating on Hitec’s dual fuel conversion system. This data has been gathered from Hitec’s conversion system software and truck fuel logs.
Table 1. Hitec Operational Track Record
Feedback from current users of Hitec’s technology has been positive with little or no discernible effect on engine performance, no required change to a driver’s operation, and no change to an engine’s maintenance operation or requirements. Users also experienced economic and environmental benefits like cost savings and GHG emissions reduction.
COMPETITIVE ANALYSIS
Based on an environmental scan of the Canadian trucking industry and supplemented by primary research, four (4) major competitors in North America that develop and supply natural
gas conversion systems technology have been identified (Table 4).
1. American Power Group (APG) – Algona, Iowa – The American Power Group (APGI:US)
developed a patented Turbocharged Natural Gas Dual Fuel Systems technology that converts existing diesel engines to operate on natural gas. Their V5000 Dual Fuel System for Class 8 trucks and glider kits can be used for stationary and vehicular engines. APG has authorized dealers and installers of APG technology in the United States. APG’s technology limits the model and make of engines it is applicable to, particularly newer engines, and requires the installation of a glider kit. This results in a low diesel displacement rate of 40%.
2. MaxQuip – Calgary, Alberta – MaxQuip developed the DieselFlex vapour injection system
that blends measured amounts of CNG in diesel engines using a computerized system. MaxQuip supplies and distributes its technology in Canada and the United States4. MaxQuip’s
technology is only applicable to Peterbilt engines and creates a low diesel displacement
rate.
3. Energy Conversions Inc. (ECI) – Fife, Washington – ECI designs and manufactures the
Economizer, a computerized dual fuel conversion system for industrial four stroke diesel engines. The technology is restricted to diesel engines 12L and below, and has been used in
rail with 2 Canadian National (CN) locomotives.
4. Omnitek – Vista, California – Omnitek Engineering Corporation develops and sells proprietary diesel to natural gas engine conversion systems. Omnitek has performed over 5000 engine conversions, which have been restricted to stationary engines6. Omnitek’s technology does not perform well in trucks because of the swing in RPM.
Table 5 outlines the key differences between Hitec’s technology and its competitors. As mentioned in the value proposition section, Hitec technology’s key competitive advantages are
the post turbo injection system that reduces GHG emissions, the 3D fueling table that results in increased diesel displacement, and its ability to be installed and transferred to any diesel engine model.
Table 2. Hitec Competitive Analysis
**Pricing varies depending on the vehicle and the engine. Pricing is ~ ,000-60,000 per engine
Other competitors include the OEM engine manufacturing companies, who offer mono and dual fuel engine alternatives. Primary research has determined natural gas engines cost around 0,000 per engine (e.g. Cummins Westport ISX 12G); however, this cost is not considered to be a deterrent for trucking companies. There is little to no interest in monofuel or dual natural gas engine technology because of past negative experiences with unreliable technology, which resulted in increased downtime and missed customer deadlines. There are also no reports of new natural gas engines in development by OEM engine manufacturers.
The natural gas dual conversion system market remains early stage with few competitors. Interviews with natural gas production companies have concluded that none of Hitec’s competitors have significant market share, and are only established in their own niche markets. What distinguishes Hitec’s system is its high accuracy fuel control technology combined with highquality components in a robust installation configuration.