One of the sources of increased fuel consumption in modern cars is the parasitic loss caused by the drag of having to turn ever larger alternators to provide electrical power to all the assorted accessories and features. The alternator is typically belt driven by the engine and runs continuously, providing juice to charge the battery and drive radios, lights, computers, etc.

For 2008 BMW is introducing what they call Brake Energy Regeneration on the 5-Series. The new system uses a larger than normal battery, and an electronically controlled alternator. The alternator is disengaged from the engine during normal cruise and acceleration and activates during vehicle deceleration. This adds to the engine drag braking, and the car's kinetic energy is effectively transformed into electrical energy which replenishes the battery, which now provides the accessory power.

When the battery level gets too low, the system reverts to normal charging mode. Until BMW introduces some hybrids in the next couple of years this provides a stop gap that gives an extra efficiency boost. WorldCarFans has an animated video that shows the flow of energy around the car in various operational modes.

[Source: WorldCarFans]