If the internal hub gear jams on due to failure all that will happen is the motor becomes permanently engaged. My last build had no freewheel so as soon as you shut the power off it just started to drag a little so hopefully all that would happen is it would gently slow the bike down instead of starting to freewheel as normal. As for gear down you physically cannot get a smaller motor sprocket on these shafts than the ones I have made without cutting the rod off and welding a 6 or 7 tooth one on. I managed to get a 9t double slotted sprocket and machine it out to a D shape then grind off some of the washer and spacer so the chain stopped riding up on the shaft and nut badly.
I honestly wouldnt even bother with a my1016 or zy1016 (unite copy?) unless you ditch the standard 12t sprocket for a 9/90t type of setup. Unless of course you can get a larger than 90t cog but even then it starts to fowl curved forks and accentuate any play in your freewheel. I ran this on a 26 inch wheel with no gears to reduce the gearing and at around 1900rpm fighting the wind for a few miles it nearly caught fire. After 20 minutes I could just touch it enough to open it up and it was black and full of molten stuff lol. Maybe if you had a sturmey hub built into a 26" wheel and wanted to support it well with your legs it might be ok but my last build had no gearing involved making it always wanting to do 25mph or overheat if you went slower. Here are my sums which have become vital for these little motors to survive.
I did the inches in a mile 63360"
divided by wheel circumference 63"
multiplied by the hypothesises speed you want to look at 14 (mph) finally
divided by 60. So at 14mph my wheels are doing 234rpm, my 90t cog is ten times bigger than my 9t sprocket so my motor ends up at 2340rpm (2600 rated motor) and draws around 6 to 8amps. Just 200rpm less than this and it draws nearer 12amps and heats up. On the 20 inch rim it also draws half the power and goes 35 percent further per charge than it did on my 26" wheeled bike. The reason iv used 14mph is this is the constant speed it does on the flat whether it has 10 stone or 20 stone on it in 1st gear without pedaling. Its more like 17mph in second but raises the current to 10ish amps and heats the motor to 40 degrees (cuts out at 60).
http://www.900mpg.org/electric_building.php
As for power It started life with two 7kg 12v 24ah lucas deep cycle gels. But the powers that be didnt like the weight and as mine is out of action for now my lady friend has borrowed my 20ah ping lifepo4. On my previous build (http://endless-sphere.com/forums/viewtopic.php?f=6&t=23790) We never went more than 20 miles on the lead acid as the volt display would start showing voltage sag and id panic about over discharging them but would guess there is probably at least a 5 mile difference in these batteries even though the gels say 24ah it seems they gave out 18ish in the end due to that pesky pukka purket thingy effect. Iv never actually run the batteries out of power even after 30 miles but just hate it when cells start to drop as I know they dont like it, maybe il do a full drain one day.
I believe this hub is the AW version with 2nd as direct drive and the ones either side reduction or increased ratio with an oln of 108mm. I think I may have swapped the lock nuts for slimmer ones or lost a spacer I cant remember now but this slim hub with track spacing has been key to this all working out as it has.
http://www.sheldonbrown.com/sturmey-archer.html aw
I know every idea you will have ever thought of has been done before or patented and I wasnt professing to be the first for this idea but I bet mine would out do the rest of them on range due the extra effort iv made with making sure my sturmey had reduction gearing (I think most have direct drive and then increase) and modified the motors sprocket meaning optional legal uk speeds, and very low amp draw. I actually wanted an 8 speed hub as a friction drive but thought better of it and did this as the bike was a gift given by my 22 year old womans brother who sadly died 2 days after and wanted to make something fun with his last gift and memory to maria from him.
Heres a quick pic of the £6 voltage display which helps to gauge how much your asking of the motor by watching the voltage drop or raise, the battery and the tiny 9t sprocket.