Do electric cars really save carbon emissions?

Smart grids, together with electric vehicles, will enable their owners to sell power back to the grid, make money for themselves, and help keep the network from overloading.

But research shows that the cost of reducing carbon emissions this way is high compared to other methods.

Smart grids will be essential to the mass public uptake of electric vehicles (EVs) without overloading the electricity network, according to a report, Smart Grids and Electric Vehicles: Made for each other? from the OECD's International Transport Forum that was published yesterday.

It is assumed by governments that electric vehicles can be a significant means of decarbonising transportation to make it more climate-friendly. However, there would be a concomitant increase in demand for electricity, that must be clean.

The report finds that smart grid technologies, if rolled out nationally, make an ideal partner to EVs, because they enable demand management and therefore a reduction in peak electricity supply requirements, meaning fewer power stations would have to be built.

Moreover, EVs will be able to use their batteries to store intermittent solar and wind power supplies at off-peak times and feed the power back into the grid when needed, should the vehicle not require it.

"Vehicles are parked on average 95% of the time, providing ample opportunity for the batteries to be used in this way," the report observes.

EV owners would be paid for permitting this, reducing the overall lifetime cost of owning such a vehicle. This cost is already, on average, less than that of an internal combustion engine, despite the higher purchase price, because of the vastly reduced running costs.

The report therefore recommends that governments or network controllers should change the tariff pattern of electricity pricing to encourage the take-up of smart grid technologies and the use of electric vehicles for supplying power to the grid.

EV owners would have the added benefit that their vehicles could provide backup supply in case of power cuts.

Do EVs really save carbon?

But do electric vehicles really reduce carbon emissions when compared to the internal combustion engine (ICE)? A discussion paper, produced in April for the OECD, compared the lifetime impacts of different vehicles, taking into account various electricity generation scenarios.

It found that, for 4-door sedan and 5-door compact cars, the cost was at the high end of the range of costs of measures to reduce carbon dioxide emissions in the transport sector: between @500 and €700 per tonne of CO2 avoided. That is a lot.

The compact electric van was more of a bargain, largely because it travels further, therefore saving on fuel costs.

But the degree of carbon abatement benefit does depend on the electricity generation mix in the country concerned. If a large amount of coal is burned there may be no carbon dioxide savings over conventional vehicles.

The study adds “even in regions where baseload generation is relatively low carbon, high rates of peak hour charging will come from marginal electricity generation which may be much more carbon intensive", like coal, oil or gas. It adds: “the timing of recharging will have a significant impact on overall greenhouse gas emissions for electric vehicle use)".

The study also found that households may well not buy electric vehicles as 'like-for-like' replacements for fossil-fuelled cars. For many urban households, the electric vehicle may be a two-wheeler or other small, purpose-built, low range, agile, easy-to-park and congestion-beating urban electric vehicle.

The 4x4 will still be used for long or family journeys.

What is a smart grid?

The scenario above would take off after 2020, the date for the UK target of installing smart meters into every building in the country, provided that current concerns with privacy over data provision from smart meters are dealt with.

Many companies are currently positioning themselves to provide this service, and a huge amount of capital is being invested.

The digital technology installed in the metering network will enable communication, and, where permitted, switching capability, to be two-way between the utility and the customer's premises. Consumption and pricing information will be available almost in real time.

Utilities will therefore be able to dynamically manage the system "as efficiently as possible, minimising costs and environmental impacts, while maximising system reliability," the report says.

Motorists will be able to plug in their cars to recharge either at the end of the working day and overnight, or, if their employer permits, during the day while they are at work.

It has so far been assumed that off-peak priced electricity would only be available overnight, but the report suggests that smart grid technologies will let these tariffs apply automatically regardless of when the owner is charging their vehicle.

This will provide opportunities for EV owners, business fleet managers and employers, to make money from reselling electricity they purchase in this manner, as well as minimising carbon dioxide emissions from electricity generation.

EVs could feed electricity either back into the grid, or into homes and buildings. Smart meter technology could be programmed to determine, on the fly, at any given moment, which is the most financially advantageous use of this stored electricity.

EV ownership could grow to account for a substantial share of electricity consumption and peak load. Some scenarios put the increase in peak demand by over 20% in the long-term. The greater the increasing consumption, the larger the potential benefits from using smart grid technologies.

So far however there has been no study I know of that attempts to calculate the lifetime carbon emissions impact of installing the smart grid.

Batteries must do better

The report notes several issues that need to be addressed before this scenario can be realised. Firstly, the availability of such capacity during peak demand periods is uncertain and needs to be mapped.

Secondly, battery technology is not yet at a point where units that can perform efficiently in this way over a long period of time are commercially available.

Also, the capability of the smart grid to provide this function has not yet been demonstrated on a large scale. The report adds: “the sheer number of electric vehicle connection points that would need to be managed makes it prohibitively expensive at present".

Two technical developments therefore are required: charging times must be reduced significantly and battery storage capacity increased dramatically.

There have been as exciting developments in this respect: at the beginning of last year, the University of Illinois, and nearby Northwestern University, announced a breakthrough in charging time, and last October Nissan, working with Kansai University in Japan, announced that it had reached the charging time of just 10 minutes.

All these solutions use changes to the design of electrode and are lithium-ion batteries. Nissan said it would take up to a decade to get such batteries to the marketplace. One of the main challenges to overcome is to minimise the reduction in capacity of the battery over time as a result of such fast charging and frequent discharging.

In a way, the question of carbon impacts are immaterial. People will desire cars for the foreseeable future. The market will meet this demand. The grid will be decarbonised anyway.  Eventually.

But don't write off the internal combustion engine just yet, especially as they will become more and more efficient.

Car manufacturers to get new targets that will cut driving costs

Moustaches in the driving seat: Siim Kallas, Vice President of the EC in charge of Transport (left), and Dieter Zetsche, Chairman of Daimler AG and Head of Mercedes-Benz Cars, at yesterday's CARS 21 group meeting.

The European Commission is next month to propose tighter carbon emissions standards for new European cars with a 2020 target of 95gm CO2 per kilometre, that will cut costs for motorists by 25%.

But the Commission has not decided whether to make the target binding, and there are calls for the target to be even stiffer in order to save drivers even more on fuel costs.

Currently, manufacturers have to reach a binding target of 130gm CO2/km by 2015, which they are on target to attain. Fines for failure are presently €95 for every gram over the target per vehicle and these would be kept at the same level in the future.

Long-term carbon dioxide emission standards for new passenger cars, for 2025 and 2030, are also envisaged by the Commission. These would be set by the end of 2014 at the latest.

The new limits would cut fuel consumption in cars and vans by up to a quarter and save European citizens an estimated 25 billion euros ($31.2 billion) per year, as we reported last month. The estimated fuel savings from implementing the 2020 target would more than compensate for the expected cost of compliance.

The average motorist would save around €500 per year on fuel from the 95 gram 2020 target, based on a driving distance of 20,000 km per year and a fuel cost of 1.4 euros per litre.

Greg Archer, programme manager at the Transport and Environment campaign group, welcomed the news, but said that drivers should be helped to save even more. "Drivers have been short-changed," he said. “A 2020 target of 80g CO2/km is perfectly attainable."

The European Commission is currently assessing the feasibility of a 70gm CO2/km target by 2025.

In an interview in Der Spiegel people last December, Guenther Oettinger said "German automakers will have to fight hard [to meet the new emissions targets], but they will meet them".

But they will not have to fight that hard, being already well on the way towards meeting the 2015 target. According to the Society of Motor Manufacturers & Traders (SMMT)'s report on new car CO2 emissions, last year average emissions had fallen to 138.1g/km, down 4.2% on 2010 and 23.7% below the 2000 average.

Low emission cars are gaining market share

Lower emission, cheaper to run cars are also becoming more popular. In 2011, registrations of alternatively-fuelled vehicles rose by 11.3% to over 25,000 units, and accounted for a record 1.3% share of the total market. All market segments reported a further decline in CO2 emissions in 2011, highlighting the broad nature of the total market shift to more efficient cars.

The SMMT says that the continuing challenging economic situation has increased consumer awareness and the desire to reduce running costs by purchasing lower CO2-emitting cars.

While the UK has to comply with emissions standards set at the EU level, it has also introduced its own complementary policies to incentivise the uptake of low-carbon vehicles. These include a plug-in car grant scheme, a fund of over £300 million, which offers motorists up to £5,000 for the purchase of cars with tailpipe emissions of 75g CO2/km or less. A similar grant has been created to encourage the purchase of ultra-low emissions vans. However, take-up of this has been low so far.

British consumers and businesses also benefit from a favourable tax regime, with plug-in vehicles receiving Vehicle Excise Duty and Company Car Tax exemptions, as well as Enhanced Capital Allowances.

Furthermore, the Plugged-In Places programme has made £30m available to match-fund eight pilot projects installing and trialing recharging infrastructure in the UK to support the Carbon Plan commitment to install up to 8,500 charge points.

Support for the automotive industry

Although in the UK, the auto market is doing surprisingly well given the recession, the story is not the same across the whole of Europe, where altogether it supports 12 million jobs, a €92 billion trade balance, and receives €30 billion investment in R&D.

So yesterday the European Commission announced a series of actions to support the industry, with a proposed action plan that will include providing EU financing for research, in particular to help the sector adapt to the technologies of tomorrow, through reinforcing European Investment Bank lending.

It will also help to manage business costs by applying smart regulation, and improve exports through trade negotiations and work on global regulatory and procedural convergence with the ultimate aim of achieving the approval of a worldwide car type. This would mean that any car produced in the world can be marketed in every country of the world.

Also yesterday, members of the CARS 21 High Level Group, which consists of ministers and senior industry representatives, met for the final time and approved a report which sets out a complete vision for the automotive industry in 2020.

It calls for, amongst other things, support for the development of "a portfolio of propulsion technologies, dominated by advanced combustion engine technology, that would be increasingly electrified. In addition, the deployment of vehicles with alternative powertrain concepts (such as electric and fuel cell vehicles)".

Parallel to this they also called for "appropriate refilling and recharging infrastructure for alternative fuel vehicles" to be built up, "in line with their market potential".

European Commission Vice-President Antonio Tajani, responsible for Industry and Entrepreneurship, said: "The automotive industry needs to be in good shape first in order to realise this vision. We therefore need to act now and decisively in order to counter current economic difficulties by mobilising financing for research, carefully evaluating any new regulation and supporting the expansion on third markets”.

The future for low emission vehicles

This is still largely driven by European legislation, although high fuel prices and concerns about climate change are playing a large part, especially outside of Europe.

Under the 2009 Renewable Energy Directive, fuel suppliers are required to source 10% of their transport fuel from renewable sources (although this policy has been met with controversy due to concerns over unsustainable biofuel cultivation).

One in four business leaders have already making use of, or are considering introducing, alternative fuel vehicles to their business operations, partly as a response to oil prices remaining stubbornly high, according to a report last month from Grant Thornton. This finds that 24% of businesses globally are looking to alternative fuel vehicles, such as electric cars, hybrids, LPG and fuel cell cars, to help mitigate rising transport costs.

The survey covered 12,000 businesses per year across 40 economies, finding also that the price of oil prices was the leading cause driving business owners to consider alternative fuel vehicles, for 69% of survey respondents globally.

The drive towards clean alternatives is being largely steered by mature markets, with 28% of businesses in the G7 at least considering adopting such vehicles, compared to just 15% in the BRIC economies.

55% of businesses cited tax relief and 62% cost management as key motivators for switching to low emission vehicles. Businesses are also increasingly aware of the environmental impact of their fleets with 58% citing saving the planet as a driver towards the adoption of alternative-fuel vehicles.

Amongst those who have not considered alternative fuel vehicles, cost (49%) emerges as the greatest constraint, closely followed by the difficulty of charging/refuelling (48%) and a lack of choice (38%).

The trend toward alternative fuels is also visible in global sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs), which are projected to reach 5.4 million vehicles by 2021 (more than 6% of the automotive market).

But a recent KPMG report found that electrified vehicles will not exceed 15% of annual global new car registrations before 2025, because of cost and lack of charging infrastructure; for the immediate future, hybrids will continue to be more popular than pure battery-powered cars.

Over time, fuel cell vehicles are seen as a more promising prospect than battery-electrified cars, especially in the BRICs countries. They find that 9–14 million new electric vehicles will be registered in TRIAD and BRIC markets by 2026.

What a waste the car is.

Isn't it absurd that the average car in the UK weighs 1.3 tonnes, is used for 4% of the year, and when in use carries an average of only 1.6 occupants?

It means that most of the time most cars have excess capacity and/or underused and heavier than their cargo. What a waste of fuel and resources!

We are running out of raw stuff. To be more specific: global resources of minerals are becoming increasingly scarce.

This is not news; some farsighted policymakers and visionaries have been attempting to draw attention to the value of resource efficiency for at least 20 years.

Over this time the evidence of the cost of mineral extraction and the processing of raw materials has grown into a substantial body of well-documented data.

Amongst other things, we now know a lot more about the wasteful use of water and the high energy and climate-damaging affects of the dash for growth happening in many parts of the world.

For example, we know that five key materials: steel, cement, plastics, paper and aluminium, dominate emissions from industry and producing them accounts for 20% of all global emissions from energy use and industrial processes.

And this is before these materials are actually processed into their final form.

The situation is worse in China because of its dependence on coal and its inefficient energy system. There, construction and manufacturing adds a further 2% of global energy and process emissions.

If, therefore, we could concentrate on tackling the efficiency of use of these 5 materials we would be going a long way towards reducing pollution, emissions and water use globally.

This depends in turn on the ability of these five sectors to cooperate.

You might think that because of the trends of globalisation and consolidation in these industries, this would not be too difficult.

In fact they are still surprisingly fragmented.

The top 10 global companies produce less than a quarter of all steel, and the largest of these, ArcelorMittal, accounts for only 6% of the total.

The effect of this is that there is much competition for inputs, especially iron ore and coke, which, contradicting the ideology of free market thinkers, does not result in increased efficiencies.

A group of researchers from Cambridge University led by Julian Allwood and Jonathan Cullen have been exploring solutions to this issue.

I've been reading their book, ‘Sustainable Materials With Both Eyes Open’, and it is full of brilliant ideas.

It also illustrates how tough the mountain of resource efficiency is to climb; harder than climbing a mountain of slag wearing roller-blades.

One of their solutions is that if goods were designed to use less metal, global metal production could be reduced by a staggering 30% without any loss of final service.

Another solution is to change the practice of construction and deconstruction so that buildings are designed to be reused.

To achieve this, they say, we need some pioneers who, they suggest, might be retailers seeking brand advantage, or the government through its procurement policies, to stimulate demand.

The supply of re-used steel will follow the demand for it, and could be increased with changes to demolition practice, perhaps as an extension of the requirements of Considerate Construction guidelines.

The voluntary eco-standard BREEAM gives accreditation for the sustainability features of buildings. However, it does not set minimum targets for reducing the embodied life-cycle impact of buildings.

The authors note that it is surprising that only approximately 5% of total credits are allocated in BREEAM to reducing a building's footprint.

In contrast, the Australian Green Star rating system, revised in February 2010 to drive best practice in steel production, has much more rigourous standards.

Of course, we can make products which last longer, and which can be repaired and renovated more easily. Prime candidates for this are vehicles and household appliances.

But as long as companies obtain financial benefit from the early obsolescence of their products, this is not going to happen. It is therefore up to national and regional governments to create and impose standards, just as they are doing, for example, with the End of Life Vehicle Directive.

Alternately, we can rent the service of transport, clean clothes, or whatever, instead of owning a machine which provides this. It is then in the interests of the service provider to maintain in an efficient way the product that is on loan to us.

I am sure that in the future people will look back on our time and marvel at how wasteful we were.

There are many barriers to material efficiency strategies, but they boil down to two things: firstly, material efficiency requires a greater level of cooperation between the many companies involved in producing a product with metal components; secondly most changes the authors propose require a radical change in company strategy.

One of the biggest of these changes is that companies within sectors and even across sectors need to cooperate more instead of competing.

This is a strategy that has been followed, but not nearly widely enough, by the National Industrial Symbiosis Programme, which takes as its starting point the idea that one company's waste might be another company's raw material.

NISP, which receives some funding from Defra, but not nearly enough, is a free business opportunity programme that delivers bottom line, environmental and social benefits, and deserves credit for being the first industrial symbiosis initiative in the world to be launched on a national scale.

In an age of austerity, resource efficiency and industrial symbiosis makes sense. Costs can be saved and raw material usage and emissions reduced.

But it does require vision and almost unprecedented degrees of cooperation between companies. Farseeing firms are doing it already and reaping the benefit.
I don't know what the car of the future will look like. But I do know it must leave a far smaller scar on the planet.