Developing and emerging economies face a complex challenge when it comes to their energy infrastructure: they must meet the needs of growing populations that still lack access to basic services like water and electricity but – the climate crisis front and centre – they must also be part of the solution by answering the global climate emergency through innovative efforts to ensure a low-carbon future.
This article is part of Friends of Europe’s “Energy for Development” discussion paper. Beginning on the day of the UN Secretary-General Summit on Climate Action and ending at the time of COP 25 in Santiago, Friends of Europe will release such articles online on a weekly basis. The full publication will be launched in December and its insights and recommendations aim to demonstrate that it is possible to achieve SDG 7 well before 2030, and inform the next EU mandate on actions to take.
After the Paris Agreement was signed in 2016, the transport sector came to realise the full scale of the challenge it faced in fulfilling its climate targets. Although the energy transition has achieved considerable international success, the transport transformation is lagging behind. In many developing countries and emerging economies, increasing motorisation has led to a sharp rise in greenhouse gas emissions.
Certain countries have recorded significant increases in CO2 emissions. Between 2001 and 2013, China’s emissions went up by 191%, Ghana by 140% and Peru 111%. At the same time, many cities are currently looking for solutions to reduce air pollution and noise, thereby improving the quality of life and health of their inhabitants.
To achieve global climate targets, the use of renewable energies (RE) in the transport sector will be inevitable in the long run. Moreover, priority will have to be given to traffic avoidance, efficient traffic management and a modal shift towards public transport. While motorised means of transport will continue to play an important role, a greater emphasis needs to be placed on non-motorised transport and shared vehicles.
Electric vehicles (EVs) present a unique opportunity to reduce the environmental impact of the transport sector while at the same time shrinking dependence on fossil resources. Various studies have shown that EVs significantly lower CO2 emissions in regions with a high proportion of RE when compared with petrol or diesel vehicles. In addition to this, they are generally more energy-efficient than internal combustion and fuel cell vehicles.
In cities where air pollution is an issue, electric buses could play a key role in improving air quality
As the energy transition progresses, emissions produced in the manufacturing process and vehicle operation will decrease. However, it is not advisable to wait until the energy sector has been decarbonised before renewing the fleet. Rather, the transport sector should move away from dependence on current technologies. To help decision-makers in identifying appropriate measures, the basis for a uniform determination of climate-impacting emissions must be created.
Of course, the introduction of electromobility will have to be adjusted to fit the local context. In some cases, electric bicycles, scooters and motorcycles could lead to a significant emissions reduction effect, as was the case for Vietnam. In other regions, where their driving framework allows for it, electric taxis or commercial vehicles could prove more economically viable (such as high mileages, well-planned journeys, along with vehicle and battery size). In cities where air pollution is an issue, electric buses could play a key role in improving air quality.
A requirement for all cities and regions introducing electromobility should be a climate-friendly transport policy, a clean electricity grid, ambitious RE expansion targets and a formalised bus system. A cooperation agreement should also be arranged between manufacturers, operators, utilities and other relevant stakeholders to develop a sustainable business model.
Santiago de Chile provides an excellent example in this regard. In 2018, they introduced 200 electric buses using a leasing model to minimise the risks involved in having high upfront costs for the vehicles. The buses were purchased from different manufacturers by two utility companies and were then leased to the bus operators. They were partially paid for with user fares and partially covered by existing public transport subsidies.
Smart charging can help to control the charging processes, which is particularly important for centrally managed fleets
Similar business model approaches will be implemented with the support of GIZ in different countries, among them Brazil (funded by the German Federal Ministry for Economic Cooperation and Development, BMZ) and Costa Rica (funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, BMU).
However, certain challenges will have to be addressed beforehand. For instance, the growing number of EVs will create higher demand for electricity. A study carried out by the German Öko-Institut shows that an ambitious long-term scenario with electric cars, accounting for 75% of the total car fleet in Germany, would increase demand for electricity by 80 to 100 TWh per year. This is roughly equivalent to the overall electricity generated by wind energy in Germany in 2015. At the same time, the expansion of charging stations for EVs could affect grid infrastructure and lead to a temporary overload of distribution grid elements in certain regions. It is therefore important to expand the infrastructure accordingly.
There are possible ways to mitigate these risks. Smart charging can help to control the charging processes, which is particularly important for centrally managed fleets. Additionally, new business models are emerging to shift the charging processes over time, for example by offering flexible tariffs.
EVs can further serve as power storage devices and contribute to grid stabilisation for the fluctuating RE. Through bidirectional charging (also called vehicle-to-grid), energy can be temporarily stored in the vehicle battery in order to compensate for power peaks. Conversely, the energy can be fed back into the grid from the vehicle when demand is high. Such solutions would be especially suited to those areas which are highly dependent on diesel imports but have a lot of wind and solar potential (e.g. the Caribbean Islands, where GIZ supports national and regional e-mobility activities, funded by the BMU).
National recycling standards can prevent the improper disposal of batteries and thus counteract negative environmental effects
Introducing and implementing electromobility will also require the creation of appropriate framework conditions. The European Union has already begun to support such efforts. This will have to address fiscal, regulatory and legal issues. National roadmaps can be helpful in creating a strategic conceptual framework, ideally keeping in line with the country’s Nationally Determined Contributions (NDC).
For example, Costa Rica has adopted a National Electric Transport Plan 2018-2030 with clear targets and actions towards zero-emission transport, in line with its National Decarbonisation Plan 2018-2050. GIZ supports Costa Rica in the implementation of both plans. Some European countries as well as North American states and provinces have set ambitious targets for phasing out fossil fuels by 2040 or earlier (e.g. Norway, Netherlands, France, United Kingdom, British Columbia, California).
In addition to the reduction of acquisition costs by financial subsidies and the introduction of fuel efficiency standards, incentives such as parking privileges or support in setting up a charging infrastructure have also proved to be decisive success criteria for the rise of e-mobility, as seen in Norway. In that country, EVs had a market share of almost 50% in the first quarter of 2019. In any case, due to the higher upfront costs of EVs, it is necessary to create appropriate financial instruments and mechanisms where funding makes sense.
At the international level, new import dependencies combined with the social and ecological effects of increased raw material extraction (e.g. lithium, cobalt) play a crucial role. GIZ is part of the Global Battery Alliance, a public-private coalition set up to catalyse, accelerate and scale up action towards an inclusive, innovative and sustainable battery value chain. Likewise, national recycling standards can prevent the improper disposal of batteries and thus counteract negative environmental effects, given that around 95% of the batteries are recyclable. China, for example, has introduced a battery recycling scheme for EVs in 2018, including a set of industry guidelines and tax incentives. GIZ supports Chinese partners with feasibility studies and industrial dialogue, funded by the BMU and the German Ministry for Economic Affairs and Energy (BMWi).
Further innovations, such as connected and automotive vehicles, could disruptively change the mobility of the future
Due to the challenges and potential opportunities highlighted above, the introduction of electromobility, the RE expansion and the grid integration of EVs must be considered in conjunction with one another. With a growing share of variable RE in an electricity system, questions of efficient and effective grid integration are coming to the fore. EVs offer an opportunity to make the electricity system more flexible and stable by temporarily storing electricity and then feeding it back into the grid when it is needed.
In certain cases, however, the question arises as to whether charging is technically controllable and, for example, controllable by means of appropriate price incentives. Digital technologies and regulatory framework conditions should have a supportive effect here. ‘Second life’ applications also play a role in this context and require integrated, systemic consulting approaches.
At the same time, distribution networks may have to be expanded in order to meet the additional demand for electricity. The planning approach should be designed in such a way that the complementarity of electricity demand from EVs and the supply of variable RE reflects the advantages of the coupling of sectors. Then the expansion of electromobility can support the energy system transformation.
Overall, sustainable transport, especially e-mobility is characterised by dynamic technological and organisational developments. Further innovations, such as connected and automotive vehicles, could disruptively change the mobility of the future. It is essential to jointly consider the opportunities and risks arising from those developments and to follow integrated, cross-sectoral approaches for a decarbonised future in Europe and around the world.