By Nancy L. Vandycke, Program Manager, Sustainable Mobility for All Initiative, World Bank
Can one plus one be more than two? I believe that it can. In fact, I would wager that we must find opportunities to do so if we are serious about delivering our goals for the Paris Climate Agreement. The transport-energy nexus is precisely a place where we can find such opportunities; more specifically, I am talking about the possibility of global decarbonisation through the adoption of electric vehicles (EVs). That said, we must always be aware of potential pitfalls. Allow me to share my experience.
The promise of global emission reduction
In 2017, transport accounted for 24 per cent of total CO2 emissions from fuel combustion. To reduce emissions, many countries have been promoting the electrification of transport. For many, adopting the trend for EVs is a way to transition passenger fleet away from conventional gasoline and diesel-fuelled cars. In fact, last year, global sales of EV surpassed a million units. Under the current trend, EV production could almost quadruple by 2020, with China leading the way.
As more and more EVs replace internal combustion vehicles, the energy burden for transport will eventually shift from oil to electricity. This is good news for the power sector. By riding on the trend of increased EVs, it can become part of a solution for global decarbonisation.
There is an added bonus for the power sector. For years, its profitability has been in decline. Charging EVs will add some load to the power grid, which is a welcome development for utilities against the continued decline in electricity prices.
Such a scenario seems promising, but there are potential pitfalls along the way.
For a long time now, the transport and energy sectors have been talking about decarbonisation in their own circles.
As I sat in conversations with industry leaders from each sector—both in my role as the lead for Sustainable Mobility for All (SuM4All) and as a member of the World Economic Forum (WEF) global council on advanced energy technologies—I came to realise how disconnected the conversations about decarbonisation are. If we were to connect the two sectors, we must bring them to sit at the same table.
Accordingly, SuM4All invited experts in the energy sector to the table at our last consortium meeting in January 2019. However, it soon became clear that each side is speaking about decarbonisation in their own language and neither side could understand the other. Until both sides find a common language and tie their conversations together, it is unlikely that developments in these respective industries will succeed at decarbonising the global economy.
Even if both sides manage to come to an agreement on a common language and approach, one must be thoughtful about the way both sectors collaborate.
As of today, renewable energy accounts for merely a quarter of total global power generation. Without greening the power grid, a wholesale adoption of EVs will not result in true decarbonisation in either sector. Half of the G20 countries have made progress in expanding renewable electricity generation in the years leading up to 2015, but, alarmingly, nine saw declines in 2015 and the preceding years. Reducing the carbon intensity of power generation is what matters in the end.
But this transformation will not happen overnight. As the share of renewables increases in the energy mix, the carbon intensity of energy production will also increase. In fact, in the short term, one expects an overall increase in carbon emissions with the EV deployment, simply because of the EV battery manufacturing.
The way forward
The good news is that if we manage to co-ordinate policy interventions within the transport and energy sectors, we can make great strides towards decarbonisation. For example, policy support measures that target electrification in the transport sector should be linked to renewable requirements on the energy side. For this reason, I plan to bring a clear and simple message to the Electric and Digital Mobility event ahead of the upcoming ITF Summit: to fully leverage the power of mobility, we need to concurrently clean up the grid.
If we manage to do so, one plus one can indeed be more than two, and the Paris Climate Agreement goals will be very much within our reach.
Nancy L. Vandycke is a speaker at the TUMIVolt Conference on 21 May 2019 in Leipzig, Germany. The ITF Summit follows from 22-24 May.