Renewables in Transport (RETRANS)

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Bennett Chapman
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1 Renewables in Transport (RETRANS) Synergies in the development of renewable energy and electric transport Project Presentation at BMU, Berlin 2 September 2010

2 2 RETRANS project - Introduction and scope

3 The scope of the project is the deployment of sustainable alternative road transport technologies The focus of the project is on: renewable electricity (RES-E) for plug-in hybrids (PHEV) and electric-only vehicles (EV) infrastructure and storage issues co-evolution of infrastructure and transport systems policies to make this co-evolution happen 3

4 What is meant by co-evolution? A simultaneous and correlated increase in: vehicle efficiency / use of alternative propulsion systems and energy carriers uptake of renewables in energy supply For road transport using EVs running on renewable electricity: Growth in share of EVs needs to be accompanied by increased share of renewables in electricity consumed by EVs This co-evolution is facilitated by technical and / or economic synergies Smart grids and EV charging infrastructure Uptake / buffering of excess RES-E by EVs Grid services provided by EVs

5 5 The argument for co-evolution

The often variable nature of RES-E (wind, solar) can cause a mismatch between supply and demand when a high share of renewable energy is to be implemented Example in

6 The often variable nature of RES-E (wind, solar) can cause a mismatch between supply and demand when a high share of renewable energy is to be implemented Example in Denmark: wind energy providing 50% of all electricity with supply often exceeding demand Source: EcoGrid production > demand demand > production Storage / backup needed

charging regulation With charging regulation Backup capacity or peak shaving is needed 7 Regulation

7 Increased share of EVs requires smart grids EVs are an additional load (red) that is variable The point in time when EVs are charging can be postponed to reduce the impacts on the grid Without charging regulation With charging regulation Backup capacity or peak shaving is needed 7 Regulation strategies can reduce impacts on the grid and make a high penetration rate of electric vehicles possible!

8 Two main options to use EVs as enablers for increased RES-E charging regulation grid related services (V2G) 8 Essential requirements for the electric vehicles and the grid have to be fulfilled to provide vehicle-to-grid (V2G) services!

Storage of renewable energy Arbitrage at energy exchange maximum revenue depends on battery size Offering of reserve power maximum revenue depends on connection power securing a minimum availability

9 Storage of renewable energy Arbitrage at energy exchange maximum revenue depends on battery size Offering of reserve power maximum revenue depends on connection power securing a minimum availability of the vehicles Frequencyresponse reserve Technically possible High revenue Currently outlawed vehicles Spinning reserve Non-spinning reserve Possibility depending on the laws of each country Revenue depends on the demand and energy rate Up to 250 /a 100 /a to 300 /a High battery costs because of the common use Usage most likely vehicles vehicles 9 Value added for V2G depends on battery pack cost per cycle and can be negative!

10 Basis for the development of a political roadmap for a high integration of renewable energy and a high penetration of EVs 10 4 aspects to be considered From the middle, each layer is a condition for the next

11 Market share Commercialisation R&D Demonstration Early markets Time Now: First markets will be small and large demonstration sites and commercial niches Until 2020: mainly niches (commercial applications) and some early adopters (consumers) in areas with strong EV stimulation measures By 2020: Expansion / commercialisation phase towards main markets 11 Policy to promote co-evolution should thus be implemented now!

12 12 Policy options to stimulate co-evolution of transport and energy system

DSO OEM Utilities Government Invest energy tax for traction current in

to count EVs as ZEV if financial contribution per sold EV goes to energy

emissions System stabilizing bonus if consumers connect their car to the

financed from DSO and OEM Hard coupling: increase RES-E share in the

13 DSO OEM Utilities Government Invest energy tax for traction current in additional RES-E deployment via energy fund Requires smart metering Allow to count EVs as ZEV if financial contribution per sold EV goes to energy fund (depending on vehicle type and kwh/km) Helps lower overall fleet emissions System stabilizing bonus if consumers connect their car to the grid Set up independent energy fund that invests in RES-E deployment, financed from DSO and OEM Hard coupling: increase RES-E share in the system with growing EV market penetration Tax exemption on traction current if from RES-E 13

Investment in renewable capacity per car sold Member

installed RE capacity is in line with EV sales and

individual) Production Feedin-Tariff kwh consumed kwh

vehicle consumes 2500 kwh/year -> 1 kw wind capacity

14 Investment in renewable capacity per car sold Member States / EU: Supervision to ensure that newly installed RE capacity is in line with EV sales and additional to national RE targets kw Fund (shared or individual) Production Feedin-Tariff kwh consumed kwh produced Example (approximate values): 1 electric vehicle consumes 2500 kwh/year -> 1 kw wind capacity -> 1000 EUR investment; yearly return 6-7% through Feed-in-Tariff 14

15 Pros and cons of an energy fund Pros Additional RES-E are installed Car manufacturers can count EV as zero-emission-vehicles Consumer is sure that during the life time of his car it consumes renewable energy (independent from electricity provider) No technical obstacles for introduction of EV No additional costs for state budgets Existing FiT schemes are used, guaranteed return rates for investors Until 2020 rather minor investment (1 Mio EV -> 1 GW wind energy -> 1 bn ), basically only financing costs Can be introduced on Member State level first in case discussions on EU level take time New business opportunities for car industry No additional costs for car buyer Cons: Car industry may be reluctant to invest in RE but can make arrangements with utilities Does not ensure that RE is used real-time when loading the battery but also does not contradict it (load balancing and V2G are to be developed in any case) 15

16 16 Policy

17 To stimulate large scale introduction of EV s and co-evolution with RES-E, a two-phased, long term policy approach is needed: Phase 1 Market Preparation Phase 2 Deployment 17

18 18 Conclusions

19 Renewables are not dependent on EVs for their full deployment But EVs can help to increase uptake of renewable energy EVs do need renewables to realise their full benefit: Reducing greenhouse gas emissions Reduce dependence on fossil fuels A co-evolution between the introduction of electric vehicles and increased renewable electricity production may provide a range of synergies: Buffering peaks in renewable electricity production Vehicle-to-grid functions: grid stabilisation 19

20 Synergies may: improve the business case for electric vehicles and for renewable electricity increase the speed of and potential for the uptake of renewable energy in the electricity sector Coordinated policy and system integration are required for harvesting these synergies To harvest the abovementioned synergies, action is required NOW! 20

21 Thank you very much for your attention

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