Transition to electric mobility

Size: px

Start display at page:

Download "Transition to electric mobility"

Andrew Morton
5 years ago
Views:

1 Transition to electric mobility Imen Ben Tahar 1 joint work with René Aïd 2 Workshop on Electricity, Energy and Commodities Risk Management August, 14-16, CEREMADE and FiME 2 EDF R&D and FiME

2 Introduction: some data Transition dynamics Optimal subsidy rule

3 Introduction Electric vehicles (EV) v.s. Fossile-fuel Vehicle (FV) Renewed interest in electric mobility: peak-oil, decarbonization ambitions, new socio-technical developments,... Ambitions Facts IEA s goal: 5.9 millions EV/year by 2020 last year: target: 75% by 2050 currently 0,02% barriers to electric mobility? [battery costs, other battery concerns, infrastructure,..] EV cost of owning

4 Introduction Electric vehicles (EV) v.s. Fossile-fuel Vehicle (FV) Renewed interest in electric mobility: peak-oil, decarbonization ambitions, new socio-technical developments,... Ambitions Facts IEA s goal: 5.9 millions EV/year by 2020 last year: target: 75% by 2050 currently 0,02% barriers to electric mobility? [battery costs, other battery concerns, infrastructure,..] EV cost of owning

5 Introduction Electric vehicles (EV) v.s. Fossile-fuel Vehicle (FV) Renewed interest in electric mobility: peak-oil, decarbonization ambitions, new socio-technical developments,... Ambitions Facts IEA s goal: 5.9 millions EV/year by 2020 last year: target: 75% by 2050 currently 0,02% barriers to electric mobility? [battery costs, other battery concerns, infrastructure,..] EV cost of owning

6 Introduction Electric vehicles (EV) v.s. Fossile-fuel Vehicle (FV) Renewed interest in electric mobility: peak-oil, decarbonization ambitions, new socio-technical developments,... Ambitions Facts IEA s goal: 5.9 millions EV/year by 2020 last year: target: 75% by 2050 currently 0,02% barriers to electric mobility? [battery costs, other battery concerns, infrastructure,..] EV cost of owning

7 FV EV energy cost maintenance cost battery cost vehicle price Time Horizon: 15 years, kilometers/year = Study and documents, n 41, May 2011, General Commissioner for Sustainable Growth

8 Figure: premium consumers are willing to pay for EV, Europe ( Deloitte)

9 Cost vs. Social Benefit Vehicle Cost-of-owning energy cost C t = P t + discount rate distinction between: short-term private discounting & longer time-horizon social discounting FV EV vehicle price energy cost/year private disc. rate 16% 16% private cost of owning F V < EV social disc. rate 4% 4% social cost of owning FV >EV Social benefit per EV: C F V t C EV t = purchase price + energy cost social discount rate

10 A Basic Model Notations and Hypothesis: the EV purchase price, Pt e the FV purchase price, P, constant over time the price-spread x t = Pt e P t : explained by the cost of the Where will battery costs go? battery Cost Estimates with Production Volume Cost ($/kwh) ANL (2009) EPRI (2007) Miller (2006) CARB (2007) TIAX (2009) 85% experience curve fitted to points from all models Cost range for lead-acid % experience curve projection based on ANL model 0 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 Production Volume (packs/yr) 2009 Electric Power Research Institute, Inc. All rights reserved. 9 Figure: battery experience curve

11 A Basic Model standard exponential learning dynamics for the Battery cost B t+δt = B t α(t) (B t B ) Then x t+δt = x t α(t) (x t β) the speed of learning: α(t) new EV adopters

12 A Basic Model W.B. Arthur (1989) style model annual rate of new EV purchases µ Sequentially arriving car buyers at times {t i } i : at time t i agent i adopts EV iff x ti w.t.p(i) Number of new EV adopters in [t k, t k + δt] n EV t k = [ µδt ] j=1 1 {w.t.p(j) xtk } = µδt ( P(w.t.p(k) x tk ) + M tk+1 ) = µδt (Φ(x tk ) + M tk )

13 Figure: Willingness to pay statistics function Φ

14 The limiting o.d.e. Dynamics of the cost-spread x x t+δt = x t α(t) (x t β) with α(t) = αn EV t x t+δt = x t αµδt (Φ(x t ) (x t β) + M ) tk Limit o.d.e ẋ(t) = αµφ(x(t)) (x(t) β) Reference: V. S. Borkar (2008).

15 Optimization Problem Objective: maximize the social benefit Control: subsidy process {s t } Cost spread dynamics ẋ s (t) = αµφ(x s (t) s t ) (x s (t) β) Social Benefit: ( Ct F V Ct EV ) n EV t Optimization problem where b := T max e ρt {b x s t s t ) µφ(x s t s t )dt. {s} 0 energy cost social discount rate is the fuel economy

16 Optimal subsidy rule optimal {s } is such that: (Kalish and Lilien (1983)) e ρt (x t s t ) constant 15 Subsidy (keuro) optimal subsidy subsidy caped at 7 no subsidy Consumer price (keuro) optimal subsidy subsidy caped at 7 no subsidy years années Figure: optimal subsidy rule Subsidised purchase price of EV

17 Price spread EV FV (keuro) optimal subsidy subsidy caped at 7 no subsidy optimal subsidy subsidy caped at 7 no subsidy EV (millions) years years Figure: price-spread evolution EV purchases evolution

18 Social surplus (Geuro) optimal subsidy subsidy caped at 7 no subsidy Cumulated subsidy (Geuro) optimal subsidy subsidy caped at 7 no subsidy years years Figure: Social Benefit cumulated subsidy value

19 Conclusions and Perspectives Without subsidy no take-off Below threshold subsidy no take-off With optimal subsidy rule take-off interacting strategic firms R& D investment

Accelerating electric vehicle deployment and support policies

Global Climate Action Agenda: Transport Action Event COP 22, Marrakech, Morocco 12 November 2016 Accelerating electric vehicle deployment and support policies Kamel Ben Naceur Director Directorate of Sustainability,