Overall Environmental Contribution – the Balance of Total Emissions

There is basic agreement in both these reports, as there is in the research and the many articles published in recent years, that the local contribution of the electric vehicle (especially in the urban environment) to the improvement of air quality is absolute and fundamental.  However, the overall environmental contribution depends on the balance of the total emissions and this must take into account the energy sources that are used to generate the electricity. Unfortunately, in both abovementioned reports reference to this balance was not included.

The first recommendation in the Neaman report is to ensure that large-scale introduction of electric vehicles will be based on a managed charging infrastructure which will be able to prevent further loading of the electrical grid during peak consumption. This is true in any country but especially in Israel which due to political circumstances constitutes an “energy island”.

Analysis performed by the electric company determined that, in contrast to other scenarios which will require construction of additional power plants, a managed charging infrastructure will allow the penetration of two million electric vehicles by 2020 without the need for the construction of any additional power plant beyond the existing development plan. This of course has significant environmental implications with regard to the ability of increasing the efficiency of existing infrastructure, without the need to capture more open space which is a limited resource in Israel.

The McKinsey report, which focused on the potential of reducing greenhouse gas emissions, determined that of all technologies they analyzed to reduce greenhouse gas emissions in the transportation sector, electric vehicles have the greatest potential for reduction per km.

Even after the implementation of technological improvements by 2030, gasoline vehicles will emit 152 grams of carbon dioxide per km, diesel vehicles will emit 141 per km and hybrid vehicles will emit 138 per km, while the electric car can go down to 100 grams of carbon dioxide per km in a scenario whereby 25% of electricity production in Israel is generated from renewable energy.

The report also states that even without reaching 25% renewable energy in the electricity generation mix, the electric vehicle does not fall short in potential reduction to the other technologies. In addition, it should be noted that the electric vehicle is the only technology that can further reduce the amount of emissions per km depending on the electricity generation mix, and even reach zero once it is based on 100% renewable energy.

Initial Investment, Annual Cost and Cost Effectiveness

The McKinsey report deals with the issue of the initial investment and the annual cost required for each tool, and projects this cost on the cost effectiveness of the tool.

Without going into discussion about the values themselves, McKenzie’s premise is that all extra cost will be expressed in the vehicle price and would therefore constitute a cost for the economy. McKinsey’s model makes no distinction regarding who bears the additional cost, if it indeed exists, and it is important to note this in light of the importance of the subject matter.

According to the model of “Better Place” for example, the cost of infrastructure and most of the extra cost of the electric vehicle itself is assumed by the company and therefore cannot be considered a cost to the economy. In fact, if the business model of “Better Place” will indeed enable a lower cost per km compared to using a gasoline vehicle, then the cost to the economy of reducing greenhouse gas emissions is zero and possibly negative.

The Pace of Market Penetration

That same analysis is also lacking with regard to the pace of market penetration of electric vehicles. If the end customer is not exposed to additional cost compared to gasoline vehicles, then the assumed penetration rate of 10% in 2030 is extremely low.

Even according to the latest forecast published by the International Energy Organization (IEA) less than a month ago, in 2030 sales of electric vehicles will constitute about 30% of the total world market. If these are the numbers predicted by such a conservative organization then there is no question that the penetration rate can be higher and so will the reduction potential of this tool.

The Improved Internal Combustion Engine Option

McKinsey states that the tool with the greatest potential for reduction in the transport sector in Israel is an improved internal combustion engine vehicle. If we again ignore the numbers themselves then we are debating around a medium upon which the State of Israel has no control.

Manufacturers may meet the discussed emission levels and they may not, but since there is no automobile industry in Israel, you cannot rely on this tool in establishing a national reduction strategy. However, Israel does have control over the fuel mix of energy sources used for electricity generation and therefore the state must do its utmost to encourage penetration and implementation of these technologies by utilizing local resources. Such activity will reduce greenhouse gas emissions from the electricity sector and have an indirect influence on all electricity consumers, including the electric vehicle.

Electric Vehicles as Energy Storage Facilitators and Network Stabilizers

Another interesting advantage which arises in both reports is the ability of the electric vehicle to facilitate energy storage. One of the limitations of large-scale penetration of renewable energy technologies is the fact they are intermittent in nature (electricity generation depends, for example, on sun and wind intensity which vary throughout the day).

McKinsey consultants also explain that in the analysis of the cost of application of solar and wind technologies they added, due to this limitation, an additional cost for network backup and stabilization. These systems, especially for Israel’s isolated electrical grid, may be even more vital than in other Western countries where the networks are stabilized through connections between different countries. In the scenario of large-scale penetration of electric vehicles, the managed charging infrastructure has a potential to serve as a leading contributor to network stabilization. Because private vehicles are in use for an average of about two hours a day, the electric vehicle is a very flexible consumer that can be used as a storage facilitator and stabilizer for most hours of the day. This contribution can reduce the cost of penetration of renewable energy technologies and strengthens even more the synergy between these two mediums.

The Bottom Line

Environmental challenges are handled faster and more efficiently when there is congruence between business interests and environmental goals. The two sectors responsible for most emissions of air pollutants and particularly greenhouse gases are energy and transport, and in both of these, demand is expected to rise significantly. Therefore, Israel will do well to allow maximum utilization of local resources in the field of renewable energy and complementary tools such as electric vehicles.

* Ofer Ben-Dov is a renewable energy expert with vast experience conducting feasibility studies, developing environmental business strategies and management systems as well renewable energy and carbon programs.

He serves as Sustainable Energy & Carbon Director of Assif-Strategies Ltd which specializes in cleantech initiatives and renewable energy as well as in providing environmental strategic consulting services for industry, businesses and financial institutions and as CTO of Elysium – Carbon Trade & Investment, an Assif-Strategies subsidiary.

Ben-Dov has a graduate degree in Business Strategies for Renewable Energy and a diploma in Business & Environment from York University, Canada. His research on renewable energy business strategies earned him the prestigious International e7 Sustainable Energy Development Scholarship.

Previously, he served as campaign director for Greenpeace Mediterranean in Israel and was a founding member of The Natural Step in Israel. He is a Member of the Energy & Agriculture Steering Committee of the Israeli Ministry of National Infrastructure and the Ministry of Agriculture.

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