This piece originally appeared on PetrolPlaza on Sept. 13, 2021 and is republished with permission.
Policy-makers, companies and consumers see the transition from fossil fuel powered vehicles to electric vehicles as a prominent option to reduce greenhouse gas emissions. The inherent efficiency of electric motors promises significant reductions but what about the emissions from the grid used to charge the batteries? Lars Kvale, VP of Sustainability Solutions at GreenPrint, writes about how significant these emissions are, and what can consumers and businesses do to mitigate them.
The transition to EVs is accelerating and continues to dominate headlines within our industry. Electric cars accounted for 5% of global car sales in 2020, registering a 40% year-on-year sales increase in 2020. EV sales in 2021 are trending towards north of 10% of new vehicle sales. Several auto manufacturers, including VW, have announced that they will stop selling new gasoline-powered cars and light trucks within the next decade and will pivot to battery-powered vehicles. Automakers like Tesla, Ford, and Volkswagen plan to introduce dozens of new electric models in the years ahead. These announcements are spurred on by plummeting battery prices, increasing environmental consciousness driving consumer purchasing decisions, and regulatory pressures, like the EU aiming to ban the sale of fossil-fuel vehicles by 2030.
EV’s convert more than 75% of the electrical energy from the grid to power at the wheels. This compares favorably with conventional gasoline vehicles that only convert about 15-30% of the energy stored in gasoline to power at the wheels. The increased efficiency leads to reductions in greenhouse gas emissions. However, while the EVs do not have tailpipe pollutants, the power plant producing the electricity for them may be emitting them. Electricity from nuclear-, hydro-, solar-, or wind-powered plants causes no air pollutants but grids still rely on a large proportion of generation sources that burn fossil fuels, like coal and natural gas. To fully realize the complete benefits of EVs we must take into account the energy sources used to power these vehicles. In the European Union 34% of the electricity comes from non-renewable sources, primarily coal and natural gas, while in the United States it is 60%. In both markets nuclear power generation is the primary non-renewable but zero emitting generation resource. To summarize, a significant amount of the energy used to charge EV batteries, heat homes, and power laptops, lamps, and ovens are reliant on sources of energy that continue to emit carbon and other pollutants. The solution? Accelerate the transformation of the grid to be 100% clean.
3 Drivers Impacting Grid Mix
So how do we move our energy grid from its current state to 100% renewable, green and clean? Historically, three drivers have had a large impact on the mix of grid resources.
The first is dramatic reductions in the cost of the technology and reaching economies of scale enabling further cost reductions for constructing, developing and deploying renewable technologies. The cost of solar photovoltaics has dropped by more than 80% over the last 10 years, onshore wind by 40% and offshore wind by 30%. Cost reductions have been driven by significant public and private investments in the technology but also the push from regulatory mandates to increase the amount of renewable energy on grids.
Mandates are the second driver and examples include state Renewable Portfolio Standards (RPS) in the US (with targets ranging from 30% to 100% renewable energy), and similar renewable energy directives in the EU (targeting 32% by 2030). Both policies have mandated power market participants to gradually increase the share of renewables. Another regulatory policy that has made the cost of renewable energy more competitive with emitting resources is the institution of carbon cap-and-trade programs, such as the EU Emissions Trading Scheme (EU ETS), the Regional Greenhouse Gas initiative (RGGI) in the Northeast US and the California cap-and-trade program. By mandating that fossil fuel emitting power generators acquire emissions allowances for each ton of emissions the relative cost of renewable energy is lower. These policies are implemented to provide a disincentive for emitting carbon and have played a part in the increase in retirements of coal plants over the last five years or so.
Finally, companies and consumers are driving the energy transition by voicing strong preferences for buying renewable energy and a willingness to pay more for clean generation. Examples include the many large scale corporate agreements to buy 20-year streams of renewable energy from new solar and wind farms. These have been executed in power markets in both the US and Europe and are now as significant to many developers as agreements with the electric utilities. In addition, consumers have played a role albeit for much smaller volumes, by choosing electricity suppliers that sell 100% renewable energy, by installing solar PV on residences, and by voicing these preferences to consumer goods companies. According to GreenPrint’s 2021 Business of Sustainability Index 73% of Americans use a product’s environmental friendliness as a factor in their purchasing decision.
What businesses & consumers can do to bridge the gap
So for a business with a fleet of vehicles or for an individual, making the transition from a combustion engine to an EV is an important step and does bring many significant environmental benefits. To bridge the gap between the current grid with fossil resources and the desire to be 100% renewable, consumers and fleets can buy renewable energy or offset the remaining emissions from their vehicle charging. These actions act as valuable and effective mediators until we reach that long-term shift and more permanent change. It’s important to remember that in order to start your sustainability journey, you have to start small and iterate as you go. The shift to renewable energy is promising, but let’s think about ways we can begin operating more sustainably today.
There are several options available for EV owners wanting to have a bit more control over transportation-related emissions. It is possible to buy renewable energy either by installing solar on your home, procuring it through your local utility or electricity supplier, participating in a community solar project or by buying Renewable Energy Credits, in the US, or Guarantees of Origin, in the EU (RECs/GO’s; a simple system of tracking ownership of renewable energy generation). Each of these options ensures that renewable energy generators are financially rewarded for generating cleaner sources of power.
From a retailer perspective fueling options can be expanded with EV chargers as well as option to ensure the charging is done 100% with renewable energy and/or any emissions from EV charging are offset.