A Building Ground or A Green Vehicle Transition

​In a nutshell:

The green transition in the traffic sector has not started yet. But there are more and more indications that changes are on their way. Thanks to incentive programmes, the public charging infrastructure will be soon expanded, and car manufacturers have already announced that they will launch many new car makes within the coming 3 years. The renewable energy sector will benefit mainly from the fact that the incentives for charging stations are linked to the use of electricity from renewable energy sources.

The electric vehicle breakthrough did not come in 2016, either. At least in Germany, the widely talked-about green vehicle transition has not arrived yet. It seems that after the initial excitement we must yet wait for the transition to happen. Electric cars are hardly popular and there are hardly any special offers that potential buyers would find attractive. The disillusioning statistics relating to the number of newly registered electric vehicles in Germany are thus hardly surprising.

Between January and November 2016, electric cars accounted for only 0.7 percent (about 12,000) of the total number of new registrations. Thus, Germany is still below average compared to other European countries.

Also the mechanism of incentives for buyers of EVs has failed to be effective: until the end of January 2017, only 10,835 grant applications were filed in total.

The target of the federal government is that one million electric cars should be operating by 2020 in the country. But the achievement of this target seems to be hardly possible from today's perspective. A reason for the number of new registrations being lower than expected is the missing EV charging infrastructure. In a bid to advance the expansion of a nationwide EV charging infrastructure, the Federal Ministry of Transport and Digital Infrastructure (BMVI) adopted an incentive programme with a funding volume of about EUR 300 million. Out of this amount, BMVI plans to provide EUR 200 million for the installation of 5,000 fast charging stations (>22 kW) and EUR 100 million for the construction of about 10,000 normal charging stations (3.7 kW to 22 kW). Applications are filed online with the Federal Administrative Service Institution (BAV). Private investors, cities and municipalities could apply for incentives for the construction of EV charging stations as part of the first application round, which started on 01/03/2017. In this round, applications were accepted by 28/04/2017, 12:00 hours. The funds were awarded on a first come first served basis. Therefore, applicants were requested to file applications as early as possible as the amount of funds (EUR 5 million) to be awarded was limited. The interest was so big that only within the first two weeks, the amounts applied for exceeded the planned funding volume.  In addition to diverse technical requirements and 24/7 accessibility, one of the main requirements for being eligible for the funds was that electricity had to be generated from renewable energy sources evidenced by certificates of origin or from local renewable sources. Meeting this requirement is inevitable in helping reduce emissions in the traffic sector with the use of EVs.

Next funding rounds are yet to be announced by BAV. No specific timeframes have been defined yet, though. The amount of funds to be available in the next tenders has not been announced, either. BMVI first wants to analyse the first funding round and appropriately adjust the next ones. The specific terms of the next rounds will also depend on the outcome of the coming Bundestag elections.

There are currently about 6 000 EV charging stations in Germany. The aim of the Federal Transport Minister Alexander Dobrint is to give e-mobility a further push by installing a further 15 000 charging stations. According to the plans of the German National Platform for Electric Mobility, it is quite possible to reach the one-million target, but 7,100 publicly accessible fast charging stations and 70,000 normal charging stations should be installed by 2020 to that end.  

Unquestionably, demand for electric cars depends on the availability of a nationwide charging infrastructure. The financial incentives for the installation of new charging stations also in a way signal how electrical mobility is perceived. The public charging infrastructure is a critical element in dispelling ”range anxiety” among consumers.

Another element that is key to the success of the electric mobility market is the ease of using the charging station, and the technical standardisation.

The EU Directive on the deployment of alternative fuels infrastructure (AFID) sets out important principles in this respect. In particular, payment and authentication methods should be harmonised. Charging station operators should offer at least three payment methods like cash, EC or credit card, or a web-based payment per smartphone, unless they offer powering up for free. In case of online payment methods, the user can e.g. transfer the money using an app or a QR code for systems such as Paypal.

Conclusion

The green vehicle transition is currently not progressing as expected. But positive trends are in sight amid the incentive mechanisms furthering the expansion of the charging infrastructure. If the green vehicle transition picks up steam in the medium term, we might expect that this will have a positive impact on the renewable energy sector too. A latest study conducted jointly by Freiburg's Öko-Institut and a Belgian organisation Transport and Mobility Leuven at the behest of the European Environmental Agency (EEA) has shown that if, in 2050, electric cars were charged mainly using electricity from renewable resources, emissions could be reduced by 84 percent.

To achieve this target, an additional capacity of 150 GW from renewable resources would be required.