Elec­tric Car Takes to the Road

L.P. PADALKO, D.Sc. Eco­nom­ics, Pro­fes­sor, chief re­search of­fi­cer at the In­sti­tute of Eco­nom­ics, the Na­tional Academy of Sciences of Be­larus F.F. IVANOV, se­nior re­search of­fi­cer at the In­sti­tute of Eco­nom­ics, the Na­tional Academy of Sciences of Be­larus

Economy of Belarus - - FRONT PAGE -

The rate of mo­tor­iza­tion in Be­larus is one of the high­est among the for­mer Soviet Union coun­tries: 337.8 ve­hi­cles per 1,000 res­i­dents. As of 1 Jan­uary 2013, there were 3,817,792 ve­hi­cles in Be­larus. Of them 2,774,832 were pri­vately owned cars. Over the past 10 years, the num­ber of cars in Be­larus has in­creased more than 2 times. As com­pared to the pre-per­e­stroika pe­riod this num­ber has grown more than 8 times, but the in­fra­struc­ture has largely re­mained the same.

Ob­vi­ous Ben­e­fits

Oil mo­tor fuel is not cheap as it re­quires sub­stan­tial for­eign cur­rency ex­penses on the im­port of crude oil and on its re­fin­ing. Out of the to­tal oil de­liv­ered to Be­larus, about 6 mil­lion tonnes are used for do­mes­tic needs in the form of var­i­ous oil prod­ucts (mostly mo­tor fu­els). The burn­ing of oil fuel has a neg­a­tive im­pact on the en­vi­ron­ment due to harm­ful emis­sions that af­fect hu­man health, flora and fauna. Given the fact that crude oil is not cheap it is im­por­tant to de­crease the con­sump­tion of oil fuel by sub­sti­tut­ing it with a cheaper source of energy. For ex­am­ple, it could be elec­tric­ity gen­er­ated from nu­clear fuel or re­new­able energy sources.

The im­por­tance of re­solv­ing the en­vi­ron­men­tal prob­lem is ob­vi­ous. Now it is global in na­ture as the emis­sions of green­house gases lead to global warm­ing. One of these green­house gases is car­bon diox­ide CO2 emit­ted dur­ing com­bus­tion of oil fuel. The land is pol­luted by emis­sions of sul­fur and ni­tro­gen com­pounds, lead and other chem­i­cal el­e­ments.

To­day the prices in the vol­un­tary car­bon mar­ket are slightly lower than in the mar­ket com­pli­ant with the Ky­oto Pro­to­col. The Western coun­tries agreed to cal­cu­late the CO2 re­duc­tion units in tonnes, and one tonne costs € 8-10 to­day. How­ever, ex­perts pre­dict that as the new cli­mate agree­ment comes into force, the prices will rise sig­nif­i­cantly.

Another im­por­tant thing which is reg­u­lated by the Be­larus pres­i­dent’s De­cree No. 625 dated 8 De­cem­ber 2010 “Con­cern­ing the re­duc­tion of green­house gas emis­sions” is the pro­vi­sion of ben­e­fits. En­ter­prises are ex­empt from taxes on prof­its from the funds earned on the projects to re­duce CO2 emis­sions. To­day, the Min­istry of Nat­u­ral Re­sources and En­vi­ron­men­tal Pro­tec­tion is con­sid­er­ing 27 pro­ject pro­pos­als. Their im­ple­men­ta­tion will help re­duce green­house gas emis­sions by 48 mil­lion tonnes. All of them have re­ceived letters of sup­port from the en­vi­ron­men­tal pro­tec­tion agency. The largest projects have been sub­mit­ted by the Energy Min­istry, Bel­neftekhim Con­cern, the Forestry Min­istry, which is im­ple­ment­ing a re-swamp­ing pro­gram, and the Trans­port Min­istry.

One of the most im­por­tant mea­sures to re­duce the neg­a­tive im­pact of trans­port on the en­vi­ron­ment may be the con­ver­sion from liq­uid mo­tor fuel to elec­tri­cal energy, i.e. elec­tric trac­tion. Elec­tric ve­hi­cles (EV) run on the elec­tric

en­gine in­stead of the in­ter­nal com­bus­tion en­gine. Energy is pro­duced by bat­ter­ies which can ac­cu­mu­late a large amount of energy. To­day elec­tric cars run on lithium-ion bat­ter­ies which last sev­eral hun­dred kilo­me­ters and are recharge­able. The world has gained a great deal of ex­pe­ri­ence in the use of elec­tric ve­hi­cles. To charge bat­ter­ies we need elec­tri­cal energy sources, i.e. power plants. Yet, we need power plants run­ning on non­fos­sil fuel to rule out pol­lu­tant emis­sions. As such we can use power plants run­ning on re­new­able energy, par­tic­u­larly wind, so­lar, hy­dropower. These could also be nu­clear power plants as they do not re­lease harm­ful emis­sions. Thus, while pro­mot­ing the use of elec­tric ve­hi­cles we will not shift the bur­den of harm­ful emis­sions from trans­port to power plants.

In­ter­na­tional Ex­pe­ri­ence

The anal­y­sis of the in­ter­na­tional mar­ket shows that the elec­tric ve­hi­cle is be­com­ing a more se­ri­ous al­ter­na­tive to the con­ven­tional car in the eyes of con­sumers. Ac­cord­ing to the an­a­lyt­i­cal agency BNFF, 225,000 elec­tric cars were sold glob­ally in 2013. In 2012, the United States ac­counted for 46% of the sales, Europe and Ja­pan for 23% each. To­day, nearly a third of Amer­i­can con­sumers show an in­ter­est in buy­ing an elec­tric car as the sec­ond ve­hi­cle in a fam­ily. There are as many po­ten­tial buy­ers in other coun­tries. For ex­am­ple, 57% of the mo­torists in Is­rael are in­ter­ested in pur­chas­ing an elec­tric ve­hi­cle, 40% in Den­mark, 39% in Aus­tralia, and 35% in Canada. Nearly half of con­sumers across all de­mo­graphic groups are pre­pared to con­sider switch­ing from the car with the ga­so­line en­gine to an elec­tric car.

Ger­many has planned three phases for the de­vel­op­ment of its mar­ket of elec­tric ve­hi­cles and in­fra­struc­ture: the prepa­ra­tion and de­vel­op­ment of the elec­tric car mar­ket by 2014; mar­ket growth and reach­ing the planned vol­umes by 2017; the ma­ture mass mar­ket by 2020. Plans have been made to de­sign and bring to the mar­ket more than 15 new mod­els of elec­tric ve­hi­cles dur­ing the first phase.

In ad­di­tion to the EV de­sign ef­forts, there are plans to launch the pro­duc­tion of bat­tery packs and wheel con­trol sys­tems, up­grade the recharg­ing net­work, and de­velop a net­work of power sta­tions run­ning on re­new­able energy. In this re­spect we can ex­pect a sharp in­crease in the pro­duc­tion of re­new­able elec­tric energy.

Due to the rapid de­vel­op­ment of elec­tric car in­no­va­tions, a num­ber of Western coun­tries have adopted 10-year-long elec­tric car and plug-in hy­brid pro­grams. These pro­grams en­vis­age in­fra­struc­ture de­vel­op­ment (charg­ing sta­tions) and elab­o­ra­tion of a le­gal frame­work and stan­dards to reg­u­late safe op­er­a­tion of elec­tric cars and their re­cy­cling. These pro­grams are in the stage of im­ple­men­ta­tion with their first phase al­ready com­pleted. The prepara­tory phase in­cluded the pro­duc­tion of pro­to­types and EV in­dus­trial mod­els, the launch of small-batch man­u­fac­tur­ing and the

in­stal­la­tion of charg­ing sta­tions across cities and re­gions.

These pro­grams re­quire con­sid­er­able in­vest­ments in the de­vel­op­ment of the mar­ket, per­son­nel train­ing, and fi­nan­cial sup­port sys­tem for EV buy­ers. In Nor­way the pur­chase of an elec­tric car nets $8,200 in sub­si­dies from the state. To make an elec­tric car an eco­nom­i­cally sound al­ter­na­tive the gov­ern­ment of­fers tax con­ces­sions, free or cheap park­ing space, and ac­cess to bus lanes.

The ex­pe­ri­ence of the coun­tries where elec­tric cars al­ready hum along the streets shows that the key prob­lem for this ve­hi­cle is the de­vel­op­ment of the sup­port­ing in­fra­struc­ture, which re­quires the big­gest ef­forts. Many spe­cial­ists be­lieve that it would be much eas­ier if elec­tric cars recharged from the stan­dard power grid. The point was taken by elec­tric car­mak­ers to roll off a Volvo C30E that recharges its bat­tery from 220-volt house­hold out­let. The bat­tery needs at least eight hours to recharge.

Spe­cial recharg­ing sta­tions are also needed. The mat­ter is that mod­ern bat­tery packs can charge in 20 min­utes when the charge cur­rent is in­creased. For ex­am­ple, Toshiba bat­ter­ies can recharge with the speed of 2-3% per minute. The Ja­panese firm guar­an­tees a five-year ser­vice life for such a bat­tery. Rapid charge bat­tery packs and recharg­ing sta­tions are in wide­spread use in the United States.

Ger­many un­veiled its Na­tional Elec­tric Mo­bil­ity Plat­form (NEMP) in 2009. It laid a foun­da­tion for a pro­gram that the coun­try adopted in 2011 to de­velop its EV mar­ket. A to­tal of € 500 mil­lion was al­lo­cated to im­ple­ment the pro­gram in 20092011. Another € 180 mil­lion was ear­marked for pi­lot projects in 2012. The fi­nanc­ing of the pro­gram is ex­pected to reach € 17 bil­lion in the fu­ture. It is hoped that the to­tal out­put of elec­tric cars and plug-in hy­brids in Ger­many will make up at least 1 mil­lion units by 2020 and 6 mil­lion by 2030.

The gov­ern­ment also sup­ports de­sign­ers and pro­duc­ers of re­new­able energy gen­er­at­ing equip­ment. The gov­ern­ment of­fers in­cen­tives for the pur­chase of a car with CO emis­sions of no

2 more than 50g/km in Ger­many and Nor­way, which in­clude ve­hi­cle tax ex­emp­tions, ad­di­tional park­ing space, ac­cess to spe­cial zones and public bus lanes. The Ger­man fed­eral gov­ern­ment re­quired that from 2013 at least 10% of all new or leased gov­ern­ment cars must emit less than 50g CO2 /km. This is be­lieved to give an ad­di­tional ex­po­sure to elec­tric ve­hi­cles.

In China mo­tor trans­port con­sumes over one third of the oil prod­ucts used in the coun­try. A sharp growth is pro­jected in car mak­ing (the num­ber of cars will ex­ceed 200 mil­lion units by 2020) and this will make China’s to­tally de­pen­dent on oil im­ports. In 2013 air pol­lu­tion in 90% of China’s big­gest cities was be­low en­vi­ron­men­tal stan­dards. 80% of pol­lu­tion is caused by mo­tor ve­hi­cle emis­sions. In re­sponse China an­nounced its Ac­tion Plan for Air Pol­lu­tion Con­trol for 2013-2017. One of its main ob­jec­tives is to in­crease the share of re­new­able energy sources to at least 15% by 2020, 28-32% by 2030 and 30-40% by 2050.

In 2011 the State Coun­cil of China ap­proved the energy-sav­ing and new-energy car in­dus­try pro­gram (2011-2020). It was later (in 2013) spec­i­fied by the gov­ern­ment’s

res­o­lu­tion con­cern­ing the plan of energy-ef­fi­cient car pro­duc­tion in 2013-2020 tak­ing into ac­count that in 2003-2013 China in­jected $300 mil­lion in its energy-sav­ing car in­dus­try. The pro­gram en­vis­aged over $15 bil­lion in in­vest­ment in the pro­duc­tion of cars run­ning on new types of energy within the next 10 years. Apart from that, $15 bil­lion was al­lo­cated to de­velop the rel­e­vant charg­ing in­fra­struc­ture. The pro­gram aims to turn China into a world leader in green car pro­duc­tion, to in­crease the coun­try’s share in the world elec­tric car out­put from 2.7% in 2015 to 35% in 2020. It is ex­pected that China will man­u­fac­ture up to 4 mil­lion elec­tric cars a year by 2020.

Rus­sia’s Test­ing Cen­ter for Mo­tor Ve­hi­cles, Spare Parts and Ac­ces­sories (NAMI) tested plug-in hy­brids and elec­tric cars in 2012. Among them was the Rus­sian elec­tric car EL Lada of­fer­ing a mileage of 162km with energy con­sump­tion at 160 watt-hour per 1km. That cor­re­sponds to RUB0.4 with the cur­rent tar­iffs of RUB2.5 per 1kWh.

Be­larus has a po­ten­tial for elec­tric car de­vel­op­ment and needs the rel­e­vant sup­port­ing in­fra­struc­ture. There is a re­fu­elling sta­tion in Borovaya in Minsk which opened a charg­ing point sev­eral months ago. Bel­neftekhim Con­cern has an­nounced a plan to de­velop the nec­es­sary charg­ing in­fra­struc­ture. This work has just be­gun. It is worth men­tion­ing that elec­tric ve­hi­cles re­quire the rel­e­vant in­fra­struc­ture across towns and cities, which needs sub­stan­tial fund­ing.

Vir­tu­ally no in­vest­ments are re­quired for slow charg­ing. All is needed is a reg­u­lar power socket. Dozens of mil­lions of U.S. dol­lars or eu­ros are needed to cre­ate fast charg­ing fa­cil­i­ties (in ac­cor­dance with the avail­able data, the bat­tery is charged by 80% in 30 min­utes). This is an am­bi­tious pro­gram. Cre­ation and en­large­ment of the EV fleet will be ac­com­pa­nied by the con­struc­tion of a recharg­ing net­work.

In our opin­ion, the state should su­per­vise in­fra­struc­ture de­vel­op­ment projects. If the state de­cides to raise the num­ber of elec­tric cars, it should of­fer re­duced du­ties and also stim­u­late the con­struc­tion of recharg­ing sta­tions by means of re­duc­ing the cost of im­ported equip­ment and pro­mot­ing energy sav­ing pro­grams.

The United States and Euro­pean coun­tries pro­vide sub­si­dies to the own­ers of elec­tric cars: if the owner ful­fills a num­ber of con­di­tions, the state re­turns nearly a half of the car’s price. The state in­ter­ested in rais­ing the num­ber of elec­tric ve­hi­cles is ex­pected not only to zero the du­ties but also to cre­ate con­di­tions for the aug­men­ta­tion of the net­work, cheap­en­ing of equip­ment, es­tab­lish­ment of fa­cil­i­ties to pro­duce this equip­ment. Swing the pen­du­lum, spur the in­ter­est of peo­ple, and the ball will start rolling.

As soon as the num­ber of elec­tric cars in the coun­try in­creases, more park­ing lots can be equipped with charg­ing de­vices. To ar­range slow charg­ing it is enough to equip park­ing lots with elec­tri­cal in­ter­con­nec­tion. Charg­ing one hun­dred cars fast is more dif­fi­cult to ac­com­plish.

Vi­able and Ef­fi­cient

Due to the com­mis­sion­ing of the Be­laru­sian nu­clear power plant with the out­put ca­pac­ity of 2,400MW, the Be­laru­sian power sys­tem will face prob­lems with cov­er­ing the daily in­ter­me­di­ate and peak load de­mand and, es­pe­cially, the fall­ing de­mand dur­ing night hours. It is ex­plained by the fact that im­me­di­ately af­ter the com­mis­sion­ing of the nu­clear power plant in 2020 there will be re­dun­dant power out­put, while dur­ing night hours the elec­tri­cal load of the power sys­tem will be re­duced to 64% of the max­i­mum level. It is worth say­ing that the nu­clear power plant can op­er­ate only with a per­ma­nent load, whereas op­er­a­tion in a vari­able regime, i.e. in a load/un­load mode, is vir­tu­ally im­pos­si­ble and dan­ger­ous as it can cause an ac­ci­dent. Dur­ing night hours in the win­ter sea­son the gen­er­a­tion of heat power as well as the gen­er­a­tion of elec­tric energy at the NPP can be con­sid­ered must-run gen­er­a­tion as it is at­trib­uted to the ther­mal ca­pac­ity. The sum of these two gen­er­at­ing ca­pac­i­ties, ex­cept for the ca­pac­i­ties of other power plants, ex­ceeds the re­quired amount. This is­sue can be par­tially solved by

un­load­ing CHP plants op­er­at­ing on the ther­mal load sched­ule. It means that part of ther­mal load should be trans­ferred from ex­trac­tion tur­bines to power boil­ers. This prac­tice is al­ready used be­cause the prob­lem ex­ists even with­out the nu­clear power plant. Although it wors­ens the per­for­mance of CHP plants, this mea­sure is nec­es­sary. It is also pos­si­ble to raise the elec­tric de­mand dur­ing night hours. This energy can be con­sumed by elec­tric trans­port.

There­fore, there are three rea­sons for the de­vel­op­ment of elec­tric car tech­nol­ogy. First, it is ben­e­fi­cial for the energy pro­duc­tion sys­tem as in this case the op­er­a­tion mode of the nu­clear power plant cor­re­lates with the op­er­a­tion mode of the power sys­tem since the launch of two large power units (1,200 MW each) at the nu­clear power plant, as men­tioned above, will cre­ate prob­lems for the energy gen­er­a­tion sys­tem as it will have to deal with the power con­sump­tion drop dur­ing night hours. It is es­pe­cially im­por­tant in win­ter when the to­tal energy out­put of the nu­clear power plant shall be added to the heat gen­er­a­tion ca­pac­ity of all CHP plants which makes up about 3,000 MW.

The sec­ond rea­son is about eco­nomic ben­e­fits. The con­ver­sion from liq­uid oil fuel to elec­tric energy which is used to charge bat­ter­ies dur­ing night hours will re­sult in big cost sav­ings. A sim­ple ex­am­ple can il­lus­trate the idea. Let’s sug­gest that a pas­sen­ger ve­hi­cle con­sumes 10 liters of petrol per 100 kilo­me­ters. If the cost of petrol is Br11,000 per liter, then your ex­penses on petrol for 100 kilo­me­ters will be Br110,000. Ac­cord­ing to the avail­able data, an elec­tric car con­sumes 0.2 kWh per 1 kilo­me­ter on av­er­age. Then the con­sump­tion of elec­tric­ity per 100 kilo­me­ters will make up 20 kWh. If the elec­tric energy gen­er­ated by a nu­clear power plant is used to recharge bat­ter­ies, the cost of 1 kWh will make up ap­prox­i­mately $0.05. By the way, nu­clear fuel is al­most five times cheaper than nat­u­ral gas used in ther­mal power plants. As a re­sult, the cost of elec­tric­ity for 100 kilo­me­ters will make up $1 or about Br15,000. Ob­vi­ously, elec­tric trac­tion is 7.3 times cheaper than the use of oil fuel (Br110,000 vs. Br15,000). It is worth men­tion­ing that eclec­tic trac­tion mo­tors op­er­ate with a 90-95% ca­pac­ity, while the ef­fi­ciency of a petrol en­gine is 20-40%.

By the way, oil re­serves will be de­pleted some time in the fu­ture. Even to­day the pro­duc­tion of oil in a num­ber of coun­tries is de­clin­ing, and it is the main rea­son why prices for oil prod­ucts keep ris­ing. As a con­se­quence, this hin­ders the de­vel­op­ment of economies of cer­tain coun­tries and the global econ­omy in gen­eral. Given the fact that 80% of me­chan­i­cal energy used by man in his ac­tiv­i­ties is pro­duced by in­ter­nal com­bus­tion en­gines, we must think about the use of al­ter­na­tive non-oil energy sources.

The third rea­son is en­vi­ron­ment. Nowa­days mo­tor ve­hi­cles emit a huge amount of pol­lu­tants which have a detri­men­tal ef­fect on peo­ple’s health and flora. Green­house gas emis­sions con­trib­ute to the global cli­mate change. An ex­ten­sive use of cars in ur­ban ar­eas raises the pro­por­tion of ex­haust gases in the air. Dam­age from the afore­men­tioned emis­sions is dif­fi­cult to quan­tify. How­ever, Rus­sian ex­perts say that in money terms this dam­age can be es­ti­mated at $0.75 per $1 of used fuel. This fig­ure can help get a more ob­jec­tive as­sess­ment of the ef­fi­ciency of var­i­ous en­vi­ron­men­tal

pro­tec­tion mea­sures.

The ex­pe­ri­ence of the coun­tries where elec­tric cars al­ready hum along the streets shows that the key prob­lem for this ve­hi­cle is the de­vel­op­ment of the sup­port­ing in­fra­struc­ture, which re­quires the big­gest ef­forts

One of the most im­por­tant mea­sures

to re­duce the neg­a­tive im­pact of trans­port on the en­vi­ron­ment may be the con­ver­sion from liq­uid mo­tor fuel

to elec­tri­cal energy

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