This week China’s vice minister of industry and information technology, Xin Guobin, told an industry forum in Tianjin that the government is working on a timetable to end sales of fossil-fuel-based vehicles. It’s the latest public pronouncement adding to the momentum behind the electric vehicle revolution. But what does it mean for the power generation sector?

Guobin’s statement means China will join Norway, France and the UK in switching to a wholly electric fleet within the lifetime of most current drivers.Electric vehicle graphic

Almost 80 percent of the global auto market is pushing toward phase-out of petroleum cars and adoption of electric vehicles.

Anil Valsan, EY Global Automotive & Transportation Lead Analyst told Power Engineering International that China views electric vehicles strategically important as part of its drive towards sustainable growth.

“China has been investing heavily to shape its EV competence with ambitious targets planned for 2020. Many Chinese automotive companies are pumping significant investments into this sector.”

“For instance, SAIC Motor, China’s largest automaker, plans to invest $3bn in new-energy cars in the period until 2020, and is targeting an annual sales volume of 600,000 cars. Several foreign automakers have already entered the Chinese EV market, including Tesla, General Motors, Nissan and BMW.”

China’s auto industry plan released in April envisages new energy vehicles — including electric and hybrids — making up all the future sales growth in the country. With conventional cars plateauing at current levels, new-energy vehicle sales will reach 7 million annually in 2025. As many as 800,000 charging stations will be built this year alone, according to the official China Daily.
Government mandates will require manufacturers to sell 8 percent of their vehicles with electric or hybrid powertrains from next year, rising to 20 percent by 2025.

India is on a similar path with an objective of electric vehicles accounting for 44 per cent of the overall fleet by 2030. Narendra Modi’s government is aggressively favouring them with tax rates 31 percentage points below those on hybrids and internal-combustion-engine cars.

The pattern will accelerate as major automakers dedicate more of their research and development budgets — and, subsequently, lobbying funds — to the EV transition. 

While an outright ban on fossil-based vehicles is unlikely this century scenarios such as fewer gas stations and more expensive regulation will further increase their marginalisation.

Valsan says the impact on the power sector will differ between the developed and the developing worlds.

“Rising EV penetration would need additional electricity demand, primarily in the developing region. Forty-one million EV sales are expected by 2040 (35 per cent of new light duty vehicles), requiring 2,700 TWh of electricity (11 per cent of 2015 global demand). This will also lead to higher baseload utilization of renewable energy power. Potential over-generation due to the renewable energy surge could be used for EV charging during afternoon – to provide efficient evacuation for renewable power without utility-scale storage.”

Meanwhile, developed countries may not need more than budgeted additional generation capacity, as they are already suffering from ‘overcapacity.’

However Guobin says the impact of charging EV batteries in developed countries would be to reverse the trend in recent years of falling electricity demand, driven by energy efficiency measures such as better refrigerators and LED lighting.

Developing countries would need a higher pace of generation capacity addition, if EV demand picks up given that existing capacity is not enough to cover current needs and there are often blackout periods in some areas. An additional 6-7 million EVs on the road in India would require 7-12 GW of base-load capacity, for instance.

“A major risk associated with these projections is the increasing battery size in EVs. The Nissan Leaf has a 24 KWh battery but the new Tesla model has a 85 KWh battery size. It is possible for future EVs to have a higher battery size (as battery weight reduces). This might result in higher demand projections, and more fluctuations in demand due to simultaneous charging with people always charging the battery to full to ensure ample range.”
“Electricity distribution infrastructure is the most vulnerable points of failure due to EV fast charging. The strain on the local distribution networks will increase as EV adoption rises – and clusters of EV owners develop.”

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