Grid Integration of Electric Vehicles in Open Electricity Markets

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Electrification of Vehicles: Policy Drivers and Impacts in Two Scenarios

Martin Albrecht,¹ Måns Nilsson¹,² and Jonas Åkerman¹

¹ Royal Institute of Technology (KTH), Division of Environmental Strategies Research, Stockholm, Sweden

² Stockholm Environment Institute (SEI), Stockholm, Sweden

1.1 Introduction

Over the last 10 years, the interest for low-carbon vehicle technologies has surged among both governments and automotive manufacturers across and beyond the European Union (EU). Great hopes have been put, first, on biofuel vehicles and more recently (as the enthusiasm for biofuels cooled off) on electric vehicles (EVs) and hybrid electric vehicles (HEVs) as key technologies to mitigate climate change, enhance energy security and nurture new industry branches within the automotive sector. In particular, in the Nordic region, where electricity production has a relatively minor fossil input on average, electrification of transport has been seen as a key strategy to reduce CO2 emissions from the transport sector.

However, while the market penetration for biofuel vehicles has been relatively high in some countries, the corresponding increases in electrification of vehicles have not materialized so far. An important reason for this is that vehicle prices remain considerably higher for EVs and HEVs compared with internal combustion engine (ICE)-based vehicles mostly due to high lithium-ion battery prices. Also, the shape of the learning curve and associated future costs remain uncertain and predictions vary strongly [1–3]. Lack of experience with battery durability under different climatic and driving conditions poses a significant risk for early adopters investing in a new EV car. Additionally, battery electric vehicles (BEVs), and in some cases also plug-in hybrid electric vehicle (PHEVs) or range-extended electric vehicles (REVs), require new infrastructure (for charging and to some extent for the upgrade of the local power grid) and different driving behaviour. As a result, there are major uncertainties in (a) future forecasts about BEV/PHEV/REV market penetration, (b) what policy frameworks are needed to facilitate the market uptake of these vehicles and (c) what are ultimately the climate implications of these forecasts. We do know that, over the coming years, BEV/PHEV technology will require public governance measures of different types, both to induce innovation and market uptake, and to control and mitigate possible environmental and social consequences.

This chapter addresses these uncertainties in the context of the Nordic region (Denmark, Finland, Norway and Sweden), through focusing our discussion on the following questions:

How do policies, goals and targets within and across the Nordic countries compare against industry, government and expert forecasts about market uptake?

What policy or broader governance initiatives are likely needed to have a plausible chance of reaching a breakthrough scenario?

What are the climate impacts of our scenarios and what are the implications for the attainment of climate targets?

The chapter unfolds as follows. In Section 1.2 we present a review of policies and key targets in the Nordic countries and the EU, and discuss to what extent they align with or deviate from industry and expert estimates of how the systems can grow. On the basis of this, Section 1.3 elaborates scenarios of EV development in the EU and analyses the energy and climate impacts of the two scenarios, given different assumptions relating to power supply in the Nordic region. Section 1.4 examines what policy drivers might be needed to enable the breakthrough scenarios, using a technological innovation system (TIS) perspective to describe the processes, drivers and developments needed in policy and technology. Section 1.5 summarizes our results and conclusions.

1.2 Policy Drivers, Policies and Targets

Across the EU and globally, policy makers' interests in the electrification of vehicles have surged. Most EU countries have presented national development plans and targets for EVs. The interest is related to at least three political priorities.

The first concerns climate change mitigation. In the Nordic countries, total passenger car emissions in 2010 accounted for 14.10% of total emissions in Denmark, 11.15% in Finland, 12.31% in Norway and 23.05% in Sweden (see Figure 1.1) [4–9]. It is worth noting that this makes Sweden the second worst in the EU27 when just looking at the percentage. This is partly a result of Sweden having relatively lower emissions percentages in other sectors. However, it still indicates that it is especially in this sector that Sweden still has much to gain from mitigation measures.

Figure 1.1 Passenger car's share of total emissions in the Nordic countries [4–9].

The emission share of passenger cars within road transport is decreasing in most Nordic countries, while emissions from light and heavy trucks are increasing (see also Figure 1.2) [4–9]. The numbers are, however, overshadowed by the financial and economic crisis which reduced economic activity in the other road transport modes. Overall, the long-term trend indicates that some of the transport work is shifted between road transport modes but also that the environmental performance of passenger cars is improving more quickly.

Figure 1.2 Passenger car's share of total road transport emissions in the Nordic countries [4–9].

In absolute terms, CO2 emissions from passenger cars stayed on a relatively high but stable level for Sweden and there are signs of a downward trend. The other Nordic countries are still growing in absolute CO2 emissions from passenger cars, although from a much lower base. If one looks at the passenger car emissions per capita numbers, the Swedish downward trend becomes more obvious [4–10]. Norway has been able to stabilize its emissions, while Denmark has almost succeeded in doing so. Before the financial and economic crisis, Finland was on a clear upward trend (see also Figure 1.3).

Figure 1.3 Total passenger cars' emissions per capita [4–10].

Generally, rapid action is required to reduce passenger car emissions in line with ratified climate change goals. Otherwise, extrapolating the current function of environmental performance of the average passenger car in the fleet, we will not see a carbon-neutral road transport sector within the next couple of decades. The data also suggest that, even though passenger cars are the most important challenge right now, we will also have to tackle light and heavy trucks in the near future if one wants to counter given growth trends (see Figure 1.2).

The second political priority concerns energy security. Overall, transport accounts for around one-third of energy consumption, and with its heavy reliance on fossil fuels the sector is vulnerable to oil supply and connected price changes. The electrification of vehicles is a prime strategy to decrease the reliance on imported fossil fuels. The third concerns innovation, job creation and economic growth [11]. Competition globally in the automotive sector is fierce, and it is commonly held that manufacturers need to be ‘ahead of the curve’ in terms of technology development in order to stand their ground against emerging low-cost competition from Asia in particular. In the EU, this concern can be framed politically in the broader Lisbon strategy of 2006, which set out the EU becoming a ‘dynamic and competitive knowledge-based economy’ [12]. The European automotive sector is an important sector representing 2.3 million directly employed (7% of all manufacturing employment in the EU27) and indirectly supporting more than 12 million European jobs (taking into account connected services, etc.) [13].

On the EU level, important policies include the renewable energy directive which has the goal of achieving 10% renewable energy in the transport sector by 2020. Through the fuel quality directive, a reduction of CO2 intensity of fuels by 6% by 2020 has to be achieved. With the clean vehicle directive starting December 2012, public procurement of vehicles needs to take into account the energy consumption as well as CO2 emissions of the vehicles. In 2011, the EU adopted a road-map for the next decade to reduce its dependence on imported oil and to cut carbon emissions in transport by 60% by 2050 [14]. Furthermore, EU vehicle CO2 emissions regulations stipulate that 130 g/km (phased in, starting 2012) has to be met by 2015 and that 95 g/km very likely has to be fulfilled by 2020 [15–17]. Furthermore, the European parliament has mentioned the possibility of setting a 75 g/km CO2 target for 2025 [18]. To set those numbers into context, the current grams of CO2 per kilometre data for the average new passenger cars in the Nordic countries can be seen in Figure 1.4 [19–21]. The graph shows that Sweden and Finland are clearly lagging behind Norway and Denmark. In fact, Denmark already is below the 2015 EU emission target.

Figure 1.4 Average CO2 emissions per kilometre from new passenger cars [19–21].

Globally, as well as in the EU, the economic crisis since 2008 pressed for stimulus spending in the automotive sector. Governments have provided subsidies, loans and research and development (R&D) support, the latter typically oriented towards environmentally friendly cars. Piloting and demonstration projects have often been implemented in cooperation with the private sector and in cooperation between universities, public institutions, the power industry and the automotive industry both on the national level and the European level.

Tax incentives, such as CO2-differentiated vehicle taxes and car rebates, have been introduced in many countries in the EU. However, the tax level can be very different from country to country, taking into account the full set of measures. Kley et al. found that, as of 2010, the EU countries could be grouped into three categories with respect to the total incentives provided when it comes to mid-sized cars [22, 23]:

the leaders (incentive from €10 000 to €28 000: Denmark, Norway and Belgium);

the followers (incentive from €4000 to €9000: Netherlands, Spain, UK, France, Switzerland and Austria);

the laggards (with amounts ±€3000: Ireland, Greece, Italy, Germany, Sweden, Poland and Finland).

Among the Nordic countries, only Sweden has a significant automotive industry [24]. The sector directly employs roughly 72 000 people in Sweden, representing 10.7% of total manufacturing jobs (2009), 6331 in Denmark, representing 1.6% of total manufacturing jobs (2008), 7509 in Finland, representing 1.9% of total manufacturing jobs (2009), and 3300 in Norway, representing 1.4% of total manufacturing jobs (2009). Despite their relatively small automotive industry, Norway and Denmark have taken a strong interest in advancing EV technologies and innovation systems.

In terms of market introduction of EVs, Norway currently has the lead. At the end of October 2012, 9212 EVs were on Norway's roads, which makes it one of the most successful countries in terms of EVs per capita [25]. By comparison, as of the end of September 2012, there were 1320 BEVs registered in Denmark, 1067 BEVs and PHEVs as of the end of October 2012 in Sweden and about 60 BEVs in Finland as of June 2012 [26–31]. These numbers are, however, somewhat unreliable, as some sources include direct private imports while others do not. Also, some sources take into account four-wheel drives that are not classified as passenger cars and some take into consideration PHEVs/REVs while others do not.

Below, we describe in more detail the policies and targets for our four Nordic countries. Through this we get a better understanding of the policies that exist and how they compare with the policy drivers presented above.

1.2.1 Finland

Goals

Finland has so far not established a specific national goal for the introduction of EVs. However, the government has presented a climate and energy strategy where two goals are to reduce greenhouse gas (GHG) emissions from traffic and transport by 15% and to increase the energy efficiency of the transport sector by 9% from 2005 to 2020 [32]. The government has also developed a vision for 2050 in which the direct specific emissions of cars are supposed to reach 80–90 g/km CO2 by 2030, 50–60 g/km CO2 by 2040 and 20–30 g/km CO2 by 2050 [33].

Policy Instruments

A vehicles tax reform began in 2008 which eventually is supposed to give consumers more choice on the level of tax when they buy new or used cars [34, 35]. Today, the registration tax and the annual vehicle tax are based on CO2 emissions. The new registration tax was introduced in 2008 and the new annual vehicle tax in 2010 [36]. In 2012, the lowest registration tax level, for cars with 0 g/km CO2, was reduced from 12.2% to 5% [34, 35, 37, 38]. The highest tax level was raised from 48.8% to 50%. Overall, the message is that cars with less than 110 g/km CO2 will get a lower registration tax compared with the tax regime before. For new BEVs, this means that the previous registration tax is being reduced from €3660 to €1500 for a BEV that costs €30 000. The base tax within the annual vehicle tax is also based on CO2 emissions and after the 1 April 2012 can vary between €43 and €606 per year [34].

The Finnish government has also identified the EV as a Finnish export opportunity [39]. Subsequently, in 2011, TEKES (the Finnish Funding Agency for Technology and Innovation) introduced a 5-year program for the development of concepts for the EV and connected infrastructure [38, 40]. The programme is called EVE – Electric Vehicle Systems programme – and also hopes to create a strong community around EVs in Finland [41]. The largest project in the portfolio is the Electric Traffic Helsinki Test Bed project, which among other targets has the aim to establish around 850 charging spots in the capital region and enable the driving of 400 EVs during a period of 4 years [42–44]. Other significant projects include EVELINA (National Test Environment for Electric Vehicles) [45], Eco Urban Living [46], SIMBe (Smart Infrastructures for Electric Mobility in Built Environments, which started in January 2010 and is funded by TEKES Sustainable community programme) [47], and the battery research programme SINi [48].

Industry Position

Finland has a major and experienced EV manufacturing facility through the company Valmet Automotive who mainly builds EVs for other brands; for example, the REV sports car Fisker Karma [49]. Furthermore, before its recent bankruptcy, the Think car was produced in Finland at the same factory [50]. Another Finnish EV manufacturer is the company AMC Motors with their model Sanifer [51]. Finland is also home to a larger battery manufacturer called European Batteries [52]. Fortum as the major Finnish utility is part of several pilot projects across the Nordic countries and is foremost driving developments in the smart and fast charging area [53, 54].

1.2.2 Sweden

Goals

The Swedish government has established the vision of a fossil fuel independent transport sector by 2030, but has no target for PHEV/BEV penetration. Industry groups have put forward a vision for 600 000 PHEVs and BEVs on Swedish roads by 2020 [55–57]. The 2030 government vision is currently not backed up by concrete road-maps, even though the government recently decided to develop such a road-map [56]. At the same time, different industry organizations have established scenarios [58, 59]. There is significant scepticism and uncertainty about those targets, and even government officials think that only a modest 20 000–85 000 PHEVs and BEVs by 2020 is actually achievable under current institutional conditions [55, 60, 61].

Policy Instruments

Sweden has implemented a number of separate policy measures that are targeted at environmental friendly cars in a seemingly technology neutral way. A major part of Sweden's policy package, and the debate around it, centres on the green car definition. Confusingly, different definitions persist, emanating from different institutional homes: the road transport law, the income tax law and from several municipalities developing their own definitions [62]. The road transport law primarily eliminates the yearly vehicle tax for private persons and professional organizations for a period of 5 years for all green cars introduced after 1 June 2009 (currently, the green car definition translates into 120 g/km CO2 – or cars driven by alternative fuels with fuel consumption per 100 km of 9.2 L gasoline equivalents, 9.2 m³ of gas or 37 kWh electricity). A new green car definition is scheduled to be implemented early in 2013.

For the income year 2012 and 2013 the income tax law foresees that the tax on the private benefit stemming from an employee-driven but company-owned BEV, PHEV or biogas car to be 40% less than a comparable average model. The reduction takes place after the tax level has already been reduced to the average model; but all in all, the total reduction cannot be higher than 16 000 SEK [63]. Ethanol cars, HEVs and a variety of other biofuels are only reduced to the tax level of a comparable average model but are not reduced further. In 2012, the government introduced a new 40 000 SEK subsidy for the purchase of ‘super green’ cars (less than 50 g/km CO2). The budget will be sufficient to support the equivalent of about 5000 EVs [64, 65]. At the end of September 2012 the maximum budget for 2012, which was 20 million SEK, had been reached [66].

Additionally, Swedish government efforts are connected to research funding usually for larger industry players (e.g. Volvo, Saab) as well as several pilot projects across Sweden (e.g. Malmö, Gothenburg, Stockholm, Östersund, Sundsvall, Helsingborg) [67–72]. Those measures are co-financed with a 25–50% stake by the Strategic Vehicle Research and Innovation programme (FFI – a Vinnova-funded research programme) or the Swedish Energy Agency (SEA) [61]. Other significant incentives include the national procurement plan initiated by the city of Stockholm and Vattenfall and partly financed by SEA [73]. The purpose of the procurement is to allow the coordinated procurement of 6000 EVs for companies and public agencies.

Regulatory changes are made to enable EV introductions. Since February 2011, municipalities can reserve parking spots in public spaces for EVs [61, 74]. However, it is not allowed to discriminate different types of vehicles when it comes to parking fees [71]. As a way to accelerate charging infrastructure deployment, there is no longer a need to pay grid concession fees to the local grid company for connecting outside charging infrastructure (e.g. in malls) [75–79].

Industry Position

In Sweden, industry is primarily concerned with R&D of electric powertrains or aspects related to them. However, Volvo is on the verge of commercializing two cars, namely a BEV and a PHEV, the latter co-financed by Vattenfall. Similar to Volvo, Saab has also developed a BEV, but the future of this project due to the company's recent bankruptcy remains uncertain. The new owner expects that they will sell a Saab EV by 2014 [80]. The company EV Adapt is converting conventional cars to BEVs and there is also a company called Hybricon that will be selling electric buses. Otherwise, there are also a number of companies that are active in the charging infrastructure business (e.g. Park&Charge, ChargeStorm, Easycharge). Moreover, Sweden has, and has had, a number of demonstration programmes in which, for example, utilities have been major partners [53, 81].

1.2.3 Denmark

Goals

In 2009, the Danish parliament agreed on a common policy for a greener transport system [82]. The new Danish government recently adopted the goal to phase out all of the country's oil, coal and natural gas until 2050 and to provide 50% of the country's electricity by wind energy already by 2020 [83, 84].

Policy Instruments

The major EV instrument is the relief from registration fees until 2015 [85–87]. The registration fee on passenger cars in Denmark in 2011 is 105% of the value until 79 000 DKK and 180% of the value above [88], making such a tax relief a very strong incentive. Also, the annual taxation of cars has been reformed: the tax was previously calculated on the basis of car weight, but is now based on fuel economy.

In line with government goals, the Danish Transport Agency has been assigned to administrate a fund for research activities and demonstration projects on energy-efficient transport. The largest single grant of the first round was given to the project ‘Test-an-EV’, where 300 EVs are tested for daily use by 2400 families during certain time periods [89]. The partner company for the project is Clever and the test is expected to reveal driving and charging patterns as well as user experiences with EVs. Another large-scale project is named EDISON (Electric vehicles in a Distributed and Integrated market using Sustainable Energy and Open Networks). The project uses the island of Bornholm as a full-scale laboratory to investigate market solutions, electricity network configurations and interaction between energy technologies for EVs [90]. The citizens of Bornholm also participate in the smart-grid project ‘EcoGrid EU’, and results are exchanged between the two projects [91]. Apart from the island of Bornholm, Copenhagen municipality should also be put forward as a major actor since it is, like Bornholm, part of several EU research and demonstration projects. Essential to all those projects is also the cooperation with Danish universities like DTU that are part of multiple projects.

Industry Position

Denmark is one of the countries where new business models with regard to electric mobility are being implemented. Such companies dedicated to deployment, service systems and infrastructure for EVs are by some addressed as electric mobility operators (EMOs). Central EMOs in Denmark are, for example, Better Place Denmark (owned by Better Place Global with Dong Energy as minority stakeholder), ChoosEV (which is now also called Clever – owned by the energy companies SE, SAES-NVE and the car rental company SIXT), CleanCharge and Clear Drive [92–95]. Better Place, in particular, has received worldwide attention for their business model that, among other features, relies on battery switching stations to overcome the range problem connected to EVs. Clever has also received attention owing to the largest BEV trial within the EU in which 1600 Danish families have so far participated within a period of 3 years [96, 97]. Clever is building up a national charging network and among slow charging stations wants to reach 350 fast charging stations by 2015. An important network is the Danish Electric Vehicle Alliance, which is a trade association for the EV industry in Denmark, formed in 2009 by the Danish Energy Association. The Alliance has initiated projects on standardization and roaming within the charging infrastructure and has recently prepared a long-term EV strategy [26]. Members range from electric distribution and utility companies over the automotive industry to research institutes and smaller projects on EV technology.

1.2.4 Norway

Goals

The EV network elbil.no has a target of reaching 100 000 EVs by 2020. An even more ambitious industry vision is raised by Energi Norge to reach 200 000 BEVs and PHEVs by 2020. The government regularly releases its 10-year plan for development in the transport sector. The latest plan, spanning from 2010 to 2019, emphasizes the environmental impact of the transport sector and goals for limiting GHG emissions. The goal is to limit emissions from transport by 2.5–4.0 million tons of CO2 equivalents in 2020 according to continuation of the current development in the sector [98]. The country has also set the target to achieve an average emission level of 85 g/km CO2 in terms of total new vehicle sales by 2020 [99].

Policy Instruments

In order to reach its goals, the Norwegian government encourages the purchase of EVs in various ways. Noteworthy here is that BEVs currently are relieved from the registration tax (also sometimes called one-time tax or import tax) as well as valued-added tax (VAT) and have a much lower annual tax (10–20% that of ICE-propelled vehicles) [100]. These measures are guaranteed until 2017 as long as no more than 50 000 such cars are on the roads [101]. The current government has even preliminary plans to continue them at least until 2020 [102]. BEVs are further relieved from parking fees at public parking lots, road pricing or congestion charges, charges on ferries (but the driver has to pay) and are often allowed to drive in bus lanes that are otherwise reserved for public transport [99]. Also, in Oslo and other areas, most public charging spots are free to use for owners of BEVs.

Another actor to mention here is the public funding programme Transnova that is currently among other initiatives funding fast charging stations across the country. The agency also funds various other projects aiming at reducing GHG emissions from the transport sector (e.g. trial or pilot programmes). The Norwegian Research Council runs a funding programme called RENERGI with the objective of ensuring environmentally friendly and economic development of the energy infrastructure, including transport solutions.

Industry Position

Norway is, or has been, home to several EV-related start-up companies, among them the car manufacturers Think and Reva as well as the car sharing company MoveAbout. Unfortunately, Think has not yet been able to restart production after its latest bankruptcy in 2011. Furthermore, Norway has active industry associations around EVs that strongly support further developments.

1.2.5 Nordic Comparison

Looking at the overall Nordic perspective, it becomes apparent that there are large differences in how the countries try to support the deployment of electric powertrains. Especially striking is the significant policy gap that exists in Sweden, where the government set the goal of achieving a fossil-fuel-free independent transport sector by 2030 as well as an industry vision of 600 000 BEVs and PHEVs by 2020, but few policies suggest such a development. Instead of deployment, Sweden and, to a lesser extent, Finland have focused on R&D, annual vehicle tax definition reform and demonstration projects but have not yet made the link to actual deployment of EVs. Norway and Denmark, however, have had a more entrepreneurial policy approach, through actively supporting new start-ups while at the same time giving generous tax exemptions to customers for market uptake. However, taking into account the slow renewal rate of vehicle fleets, one can argue that in all countries the number of EVs on the street still lag behind the ambitious goals set forward. Table 1.1 summarizes existing policy frameworks across the four countries in terms of economic, regulatory and cognitive/normative governance mechanisms [103].

Table 1.1 EV policy frameworks across the Nordic countries.

The range of policy measures results in different price tags across the Nordic countries, which is exemplified here in Figure 1.5 by using the BEV Nissan Leaf and the fuel-efficient diesel-driven Golf BlueMotion 1.6 TDI (based on exchange rates from June 2012). The figure solely focuses on initial prices at the point of purchase and, hence, does not include operational costs or benefits. The price information is gathered from the original equipment manufacturers' (OEMs') web sites and then combined with the policies that exist in the Nordic countries at the point of sale. It can be clearly seen that BEVs will have a hard time competing in Finland and Sweden given current governance regimes. Even though the BEV is likely favourable in terms of operational costs, it will be difficult to close the existing cost gap within a reasonable investment time frame.

Figure 1.5 Initial price comparison taking into account existing governance regimes.

1.3 Scenarios and Environmental Impact Assessment

On the basis of existing EV-related policy targets, this section will elaborate two simple future scenarios. The primary variable in the two scenarios is the rate of market uptake of BEVs and PHEVs. This variable will be specified relying on existing market uptake scenarios focusing on Europe that were identified in a literature review. It becomes apparent that there are quite large differences between those reports and studies [1, 104–107].

In terms of annual vehicle sales percentage, BEVs range between 1 and 12% in 2020 and between 11 and 18% for 2030. In the same way, PHEV and REV combined can be found to be between 4 and 8% in 2020 and between 41 and 66% in 2030.

In terms of total car fleet percentage, BEVs range around 0–1% in 2020 and 3–7% for 2030. In the same way, PHEV and REV combined can be found to be between 0 and 1% in 2020 and between 15 and 26% in 2030.

Owing to the different varieties in the scenario studies found, we decided to consider an incremental as well as a breakthrough scenario largely based on an existing study written for the European Commission [1]. At one end, we hence consider an incremental growth outlook of EV developments given a continued business-as-usual governance regime. This incremental growth scenario assumes an 18% vehicle fleet share by 2030 for PHEVs, REVs and BEVs combined. The assumptions for this scenario are as follows:

battery improvements lack substantial breakthrough;

lack of coordinated and long-term policy support;

only limited public acceptance for EVs;

ICE technology will achieve EU transport targets for 2020, which gives OEMs less incentive to push for EVs in the near future [107].

At the other end, we consider an EV breakthrough scenario, where market share increases rapidly until 2020 and 2030. This breakthrough scenario assumes reaching a vehicle fleet share of 33% by 2030 for PHEVs, REVs and BEVs combined. In order for this to be possible, we use a number of important assumptions:

OEM prices for lithium-ion batteries in the case of BEVs continue to decrease to roughly USD 400/kWh in 2020 and to between USD 150/kWh and USD 200/kWh in 2030 [104, 108, 109];

strong long-term and coordinated policy support;

strong public acceptance and behavioural changes in transport [110].

Before now focusing on policies on how to achieve those scenarios, we will first focus on the environmental impact of the market uptake options described. The electrification of vehicles is currently being discussed as a major lever for a more environmentally friendly form of transport. Emissions of nitrogen oxides (NOx) and particulate matter can be avoided locally and climate impact may be reduced if low-carbon electricity is used.

Here, we will estimate the potential effect of the EV scenarios regarding GHG emissions. A life-cycle perspective is used, which means that emissions associated with vehicle manufacturing and maintenance as well as emissions caused by electricity production are considered, in addition to tail-pipe emissions. First, we calculate life-cycle emissions for three typical vehicles in 2030. These results are then combined with the shares for PHEVs (includes also REVs) and all EVs in the scenarios, to estimate approximate emission changes for the passenger car fleet in 2030.

The three types of vehicles are: an efficient diesel car emitting 80 g/km CO2 according to the New European Drive Cycle (NEDC), a PHEV with a 50 km electrical range and an all-electric car with a 150 km range. All cars are assumed to be the size of a Volkswagen Golf. The key assumptions behind the calculations are presented in Table 1.2.

Table 1.2 Key assumptions used to calculate life-cycle emissions.