The bumpy road to greener mobility

Last summer, Transport Minister Omar Alghabra announced that Canada’s federal government would ban sales of new cars and light-duty trucks with internal combustion engines by 2035. Just this month, the European Union agreed on the same target. The electrification of mobility is gaining speed. Carmakers are introducing more electric vehicles (EVs) and model choice, and battery manufacturers are scaling up production. Ontario will see a large battery plant being built by Stellantis and LG near Windsor. But how will all these EVs get charged? Will our infrastructure be ready? Federal and provincial governments have to choose carefully where they provide incentives as budgets are limited. What do smart policy designs look like? EVs will become more affordable as battery production scales up and innovation lowers costs—notwithstanding current supply chain issues. Targeting EV incentives based on purchase price thresholds is problematic and leads to opportunistic behaviour by producers and households. A better approach involves using household income to determine eligibility—as British Columbia does. It helps those whose decision is most swayed by subsidies. EVs are not strictly zero-emission vehicles if the electricity they use is not clean. Incentive programs should allow for this and decrease the subsidies proportional to the CO2-intensity of each province’s electricity generation. Where electricity isn’t clean, it would be better to encourage improved fuel economy of cars instead. Provincial and federal incentive programs also suffer from unnecessary duplication. Motorists have to navigate the different programs separately to take full advantage of available offers. This duplication is burdensome and ineffective. Perhaps the federal government should team up with clean-energy provinces and boost their local programs rather than running their own. Yet for many motorists the largest hurdle to adopting EVs is not the cost. It is the paucity of EV charging infrastructure and the hurdles in installing them. Motorists won’t adopt EVs on a large scale if they are worried about where they can charge their vehicles reliably. The ideal place is still everyone’s home because only there electricity is available at the nominal utility price. Using public chargers is less desirable because of the higher cost, typically administered by the minute rather than kilowatthour. Getting individual EV chargers (EVCs) will be challenging for three major groups, all concentrated in urban areas. Motorists living in multi-tenant buildings have to convince their landlords to install equipment that they can use, and also pay extra for the overhead administering these EVCs. Motorists living in condominiums often have to battle their condo associations or strata councils to allow installing EVCs. Ontario pioneered a “right to charge” in its Condominium Act, enabling owners to install EVCs. Other provinces should follow suit. Potentially worst off are motorists who rely on on-street parking for lack of a garage or driveway. Running an extension cord from home to car across the sidewalk—as the City of Vancouver allows—can only be a temporary fix and is unlikely to work where people are unable to park very close to their homes. Instead, municipalities need to develop ubiquitous charging infrastructure such as the lamppost chargers on the UK’s “electric avenue." Most of the above problems cannot be fixed simply by throwing money at them. They need careful changes to existing legislation and regulations to enable EVC solutions and resolve conflicts between tenants and landlords, between owners and stratas, and between home owners and municipal governments. Municipalities have already started amending their building codes to ensure that new buildings are fully EV-enabled. For example, as of June 2019, the City of Vancouver requires all new residential buildings to have level-two EVC infrastructure, one per home or 100 per cent of all stalls in a multi-unit residential building. Other municipalities are enacting similar measures. But retrofitting existing older buildings is costly and technically challenging. The problems with EVC infrastructure don’t stop there. As EV use increases, so does the demand on the electric grid. Ultimately, clean generating capacity needs to be added; but figuring out exactly how much more supply is needed when and where is difficult. Electric utilities prepare for managing existing capacity and demand more effectively. Energy management systems can help share available load across multiple users. Utilities can set tariffs that encourage charging during off-peak hours, thus reducing the need for more generation and distribution capacity. The road to adopting EVs will be bumpy. More policy coordination is needed to remove the speed bumps that will otherwise slow down EV adoption. Werner Antweiler is an associate professor at the University of British Columbia’s Sauder School of Business who specializes in environmental and energy economics. He researches the electrification of mobility, the transition to renewable energy, and global energy systems and energy trade. The Hill Times