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Executive summary and methodology

Executive summary and methodology

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    ZEC project ZEC project Document Transcript

    • ZEC “zero emission city” A new system of public and private electric mobility Preliminary guidelines Carlo Iacovini and Alessandro Marchetti Tricamo Rome, July 2010 1- INTRODUCTIONThis document presents preliminary research undertaken to describe the characteristics of amobility service system whose aim is that of facilitating a transition towards massive use ofelectric vehicles. By analysing the urban and market, our brief has been that of working out aproposition for helping authorities and companies to use electric vehicles in a context that is asclose as possible to the scenarios predicted by the most authoritative market estimates. At a laterdate, this study will need to be adapted to the different contexts of experimentation, identifyingfigures, costs, quantities and benefits relative to the environment of application. The proposedmodel marks out a path, a guide to starting off in a concrete way the implementation of electricmobility. 2- ELECTRIC MOBILITY: A CONTROVERSIAL HISTORYThis is a revolution that has to answer to its past. The dream of the electric motor hasaccompanied the car from its birth, but as early as the end of the nineteenth century its limitswere quite obvious: the ability to accumulate energy with batteries. Performance was never aproblem: in 1899 an electric vehicle broke the barrier of 100 km/h, reaching 105.88 km/h. From1920, however, with the development of combustion engines, it was clear: the structuralsimplicity of an electric car and its ease of driving could not compete with the three-figureautonomy of the combustion engine. Lead batteries, the only ones at the time that couldguarantee a car’s necessary reliability, could accumulate (at the peak of their development) about40 watt-hours per kilogram: in practice, one needed 25 kg of batteries to obtain the same energycontent given by 2 glasses of petrol. Periodically, most often under pressure from petrol crises, thecar industry has tried to get the electric project going, but always without success. BMW tried in1992 with the E1, perhaps the one closest to today’s concept and to the coming mass-producedelectric cars: the E1 was built completely in aluminium, with panels in aluminium and plastic, toreduce the weight as much as possible and thus increase the autonomy of the batteries. BMWZEC Zero Emission City confidential 1
    • decided to equip the E1 with what were considered innovative batteries, sodium-sulfur ones,which had a specific energy 4 times higher than lead ones but had the drawback of working attemperatures around 300°. This is the reason why the only two E1 prototypes were destroyed by afire at night in a BMW factory. Another example of the many “flops” was the GM EV1 (1996):captivating lines fit for a car museum, 2 seats, first lead batteries and then nickel-metal hydrideones (like those in hybrid cars), front electric motor, it was born to meet the demands of theCalifornian administration and 1,117 models were produced. The EV1 was sold with a leaseformula (as with tomorrow’s electric cars), at a monthly rate starting from $300. The story of theEV1 ended in 2003: the first lead batteries did not ensure the declared 90 km autonomy; the nickelones were still at the first stages of development, had a tendency to overheat and did not lastlonger than a year. It was also a question of price: American newspapers at the time relatedproduction costs of $80,000 per car. Too high. Fiat also did its electric duty: among its prototypeswere the X1/23, designed in 1972 by Dante Giacosa, and the little-known Downtown, a prototypepresented, in a familiar pattern, at the Geneva Salon in 1993, with 3 seats and the innovativesolution of electric motors (9.5cv) with the drivetrain in the back tyres. It used a sodium-sulfurbattery (like the E1) and, according to what was claimed at the time, could guarantee anautonomy of over 190 km. It was a classic case of Auto Salon optimism and the Downtown neverentered production. On the other hand, the Panda Elettra did, in 1990: 2 seats, lead batteries,maximum speed of 70 km/h, 65-km autonomy (in theory, because in city driving they did not goover 50) and a listed price of 25,600,000 liras. In 1998 it was followed by the 600 Elettra: leadbatteries weighing 400 kg, autonomy of just 90 km (in the homologation cycle), official useful lifeof 600 recharge cycles (about 50,000 km, without taking into consideration the lazy-batteryeffect). What happened to them? They disappeared. Or rather, they lie unused in some town hallparking lot, since only public administrations bought them (in Palermo, Turin, Brescia, etc). Anelectric bubble, destined once again to burst because of the same problem: reduced autonomy ofelectric vehicles.ZEC Zero Emission City confidential 2
    • 3- MARKET ESTIMATES AND OBJECTIVESNowadays, however, the electric car is making a comeback as the protagonist of the zero emissiondream (at least with the exhaust). What has rekindled enthusiasm for electric traction are the newlithium batteries, using the same technology as those used in cell phones or portable computers.Today a lithium battery has an energy content of about 140 watt-hours per kg, nothing incomparison to the 13,000 watt-hours per kg that petrol delivers, but enough to give an autonomy,at least in theory, of more than 100 km: a sufficient distance, according to research, to cover theaverage daily needs of the European driver, which in 80% of cases is less than 50 km. The motorindustry is beginning to believe in the electric solution in compact form, pushed first of all by thegreat research incentives in the United States and China (with Europe slightly behind). Also, thedifferent projection estimates about the electric market seem to confirm this belief: • IHS - Global Insight: a market share of 1-2% in 2020, which could go up to 11-30% in 2030. As far as plug-in hybrids are concerned, they foresee a market share of 2% in 2020 and of 5-20% by 2030. • Deloitte: by 2020 electric and hybrid cars will represent up to a third of total sales in developed markets and up to 20% in urban areas of emerging markets. • ACEA (European Automobile Manufacturers’ Association): by 2020 electric cars will account for between 3% and 10% of the market. • Roland Berger: 3 million electric and plug-in hybrids in 2020, the equivalent of 20% of the total market. • Istituto Swg. over 70% of Italian drivers would be ready to buy an electric car. One out of 10 would be sure to buy it, if it was available for sale. 54% ask for good autonomy and more recharge stations, 45% would like government incentives and 40% would like electric cars to cost the same as cars that are available today. • Accenture: survey of over 1,800 consumers in Italy, Germany, France, United States and Canada. 60% of interviewees would choose a hybrid or electric car, over a petrol-fuelled one, as long as the new vehicle could compare or even be superior in terms of driving comfort, performance, style and maintenance. It also emerges that 43% of the interviewees – but in our country this percentage jumps to 62% - intends to buy a hybrid or electric car in the next two years.ZEC Zero Emission City confidential 3
    • 4- CHARACTERISTICS OF THE PROJECTAll the different options above have in common medium/long-term objectives and estimates thatpredict a considerable share of both the private and public market. A market share that, at least inthe short term, considering the increased but still limited autonomy of the vehicles, will involveessentially a city use: the electric car is a car destined to substitute the city car or the secondfamily car used in the city. This is the starting point for the input that launches the ZEC project.How can we reach the – at times optimistic – figures indicated by the above estimates? Whichstrategies are needed to turn into a reality the policies and actions to be undertaken? It must bekept in mind that it is not enough to have available a choice of vehicles without integrating theminto present and future mobility systems (PUT – Urban Traffic Plan - and PUM –Urban MobilityPlan) and without adopting an appropriate plan of recharging infrastructure. We also need tobuild a culture that can bring us within reasonable times to virtuous behaviours and at the sametime work as a system, that is, involve all public and private potential users of electric mobility,and stimulate them with a fiscal and economic incentivisation system. The challenge is far fromsimple, all the more so as often we concentrate on defining the final objectives, losing sight of theroad for reaching them.The ZEC project provides a method for implementing an electric mobility system, with thepossibility of experimenting, in a short-time first phase, all the factors that will characterise thefuture. It is a question of recreating on a minor scale the global scenario of electric mobility:matching the different vehicle uses (private citizens, companies, public fleets, car sharing, businessservices) with cars (already listed o to be listed in the future) possessing characteristics compatiblewith the different needs. Following the fundamental rule of the free market, we must bringtogether supply and demand. We need, for example, someone charged with coordinating thepreliminary phase of the new mobility, who will incentivise the demand for electric vehicles, helpthe spread of recharging infrastructure, facilitate the mobility of electric vehicles in urban areas,supply (public and private) companies in the area with vehicles and communicate with the autoindustry, at the same time promoting innovative and virtuous lifestyles.The ZEC project envisages the Town Hall as the authority charged with building up an electricbusiness model that will provide answers to such objectives. Through mobility agencies, or otherZEC Zero Emission City confidential 4
    • organizations they participate in, and a partnership with local multi-utility companies, the LocalAuthority can: • plan and build the recharging network, privileging electric energy from renewable sources, so as to build a real zero-emissions closed cycle; • involve mobility operators and traffic generating centres in order in identifying the private and public market demand for electric vehicles (through the network of mobility managers, public transport users and citizen services); • incentivise the private use of electric vehicles (both at the purchasing and leasing level); • purchase (or rent) a fleet of electric vehicles from different producers in order to then lease them (or offer them for purchase or hire purchase) to the first users (representing different target users). All this should take place though a local fleet manager; • facilitate mobility for electric vehicles (for examples, with free parking and free access to limited traffic zones); • promote social awareness and stimulate new individual behaviours.On the basis of these considerations, made operative by the ZEC project, the study that has beenundertaken considers a medium-sized Italian town (200 thousand inhabitants) which, according tothe average parameters of market potentialities, in the next 5 years could come to have 1,250electric vehicles in circulation. In order to reach this objective, a service is to be activated for thelease/hire-purchase use of a fleet of vehicles (with two and four wheels) taken from thoseavailable on the market even in small quantities (starting from the end of 2010 every automobilecompany will launch its own electric vehicle, Citroen C-Zero, Peugeot iOn, Mitsubishi iMiEV,Renault Fluence, Kangoo, Zoe e Twizzy, Smart Ed, Nissan Leaf, etc. ). The manager, through aframework agreement with the vehicle producers, will centralize management and build a productline to offer to different urban users (private users, citizens, public companies, public service). TheLocal Authority, through appropriate regulations, will supply the necessary facilities andincentives.ZEC Zero Emission City confidential 5
    • OPERATING DIAGRAM OF THE ZERO EMISSION CITY SERVICEZEC Zero Emission City confidential 6
    • 5- INVESTMENTS AND MANAGEMENT COSTSThe objective of over one thousand electric vehicles is commensurate with the average marketforecasts but it is interesting to look at the economic dynamics regarding the necessaryinvestments. Since it is an experimental application, the economic analysis must concentrate onboth the costs/benefits relationship and the sustainability of the service once in place. Also, itmust be stressed that the Zec model is a service that will evolve and finally concentrate on thepublic mobility component, and that the mobility private sector will take over in numerical andmarket terms.The total investment envisaged in the space of 6 years is a little over 14 million euros. In the firststart-up phase (lasting 24 months) an investment of 3,296,000 euros is estimated. In the second-phase (up to completion), the investment will be a little over 11 million euros. It is important tosee these figures as a whole, but the different cost items need to be evaluated.Firstly the budget foresees, on the basis of European experiences, forms of incentivisation for thepurchase or lease of vehicles for a total of 7.5 million euros. This sum will be distributed betweenthe main operators in the sector who will be the first to have vehicles ready and marketable. Thisitem is an obvious industrial “support” aiming, as in different European experiences, to supportthe transformation of the automotive sector. This form of incentivisation is optional. It can begranted at a local level, but much more rationally it will exist only if financed at the centralgovernment level (or at most the regional one), since it is a question of industrial financing. It isnot to be excluded that even single car producers will be interested in promoting further forms ofincentivisation for the spread of their product. It is to be assumed that especially in the first phasethere will be an attempt to supply products at very reasonable prices, bearing in mind that, as insome experiments already underway, single customers will need to underwrite the contract andincur costs in the purchase or use of the vehicles. These costs are not calculated here because theyconcern directly the private market sphere of the automotive sector and cannot therefore beattributed to an experimental model of electric mobility services. The second investment item islinked to the recharging infrastructure (4 million euros). This figure, however, cannot be attributedexclusively to the project. First of all, the costs of the infrastructure will be absorbed over severalyears and, secondly, it will serve not only the vehicles linked to the experiment but more and moreZEC Zero Emission City confidential 7
    • the vehicles and motorcycles that will grow spontaneously from the private market of the electricsector. As it is principally a public work project, in the total numbers is it right to record it asequivalent to the amortization amounts in the relevant periods.Once the project has taken off, the running service will have moderate costs of between 500/700thousand euros for annual management, including maintenance and promotion activities. 6- EXTERNAL EFFECTS OF THE PROJECTThe mobility sector, just like industrial production, produces external effects, that is, collateral andnot deliberate effects linked to activities that have a negative effect on third parties, usually theenvironment and people. According to data in our possession, in Italy cars contribute to over 60%of the creation of external effects; commercial vehicles (light and heavy ones) to about 20%; publictransport on rubber tyres to about 12%, motorcycles to about 5%. The identification andassessment of the external effects of pollution is often a very difficult task: for example, there aremany estimates of the total net economic costs of damage produced by climate changes all overthe world (for example, the social cost of carbon (SCC, expressed in terms of net future benefitsand costs that are currently discounted). The SCC estimates for 2005, which have been subjectedto peer review, have an average value of 43 USD per ton of carbon (tC), that is, 12 USD per ton ofcarbon dioxide (CO2), but the interval around the average is great. For example, on a study basedon 100 estimates, the values range from 10 USD per ton of carbon (3 USD per ton of CO2) up to350 UD/tC (95 USD per ton of carbon dioxide). The great discrepancies in SCC estimates are due ingreat part to the differences in assumptions regarding climate sensitivity, to delayed answers, tothe treatment of risk and equity, to economic and non-economic impacts, to the inclusion ofpotential catastrophic losses and to discount rates. It is very likely that globally the figuresunderestimate the damage costs, because they cannot include many non-quantifiable impacts. Asa whole, the publications indicate that the net costs due to climate change damage are probablysignificant and will increase with time. In our research we have decided to assume as the SCCindex the value estimated in the Stern Report (Stern Review, 2006) of 75 euros per ton.As for air pollutants, we took into consideration sulphur dioxide (SO2), nitric oxides (NOX),particulate matter (PM2.5 and PM10 particles with a diameter smaller than 2.5 or 10 microns),carbon monoxide (CO) and volatile organic compounds (VOCs). For the monetary costs associatedZEC Zero Emission City confidential 8
    • with air pollution (particulate matter, nitric oxides, carbon monoxide, etc.) we have adopted thoseof the INFRAS – IWW study, Externals costs of transport (2004), a source accredited by theEuropean Community.In summary, the average cost values we have used for the estimate are:- pollutants: 1.27 cents of euro/passenger per km;- climate-altering emissions (CO2): 0.94 cents of euro/passenger per km,- noise: 0.52 cents of euro/passenger per km.Considering the following hypotheses of calculation:1) 1,250 electric vehicles substituting as many internal combustion vehicles;2) the energy used to recharge batteries from a renewable source;3) an average vehicle occupation of 1 passenger;4) average travelling distance of 12,500 kilometres/year,one gets, once the system is in place, a value of 426,563 euros a year saved with the adoption of afleet of 1,250 electric vehicles recharged with energy from renewable sources. An amount that isequal to the annual management costs estimated by the plan.In particular, attention must be given to the environmental aspect that, once the system is inplace, every year will cause the reduction of CO2 emissions from car traffic by 2,344 tons, as well asthe emissions of the other pollutants and those, harder to quantify, of particulate matter, nitricoxides, carbon monoxides and volatile organic compounds.ZEC Zero Emission City confidential 9
    • ABOUT THE AUTHORSCarlo Iacovini was the founder and President of the Euromobility Association, and he hascollaborated with several Local Authorities in introducing new mobility policies and services. Hehas undertaken international research for European projects, for the Australian government andhe has coordinated the international forum Move, promoted among others by the Fia Foundation.As Director of Infomobility S.p.A (joint stock company), a mobility agency for the Municipality ofParma, he has collaborated in the construction of the “Parma model”, an example of goodpractices in the sector. After heading the mayor’s staff, he now has the role of Director of theAttractiveness and Marketing sector of the Municipality of Parma. Since 2009 he has beenfounding partner and president of the group Green Value.Alessandro Marchetti Tricamo, transport engineer, participated in the first internationalconference of young researchers on hydrogen with the project paper “The use of hydrogen for cityservices by a fleet of vehicles” published by the Begell House Inc magazine of New York. He hasworked for ATAC S.p.A. (joint stock company), where he collaborated in the development of RomeCar Sharing, the planning of a recharging stations network for electric vehicles, and satellitemonitoring activities of Roman public transport. He is the head of E-Mobility, which providesactive consultancy services in mobility management and evaluation of environmental impact. Heworks as a journalist for the Corriere della Sera.ZEC Zero Emission City confidential 10