Good Morning Ladies & Gentlemen, I am delighted to provide the keynote address this morning. I certainly enjoyed my ride over here from my hotel in a (possibly add brand name) electric vehicle.The IEA happens to be holding the Irish launch of our Energy Technology Perspectives report later today, and I think its safe to share with you a few of its key findings as related to this important topic. Let me get to the point: midway through 2012, the challenges are clear:Energy demand and prices are rising steadily.Energy-related carbon dioxide (CO2)emissions have hit record highs.Energy security concerns are at the forefront of the world’s political agenda.The bad news is that The world is failing to tap technology’s potential to create a clean energy future. But the good news is that We can turn affordable clean energy from aspiration into reality by tapping technology’s full potential. Electric vehicles are a key part of the technology set that we need to rapidly deploy.
The ETP looks at 3 different scenarios – a sustainable one which offers the prospect of attaining the international goal of limiting the long-term increase of the global mean temperature to 2°C …a less ambitious one which leads to a 4 degree rise …and one with disastrous climatic impacts – a 6 degree rise.The 2DS outlines policies, technologies and financing required to reach this international goal and offers a clean energy pathway.
[ANIMATED SLIDE]So how do we clear the obstacles on the road towards a clean energy future?ETP 2012 has some key recommendations on ways to transform our energy system. One key conclusion is that:A sustainable energy system is a smarter, more unified and integrated energy system. [KEY MESSAGE]Today’s system is centralised and one directional.[CLICK]Tomorrow’s system will be decentralised and multi directionalComplex and diverse individual technologies will need to work as one.Policies should address the energy system as a whole rather than individual technologies.Clearly, electric vehicles will be part of this systems approach: not only can they provide low carbon, oil-free mobility, they can eventually play an integral role in managing a smart-grid system, such as by offering storage for night time power, and help meet peak demand and provide grid stability during the day. Building such a system will take time, but in Ireland, with the goal to reach 40% renewables generation by 2020, and fast growth in EV use, this integration could prove very important within the coming decade.
Just to focus on that for a moment: The Irish 40% renewables goal by 2020 is one of the most demanding targets in the world. Yes, Ireland’s location at the edge of the Atlantic Ocean ensures one of the best wind and ocean resources in Europe. But it will require a fundamental shift in energy production, and grid integration will play a key role. The government is encouraging the development of electricity generated from renewable sources by means of a renewable energy feed-in tariff (REFIT) programme. A key component is wind – a variable renewable energy source.The strong ramp-up in wind must be accompanied by investments in transmission and distribution systems, along with smart-grid type investments.We think Ireland can make it – and this is the type of effort we will need to see from countries around the world – rapidly decarbonising electricity grids, ambitious ramp up of renewable generation. In fact this type of variability of power source fits beautifully with electric vehicles, that can increase night-time demand, when wind generation is often at a peak.
And we do need to move fast on the electricity side, in part to enable other transformations to occur, such as the shift to electric vehicles. Here is our global vision on light-duty vehicles. Electric and plug-in hybrids play a central role, reaching about 50% of global sales by 2040.Yes, we are just starting – we had 50,000 electric and plug-in hybrid vehicles sold in 2011, but we must increase these numbers quickly. Our 2 degree scenario reaches sales of 7 million electric cars by 2020 – about 10% of global sales. This means we have to nearly double the sales of EVs each year over the next 8 years. If we can keep it going after 2020, we can reach sales of over 100 million per year by 2050, with about 1 billion on the road at that time.In IRELAND, you are certainly being proactive as outlined in your recent EV roadmap. The target of 10% of vehicles on road being electric by 2020 is ambitious; it means very fast sales growth. We wish you luck with this.To achieve these targets, there are a range of things we need to do over the coming decade:We need to give many more people the opportunity to learn about and drive these new types of vehicles, and give them confidence enough to buy them. We need to be quite strategic about charging infrastructure, for example the number, type and locations of public charging stations. We need innovative business models and sustainable plans for funding and supporting EV market developmentAnd we must all work more closely together: national and urban governments, car companies, electric companies, 3rd party providers, and consumers themselves. We need to find ways to build this market.
National governments must not shy away from creating the foundations for success, such as a decade long-commitment to support infrastructure and market development.Some commitments have been made, but this may not be enough. As you can see, governments around the world have set targets to achieve annual sales of 7 million electric vehicles by 2020.<click>But EV manufacturers are not fully on board. After 2014, announced manufacturer targets are less certain and less predictable. Although industry capacity can change, this points to an important general message: Government ambitions must translate into action on the ground. Look for ways to provide confidence in EV market development over the near-medium term, out to 2020. Targets help, but for example a vehicle price incentive system with a clear funding mechanism and multi-year commitment appears very important.AND, to manufacturers, you have to do your part. I won’t mention names but there is one manufacturer that accounts for more than half of all the production commitments so far. Too many are waiting and watching. Yes this requires investment – risky investment – but manufacturers can help lower this risk by working together to build markets. In France, one manufacturer (the same one actually) has just announced they will pay to install thousands more charging points and will give away the electricity. I call that pro-active.
I admit the IEA likes to propose targets, so here are some more. Here you see both the actual situation world wide at the end of 2011 and targets for 2015 and 2020. EVs did okay last year, but to reach the 2015 and 2020 targets shown here, we will need to do much more – and to be quite creative. New business models must be developed to reach and gain interest from many more customers. For example, some companies’ plans to lease batteries – making the purchase cost of the car much lower – sound like a good approach.We must somehow give people confidence that they can use their EV for most of their driving, so strategic placement of fast chargers, and good information on where these are, is essential. We must take a close look at possible roles for innovations like inductive charging and battery switching stations.We need to cut battery costs dramatically. The good news is that battery costs do appear to be coming down rapidly, and there are claims that some producers already have hit our 2015 target of 500 dollars per kWh. If true, then we have a great chance to bring this cost down to $300 by 2020 or sooner. This should allow EVs to become quite competitive with gasoline vehicles, especially taking into account the fuel savings over vehicle life.
Coming back to the big picture:…If we can reach our targets for electric vehicles in Ireland and around the world, we will be well on the way toward achieving a low carbon, sustainable future.As you can see, for transport we are hoping to cut global CO2 emissions in 2050 by more than half compared to a “business as usual” future. This means very deep reductions in OECD countries. And nearly half these reductions come from the uptake of new vehicle technologies and new fuels, like electric and plug-in hybrid vehicles.Again, this is not just about the individual technologies but the system as a whole. Without supporting infrastructure and the right policies to decarbonise electricity, we will not reach these very ambitious targets.So I wish you a great conference, and hope you sort out some of the details that we need to make progress. Stakeholder conferences like this are a key to this planning process and ultimately, to EV success.
The role of electric vehicles in a clean energy future - IEA Executive Director
Decarbonising electricity generation in Ireland Renewables policy emphasis Favourable REFITs extended Renewables target: 40% Wind =10%; 30% 2020 target generation by 2020 New REFITs for 2nd gen. biomass 35 TWh 30 Gas is the dominant fuel 25 Now accounts for 62% of power 20 Will grow in tandem with 15 growth in variable renewables 10 Coal and peat are declining 5 0 Carbon tax disincentive 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Peat subsidies phased out Oil Natural gas Peat Coal Hydro Biofuels and waste Wind