Set clear and efficient sector-specific electrification goals

 
These should be in line with economy-wide policies targeted at energy efficiency and emissions.
Public policies should make it possible to give sector actors sufficient visibility to develop their products/services and infrastructure. This requires identifying the potential for competitiveness (cost-effectiveness) in different sectors (buildings, transport, industry) and over different time horizons, based on the specific characteristics of countries and their climate and environmental targets. Existing or planned public policy examples which demonstrate this concept:

Québec, Canada: Roulez-vert programme

The Roulez vert (Drive green) programme of the Government of Québec, Canada, is an economic instrument adopted in 2018 that encourages the acquisition of new and used electric vehicles and the installation of charging stations.

The overall objectives are to:

  • Increase the number of electric vehicles in Québec.
  • Participate in the fight against climate change, in particular by reducing greenhouse gas emissions.
  • Reduce energy dependence on oil and thus improve Québec’s trade balance.
  • Contribute to the economic development of Québec by focusing on a sector of the future and using the available electric power in Québec.

The specific targets announced in the policy are:

  • 100,000 registered electric and rechargeable hybrid vehicles by 2020.
  • Reduce annual greenhouse gas emissions from transportation by 150,000 tonnes.
  • Reduce fuel consumed annually by 66 million litres.
  • 5,000 jobs in the electric vehicle sector and total investments of C$500 million.

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China: The Clean Heating in Winter Plan for North China

In 2017, ten Chinese government agencies, led by the National Reform and Development Committee (NRDC), and the National Energy Administration (NEA), adopted a five-year plan to convert the cities and villages in North China to clean heating during the winter through to 2021. Clean heating includes natural gas, electricity, geothermal, biomass, solar energy and industrial waste heat. The government has made concrete arrangements regarding each heating mode, such as providing subsidies for the upgrading of distribution networks for electricity and gas, economic incentives for research and development into cutting-edge technologies in bioenergy heating, and setting up compulsory standards for building efficiency.

The overall objectives are to increase the share of clean heating so as to cut pollutant emissions and improve air quality, especially for Beijing-Tianjin-Hebei and the surrounding areas.

The specific targets of the Plan are to increase clean heating from 34% in 2016 to:

  • 50% by 2019
  • 70% by 2021

GSEP member State Grid Corporation of China (SGCC) has had a key role in implementing the Plan. In 2018, SGCC helped 2.1 million households and 5000 factories in Beijing-Tianjin-Hebei and the surrounding areas and Fen-Wei Plains change to electric heating (distributed electric heating, electric boilers and heat pumps). By the end of 2018, the total number of coal to electricity households in SGCC’s coverage area reached 4.2 million.

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Poland: Electromobility Development Plan

The Polish Government (Ministry of Energy) has adopted a number of policy instruments designed to accelerate electrification of transportation:

  • National framework for alternative fuels infrastructure development policy (2017)
  • National Electromobility Development Plan (2018)
  • The Act on Electromobility and Alternative Fuels (2018)

The Act was specifically introduced to subsidize the purchase and support the deployment of alternative fuel vehicles. Its main provisions are to:

  • Provide subsidies for the purchase of new alternative-fuel vehicles, including electric, hydrogen, LNG and CNG. Depending on the purpose of the vehicle and its weight, the subsidy may be up to 30% of the purchase price, or PLN 36,000-200,000. For passenger cars, the value of the vehicle must be less than PLN 125,000 to be eligible for the subsidy.
  • Provide subsidies for alternative fuel charging stations financed from low-emission fund.
  • Provide support for use of alternative fuels in public transport, for example through provision of electric buses and trolleybuses, by covering up to 50% of purchase price with a maximum of PLN 1 million and PLN 700,000 respectively.
  • Regulatory solutions are analyzed by the government on an ongoing basis and adjusted to market changes (subsidy levels are currently being analysed and will be reduced).

Financing for the application of the Act is from the low-carbon transport fund (FNT). The management of the FNT was entrusted to the National Fund for Environmental Protection and Water Management. The total costs are expected to be PLN 10 billion over a 10 year period.

With these policy measures, the government expects there to be:

  • 600 thousand electric vehicles (battery and plug-in hybrid) in Poland by 2030 (up from about 8500 in 2019)
  • 400 public-use fast charging stations and 6000 public-use regular stations by 2020

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USA: Transportation Electrification Accord

The Transportation Electrification Accord was published in 2017 to set forth eleven policy principles that outline how transportation electrification can be advanced in a manner that benefits all utility customers and users of all forms of transportation, while supporting the evolution of a cleaner grid and stimulating innovation and competition.

The main objective of the Accord is to educate policymakers on how to advance electric transportation in a manner that provides economic, social and environmental benefits. It has been signed by over 100 organizations and businesses that commit themselves to the advancement of an equitable, prosperous and electrified transportation future. Signatories include prominent car manufacturers, environmental groups, health associations and utilities, and range in scope from local to international.

As of 2019, several concrete actions which reflect the spirit of the Accord have been put into place in the USA:

  • Legislative package of four federal bills tabled in 2019 to promote development of zero-emission vehicles and infrastructure (national strategic committee, financial incentives, etc.)
  • Vehicle Innovation Act to support research to decrease fossil fuel emissions from vehicles
  • Six states (Colorado, Maryland, Michigan, Ohio, Oregon, Pennsylvania) and two policy maker associations (NARUC (Regulator association promoting policy to states) and NCSL (State legislator association promoting policy to states)) have adopted some or all of the principles

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France: Bonus for new electric light duty vehicles

In 2018, France committed to carbon neutrality by 2050. To reach this target, decarbonization of the transportation sector is key: in 2017, it was responsible for 29% of French greenhouse gas emissions. Transportation electrification is clearly an efficient way for reducing GES emissions in France, due to the fact that its power generation is already low carbon (69 g CO2/kWh in 2017 versus a world average of 485 g CO2/kWh) and affordable (30% less expensive than the European average).

The objective of a bonus for new clean vehicles and a malus for new emitting vehicles is based on two principles:

  1. Incentivize the purchase of clean vehicles and penalize the purchase of emitting cars
  2. Balance expenditures for the bonus with income from the malus, thus having no impact on the government budget.

This scheme, which favours small cars and penalizes expensive and emitting vehicles, also contributes to addressing the social equity issue raised by the implementation of a carbon policy in France.

Introduced in France in 2008, the bonus-malus instrument was revised in January 2020, as follows:

  • Bonus: 27% of the purchase price with a cap of 6000 € for new vehicles emitting less than 20 g CO2/km (in practice, that means full electric vehicles), as well as for 2- or 3- wheel vehicles below 3 kW;
  • A progressive malus for new emitting vehicles, ranging from € 50 for 110 g CO2/km to € 12,500 for 173 g CO2/km and above.

Today’s implementation incorporates major improvements compared to the 2008 scheme. At that time, a bonus was granted for the purchase of new cars emitting less than 100 g CO2/km (€ 1000 for 100 g CO2/km to € 200 for 130 g CO2/km), no bonus-malus between 130 and 160 g; and a progressive malus from € 200 for 161 CO2 g/km to € 2600 for 250 CO2g/km). This measure aimed at replacing aged and emitting cars by new and less emitting ones. However, it resulted in a “rebound effect” with an increase in car purchases, car trips and CO2 emissions. And as bonus expenditures largely exceeded malus revenues, the related budget was also unexpectedly unbalanced.

Recent increases in sales of electric cars and related avoided CO2 emissions from transportation can be attributed in part to the bonus scheme. Annual sales of full electric passenger vehicles rose from 5,663 in 2012 to 17,268 in 2015 and 42,763 in 2019.

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