Decarbonising Transport Richard Hobbs - GM Strategy - Empowering our energy future - Infrastructure New ...
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Decarbonising Transport
Richard Hobbs – GM Strategy
Empowering our energy future
Whakamana i Te Mauri Hiko: empowering our energy future
2
Agenda
1. Transport is NZ’s largest and most economic
emissions reduction opportunity
2. Electric transport economics are improving rapidly and
the benefits will be overwhelming
3. What are the barriers to uptake and how can we
achieve this future?
3
New Zealand has committed to net zero carbon by 2050 2030 Paris Climate Agreement target • Reduce GHG emissions by 30 per cent below 2005 levels • Transport = ~20% of emissions covered under target 2050 Zero Carbon Bill target • Net zero GHG emissions (excluding biogenic methane) • Transport = ~33% of emissions covered under target Source: Ministry for the Environment 4
Transport emissions have nearly doubled since 1990
Transport and energy emissions, 1990-2018
25
Million tonnes CO2-e
20
Transport
15
Energy
10
Transport +90.0%
5 Growth total
1990-2018 +2.3% pa
0
1990 1995 2000 2005 2010 2015
Source: Ministry for the Environment 5
Light road transport represents 80% of transport
emissions
Composition of transport emissions, 2018
Total emissions from
light transport: 9%
13.5 Mt CO2-e 10%
23%
57%
Cars and Light duty Heavy duty trucks Aviation, rail Total
motorcycles trucks and buses and marine
Source: Ministry for the Environment 6
Electrification forecast to provide 80% of road
transport emissions reductions to 2050
Road transport electrification contribution to 2050 emissions target
Million tonnes CO2-e
1.7 -80%
Other technologies
such as hydrogen
and biofuels
required to achieve
zero emissions
Gross emissions Growth Electrification Emissions 2050
Note: Gross emissions used here reflect road transport only, and excludes aviation, marine and other sources of transport emissions
Source: Whakamana i Te Mauri Hiko analysis and Ministry for the Environment emissions data 7
Electricity will be critical but it is not the only fuel
needed to decarbonise transport
Decarbonisation opportunities by transport segment
Weight, tonnes
Potential fuel
alternatives
1000 — Marine 100% electric
Freight
(domestic)
Heavy Passenger
100 —
Aviation 100% hydrogen
trucks
Light private (domestic)
10 — 100% biofuels
Buses
Vans &
small trucks Contribution to
1— CO2 emissions,
Light commercial
NZ 2018
2-3 wheelers Daily kilometres travelled
0— //
│ │ │ │
0 50+ 100+ 1,000+ 8
Rapid uptake of light EVs to drive transport
decarbonisation
Light transport distance travelled by fuel type
(Vehicle kms travelled, billions)
61.5
57.0 59.3
54.5 3.5 0.2 Other
49.0 51.8
46.1 16.9
31.1
43.1 55.7 61.3 Electric
45.8 47.3
40.1
23.3
0.3 1.7 8.8
2020 2025 2030 2035 2040 2045 2050
0.6% 3.5% 16.9% 42.8% 70.3% 94.0% 99.7%
% of VKTs that are electrified
9
Source: Whakamana i Te Mauri Hiko
…and slower, but meaningful uptake in heavy vehicles
Heavy transport distance travelled by fuel type
(Vehicle kms travelled, billions)
6.1
5.6
5.1
4.7
4.3 2.7 Other
3.9
3.6 3.0
3.4
3.7
3.9
3.5 3.8
3.4 Electric
2.6
1.7
0.0 0.1 0.9
0.3
2020 2025 2030 2035 2040 2045 2050
1.0% 1.8% 8.2% 20.2% 33.1% 45.9% 56.2%
% of VKTs that are electrified
10
Source: Whakamana i Te Mauri Hiko, updated from WiTMH based on new bus policy changesThe transition will be rapid… and likely even faster
than we predict
United States market share of car vs horse, 1905-1925
Horse 94.5%
97.5%
Car 5.5%
2.5%
1905 1915 1925
Source: Rethinking Humanity, James Arbib and Tony Seba, June 2020
11Agenda
1. Transport is NZ’s largest and most economic emissions
reduction opportunity
2. Electric transport economics are improving rapidly and
the benefits will be overwhelming
3. What are the barriers to uptake and how can we
achieve this future?
12Today Total Cost of Ownership (TCO) is already
lower for some EVs
2018 2025
2020 2030
Long haul truck
Regional truck
Urban truck
City bus
Passenger cars
Sources: McKinsey Energy Perspectives 13Sticker price parity to be reached in 2024
Breakdown of projected medium BEV and ICE pre-tax prices in the U.S.
$60
Thousands (NZD)
$50 Internal Combustion Engine (ICE)
Home charger
$40 28% 24% 21% 18% 16% 14% Battery
$30 Powertrain
$20
Vehicle
$10
$-
2020 2022 2024 2026 2028 2030
Source: Bloomberg New Energy Finance, EV Outlook 2020
14Battery and renewable energy costs are declining
rapidly
Global price benchmarks: Solar, wind & batteries
-75% -90% -60%
Battery costs Solar generation Wind generation
2015-2020 costs costs
2010-2020 2010-2020
Source: Bloomberg New Energy Finance
15Average household energy bill significantly lower by
2035
Forecast change in annual 2035 energy bill for household
with two vehicles
2 Petrol vehicles 1 Petrol, 1 Electric 2 Electric vehicles
Source: Whakamana i Te Mauri Hiko 16By 2030 reducing transport emissions will save
money!
EV transition marginal abatement cost curve, 2030
0
-100
Abatement cost
(NZ$/tCO2e)
-200
-300
-400
-500
-600
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Abatement potential (MtCO2e / yr)
Light passenger LCV-->EV
LPV-->EV Light commercial Medium truck
Truck_M-->EV Heavy truckBus-->EV
Truck_H-->EV Bus
Source: Ministry for the Environment 17The electric revolution is starting…
Light fleet: Commercial trucks: Heavy freighters:
Westpac Countdown Alsco
Westpac has transitioned Countdown recently Alsco is currently
over 30% of its fleet to purchased five electric trialling New Zealand’s
electric delivery trucks first electric heavy
(Drive Electric, Westpac) (NZ Herald)
freighter
(Stuff, Alsco)
18…and in public transport
Buses: Rail: Auckland Ferries: Wellington
Metlink Transport/KiwiRail East by West
By 2023, Metlink will KiwiRail is currently By the end of 2020,
have 98 new electric electrifying Papakura to Wellington is due have
buses in Wellington Pukekohe its first electric ferry
(Metlink) (Auckland Transport, KiwiRail) (NewsHub, The Driven)
19Agenda
1. Transport is NZ’s largest and most economic emissions
reduction opportunity
2. Electric transport economics are improving rapidly and
the benefits will be overwhelming
3. What are the barriers to uptake and how can we
achieve this future?
20Range: Improving trends for vehicle range will
continue
Nissan Leaf range
2011 2020
x3
117km 346km
Sources: BNEF EV Outlook 2020, CleanTechnica 21Charging infrastructure: Growing but will need to expand EV chargers Speed by charger type across New Zealand Sources: ChargeNet NZ, Tritium 2222
Policy: Need for strong and decisive policy
Proportion of new Norwegian cars that are EVs (%)
69%
61%
49% 23 PHEV
15
39%
18
29%
22% 18
13 46 46 BEV
13% 5
6% 31
0% 2% 3% 17 16 21
13
6
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Sources: Inside EVs, World Economic Forum, European Alternative Fuels Observatory 23What do we need to make this a reality?
• Strengthened policy
–Government and councils to rapidly convert their fleets
–Address up front capital cost barriers
–Behavioural incentives for uptake
• Improve charging infrastructure network – faster and more ubiquitous
charging
• Pricing and smart charging to incentivise ‘off-peak’ charging
• Planning and investment by electricity networks to enable EV uptake
• New renewable electricity generation to meet increased demand
24Whakamana i Te Mauri Hiko: empowering our energy future
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