Meridian Energy Ltd and Contact Energy Ltd National cost-benefit assessment of the early uptake of electric vehicles in New Zealand Summary report
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Meridian Energy Ltd and Contact Energy Ltd National cost-benefit assessment of the early uptake of electric vehicles in New Zealand Summary report
Hyder Consulting (NZ) Limited
Co No 1539536
Level 5, United Building
107 Customhouse Quay
PO Box 10-602
Wellington
New Zealand
Tel: +64 (0)4 472 4007
Fax: +64 (0)4 472 4008
www.hyderconsulting.com
Meridian Energy Ltd and Contact Energy Ltd
National cost-benefit assessment of the early
uptake of electric vehicles in New Zealand
Summary report
Chris Parker, Andrew
Bowman, Nick Flack,
Author Rachel Baxter
Checker Duncan Chadwick
Approver Chris Money
Report No
Date 7 October 2009
This report has been prepared for Meridian Energy Ltd and
Contact Energy in accordance with the terms and conditions
of appointment for National cost-benefit assessment of the
early uptake of electric vehicles in New Zealand. Hyder
Consulting (NZ) Limited (Co No 1539536) cannot accept
any responsibility for any use of or reliance on the contents
of this report by any third party.
CONTENTS
1 EXECUTIVE SUMMARY ...................................................................... 1
2 INTRODUCTION .................................................................................. 2
3 PURPOSE ............................................................................................ 3
4 CONCLUSIONS ................................................................................... 4
5 APPROACH TAKEN ............................................................................ 6
6 MODEL ASSUMPTIONS...................................................................... 7
7 BUSINESS AS USUAL DEMAND FOR ELECTRIC VEHICLES ......... 9
8 THE IMPACT OF EV UPTAKE ON THE VEHICLE FLEET ............... 11
9 ACCELERATED DEMAND FOR ELECTRIC VEHICLES .................. 12
10 IMPACTS FROM ELECTRIC VEHICLE UPTAKE NOT ABLE TO
BE MODELLED .................................................................................. 13
11 CONSEQUENCES OF ELECTRIC VEHICLE UPTAKE .................... 14
11.1 Fuel consumption ............................................................................... 14
11.2 Carbon savings................................................................................... 16
11.3 Electricity consumed ........................................................................... 17
11.4 Air quality ............................................................................................ 18
11.5 Resource cost to purchase and maintain fleet .................................... 19
12 RESULTS OF COST-BENEFIT ASSESSMENT ................................ 20
13 SUPPLY CONSTRAINED SCENARIO .............................................. 23
14 POLICY IMPLICATIONS OF THE FINDINGS ................................... 24
14.1 Strategic context ................................................................................. 24
14.2 What role for intervention in the market? ............................................ 24
15 ROBUSTNESS OF THE STUDY ....................................................... 26
15.1 Study limitations ................................................................................. 27
15.2 Acknowledgments .............................................................................. 28
16 LIST OF ABBREVIATIONS ................................................................ 29
17 APPENDIX ......................................................................................... 30
1 EXECUTIVE SUMMARY
Hyder Consulting (NZ) Limited, an international advisory consultancy, has been commissioned
by Meridian Energy Limited and Contact Energy Limited to test the potential impact of electric
vehicles on the New Zealand economy by undertaking a national cost-benefit assessment of the
early uptake of electric vehicles. The analysis is restricted to light passenger vehicles.
The conclusions of the study are:
Electric vehicles are good for New Zealand
The net benefit to New Zealand from comparing no uptake of electric vehicles to the expected
market demand is $8.2 billion over a 50 year analysis period. This figure should be considered
in the context of spending on passenger car imports, which equated to $2.9 billion in the year to
1
November 2008 .
The majority of the identified benefits (91%) accrue privately to vehicle owners, through
decreased operating and maintenance costs. However, $769 million (or 9%) of the net benefit
accrues to society (through air pollution and carbon savings). Electric vehicles have additional
benefits to society which were unable to be quantified, such as a positive impact on New
Zealand‘s balance of payments, enhanced energy security, improved stormwater quality and a
reduction in noise pollution. If these benefits were able to be quantified the net benefits of
electric vehicle uptake would increase further.
Accelerating demand beyond that modelled increases net benefits to New Zealand
The report also considers the potential impact on New Zealand if demand was to be accelerated
beyond the expected market demand. In the scenario modelled, net benefits increase by
$362 million, over $280 million of which is attributable to externalities (carbon and air pollution).
This means that there is a net benefit to New Zealand of more than $8.5 billion when comparing
no uptake of electric vehicles to the accelerated electric vehicle demand scenario.
Supply constraints make realising the benefits difficult
The study shows that electric vehicles have strong private benefits, largely from the reduced
operating costs compared to conventional petrol and diesel-powered vehicles. In fact, the
private benefits are so high that the demand for electric vehicles will likely exceed the available
supply. Production constraints and strong overseas incentives to encourage electric vehicle
uptake mean that demand is likely to exceed the available supply in New Zealand until around
2030.
The challenge is to create an environment where business as usual demand can be
realised
Given a supply constrained environment, the key challenge is to create an environment where
the benefits of a business as usual demand for electric vehicles can be realised.
1
Statistics New Zealand, 2008. Broad passenger imports by Broad Economic Category Group.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1
2 INTRODUCTION
Vehicles powered by electricity (electric vehicles, or EVs) have been around since the mid to
late 1800s. Since the 1900s, however, the vast majority of vehicles worldwide have been
powered by internal combustion engines, which are oil dependant. EVs have gained increasing
prominence in the past 20 years due to growing environmental and energy security concerns
associated with conventional internal combustion vehicles (ICVs). Mass production of EVs
looks set to become a reality in the near future, with a number of vehicle manufacturers (such
as Nissan and Mitsubishi) announcing plans to release EVs to the market.
As electricity providers in New Zealand, Meridian Energy Limited (Meridian) and Contact Energy
Limited (Contact) are interested in understanding the implications of EV uptake in New Zealand.
Meridian and Contact have commissioned Hyder Consulting (NZ) Limited (Hyder) to explore the
implications through a method called cost-benefit assessment. Cost-benefit assessment is a
tool that quantifies all costs and benefits, both to individuals and to society, of a proposal in
monetary terms, and discounts them to a common point in time to determine the net benefits of
2
the proposal . If the net benefit is greater than zero then there may be a case for government
3
intervention .
Cost-benefit assessment is often interpreted as justifying government intervention on the basis
that something is ‗good‘ or ‗bad‘ for society. Care should be taken, however, in interpreting
cost-benefit results this baldly because analysis that attempts to place values on the behaviour
of a large number of consumers, by its very nature, makes a number of simplifying
4
assumptions .
To put this in a vehicle purchase context, many vehicles can, by empirical measures, be
considered virtually the same. They may be similar in performance, reliability, fuel economy and
comfort and they might all look good. In this situation, a consumer who did not buy the
cheapest of a selection of similar vehicles might be considered economically irrational if one
were to take a narrow view. Human beings are not, however, all the same. They have different
preferences and value things differently and, as such, care should always be taken in
considering the assumptions that underpin cost-benefit assessment.
That said, cost-benefit assessment is particularly useful to assist with comparing potential
investment or regulatory choices for governments and businesses. It can provide an indication
of whether there is merit in intervening and, if so, what avenues would best maximise benefits to
society. The purpose of this study is to provide further information in an already interesting
debate on the place of EVs in New Zealand and what encouragement, if any, should be given to
encourage uptake.
2
The Treasury (2008). Cost Benefit Analysis. Retrieved from
http://www.treasury.govt.nz/publications/guidance/costbenefitanalysis/index.htm on 25 June 2009.
3
The Treasury. (2005). Cost Benefit Analysis Primer. Retrieved from
http://www.treasury.govt.nz/publications/guidance/costbenefitanalysis/primer/cba-primer-v12.pdf on 25 June 2009.
4
See the Treasury, 2005, for further discussion about other considerations in the decision to intervene.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2
3 PURPOSE
The purpose of the study is to:
credibly determine whether the early adoption of EVs in New Zealand accrues a net
benefit or cost to New Zealand
determine (and quantify) where the costs and benefits fall between the group of EV
purchasers and wider New Zealand (and other specific groups as required)
in the case of a net benefit, identify the primary barriers to the early uptake of EVs in New
Zealand (if any)
in the case of a net cost, identify if there are some changes or mechanisms that could be
used to overcome that cost?
identify mechanisms (and quantify their effectiveness) whereby these barriers can be
overcome and the uptake of passenger-class EVs can be accelerated (e.g. across
central/local government and commercial sectors).
Hyder has developed an economic model to give effect to the above. This report summarises
the key results of the study. Those people wanting a more detailed understanding of the study
methodology and assumptions should refer to the accompanying report, National cost-benefit
assessment of the early uptake of electric vehicles in New Zealand – Methodology, assumptions
and results.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 3
4 CONCLUSIONS
The conclusions from the study are:
Electric vehicles are good for New Zealand
Hyder‘s economic model considers the potential impact of EVs over a 50 year time span. The
analysis is critically underpinned by a forecast decrease in EV prices relative to those of ICVs.
This decrease is almost entirely based on international forecasts of significant reductions in
battery prices over the analysis period due to technological improvements.
Once EV prices drop below ICV prices, Hyder‘s modelling shows considerable private net
benefit from purchasing EVs. As such, there is a strong forecast demand for EVs over the long-
term, which will stabilise at around 65% of fleet entrants.
Should this demand be able to be satisfied by international manufacturers, there is a net benefit
to New Zealand over the analysis period of $8.165 billion, which equates to an average of over
5
$160 million per year . This figure should be considered in the context of spending on
6
passenger car imports, which equated to $2.9 billion in the year to November 2008 .
Most of the net benefit (93%) is accrued by the vehicle purchaser in terms of a lower long-run
purchase price (inclusive of battery replacement costs), and lower fuel, electricity and
7
maintenance costs. However, over $769 million of the net benefit, or $15 million a year , is
gained by the wider community through air pollution and carbon savings (externalities).
The externality benefits calculated are conservative in that they value consequences that can
be readily calculated using accepted values. Less quantifiable benefits, such as the impact of
reduced oil dependence, and its consequential impact on New Zealand‘s balance of payments,
would further enhance the net benefit of a greater proportion of New Zealand‘s vehicle fleet
comprising EVs.
Accelerating demand increases net benefits
The report also considers the potential impact on New Zealand if demand was accelerated
beyond the business as usual demand.
Comparing the business as usual EV demand scenario to the accelerated EV demand scenario
gives an additional net benefit to New Zealand of $362 million, over $280 million of which is
attributable to externalities (carbon and air pollution). This means that there is a net benefit to
New Zealand of over $8.5 billion when comparing no uptake of EVs to the accelerated EV
demand scenario.
Supply constraints make realising the benefits difficult
The study shows that EVs have strong private benefits, largely from the reduced operating costs
compared to ICVs. In fact, the private benefits are expected to be high enough so that the
demand for EVs will likely exceed the available supply in New Zealand. Production constraints
5
The annual equivalent figure is $518 million over 50 years at a 6% discount rate.
6
Statistics New Zealand, 2008. Broad passenger imports by Broad Economic Category Group.
7
The annual equivalent figure is $49 million over 50 years at a 6% discount rate.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 4
and strong overseas incentives to encourage EV uptake mean that demand is likely to exceed
the available supply in New Zealand until around 2030.
The challenge is to create an environment where business as usual
demand can be realised
In a supply constrained scenario, vehicle purchase trends are likely to continue to be dominated
by ICVs (including fuel efficient diesels and hybrid vehicles), with the resulting opportunity costs
associated with not being able to move to EVs.
Given a supply constrained environment, the key challenge is to create an environment where
the benefits of a business as usual demand can be realised.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 55 APPROACH TAKEN
The study estimates the impact of the uptake of EVs relative to conventional ICVs. For the
purposes of the study, EVs include battery electric vehicles (BEVs) and plug-in hybrid electric
vehicles (PHEVs):
BEVs do not use petrol or diesel but instead use chemical energy stored in rechargeable
battery packs to power an electric motor. BEVs are charged from the electricity grid
(such as at home or at work).
PHEVs provide a driving range that uses only battery power; PHEVs can operate like a
BEV within this range. For journey distances outside this range a PHEV relies on petrol
or diesel for propulsion. Hyder has assumed that the alternative source of fuel for PHEVs
is petrol.
In this study an ICV is defined to include oil dependent that cannot be charged from the
electricity grid. These are conventional diesel and petrol vehicles as well as hybrid electric
vehicles (HEVs). HEVs combine a conventional internal combustion engine with an on-board
8
battery pack .
Methodology
To address the question of whether early/accelerated adoption of EVs is in the national interest
the model addresses the following issues:
the probable business as usual demand for EVs and the financial factors that influence
purchase decisions
the changing impact on the light passenger vehicle fleet over time as EVs are
progressively introduced
the consequences of EV demand, such as on energy demand, health and environmental
externalities etc.
the probable supply of EVs.
The methodology is outlined in more detail in the accompanying report.
8
The battery pack, which is rechargeable, powers an electric motor.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 66 MODEL ASSUMPTIONS
Given the broad coverage of the appraisal, and the long-term period considered, many of the
model assumptions are uncertain. Changes to the assumptions impact not only on the
estimates of EV demand, but ultimately the cost-benefit assessment and the results of the
study. Sensitivity testing was undertaken to determine how changes in the assumptions impact
on the net present value calculations undertaken.
The important assumptions are discussed below.
USD/NZD exchange rate
The assumed USD/NZD exchange rate impacts on the assumed EV battery price, EV purchase
price (both new and used vehicles) and fuel prices. The long-term exchange rate prediction is
just under USD$0.60 from around 2020. This assumption is consistent with that used in the
Ministry of Transport Vehicle Fleet Emissions Model.
EV battery price
The EV battery price is one of the most important assumptions in the model as it impacts on the
purchase price of EVs, for both new and used vehicles. Battery technology is rapidly improving,
and costs are likely to decrease over time as production increases. The assumptions on EV
battery prices are drawn from industry expert predictions and are assumed to decline rapidly
from US$1,200 per kWh in 2009 and level off to under US$200 per kWh in 2045.
New vehicle purchase prices
Initially, new vehicle prices for ICVs are based on applying a weighted average of vehicles in the
light passenger fleet to Automobile Association (AA) purchase price data, to give a
representative-sized vehicle. Over the analysis period purchase prices are assumed to
decrease in real terms at 0.86% per annum due to technological progress.
While there is much speculation about the likely purchase price of EVs, there is little confirmed
price information given by vehicle manufacturers. Initial new vehicle prices for EVs are based on
research and interviews conducted by Hyder and benchmarked against available market data
(such as the Mitsubishi iMeV and the Chevrolet Volt). This price reduces in accordance with
expectations of battery price reductions.
Used vehicle purchase prices
Used vehicle purchase prices are based on a depreciated value of an equivalent New Zealand
new vehicle. Used vehicle prices are therefore a function of the assumed purchase price of
new vehicles, the age at which used vehicles enter the fleet and the depreciation rate.
Price of carbon
The price of carbon, both in resource cost terms and expected prices in an emissions trading
scheme, assumed in the model is $25 per tonne and is in line with New Zealand government
estimates (although the NZ Transport Agency uses $40 per tonne as an economic resource
cost). This increases the price of petrol by 5.83 cents/litre and diesel by 6.55 cents/litre.
Oil prices/cost of fuel
The cost of fuel is based on world oil prices and the assumed USD/NZD exchange rate. The
assumed oil price comes from the Ministry of Transport Vehicle Fleet Emissions Model. Petrol
prices are assumed to rise from $1.70 per litre in 2009, levelling off to $2.44 per litre in 2027 (in
constant 2009 dollars).
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 7Fuel consumption
Later model vehicles are generally more fuel efficient, and this is included in the appraisal. The
initial assumed fuel consumption for petrol and diesel vehicles is based upon AA data (taking a
weighted average of fuel efficiency by engine size).
Long-term trends in efficiency improvements are based on United Kingdom Department for
Transport estimates, with petrol vehicle fuel consumption improving at 1.15% per year and
diesel vehicles 1.35% per year. For the first five years of the analysis period it is assumed that
diesel fuel economy improves by 3% per annum to account for technology improvements
through Euro-4 standards.
Price of electricity
The resource cost of electricity is assumed to be 8.6 cents per kWh, rising to 10.1 cents in 2010
9
when the electricity sector is bound by a $25 per tonne carbon charge . This is assumed in both
night-time and peak times. The retail price is assumed to be marked up by GST only.
Vehicle kilometres travelled
Annual vehicle kilometres travelled is assumed to be a function of the age of the vehicle and is
calculated using averages from the Ministry of Transport Vehicle Fleet Emissions Model. It is
assumed that the average annual distance travelled by a vehicle does not change as EVs are
taken up. Short range EVs will replace cars that on average travelled similar mileage, and
PHEVs will replace those vehicles that travel long distances (as they have a similar total range
as ICVs).
9
Parameter values in the model take one of two types: resource costs, or perceived costs. Resource costs value the
impact to the nation overall and ignore distortions such as taxes; as such they value the impacts for the cost benefit
assessment. Perceived costs do incorporate such distortions and they govern behaviour and, as such, are the relevant
costs used to determine the take up of EVs. Including GST in perceived costs is a typical example of such a correction.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 87 BUSINESS AS USUAL DEMAND FOR
ELECTRIC VEHICLES
EVs already exist in the international marketplace and mass production of EVs is set to begin
shortly. There is a growing international focus not only on the environmental benefits of the
vehicles, but also their lower operating and maintenance costs. As such, it is highly likely that
EVs will progressively become a more significant proportion of the New Zealand vehicle fleet
regardless of any moves to accelerate uptake of these vehicles. Hyder anticipates that EVs will
progressively become a more significant proportion of the New Zealand vehicle fleet over time.
The reasons behind this include:
consumer responses to fuel price rises and, in particular, responses to fuel price spikes
an increasing focus on environmental awareness and ‗good citizenship‘, particularly
among corporate vehicle users
potential incentives from government, including the recently announced EV exemption
from road user charges.
In the absence of any specific policy initiatives to encourage uptake, EV demand is largely
governed by the overall costs of owning and operating an average EV. An assessment of the
present value costs of ownership of ICVs and EVs is made based on the financing and capital
costs of purchase, the maintenance and administration costs, the operating costs (as a function
of age, year of manufacture, and energy costs), the resale value, and the cost to replace the
batteries in EVs and HEVs. The present value costs of EVs lowers significantly in the initial ten
years of the analysis period. This is mainly due to falling battery prices and used EVs becoming
available on the New Zealand market. This reduction in cost is shown in Figure 7-1.
Figure 7-1 Business as usual present value financial costs for owning/operating
EVs and ICVs
The figure shows a projected crossover at about 2024, when the present value cost of an EV is
about equal to that of an ICV. It should be noted that small changes to the model assumptions
can have a significant impact on when this crossover occurs.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 9In the model intrinsic monetary values are assigned to represent people‘s tastes or preferences
for or against EVs, in addition to financial factors. This gives the business as usual demand for
EVs, which is shown in Figure 7-2.
Figure 7-2 Business as usual EV demand profile — vehicles entering the fleet
The model predicts a steep increase in demand for EVs from about 2018/2019 flattening off at
around 65% of new entrants by around 2035. The steep increase in demand is caused by the
EVs becoming cost competitive somewhat abruptly. The stock of EVs is provided in Figure 8-3
below, and has a more conventional ‗s-shaped‘ curve.
Given the relative price differentials over the long term, an important question is why a greater
demand is not forecast. The primary reason for the steady state uptake after 2040 is that the
relative present value costs of ICVs and EVs do not change (see Figure 7-1).
Hyder‘s research and interviews indicate that a market for ICVs will remain in the long term,
through factors such as market-driven improvements to ICVs to make them more competitive
with EVs, people with general taste preferences for high performance ICVs and the retention of
specialised ICVs (such as diesel vehicles for towing boats or utilities for farm work).
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 108 THE IMPACT OF EV UPTAKE ON THE
VEHICLE FLEET
The demand for EVs impacts on the composition of the vehicle fleet. The composition and age
of the fleet is important as it impacts on the consequences of EV uptake through fuel efficiencies
and distance travelled annually. Figure 8-3 shows the composition of the light passenger fleet
over time, assuming that the quantity of EVs demanded at any price can be supplied. EVs
make up an increasing proportion of the fleet, with significant growth being experienced from
2018/2019.
Figure 8-3 Impact of business as usual EV demand on the light
passenger fleet
Table 8-1 shows EVs as proportion of the light passenger fleet over the analysis period. EVs
increase from about 0% of the fleet in 2018 to almost 60% of the fleet in 2045.
Table 8-1 EVs as a proportion of the light passenger vehicle fleet, business as usual EV demand
EVs as a percentage
Year of fleet
2009 0%
2019 2%
2029 32%
2039 53%
2049 58%
2059 59%
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 119 ACCELERATED DEMAND FOR ELECTRIC
VEHICLES
Hyder imposed a demand for EVs which is earlier than the business as usual EV demand. For
this level of demand for EVs to occur there would need to be a change in one of the underlying
model assumptions, such as a policy intervention which lowered the cost of purchasing an EV.
Figure 9-4 shows the accelerated EV demand scenario relative to business as usual EV
demand.
Figure 9-4 Assumed accelerated EV demand profile relative to
business as usual EV demand
There are a range of different actions which could be taken to achieve this accelerated EV
demand scenario and each of these actions has costs and benefits particular to it. Hyder has
therefore not pre-judged what type of intervention may be deployed if accelerated EV demand
was deemed desirable.
The impacts of the accelerated EV demand scenario are discussed in Section 12.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1210 IMPACTS FROM ELECTRIC VEHICLE
UPTAKE NOT ABLE TO BE MODELLED
EV uptake in New Zealand will have a number of consequences. The identified impacts that
were unable to be modeled due to lack of data availability are described below. The inclusion of
these factors into the model would lift the net present values associated with EV uptake.
Energy security
New Zealand is heavily dependent on imported oil as a form of energy, which is driven mainly
by transport demand. The commercial entry of EVs into New Zealand will decrease our
dependence on oil as an energy source. This has the benefit of decreasing the cost of holding
oil reserves and increasing the security of energy supply by diversifying energy use, reducing
both the financial and strategic risk of a potential disruption in supply or a spike in cost.
Balance of payments
The uptake of EVs has the potential to have an overall positive impact on New Zealand‘s trade
balance. This is due to a decreased demand for fuel.
Noise pollution
Road traffic noise can have a number of adverse effects, from interfering with people‘s everyday
activities through to more significant health issues. Because EV engines are quieter than ICVs,
any shift towards EVs may have a benefit to society which may not be fully captured in the
10
personal decision making process .
Stormwater quality
Stormwater quality, particularly in coastal and estuarine environments, is degraded by the use
of fossil fuel-powered vehicles. Any shift towards EVs might reduce the volume of pollutants
deposited on roads and subsequently washed into sensitive receiving environments such as
stormwater catchments.
10
The quietness of EVs has been perceived by some as a possible safety issue for pedestrians. This issue can,
however, easily be solved by fitting EVs with a sound generator. This is discussed further in the accompanying report.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1311 CONSEQUENCES OF ELECTRIC VEHICLE
UPTAKE
The consequences of EV uptake that were able to be modelled are shown below. The results
show the impact of no uptake of EVs in the analysis period compared to the business as usual
EV demand, assuming that the quantity demanded at any price can be supplied, rather than
11
comparing the business as usual EV demand with the accelerated EV demand scenario .
11.1 Fuel consumption
Figure 11-5 shows fuel consumption if there was no uptake of EVs and Figure 11-6 shows fuel
consumption under the business as usual EV demand scenario.
Figure 11-5 Aggregate fuel consumption under no EV uptake scenario
Figure 11-6 Aggregate fuel consumption under business as usual EV
demand scenario
11
The impact of comparing business as usual EV demand with the accelerated EV demand scenario is of less relevance
due to the study result that EV demand will likely exceed available supply. This is discussed further in Sections 13 and
14.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 14With no EV uptake, aggregate petrol consumption declines due to:
a shift towards diesel vehicles
an increased uptake of HEVs, which are more fuel efficient than conventional petrol
vehicles
increased fuel efficiency of petrol vehicles.
This can be compared to the business as usual EV demand scenario, where aggregate petrol
consumption decreases more rapidly as EVs enter the fleet. In this scenario diesel
consumption increases, but at a slower rate than the no EV uptake scenario. Total petrol
consumption by HEVs and PHEVs is relatively low in comparison. With PHEVs, this result is
largely due to the assumption that 80% of kilometres travelled will be undertaken by electric
power.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1511.2 Carbon savings
Carbon from vehicles decreases as EV uptake increases, but carbon from electricity production
increases. The net effect on carbon output is positive. The total carbon savings (from both
vehicles and electricity production) is given in Figure 11-7 and Figure 11-8.
Figure 11-7 Total CO2 savings (business as usual EV demand relative to no EV
uptake)
Figure 11-8 Total CO2 savings (business as usual EV demand relative to no EV
uptake)
Total carbon savings rise steeply as EV uptake increases rapidly, but begin to decrease in the
long-term (post 2045) due to ICV fuel efficiency improvements.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1611.3 Electricity consumed
Under the no EV uptake scenario the quantity of electricity consumed is nil. Figure 11-9 shows
electricity consumption in the business as usual EV demand scenario.
Figure 11-9 Electricity consumption in business as usual EV demand
scenario
As would be expected, as EV uptake increases in the business as usual EV demand scenario
the quantity of electricity consumed increases. Electricity consumption from PHEVs is higher
than that of BEVs due to the assumptions that PHEVs will take a greater share of the EV market
in New Zealand and that 80% of kilometres travelled will be undertaken by electric power.
Table 11-2 shows total MWh consumption by EVs from the national grid under the business as
usual EV demand scenario.
Table 11-2 Total MWh consumption by EVs from the national grid, business as usual EV demand
Year MWh (millions)
2009 0
2019 0.2
2029 2.5
2039 4.1
2049 4.6
2059 4.7
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1711.4 Air quality
Transport related emissions are the primary source of air pollution in urban areas. Strong links
have been established between air pollution and serious public health effects. These effects
have high costs, relative to the overall external costs of transport. Hyder has undertaken a
quantification of the comparative respiratory effects on humans caused by particulate emissions
based on a methodology using disability adjusted life years.
Figure 11-10 shows the dollar value placed on air quality if there was no uptake of EVs and
Figure 11-11 shows the dollar value placed on air quality in the business as usual EV demand
scenario.
Figure 11-10 Value of air pollution output from the light vehicle fleet in no
EV uptake scenario
Figure 11-11 Value of air pollution output from the light vehicle fleet in
business as usual EV demand scenario
In the no EV uptake scenario there is a significant improvement projected in the air pollution
impact from petrol vehicles because of the improved fuel efficiency over the analysis period. In
the business as usual EV demand scenario there is a substantial reduction in pollution impacts
over the medium to long-term, due to improved fuel efficiency and reduced fuel consumption.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1811.5 Resource cost to purchase and maintain fleet
Purchasing and maintaining vehicles has a resource cost to the nation.
Figure 11-12 shows the resource cost to purchase the vehicle fleet if there was no uptake of
EVs and Figure 11-13 shows the resource cost to purchase the fleet under the business as
usual EV demand scenario.
Figure 11-12 Resource cost to purchase the vehicle fleet in no EV uptake
scenario
Figure 11-13 Resource cost to purchase the vehicle fleet in business as usual
EV demand scenario
The resource cost to purchase the vehicle fleet is higher under the business as usual EV
demand scenario due to the higher (initial) upfront prices of EVs. The resource cost to maintain
and operate the vehicle fleet is lower in the business as usual EV demand scenario due to EVs
12
having lower maintenance costs than ICVs .
12
Graphs showing the resource cost to maintain and operate the fleet are shown in the accompanying report. The
reasons for EVs having the lower maintenance costs are also discussed in that report.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 1912 RESULTS OF COST-BENEFIT ASSESSMENT
Outlined below are the results of the cost-benefit assessment.
No EV uptake relative to business as usual EV demand
Table 12-3 shows the results of the net present value calculation which compares no EV uptake
to the business as usual EV demand, assuming that the quantity demanded at any price can be
supplied.
Table 12-3 Net present value of business as usual EV demand relative to no EV uptake
Present value Cumulative impacts from 2009
over 50 years (discounted)
2015 2020 2030 2040
Petrol savings $9,415m $0m $121m $2,902m $6,464m
Diesel savings $1,529m $0m $12m $307m $793m
Electricity savings -$1,935m $0m -$28m -$551m -$1,223m
Purchase and maintenance
savings -$1,613m $0m -$821m -$1,983m -$2,014m
Total private benefits $7,396m $0m -$715m $675m $4,020m
Air pollution savings $395m $0m $6m $123m $263m
CO2 savings $374m $0m $5m $114m $249m
Total externalities $769m $0m $11m $237m $512m
Total (private + externalities) $8,165m $0m -$704m $912m $4,533m
Note: figures may not add due to rounding
The cost-benefit assessment shows that the net benefit to New Zealand of the business as
usual EV demand scenario compared to no uptake of EVs is $8.165 billion. Should this
demand be able to be satisfied by international manufacturers, this equates to an average of
13
over $160 million per year . This figure should be considered in the context of spending on
14
passenger car imports, which equated to $2.9 billion in the year to November 2008 . Over
$769 million of the net benefit is attributable to externalities (air pollution and carbon savings).
13
The annual equivalent figure is $518 million over 50 years at a 6% discount rate.
14
Statistics New Zealand, 2008. Broad passenger imports by Broad Economic Category Group.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 20Business as usual EV demand relative to accelerated EV demand
Table 12-4 shows the results of the net present value calculation which compares the business
as usual EV demand to the accelerated EV demand scenario, assuming that the quantity
demanded at any price can be supplied.
Table 12-4 Net present value of accelerated EV demand relative to business as usual EV demand
Present
Cumulative impacts from 2009
value over
(discounted)
50 years
2015 2020 2030 2040
Petrol savings $3,200m $62m $919m $2,673m $3,152m
Diesel savings $322m $7m $102m $271m $316m
Electricity savings -$618m -$15m -$207m -$529m -$609m
Purchase and maintenance
savings -$2,822m -$1,870m -$3,459m -$2,841m -$2,846m
Total private benefits $81m -$1,817m -$2,645m -$427m $13m
Air pollution savings $143m $3m $47m $123m $141m
CO2 savings $138m $2m $43m $118m $136m
Total externalities $280m $6m $90m $240m $277m
Total (private + externalities) $362m -$1,811m -$2,554m -$186m $289m
Note: figures may not add due to rounding
Comparing the business as usual EV demand scenario to the accelerated EV demand scenario
gives a net benefit to New Zealand of $362 million, over $280 million of which is attributable to
externalities (carbon and air pollution). This means that there is a net benefit to New Zealand of
over $8.5 billion when comparing no uptake of EVs to the accelerated EV demand scenario.
When interpreting the net-benefit from accelerated uptake, it is important to note that it does not
include any utility or disutility of car purchasers of the sort assumed when the business as usual
EV demand was calculated. That private citizens did not seek to obtain the $81 million of net
purchase/operating/maintenance benefits in the accelerated EV demand scenario was because
non-price penalties were presumed to offset these ‗financial‘ benefits. As such, in terms of a
normative interpretation we recommend that the reader place more weighting on the external
benefits.
Impact of measures not quantified
It is important to remember that EV uptake in New Zealand will have a number of additional
consequences which were unable to be quantified, as set out in Section 10. It is critical to note
that ICVs perform poorly on all of these measures relative to EVs. If these factors were able to
be modelled they would lift the net present values associated with EV uptake.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 21Sensitivity testing the assumptions
Sensitivity tests were undertaken on the model assumptions most likely to impact on the uptake
15
of EVs and the net present value calculations using Monte Carlo analysis . The testing showed
that there is a 90% chance that demand for EVs will level off between 37% and 90% of vehicle
fleet entrants, as shown in Figure 12-14.
Figure 12-14 Monte Carlo distribution for business as usual EV demand
When the no uptake of EVs scenario is compared to the business as usual EV demand, there is
a 67% chance of the total net present value being between $3 billion and $16 billion. The
greatest impacts on the variance are the discount rate, fuel price, battery price, price of carbon
and the exchange rate.
The analysis shows that when the business as usual EV demand scenario is compared to the
accelerated EV demand scenario there is a 58% chance of the total net present value being
between $0 billion and $2.5 billion. The greatest impacts on the variance are the discount rate,
fuel price, battery price, carbon price the value of a disability adjusted life year (DALY) and
exchange rate.
15
Monte Carlo analysis ―is a risk modelling technique that uses statistical sampling and probability distributions to
simulate the effects of uncertain variables on model outcomes‖, The Treasury, 2005, Cost Benefit Analysis Primer, page
49.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2213 SUPPLY CONSTRAINED SCENARIO
The analysis so far has assumed that the quantity of EVs demanded at any price can be
supplied. This assumption is, however, unlikely to hold, at least in the short-term, as production
of EVs requires lead-in investment, such as re-tooling of plants which is likely to constrain
supply. Vehicle manufacturers will want to be comfortable that the demand for EVs exist prior to
committing substantial financial resources to re-tooling.
Figure 13-15 imposes a supply constraint against the business as usual EV demand produced
by the model. The supply constraint is based on projecting the world production of EVs and
estimating the share of production that will be available to New Zealanders.
Figure 13-15 Possible EV supply constraint up to 2035
In a supply constrained scenario the actual uptake of EVs will be limited to the available supply,
as indicated by the supply constraint curve in Figure 13-15. The dotted line at year 2035
indicates when enough time should have passed to make any supply shortage unsustainable.
The actual expected proportion of EVs entering the New Zealand fleet in any given year would
be the lesser of the two curves. In the case that demand for EVs significantly exceeds the
quantity available, manufacturers and/or retailers are likely to adjust prices upwards, which will
have the result of decreasing the demand for EVs, leading to a situation where the quantity
demanded in New Zealand meets the available supply. It would be highly desirable to
quantitatively consider the consequences of EV uptake in such a supply constrained scenario.
Such an assessment was beyond the scope of the study.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2314 POLICY IMPLICATIONS OF THE FINDINGS
The cost-benefit assessment has shown that New Zealand will gain a net benefit from the
business as usual demand for EVs, relative to no EVs. It has also shown that there would be a
net benefit from advancing the uptake of EVs ahead of the business as usual EV demand. As
the net benefit is greater than zero, this suggests that there may be a case for policy changes
which seek to encourage the demand for, or supply of, EVs in New Zealand.
14.1 Strategic context
EV uptake supports the government‘s transport, energy and energy efficiency strategies.
Increasing the uptake of EVs is a target of the New Zealand Transport Strategy, is consistent
with the government‘s revised focus for the New Zealand Energy Strategy and contributes
strongly to the achievement of the Energywise Transport targets in the New Zealand Energy
16
Efficiency and Conservation Strategy .
14.2 What role for intervention in the market?
There are, undoubtedly, social benefits associated with take-up of EVs. A significant number of
potential policy interventions to encourage the demand for, or supply of, EVs are identified in
the accompanying report, which can broadly be grouped into four sets of interventions:
Impacts on vehicle purchase price
These interventions seek to alter the demand for EVs. Examples include:
grant for purchase of an EV
GST free EVs.
Impacts on vehicle owners’ operating costs
These interventions seek to alter the demand for EVs. Examples include:
increase petrol excise duty
accelerated depreciation for business tax purposes
free charging points.
General demand incentives
These interventions seek to alter the demand for EVs. Examples include:
information provision
develop business cases for certain chief executives about moving fleets to EVs
government procurement policies favouring EVs
assist development of charging infrastructure e.g. in parking buildings.
16
Brownlee, Hon G. (2009). Unlocking New Zealand’s Energy and Resources Potential. Retrieved from
http://www.beehive.govt.nz/speech/unlocking+new+zealand039s+energy+and+resources+potential on 15 June 2009.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 24Supply side interventions
These interventions seek to alter the supply of EVs. Examples include:
tighter vehicle emissions standards
simplify import standards for EVs
local government rates subsidies for car dealers selling EVs
government enters the car market to on-sell EVs to other entities or individuals
dealer incentives e.g. assistance with second-hand EV importation.
In an unconstrained environment, where supply is available to meet vehicle purchasers‘
demand, policy initiatives that reduce the upfront cost to the purchaser of buying an EV are
likely to be most successful at increasing the uptake of EVs. Achieving this through a post-
purchase subsidy would likely be the most politically acceptable method — ensuring that the
‗benefit‘ of the subsidy accrued to the purchaser directly, rather than a supply side measure that
directly subsidised manufacturers. Information campaigns that explained the lower operating
costs of EVs could also increase the uptake of EVs, and at a lower cost to the government.
Considerable further analysis would be required to determine whether or not the cost of
implementing each policy initiative was less than the benefit advanced by its implementation.
Some of the interventions identified will also be financially or politically unfeasible.
Nevertheless, the best information available during the course of this work suggests that New
Zealand will face a supply constraint for EVs — simply put, New Zealand‘s vehicle market and
lack of domestic vehicle industry mean that even if New Zealand vehicle purchasers want to buy
EVs, global vehicle manufacturers will not supply sufficient quantities to the New Zealand
market to meet this demand.
In this supply constrained environment, options for intervention are limited. At the least, any
interventions would need to be focused on meeting the business as usual demand before
attempting to deliver on the accelerated EV demand scenario. Initiatives which are focused on
the bulk purchase of vehicles from one or two manufacturers (i.e. purchases large enough to
command manufacturers‘ attention) are likely to be most successful. This could be through a
whole of government procurement policy, for example.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2515 ROBUSTNESS OF THE STUDY
The study was undertaken by Hyder, with support from an Experts Group and an Advisory
Group. The Experts Group and Advisory Group provided input to the methodology and the
assumptions critical to the cost-benefit assessment.
Hyder
Hyder is part of an international advisory and design consultancy. The New Zealand capability
specialises in economics and infrastructure issues, with particular expertise in economic and
cost-benefit assessment, network pricing, financial incentives (including ownership and use
incentives) and public policy. The New Zealand office was supported by Hyder staff in
Melbourne, who specialise in energy, recycling, climate change and environmental issues.
Experts Group
Hyder Consulting has assembled a group of leaders in their respective fields to provide expert
opinion and quality assurance throughout model development and assessment. The group
comprised of national and international experts on transport, energy, EV technology, motor
vehicles and transport policy. The members of the Experts Group were:
Dr Peter Speers – Centre for Low Carbon and Fuel Cell Technologies (UK)
Peter Aitken – Clear Edge Limited
Graeme Fincher – Independent consultant
Dr Jonathan Lermit – Independent consultant
Alastair Patrick – Beacon Consulting Limited.
Details of the background of each of the Group members can be found in the Appendix.
Advisory Group
The study has also been guided by an Advisory Group assembled by Meridian and Contact
which consisted of officials from government agencies, Meridian and Contact. The members of
the Advisory Group were:
Elizabeth Yeaman – Energy Efficiency and Conservation Authority
Darren Baars – Energy Efficiency and Conservation Authority
David Rohan – Contact
Michelle Sutherland – Contact
Jason Delamore – Contact
K-J Dillon – Meridian
Hayden Scott-Dye – Meridian
Mary Ann Mitchell – Meridian
Nevill Gluyas – Meridian
Mark Walkington – Ministry of Economic Development.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2615.1 Study limitations
Any cost-benefit assessment that forecasts 50 years into the future fundamentally requires a
considerable number of simplifying assumptions to be made. Many of the assumptions are
highly uncertain and some of this uncertainty is due to a lack of available data, particularly cost
information relating to EVs. Assumptions underpinning the assessment were drawn from a
variety of sources, including New Zealand government forecasts, extrapolated past trends
(where appropriate) and opinions from subject matter experts, along with Hyder research. The
uncertain nature of the model assumptions should be considered when interpreting the study
results.
The results of the study show that the demand for EVs in New Zealand will likely exceed the
available supply. It would be highly desirable to quantitatively consider the consequences of EV
uptake in such a supply constrained scenario, particularly around pricing of vehicles in relation
to excess demand. Such a quantitative analysis was beyond the scope of the study.
It should be noted that the assessment does not consider or compare EVs against alternative
fuels, such as compressed natural gas or hydrogen-based propulsion. While the model
developed is capable of such comparisons, this study is focused on comparing the costs and
benefits of EVs with existing light passenger vehicle technology. Commercial vehicles (goods
vans, trucks and utilities), buses, motorcycles, mopeds, caravans were not required to be
considered as part of the assessment and therefore have been excluded. It would be desirable
to undertake a more detailed analysis, by vehicle type and class, once comprehensive purchase
price and vehicle availability information on EVs exist in the New Zealand context.
The study was conducted over an eight week period. The time available to produce a model to
analyse the impact of EVs in the New Zealand context has been relatively limited given the
considerable amount of work required to complete the task. The analysis undertaken has
relied, to a limited extent, on work undertaken in other jurisdictions, with an assumed level of
applicability to the distinct New Zealand market. A full list of references is provided in the
accompanying report.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2715.2 Acknowledgments
Hyder wishes to acknowledge the input provided by a number of individuals which has
contributed strongly towards the delivery of this project. Comments and information sources
supplied by the Advisory Group has enriched the detail able to be input into the model,
particularly those provided by Mark Walkington from the Ministry of Economic Development.
Hyder‘s Expert‘s Group has provided a significant level of assistance in the completion of this
project. Particular thanks also go to:
The New Zealand Automobile Association Incorporated
Rob Hannaby – Senior Environmental Management Advisor, NZ Transport Agency
Joanne Leung – Principal Economist, Ministry of Transport
Chelsea Sexton – Independent consultant
Dr Don Law – Massey University
Ed Kjaer – Southern California Edison
Lloyd Robinson – Mitsubishi Motors New Zealand Limited
Bruce Smith – Electricity Commission
A number of other government officials and private sector participants have assisted in
identifying and interpreting relevant information.
The opinions, findings, recommendations and conclusions expressed in this report are those of
Hyder.
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2816 LIST OF ABBREVIATIONS
BEV Battery electric vehicle
Contact Contact Energy Ltd
EV Electric vehicle
HEV Hybrid electric vehicle
Hyder Hyder Consulting (NZ) Limited
ICV Internal combustion vehicle
kWh Kilowatt hours
Meridian Meridian Energy Ltd
MWh Megawatt hours
PHEV Plug-in hybrid electric vehicle
Meridian Energy Ltd and Contact Energy Ltd – National cost-benefit assessment of the early uptake of electric vehicles
in New Zealand — Summary report
Hyder Consulting (NZ) Limited-Co No 1539536 Page 2917 APPENDIX
Details of the members of the Experts Group:
Dr Peter Speers (Cenex) – Electric vehicle technologies
Peter is the Knowledge Transfer Network Manager for Cenex — the UK‘s national centre of
excellence for low carbon and fuel cell technologies in the automotive sector. Cenex specialise
in identifying and mapping current and emerging technologies in the low carbon market and
assessing the future direction of the industry. Cenex act as international coordinators of low
carbon technology initiatives, and facilitate affordable market entry strategies for low carbon and
fuel cell technologies by direct intervention with public and private sector procurement bodies.
Peter has published extensively on the topic of EVs, most recently in conjunction with Arup in a
2008 paper entitled Investigation into the Scope for the Transport Sector to Switch to Electric
17
Vehicles and Plug in Hybrid Vehicles .
Peter Aitken – Motor Vehicle Industry
Peter is former Managing Director of Mazda New Zealand, and has also held senior positions in
Ford New Zealand. Peter now heads Clear Edge Limited, a motor vehicle consultancy.
Peter has 38 years‘ experience in the automotive sector in New Zealand and overseas. Aside
from his role as Managing Director, Peter has held senior roles including overseeing Mazda and
Ford‘s New Zealand assembly operation as well as managing the Mazda dealer network. Peter
has provided a perspective on retail, wholesale and manufacturing sectors here and overseas
and has provided advice on the feasibility of accelerated demand options in New Zealand.
Aside from Peter‘s direct experience, he retains a comprehensive network of international
contacts in both the construction and retail sectors of the motor vehicle industry. As such, Peter
has provided important advice on where the industry is going internationally.
Graeme Fincher – Energy
Graeme is a self-employed engineer with many years experience in New Zealand and
internationally on electricity generation and transmission issues. Graeme has provided
assurance on network demand analysis, and security of supply.
Prior to his consultancy, Graeme held senior management and technical roles in Tyree
Industries in Australia and Tyree Power Construction in New Zealand. Graeme is a past board
member of MED Capital Power, the Electro-technical Board and AWT Transformers Australia.
Dr Jonathan Lermit – Energy economics
Jonathan has undertaken past work on cost-benefit assessment in the energy sector and has a
track record in advising the Treasury, Ministry of Economic Development and the Electricity
Commission on economics in the energy sector.
Jonathan has previously held roles as a scientist at the Electricity Corporation of New Zealand
(1974-1993) and economist at Transpower (1993-2000), as well as being Chair of the Energy
Federation of New Zealand and Chair of the Operational Research Society of New Zealand.
17
Arup and Cenex (2008). Investigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plug-in
Hybrid Vehicles. http://www.berr.gov.uk/files/file48653.pdf. Retrieved on 8 May 2009.
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