WHAT IS ECPA UP TO? On the Move with Electric Vehicles

Friday, February 17, 2017

Electric vehicles are popping up on streets and highways from Barbados to Uruguay and points in between, as governments and consumers look at ways to reduce their carbon footprints. While the trend is still largely in the nascent stage—here a few taxis, there a public bus—in some places electric vehicles are starting to pick up speed.

Electric vehicles make particular sense in countries with a clean energy grid. Take Uruguay, for example, which produces more than 95 percent of its electricity from renewables—hydropower first, followed by wind and biomass. That makes electric vehicles a good fit, since by plugging into the electric grid they will automatically be running on clean energy.

“There are very good conditions in place for the use of this technology,” said Carolina Mena, Director of the Energy Demand, Access, and Efficiency Area in Uruguay’s Ministry of Industry, Energy, and Mining.

Electric transportation is also “a good option for Costa Rica,” which gets more than 98 percent of its electricity from renewables, as Laura Lizano, Energy Sector Director in the Ministry of the Environment and Energy, recently told ECPA. (See January 2017 newsletter.)

But don’t rule out countries that are more dependent on fossil fuels for electricity.

“In an ideal word, you would want electric vehicles powered by renewable energy sources,” said Devon Gardner, Energy Program Manager at the Caribbean Community (CARICOM) Secretariat. However, he added, even in countries that produce their electricity entirely from diesel, electric vehicles are still a better environmental option because they run so much more efficiently than their internal-combustion counterparts. That translates into lower carbon dioxide emissions.

This is a major consideration in the Caribbean, where countries tend to produce electricity primarily from fossil fuels. Of course, as small island states take steps to increase their renewable power capacity—the CARICOM regional goal is to reach 47 percent by 2027—the environmental advantages of electric cars will only increase, Gardner said.

“Electric vehicles provide the easiest way of greening the transportation sector,” he said. The CARICOM Secretariat has been working with the German cooperation agency GIZ to provide technical support and business analysis regarding the potential of electric transportation for Saint Lucia, Saint Vincent and the Grenadines, and Montserrat. One plus for mountainous islands, Gardner said: By recovering the heat generated by braking, electric vehicles can recharge the battery when going downhill.

Here’s another counterintuitive fact: While in some ways smaller countries are at a market disadvantage because they lack economies of scale, in the case of electric vehicles, “small is also a good thing,” Gardner said.

One issue that has long plagued electric vehicles, he explained, is their relatively limited range compared with traditional vehicles. But in a country like Barbados, where an electric car can cover the entire country on a single charge, that isn’t a problem. Also, having an extensive network of charging stations isn’t much of an issue in a very small country. That’s why tiny Montserrat, with an area of 103 square kilometers (40 square miles) and a population of around 5,000, can be a candidate for electric vehicles.

Uruguay: The Green Route

Uruguay is a small country by South American standards, but compared with many Caribbean island states, it is vast. By next year, the state-owned electric utility UTE (the acronym stands for Usinas y Transmisiones Eléctricas) plans to have charging stations located every 55 kilometers (34 miles) on a “Green Route” that stretches 500 kilometers (about 311 miles) from Colonia to Chuy, along the country’s Atlantic coast.

The government decided to focus its initial electric-vehicle promotion efforts on taxis and public transportation in the nation’s capital, Montevideo. It offered robust incentives, drastically cutting the cost of licenses for electric taxis and offering a $10,000 UTE subsidy toward recharging costs. The government also offered fiscal incentives for electric cars, including an exemption from import duties.

All this was to help “close the gap” in prices between electric and conventional vehicles, Carolina Mena explained. Because of the distances they typically rack up in Montevideo, taxis have to be able to travel a long range before recharging, so they can’t use the lowest-priced electric cars. The electric taxi of choice is the e6 made by the Chinese company BYD—the same model used in the electric taxi fleet launched in Bogotá, Colombia, a few years ago—which costs four to five times more than its conventional counterpart.

By March of this year, Montevideo is expected to have 21 electric taxicabs on the streets—a drop in the bucket in a city with 3,000 taxis, but a start. Despite the incentives, Mena said, taxi companies still need to be convinced of the results, including the considerable cost savings of operating electric vehicles in a country with high gasoline prices. Many taxi operators, she said, are waiting for prices of long-range electric vehicles to come down.

Meanwhile, Montevideo has its first electric bus, which has been picking up and dropping off passengers since last June. This pilot effort is showing that an electric bus can serve a normal, mid-range route, according to Antonella Tambasco, who handles issues involving electric vehicles in the Energy Demand, Access, and Efficiency Area. Reports from passengers have been positive, she said.

“Sometimes people let another bus go by to wait for the electric bus,” Tambasco said, noting that one attraction is that it is much quieter than a normal bus. Of course, she added, it doesn’t hurt that the electric bus also has more comfortable seats, air conditioning, and Wi-Fi.

Uruguay plans to work with the Global Environment Facility (GEF) on a $9.3 million project to promote low-carbon transport in Montevideo. The project includes a component to test results of five electric buses and six electric delivery vans, with a view to scaling up their use.

So far, Uruguay probably has around 100 electric vehicles altogether, including about 60 owned by the electric utility. Officials hope these pilot projects will produce a “contagion effect” that will eventually help electric vehicles catch on with consumers. For that to happen will require more infrastructure—not only charging stations, but dealerships and places where the vehicles can be repaired—and companies tend to be skeptical about entering a relatively small market, Mena said. As she put it, the challenge is, “How can we generate that link between demand and supply?”

Barbados: A Jump Start

Among Caribbean countries, Barbados is the most advanced in implementing electric vehicles, according to Devon Gardner.

William Hinds, Chief Energy Conservation Officer in the country’s Department of Energy and Telecommunications, credits two main factors: lower prices for electric vehicles in the global market, and the government’s decision a few years ago to drop import taxes on these vehicles.

In the Caribbean, where buying a car automatically means buying an import, vehicle importation tariffs can be very high. In Barbados, the highest tariffs (up to 150 percent of the vehicle purchase price) are imposed on regular vehicles with large engines. Lower tariffs are available for other types of vehicles, including hybrids and natural gas vehicles. Electric vehicles are at the lower end of the scale, at 30 percent, with the lowest tariffs on those that run exclusively on solar power (20 percent).

A local company called Megapower Ltd., which imports both new and used electric vehicles, has sold some 170 of them so far, mostly Nissan plug-in cars and vans, according to Managing Director Jo Edghill. It also offers maintenance services and charging stations.

Part of the company’s “vision” is to offset the electricity used by these vehicles with power produced by solar photovoltaic panels, Edghill said. For example, she said, the company has a “solar carport” that not only supplies electricity to Megapower’s building, but also provides shaded parking under the solar panels and a place where customers can charge their vehicles using solar power. (When the sun isn’t shining, the electricity comes straight from the grid.)

The Barbados government itself is just beginning to test-drive electric vehicles through a small pilot effort that is part of its Public Sector Smart Energy Program, supported by the Inter-American Development Bank (IDB). The first two vehicles have been delivered, with another six to come. While Hinds thinks it’s important for the government to set an example by including some electric vehicles in its fleet, he believes the fiscal incentives have been the real reason the vehicles are taking off in Barbados.

“The government is supposed to be the stimulus, not the entire industry,” he said.