A report concludes that oil production could peak by 2013, causing rising fuel prices and damaging the UK economy. At the same time another report concludes that electric vehicles could cut emissions by 40% per vehicle even with the current grid mix.
Arup has been involved in both publications. Firstly, the report issued on 29 Oct by the UK Industry Taskforce on Peak Oil, ‘The Oil Crunch: Securing the UK’s Energy Future’ is the first multi-company alarm bell to be sounded on peak oil. The report identifies the risks from peak oil, including the threat that rising fuel prices will increase manufacturing and transport costs, feeding inflation in the UK. The report also looks at the opportunities for alternatives to oil, setting out recommendations for practical action.
The International Energy Agency has warned of an oil crunch by 2013. Other authoritative voices warn of severe problems earlier than this.
All is not well with the discovery and production of conventional oil – easy-flowing crude – as both the risk opinions in this report demonstrate. The production figures of all the five major international oil companies have been falling for five consecutive quarters. The steepest fall was in the last quarter, despite a collective $44bn profits in that three month period.
An opinion from an oil-industry expert known as a leading advocate of the early-peak scenario points to a peak in global oil production in the period 2011-2013. The core argument is that the problem is not so much about reserves, as the timely bringing on stream of new flow capacity to replace the depletion of existing capacity. The “easy oil” that makes up most of existing capacity is declining fast, and the new capacity coming on stream – often from “not-so-easy” oil – will not be replacing it fast enough from 2011 onwards. The conclusion is that global oil production may well descend fast too, once we reach the peak.
There is concern that the industry is not discovering more giant fields, given that oil prices have been rising for four years now. There are long lead times even when they do make a big discovery. This situation is not galvanising a response from governments and industry.
There are also allegations that OPEC governments have been less than transparent about the size of their national reserves, since deciding to fix quotas based on the size of reserves in the 1980s. Some experts, including within OPEC itself, profess that at least 300 billion barrels out of the 1.2 trillion barrels of supposed global proved reserves may be overstated.
Another report, on the potential impact of electric vehicles and plug in hybrid electric vehicles on GHG reduction, jointly produced by Arup and Cenex for the Department for Business Enterprise and Regulatory Reform (BERR) and the Department for Transport (DfT), concludes that electric vehicles have the potential to produce significant greenhouse gas emission reductions compared to conventional vehicles over the full life-cycle.
Even based on the current UK electricity grid mix, the authors expect an emissions reduction on a per vehicle basis of 40%. With further decarbonisation of the UK power mix, reductions from the use of EVs would increase.
The authors modelled out the potential cumulative greenhouse gas impact of deploying EVs and PHEVs over a variety of adoption scenarios, and with a changing grid mix.
• The mid-range scenario is based on the current trend for environmental measures being maintained, which results in 2.5% of all cars being able to connect to the grid in 2020 and 11.7% by 2030. This scenario assumes that whole life costs of an EV are comparable to an ICV by 2015.
• The high-range uptake scenario relies on the UK government wanting to position the country as a world leader in low carbon car use, manufacture and development, and that a mix of technologies will be developed to achieve this. The scenario results in 4.9% of the UK car parc being able to connect to the grid by 2020 and 32% by 2030.
• This extreme uptake scenario sees total dominance of grid connected cars to achieve a low carbon future, with 10% of all cars being able to connect by 2020 and 60% by 2030. Although very aggressive, it is possible, the authors say, assuming a renewal of a maximum of 8% of the car parc by new cars each year. This extreme scenario would require almost all new cars purchased to be grid-connected after 2025.
Business as Usual and Mid-Range adoption scenarios provide a small carbon dioxide saving of less than 1% by 2020 and less than 3.4% by 2030, relative to 1990 transport emissions. Significant emissions reductions are achieved for the High-Range and Extreme Range in 2030, reaching as high as 17.66%. Emissions reductions in any scenario in 2010 are not significant.
The report was commissioned by the UK government to provide a better understanding of the contribution that the introduction of battery electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) can make to the long-term reduction of the UK’s CO2 emissions.
Road-based transport currently accounts for about 22% of the UK’s CO2 emissions. The study focused mainly on cars and light goods vehicles as these are seen as the most promising early applications for electric and plug-in technology.
The report also examined the impact of EVs and PHEVs on the UK electricity grid and concluded that there is sufficient generating capacity to cope with the increased electricity uptake assuming that demand for charging is managed and targeted at off-peak periods where there is currently surplus capacity.
It also concluded that the existing national transmission network will be sufficient to cope with the demand from vehicles though there may be local distribution issues to overcome. In such circumstances this can be overcome with local reinforcement. The impact of vehicle charging on local networks and infrastructure is a critical area for study in future pilot and demonstration projects.
Other key conclusions of the report include:
• The development of EV and PHEV technology provides an opportunity for the UK to take a lead in the development and deployment of the new technologies required.
• A number of volume manufacturers have recently announced intentions to develop EVs and PHEVs. These will initially be introduced in to the UK market as demonstrators or in very low volumes. Due to vehicle development lead times, mass production and volume availability of EVs and PHEVs is unlikely to occur before 2014 at the earliest. Therefore up to this date the market will be supply constrained and uptake will be with early adopters.
• The widespread roll-out and uptake of EVs and PHEVs after 2014 would require increased consumer confidence and education; improvements in battery performance and cost; charging infrastructure which keeps pace with demand; and stimulation of the market through appropriate incentives which encourage the uptake of low carbon vehicles. Without these a ‘Business as Usual’ scenario would prevail.
• Largely due to the high cost of batteries, the consensus is that EVs and PHEVs will cost more to produce than comparable existing vehicles for the foreseeable future. Over the medium term the whole-life running costs of EVs and PHEVs are expected to be lower than conventionally-fuelled alternatives, primarily due to differences in fuel prices. Currently private consumers buy on capital cost rather than running costs and so education will be required to raise awareness of this benefit.
• The Pilot and demonstration projects will be critical to address the questions and concerns of all stakeholders involved in PHEV and EV in order to provide an evidence base for a possible future wider rollout of vehicles.
The authors recommend the creation of a forum for the development of the UK’s EV industry and market. This could, they say, either be physical or virtual, but would need to bring together the many stakeholders involved including policy makers, vehicle manufacturers, electricity generators and distributors, technology specialists, research establishments, urban designers, transport planners etc. The exact aims and scope of this forum should be the subject of further work to ensure that it is able to provide maximum benefit. The authors say that this would be a major step towards providing consistent and coherent industry direction to facilitate roll-out.
Other major recommendations include:
• Promote the creation of robust international standards and the sharing of international learning and experience as an essential prerequisite to the wider rollout of EVs.
• Set clear legislative landscape for 2020 and beyond with regard to vehicle efficiency standards, which will act as a driver for technological innovation. This will need to be undertaken as part of the European Union.
• Develop a 20 year roadmap for the ongoing development of EVs and PHEVs.
• Further develop relationships with existing UK manufacturers and also attract new manufacturers and high value engineering to the UK as a healthy manufacturing base draws in suppliers, expertise and funds for R&D. This must be structured to complement the existing automotive industry.
• Focus research on batteries, internal combustion engines for hybrids, electric motors, control systems, energy scavenging systems and battery recycling and ensure that this does not damage other areas of UK expertise and ongoing development such as powertrain.
• Undertake further investigation to fully understand the range of potential environmental issues associated with lithium-ion batteries and methods of mitigation.
• Facilitate pilot and demonstration studies to be carried out which will enable further real-world research to be undertaken and to build market awareness and acceptance of EVs. These studies should grow in size to test scale and capability.
• Seek to ensure the deployment of charging infrastructure for EVs and PHEVs remains ahead of vehicle uptake. A shortage of charging points would reduce consumer uptake.
• EVs have the capacity to act as a distributed energy storage system although there are currently issues related to access and utilisation. Further work is recommended to understand in more detail the technical challenges, business case and overall viability of such a proposition.
• Consider facilitating the introduction of complementary policy measures that drive local market development and encourages the uptake of EVs and PHEVs.
• Educate the public on whole life vehicle operating costs, enabling EVs and PHEVs to compete with internal combustion engine vehicles in a balanced fashion.
• Raise public awareness about journey profiles to help them make informed choices on vehicle requirements and selection.