Analysing the impacts of a large-scale EV rollout in the UK – how can we better inform environmental and climate policy?

Electrifying transport to meet local pollution and overall net zero carbon ambitions is now a key UK policy focus, but this will have important impacts on the energy system, the economy, and the environment. Understanding the changes that the electrification of transport will bring is crucial for developing sustainable policies for net zero goals and a just transition. A literature is emerging to analyse the impact of a large-scale penetration of electric vehicles (EVs), but generally limiting focus to the implications for the electricity network. In this paper, we aim to provide insight on the wider energy system impacts of the expected EV rollout in the UK, in terms of fuel changes, energy costs, CO2 emission reduction and network investments; and how different EV charging strategies increase or mitigate the impacts of the expected large-scale penetration of EVs. Results show that non-smart and/or decentralised charging will require considerably larger investments on the network to accommodate new EV demand. Network reinforcement costs are passed to the consumer via increased electricity prices and, albeit reduced, emissions shift from the transport to the power sector. These results show the importance of considering the whole energy system and the wider economy, to avoid carbon leakage and to maximise the effectiveness of policies

The impacts of energy efficiency modelling in policy making

Bottom-up energy system models have been used extensively to analyse future energy scenarios, addressing a wide variety of policy questions. This paper focuses on energy efficiency, a key energy, climate, and economic policy area where several examples of energy system model applications can be found in the literature. This paper analyses how different studies implement energy efficiency scenarios in energy system models and explains how the approach taken can affect the results significantly, potentially affecting policy decisions. This analysis contributes to understanding how this type of modelling framework considers energy efficiency policy issues and the extent of insight provided, or not, on different dimensions. With the aim of identifying ‘best practice’ in using energy system models to inform effective analysis of energy efficiency policy, the UK TIMES energy system model is used to implement five different energy efficiency scenarios for residential heating following different modelling approaches and replicating scenarios available in the literature. The study concludes that energy efficiency scenarios, implementing the same target, produce significantly different results in terms of technology mix, energy use, emissions and costs. Additionally, the outcomes show that there is no overall best energy efficiency scenario, as each impacts on different policy targets, which could come into conflict with each other

Network Investment and Electric Vehicle Rollout Required for 2050 Net Zero : the Importance of Electricity Price Impacts in Driving Policy Trade-offs

This research briefing is the first of two generated by a new research project funded by the National Centre for Energy System Integration (CESI) which focuses on addressing the question of ‘Who ultimately pays for and who gains from the electricity network upgrade for EVs to support the UK’s net zero carbon ambitions?. This research builds on a body of work produced through projects funded by CESI, Scottish Power Energy Networks (SPEN), and the Bellona Foundation. Generally, addressing the question of ‘who ultimately pays’ involves consideration of a range of indirect, unanticipated and unintended, consequences of network development for EVs through impacts on markets, prices and incomes across the economy. Our integrated scenario simulation approach reflects consideration of how consumers respond to ‘smart charging’ capability that in turn determines required levels and timing of investment in different timeframes to support the network upgrades necessary to enable the projected EV rollout, and to realise the sustained expansion of the UK economy that can ultimately be supported. We also consider scenarios where the pace of EV rollout for net zero may not actually be achievable if, for example, there are constraints on EV manufacture at UK and/or global levels both absolutely and/or in different timeframes

Who Ultimately Pays for and Who Gains from the Electricity Network Upgrade for EVs to Support the UK's Net Zero Carbon Ambition?

The UK and Scottish Governments commitments to the mid-century net zero targets present a significant challenge that requires systemic changes in how we live and do business. The questions/concerns around investment in Electric Vehicles (EVs), EV rollout and the upcoming 2035 UK-wide restriction on sales of new conventional vehicles is a key focus of net zero priorities and futures. In this context, a central and crucial question focuses on how and to what extent the level and timing of investment to support the projected EV rollout not only enables targeted emission reduction, but also affects the pathways and nature of economic expansion and economic wellbeing. In that, the decarbonisation transportation needs to be achieved in a way that is sustainable and in line with the ‘just transition’ focus of internationally agreed emission reductio

Residential energy efficiency in times – analysis of modelling approaches and impacts on energy policy

The TIMES energy system model has been used for informing energy and climate change policies in several countries and regions around the world. The type and scope of the studies varies, but many works consider (at least briefly) energy efficiency in their findings. However, very few include explicit energy efficiency scenarios and/or direct analysis of energy efficiency improvements. The studies that consider explicitly energy efficiency scenarios (in some cases in combination with other type of scenarios such as emission reduction targets) show significant differences on the modelling approach taken, potentially affecting the results and the impact policy decisions. Moreover, a direct comparison between energy efficiency modelling approaches in TIMES has not been developed yet. The work developed in this paper aims to provide insight on this issue, analysing the implications of different energy efficiency modelling approaches in TIMES, and discussing best practices on informing energy efficiency policy. Three types of residential energy efficiency scenarios are analysed using the UK TIMES model, all of them with the objective of reducing 10% of energy consumption on residential heating. Results show that these energy efficiency scenarios, which are in theory equivalent, produced different results, suggesting that the modelling approach taken can significantly impact the outcomes of the model. Also, not all energy efficiency scenarios performed as expected. In one of the scenarios, other user constraints (which are common to all the analysed scenarios) limited the amount of conservation technologies available, so the expected energy savings were lower than in other cases. Therefore, the outcomes obtained show the importance of not solely relying on a particular scenario or model for policy analysis, as this might lead to partial views or suboptimal solutions

Can spending to upgrade electricity networks to support electric vehicles (EVs) roll-outs unlock value in the wider economy?

We investigate the question of whether spending to enable ambitious EV roll-out programmes can in fact generate net gains across the wider economy. We use a multi-sector computable general equilibrium (CGE) model for the UK economy and focus on the need to upgrade electricity networks to support an initial EV penetration scenario for the period to 2030. We find that large scale spending and cost recovery for network upgrades is likely to result in net negative impacts on key macroeconomic indicators, including real income available for spending across all UK households. This is due to a combination of time-limited network upgrade activity in the presence of capacity constraints combined with the need for costs to be passed on to electricity consumers through higher bills. But the lowest income households – the group of greatest concern to policymakers – suffer the smallest losses. Moreover, the EV uptake delivers sufficient gains t that deliver net positive impacts on all household incomes, with sustained expansion in GDP and employment across the economy. The key driver is a greater reliance on UK supply chains with the shift away from more import-intensive petrol and diesel fuelled vehicles towards electric ones

How the large-scale EV rollout would impact the UK energy system? Analysis of network investments and changes in fuel use

The electrification of transport has been identified as a key policy area, which has multiple implications on the energy system, the economy, and the environment. Focusing on electric vehicles (EV), several examples of studies analysing the impact of a large scale penetration of EVs can be found in the literature. However, these studies usually focus only on the implications for the electricity network. Therefore, the challenge is to understand how the expected rollout of EVs affects the energy system on different dimensions beyond the power sector. With the aim of identifying wider impacts of a large rollout of EVs in the UK and to inform effective analysis of energy policy, we use the UK TIMES model to implement four different EV charging scenarios, varying on the timing (i.e. ‘smartness’) of the charge and the location on where it happens. We conclude that ‘dumb’ and decentralised charging will require considerably larger investment on the network than the ‘smart’ and centralised counterparts. The location and ‘smartness’ of EV charging it is, therefore, important to mitigate potential negative impacts on the power system and to reduce fuel costs for the final consumer. Moreover, we have found a shift of emissions from the transport to the power sector. These results show the importance following a whole system approach, to maximise the effectiveness of policies and to avoid carbon leakage

Can the Electrification of Private Transport Lead to Economic Prosperity?

The UK has set binding targets to meet net zero emissions by 2050 and transport is one of the key sectors where emissions will have to significantly reduce. While a range of options exist to decarbonise transport, electrification is currently, seen as a leading option for private transport in particular. To facilitate the rollout of electric vehicles (EVs), significant electricity network reinforcement is likely to be needed. However, not least because any investment in the electricity network will have to be paid for by consumers through electricity bills, a key question remains as to how this will impact economic prosperity in the long term. This policy briefing builds on a foundation of CEP research, to report on the impacts on wider economy and economic well-being indicators of investing in the electricity network to facilitate the rollout and of the subsequent impact of shifting from conventional vehicles to the extent of 99% EV penetration by 2050

Big projects, little community benefit? : How low carbon pilot projects can help tackle fuel and transport poverty

Scottish islands have been identified as potential hubs for renewable energy production, as they have continuously participated in sustainable energy and environmental management projects and networks since at least 1993, many of which have been supported through EU funds and domestic match-funding. Orkney in particular has become a European leader in the testing and application of new energy technologies. Despite this, petrol/diesel is still utilised in Orkney and the level of fuel and transport poverty is relatively high. This raises questions about the translatable benefits on communities in a context of increased cost of living, and relates to post-Brexit debates as Orkney has significantly relied on EU funds, especially in regards to its energy transition. This study aimed to examine funding impact in enabling a just transition to low carbon heat and mobility in Orkney, by assessing the effectiveness of existing government-funded projects and analysing community perception and engagement, lessons learned, and good practice

Who Ultimately Pays for the Electricity Network Upgrade for EVs? [Research Briefing]

The UK and Scottish Governments have set ambitious targets for the roll out of electric vehicles (EVs). The predicted rapid expansion in EV ownership over the next couple of decades will see a shift in demand away from petrol and diesel fuels and towards electricity. The mass roll out of EVs is likely to require upgrades to the electricity network itself, which will carry significant costs. The Centre for Energy Policy is partnering with SP Energy Networks in a National Centre for Energy Systems Integration (CESI) project that integrates energy and economic system modelling approaches to investigate the crucial question of who ultimately pays for the costs of upgrading the power network to facilitate the intended roll out of EVs