Does it make sense for consumers to purchase an electric car in the GCC?


Introduction


Since the initial rise of electric vehicles and other transportation methods, there have been concerns that usage of electric transportation may have negative environmental impacts depending on the source of electricity used to charge electric vehicles. As a result, over the years, there have been continuous efforts to estimate the environmental impacts of electric cars and transportation methods on the environment based on electricity sources used.

In this extended article, we will attempt to use research conducted elsewhere to estimate, whether it makes sense for consumers to purchase an electric vehicle in the GCC for environmental reasons. The reason behind this is that in recent years, there has been a growing trend of owning Teslas in the GCC, if not, at least in the UAE with the opening of the first Tesla dealership with acceptance of online orders. Therefore, we should ask the question, with the GCC’s electricity mix, would it make sense to import, and use electric cars given the potential environmental impacts it may have for the given grid being used in the GCC?


Background on concerns for the Environment for Electric cars


Arguments for how the grid could affect the environmental consequences can be traced back towards initial research published in Germany by the Center for Economic Studies (CES). THe CES claimed that with “Germany’s current energy mix and the amount of energy used in battery production, the C02 emissions of battery-electric vehicles are, in best case, slightly higher than those of a diesel engine, and are otherwise much higher.”

The report has been heavily criticized, which added to this, more studies on how the grid can affect electric vehicles environmental friendliness. One famous report by the authors associated with the union of concerned scientists stated that electric vehicles emissions are less than those of an average conventional vehicle, regardless of grid type. However, this study itself is limited in several ways such as not acknowledging that the location and time of day that charging occurs can have significant impacts on the emissions associated with electric vehicles.

As a result, US agencies such as the National Renewable Energy Laboratory have attempted to take into account how time of day, and location may have an impact on Electric vehicle emissions, where indeed, a locations grid mix may have a significant impact towards the emissions of an electric vehicle.


Using latest known data to estimate Emissions in the GCC


Given the information above, we now have an understanding that a location's grid mix can significantly reduce the environmentally friendliness of electric vehicles and transportation. With this, we can use data from the Alternative Fuels Data Center (AFDC) on how State level electricity sources may have an impact on annual emissions of an electric vehicle.

For Example, West Virginia’s electric grid mix consists of 3.29% Natural Gas, 91.02% Coal, and the remainder 5.50% being Non-Fossil fuel related electricity sources. The result of this is that using an electric vehicle in West Virginia would result in emissions of 4,136 kilograms of C02 equivalent per year, under the assumption that the average individual travels approximately just over 19,000 kilometers per annum. 

It is important to note that the calculations for electric cars are using “well to wheel emissions”, as Electric vehicles do not produce emissions directly, but rather through their source of fuel (being electricity), and thus, all forms of comparison on the AFDC website are using “Well to Wheel” figures (where conventional gas powered vehicles and transportation would have considerations such as refinement of fuels factored into the emissions of gasoline powered vehicles).

Using the data on each state, we are able to utilize the AFDCs figures to “recreate” their model on how different electricity mixes may have different emissions outcomes for electric vehicles using an OLS regression model. Below are the results.

Note: model uses pounds of C02 Equivalent, and figures are not in Kilograms

Note: model uses pounds of C02 Equivalent, and figures are not in Kilograms

Using the AFDC figures and modeling how each different form of fossil fuel sources would have an impact on electric vehicle emissions, we can notice the following. A) The constant would be all sources other than fossil fuels (i.e solar, nuclear, hydro, etc), B) Different forms of fossil fuels will result in different outcomes of emissions, example, for Maine uses 15.91% Natural Gas, 0.82% coal, and 0.31% oil, with the remainder 82.95% of the electricity mix being generated by non-fossil fuel methods. This would result in the following formula and emissions outcome:

826.61=(4541.03*15.91%)+(9837.96*0.82%)+(7568.08*0.31%)

Where Maines emission from the output of the model is 826.61 pounds of CO2 equivalent, providing the same result of AFDCs actual figure for Maine of 827 pounds of C02 equivalent of emissions per year from an electric vehicle.

We must stress some key important notes on the issues with using this model built around AFDCs dataset when being applied towards the GCC. First, we assume that the results from all US States combined into this one model would have similar or if not, the same environment as the GCC, second, we assume that the combination of all US States electricity mix types would have the same efficiency and technology employed as the GCC States, which may not be true, as the GCC may have higher or lower efficiency, and older/newer forms of turbine and power generation technologies.

After stressing the important limitations behind the model, below is the electricity grid mix for each member state of the GCC.

Source: IEA

Source: IEA

Using each individual nation, we can calculate the estimated emissions of an electric car (based on just over 19,000 kilometers of driving per year) for each nation, and compare them to Hybrids and conventional powered cars.

_Well to wheel_ Emissions by car type in GCC_ (1).png

From our model based on AFDC data, given the current grid mix of each GCC member, we see that overall, Electric cars would result in significantly lower “well to wheel” emissions in each GCC nation than conventional gas powered cars. However, when compared to Hybrids (non-plug in hybrids), Kuwait would see emissions from electric cars higher than Hybrids, while Saudi Arabia will only see a marginal decrease in emissions when comparing electric vehicles with hybrid vehicles.

Overall, it appears that the use of Electric vehicles in the GCC may be beneficial towards the reduction of emissions from transportation, given that our model has indicated that emissions are 53% lower across the GCC, and up to 60% lower in member states such as Bahrain.


Other considerations in regards to overall emissions in the GCC


While also considering the limitations of our model above, there are other important aspects we must also consider about overall emissions in the GCC. Below is a breakdown of emissions by activity for each GCC member state.

Source: IEA

Source: IEA

When looking at each GCC member state, in general, the vast majority of emissions result from “electricity and heat producers”. Transportation represents a significant amount of emissions of around 21.23% of total emissions in 2017. It is important to note that, it is unknown how much of emissions in the transportation sector is due to vehicles in comparison to other forms of transportation. Thus to say that overall emissions in the GCC could drop by half in the transportation sector is false. The overall drop in transportation emissions depends on how much transportation is by vehicles in the GCC. Additional to this, making this misleading statement assumes that all users of vehicles will switch towards electric vehicles, where even nations which have aggressively pushed for electric vehicle adoption such as the UK  have seen only marginal increases in the adoption of electric vehicles, where electric vehicles represent 10.79% of sales of new vehicles as of 2020, and as of 2019, only 2.50% of vehicles are electric, hybrid, or other types of vehicles.


Does it make sense to consumers overall?


Based on evidence from the United States (and evidence elsewhere), there’s an indication that indeed, it does make sense for consumers to purchase electric vehicles in the GCC in regards to consumers impacts towards the environment. However, we should stress that this is an indication, and that the model, and the figures calculated for emissions based on the grid mix of GCC nations may not actually represent emissions of electric vehicles in the GCC. More in detailed studies are needed based on GCC specific factors (from environmental to grid specific characteristics) to determine to what extent utilizing electric vehicles in the GCC’s current grid mix would result in emissions reductions in comparison to Hybrid and Conventional vehicles (where we see some indications such as in Kuwait, that electric vehicles may have higher emissions than hybrids). 

It is also equally important to stress that we should also consider future changes that the grid may have going forward, where we see member states such as the UAE introducing the Al-Baraka Nuclear power plant, and other renewable/low-carbon initiatives being introduced all over the Gulf. Thus if consumers are forward thinking in terms of how their transportation methods may have an impact on the environment, this should be taken into consideration as well as an in-detailed and more sophisticated analysis.

Overall, based on evidence from both European and American based news sources and data, electric vehicles may be a friendlier alternative towards the environment than conventional powered vehicles. Although the extent is unknown, detailed analysis with more sophisticated techniques is needed to model current and future GCC specific factors and to realise the extent of emission reductions from electric vehicles in comparison to conventional gas powered vehicles in the GCC.

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