Electric car subsidies do not serve green goals

By Richard Pike
Published: April 27 2009 19:58

Hard facts and informed opinion have been the first casualties of the maelstrom of comment, debate and public relations generated by the government’s plan to provide a subsidy of up to £5,000 to buyers of electric cars.
Missing is an answer to the main question: is this a good way of spending public money to address climate change? The government argues that the move will encourage early adopters of the technology, helping electric car manufacturers achieve economies of scale. But, given that it would cost more than £150bn to subsidise Britain’s entire car fleet, are there more cost-effective means of meeting our commitment to reduce UK carbon dioxide emissions to a fifth of 1990 levels by 2050?
From a pure energy perspective, electric cars are slightly less good at turning fuel from a power station into movement than the average engine is at extracting energy from petrol or diesel. With a modern internal combustion engine, 32 per cent of the energy in petrol ultimately drives the pistons, while for diesel the figure is 45 per cent, giving an average for the UK’s 30m cars of 34 per cent.
Whatever fuel is used in power stations – gas, oil, coal, nuclear or biomass – just over two-fifths of the available energy is captured as electricity by linking the turbine to dynamo. But, because of electrical transmission losses over miles of cabling, only 36 per cent of the available energy ends up as useful power. In charging and discharging the lithium-ion battery of an electric car, a further seventh is lost, leaving about 31 per cent of the original fuel’s energy available to the motor.
We can, therefore, draw the intriguing conclusion that in the UK right now there are no compelling ­energy-saving reasons for moving to electric cars.
The argument then switches to how much carbon dioxide is produced from different fuels for the same energy. A rough rule of thumb is that, compared with natural gas, petrol and diesel produce 1.4 times as much carbon, oil 1.5 times and coal double – against zero for nuclear and renewable energy.
As long as the mix of fuels generating the electricity does better on this ratio than petrol or diesel, there will be a reduction in emissions from replacing existing cars with electrical vehicles. This is why discontinuing the use of fossil fuels in power stations (or moving to carbon capture and storage) is so important for electric cars to be ­effective, although gas provides some benefit.
The current fuel mix for generating electricity in the UK gives a carbon ratio of 1.2 times gas (against, remember, 1.4 for petrol and diesel). This means that if all internal combustion engine cars were replaced, car emissions would fall by a seventh. In this scenario, cars could be charged up during the night with electricity from existing power stations, although emphasis on gas and the currently diminishing nuclear capacity during that period would lower the figure of 1.2 slightly.
Cars account for 24m tonnes of fuel each year and generate 12 per cent of the UK’s carbon emissions. With our current energy mix, complete replacement to electric would therefore reduce this to about 10 per cent.
The hypothetical, though absolutely relevant, question is: would it be worth spending £150bn today to replace all cars with electric vehicles, in order to reduce carbon emissions by 2 percentage points? The answer has to be No. The same money is comparable with the cost of replacing all our electricity-generating capacity with photovoltaic solar cells (if sufficient could be manufactured globally) and reducing our carbon footprint by a third.
Alternatively, it is likely that infrastructure for carbon capture, wind and tidal energy, development of better batteries, further “green” research and waste heat recovery from power stations could all be progressed to a substantive scale, with more benefit, for the same cost.
The proposed £2,000-£5,000 per car is an extravagant gesture, even if for a smaller number of cars (initially £250m of subsidy). Directionally it sends the right message for the future, as eventually we will have to move away from oil-based fuels.
But the policy is not joined up with the reality of how electricity is currently generated in this country, or how it is likely to be generated for the next decade or more. If the logic is flawed for 30m cars, it must also be wrong for the 50,000 or so vehicles the government plans to subsidise.
The writer is chief executive of the Royal Society of Chemistry
Copyright The Financial Times Limited 2009