The objective of my project is to set up a pilot electric 2 and 3 wheeler (E2/3W) in Kenya and Uganda.
Now this is no small thing! In order to implement a pilot, one must have to be aware of:
a) Is this the right project for these countries? What does 'right' mean? Does the overall good outweigh the overall harm? Will this project make EVERYONE better off? I'm not sure what the right definition of 'right' is- How do I decide?
Well who am I with respect to this project? I am an international organization- my WHAT is decided 'democratically' in a large General Assembly. However, my HOW is decided by funding sources. This leaves me perplexed as I then seem to be bound by my funding agency who may/may not have the same ideological definition of 'right' as implied in my mandate. I need to clarify this with more experienced people who understand this.
b) If I assume my definition of 'right' is ensuring an overall positive, what policies/business plans do I recommend for this pilot project to take off? Who are my stakeholders and how much control do I have over them to ensure that they stick closely to recommendations?
Well I've descended into a tangle alright!
I'm going to forget about the fact that I'm a cog in a large organization, with a predetermined mandate- and try and think through point 1) without consulting the higher-ups. But before I can tell you what I think, I will give you a taste of the research that I have done that has informed my results. This will allow you to judge whether I have been biased by reading too much literature by a certain scholar/university/region.
Here goes.
The NGO, Sustainable Transport Africa, states that Africa has the highest potential for 2/3W growth, as compared to any other region for the following reasons:
1) Empirical evidence indicates that regions where the GDP per capita is US $1,000 have a high growth potential for two and three wheelers. This is probably because at this economic level, 2/3W become affordable. This is the case with Kenya and Uganda now.
2) The current penetration rates of 2/3W in Africa are very low (about 5%)
3) Growing urbanization (questionable as the Government of Kenya has supported 2 W as they can reach rural areas where there are no paved roads etc), favourable demographics (what does this mean? Does this mean that 2/3W are actively preferred by a particular demographic? If so what?), and swelling replacement demand
Given this demand potential it is worth encouraging people to take up E2/3W as opposed to conventional internal combustion powered vehicles (ICE).
What are E2/3Ws? It is interesting that when this is spoken about in countries such as the UK- a lot of people think of the small electric vehicles that people with disabilities use. I am not sure where these vehicles fit into the debate. However, I will give you the definitions that I have read about.
By appearance, e-bicycles have pedals as traditional bicycles do, and have 2 types:
1) Pedal-assisted (or pedelec), which has a torque sensor that engages the motor without the driver operating a throttle.
2) Throttle-controlled (or twist-and-go), which permits a driver to accelerate without having to pedal
E-bikes could also be defined on the basis of top speeds that their design allows them to reach. Different countries have different regulations. Among all regions, China sets the lowest top-speed (equal or less than 20 kilometers per hour) and weight limit (max weight being 40kg); While in North America, an e-bicycle can drive as fast as 32 kilometers per hour.
E-bicycles belong to non-motorized vehicles in China. Note that e-bicycles are different from e-scooters and e-motorcycles, both of which belong to motorized vehicles and are regulated.
Why encourage people to switch to E2/3W from ICE vehicles?
Environmental factors.
Electric motors are more energy efficient- such a switch would greatly reduce air pollution as well as GHG emissions. It is wrong to say E2/3W are zero emission vehicles (ZEV). Generating electricity to power these vehicles leads to CO2 being emitted. The GHG emissions of E2/3W are primarily determined by the energy mix from which they are charged. This energy mix may vary spatially and over time. In addition, transmission and distribution losses must be factored into calculations.
Note: An E2/3W could be a ZEV if it is powered by renewables (Note energy is still required to manufacture the car, so by ZEV- I only mean its ZEV during the time of operation).
A downside of E2/3Ws however, the problem of lead pollution. Lead acid batteries are still the dominant battery technology adopted by 95% of E2/3Ws.
The large scale production and recycling of lead acid batteries in China is a major public health concern. Frequent accidents of lead poisoning forced Chinese government to launch a nationwide crackdown of sealed lead acid (SLA) manufacturing facilities in 2011. Currently, in spite of explicit regulations on SLA battery disposal and recycling, illegal recycling and disposing of SLA batteries widely exist in China. In August, 2011, there was only one qualified company in Beijing for SLA battery recycling and disposal.
Given the short life circle of SLA batteries, one or two years’ use before replacement, together with SLA battery’s vast application in E2Ws, an estimate of 30,000 ~ 50,000 ton SLA batteries need to be recycled and processed in Beijing every year. This is way beyond the capacity of the qualified company, and hence it is estimated that 80% of recyclable SLA batteries in China went to illegal channels. This is an issue of major concern.
Nevertheless E2/3Ws have clear environmental advantages as compared with competing motorized modes. Even compared to a loaded bus, E2/3Ws emit less CO2, CO and NOx. However, if powered from a coal heavy energy mix such as in China, they emit more PM, SO2 and HC than buses, but are still better than conventional motorcycles
Now that we have established from an environmental standpoint that E2/3Ws are better than conventional 2Ws, how do we get people to shift from ICEs to E2/3Ws?
The World Bank did a survey to understand why E2/3Ws had not taken off in India and Thailand and came up with the following list of axes that informed demand.
1) Purchase price: price of vehicle not including registration tax, sales tax, or VAT
2) Refuel or recharge range: the number of kms that can be traveled on a full tank of gas or a full charge before needing to refuel or recharge
3) Refuel or recharge time: the amount of time in minutes required to fill an empty gas tank or to recharge a battery from zero charge to full charge
4) Fuel or electricity cost: operating cost stated in terms of Vietnamese dong/100 km, and Rs/km in India
5) Maintenance cost: routine costs of maintenance such as battery replacement (D/month) or (Rs/15,000 km)
6) Acceleration: Measured relative to a standard motorcycle as a %, where the acceleration of the std motorcycle is 0-40 km in 10 s in Vietnam. (in Ahemdabad it is expressed as time to reach 30 km/h)
7) Top speed
8) License requirements
9) Sales and registration tax: combined sales and registration tax (independent of purchase price) expressed in millions of dong, and owned upon purchase (in Ahemdabad it is the VAT expressed in Rs)
10) Transmission: manual or automatic transmission
11) Carrying capacity
At the moment E2/3Ws have a much lower top speed/acceleration than conventional bikes. They also have a long charging time, and are more expensive. For these reasons, they haven't been popular in India and Thailand. Note that this result has to be dis-aggregated further. In India, for example, men prioritized acceleration/speed far more than women did.
Also, factors such as the weather was found to be significant in deciding if people used E2/3Ws on a particular day. This has important implications for the planning of public transport systems on days of bad weather.
Note the assumption here is that E2/3Ws will be a substitute for conventional motorcycles. However, in some cities in China, where E2/3Ws are very popular it was seen that in some cases E2/3Ws acted as a substitute for public transport. This is not desirable. I'm still not sure about what could be done to ensure that this does not happen. However, the above list could be useful in understanding transport choices.
Okay, this is a mess. Let's look at a China- a place where E2/3Ws have seen exponential growth in the last few years to see how this has happened.
The rise of electric two-wheelers in China has been fueled by two notable policies from the central government:
1) In 1999, the government designated certain electric two-wheelers as bicycles. To be considered a bicycle, an electric two-wheeler was required to have a bicycle-design with functioning pedals, weight less than 40 kg, and have a maximum speed of 20 kmph. However, according to China’s Law on Road Traffic Safety (2004), e-bicycles in China belong to non-motorized vehicles, and the top speed limit for non-motorized lanes is 15 kmph. This classification meant, among other things that qualifying electric two-wheelers could travel in the bicycle-right-of-way that they did not require licensing and registration and the users did not need a driver’s license. This made motorized travel available to people who would otherwise have been unable to use it.
2) Many cities severely restricted the ownership and use of gasoline motorcycles in their urban cores. In a country with crowded roads and restrictions on gasoline motorcycles, it is perhaps not surprising that a low-cost vehicle that ran on electricity and could travel in bicycle rights-of-way became popular.
Note that countries like Taiwan which has spent NT$1.8 billion to subsidize electric scooters has not managed to achieve the same uptake of scooters as China has. This is because it did not restrict the use of gasoline scooters. In addition, initial glitches in the new e-bike technology resulted in consumers losing faith in the technology.
There were additional factors that contributed to the rise of E2Ws in China.
During the 1980s and 1990s, China began using its pool of surplus labour to build cycle lanes parallel to roads throughout its cities. Today all cities, even tier 4 and tier 6 towns have segregated bicycle lanes.
China invested heavily in programs to develop technology for alternative vehicles such as '863' which focused on the development of fuel cells.
Over the next decade, a slew of subsidies and policy measures - subsidized land and monetary grants - propped up the industry. Consumers got cash incentives. The subsidy was hiked repeatedly when new and powerful models were introduced and was upgraded last year to a maximum of 3,000 yuan for a 1,000-watt two-wheeler costing up to 10,000 yuan.
These policies have led to China accounting for 92% of the E2W market in 2012. According to the chairman of China Bicycle Association, there are currently 142 million e-bicycles in China today.
However, this rapid expansion has come at a cost. Regulations are lax and many so called 'e-bikes' routinely violate the speed limit, which has led to a surge in road accidents. In addition, Chinese law does not require bicycle riders to wear helmets/use lights/horn. This too, has contributed to a number of road accidents. E-bikes thus run of the risk of being banned in as many as 9 major Chinese cities. Thus, any pilot program introducing these vehicles, must have road safety at the core of its agenda.
Thus the above has given us a tantalizing glimpse of what it takes to get E2/3Ws on the market. The next section shall structure policy recommendations under 4 main categories
1) Charging Infrastructure
2) Fiscal Incentives
3) Technology Support
4) Non-fiscal Incentives
1) Supporting Charging Infrastructure:
For electric vehicles (not 2 wheelers)charging infrastructure has bee seen to be very strongly correlated with EV adoption. However, the support of such charging infrastructure is necessarily a 'chicken and egg' problem, especially given the fact that the government has to make a choice between a vast number of 'alternative vehicle' technologies.
The Kenyan electrification rate is only 23% (50% in urban areas and 5% in rural areas). Therefore the development of charging stations is a point of concern. The development of decentralized charging stations could be one way around the issue.
If we consider an e-bike having the following specifications:
power is less than 500 W
lightweight - less than 60 kg
max speed is less than 40 kmph
The average solar radiation in Nairobi is 1200 kWh/sq m
Therefore the area of a 15% solar cell required to power the batter is
1200 kWh/sq m x 15% x Area = 500 W x 3600 seconds/hour
Area required = 1.67 sq m
This is of course assuming that the solar panel alone is powering the battery. The cost alone of this will be very high and will have to be subsidized by the government.
High battery costs could make the battery swapping model a viable alternative. However, this would require compatibility between models of EVs and their battery systems and would require technology standards to be developed.
The same standardization requirements go for conventional charging infrastructure.
2) Financial Incentives
BCG 2009 has noted that consumers are most heavily swayed by purchasing price when making consumer decisions. E2/3Ws are more expensive than conventional alternatives (note the alternatives/the real substitutes of E2/3Ws has to be carefull identified- what are E2/3Ws competing with? Motorcycles of the same specifications?
There are 2 types of financial incentives
a) Incentives for consumers: eg tax credits, tax reduction, tax exemption, direct subsidy, free road tax, cheap electricity prices, free parking.
b) Incentives for manufacturers: eg reduction of sales tax depending on CO2 emission level, subsidies for the production of EVs
I compiled a list of the financial incentives given in the US. Europe and China. I will summarize some of the interesting categories here
The US has a 'Car Allowance Rebate System'- known as 'Cash for Clunkers' which allows people to exchange their less fuel efficient vehicle for a more efficient one.
The US ‘Energy Independence and Security Act of 2007’ not only provided financial incentives, but also provided low loan for automobile manufacturers to develop EVs. President Obama also announced the plan of the ‘next generation electric vehicle’ which aimed to fund $1.5 billion to manufacturers to produce high efficiency batteries and their components. The plan was also to provide $400 million to produce other components needed for EVs, such as electric motors and other key components
All financial incentives proposed in Europe are mainly based on CO2 emissions, no matter what the incentive object is. European Union (EU) legislation sets mandatory emission targets for new cars, with a fleet average of 130 g·CO2/km by 2015 and 90 g·CO2/km. To achieve this goal, the manufacturers have to pay an excess emissions premium for each car registered. What is more, they could gain “super credits” if they produce vehicles with extremely low emissions. The “super credits” are that each low-emitting car will be counted as 3.5 vehicles in 2012 and 2013, 2.5 in 2014, 1.5 vehicles in 2015 and then one vehicle from 2016 to 2019, but not the money nor subsidy.
In Japan, Ahman (2006) describes how, under the Environment Conservation Programme in 1995, the government announced the replacement of 10% of its public vehicles by 2000 with vehicles producing lower emissions. Since 1978, Japan has promoted several leasing programs and other incentives to encourage the purchase of cleaner electric vehicles.
In China, local protectionism hinders the development of EVs in major cities in which pilot projects have been initiated. The government has invested CNY 100 billion for the development of the whole industrial chain of new energy vehicles. Of this, 30 billion are reserved for demonstration purposes and the diffusion of new energy vehicles.
3) Technology Support
Battery cost is the key factor that will determine whether EVs will become competitive. Given this, several manufacturers have initiated R&D projects in conjunction with battery producers aimed at improving production of this key element.
The International Energy Agency report (2008) recommends that governments provide backing for battery producers, especially the most innovative in the sector. Such support should enable the construction and expansion of battery production plants ensuring that investment requirements are not an obstacle to progress. Access to materials such as lithium in the medium and long term makes it increasingly necessary to develop R&D programs that promote the use of materials and innovative designs that can reduce the production costs of electric vehicles. Production costs can be further reduced if battery producers and electric vehicle manufacturers can operate together.
4) Non fiscal policies
a) A reduction in the time and financial costs of travel. Permission for electric vehicles to use the High Occupancy Vehicle (HOV) lanes and a differentiation in the tolls charged according to levels of contamination would help achieve these objectives. In 2009, London’s mayor proposed reviewing the possibility that electric vehicles might use the HOV lanes, as introduced in the city of Oslo (Norway).
b) Establishment of “Park & Ride” sites at interchanges. Such car parking facilities, sited in city outskirts, would allow owners of electric vehicles to leave their cars charging while they are at work.
c) Agreements with private companies to install charging stations in firms’ car parks.
d) Financial support from the Institut Català d'Energia for the implementation of pilot programs that improve the energy efficiency of companies’ transport systems. These companies receive up to 60% of the investment, provided they demonstrate an increase in energy efficiency of at least 5% in the displacement of workers from their homes to the workplace. Here, electric vehicles offer a competitive advantage in attaining this saving.
e)An information system designed for electric vehicle owners that allows them to quickly identify the nearest charging points. The introduction of clear, visible and uniform signs to help identify the recharge points is also useful in reducing the “anxiety” of the owners of electric vehicles.
Thus, to conclude, in order to establish a pilot in Kenya and Uganda, further research needs to be done on the factors that influence citizen's transport decisions- this has to disaggregated in order to understand the preferences of women.
The right policies then have to be espoused within the four policy categories mentioned above, within the context of the pilot countries. For example, in Kenya and Uganda, 2 wheelers are currently mainly used for public transport (boda bodas). Thus a policy, that first focuses on targeting the boda boda union to incentivize them to switch to E2/3Ws might be the best first step.
Finally, charging infrastructure, a road safety campaign and lead acid battery recycling needs to be addressed from the outset and the required capacity building needs to be initiated
Post script:
My organization's mandate is the following:
1) Promoting international cooperation in the field of the environment and recommending appropriate policies
2) Monitoring the status of the global environment and gathering and disseminating environmental information
3) Catalyzing environmental awareness and action to address major environmental threats among governments, the private sector and civil society.
4) Facilitating the coordination of UN activities on matters concerned with the environment, and ensuring, through cooperation, liaison and participation, that their activities take environmental considerations into account
5) Developing regional programmes for environmental sustainability.
6) Helping, upon request, environment ministries and other environmental authorities, in particular in developing countries and countries with economies in transition, to formulate and implement environmental policies
7) Providing country-level environmental capacity building and technology support
8) Helping to develop international environmental law, and providing expert advice on the development and use of environmental concepts and instruments.
Within this, my Division has the following mandate:
UNEP’s Division of Technology, Industry and Economics (DTIE) works with international and non-governmental organizations, national and local governments, business and industry to develop and implement policies, strategies and practices that are cleaner and safer, incorporate environmental costs, use natural resources efficiently, reduce pollution and risks for humans and the environment, and
enable the implementation of conventions and international agreements.
The division promotes sustainable consumption and production patterns and energy and transport policies for sustainable development, and encourages investment in renewable energy and energy efficiency. The OzonAction branch supports the phase out of ozone-depleting
substances in developing countries and countries with economies in transition, while the Chemicals branch catalyzes global actions and builds national capacity for the sound management of chemicals and the improvement of chemical safety worldwide.
DTIE’s Economics and Trade branch strengthens the ability of countries to integrate environmental considerations into economic and trade policies and promotes the greening of the finance sector, while the International Environmental Technology Centre, based in Japan, implements integrated waste, water and disaster management programmes,focusing in particular on Asia.
Now this is no small thing! In order to implement a pilot, one must have to be aware of:
a) Is this the right project for these countries? What does 'right' mean? Does the overall good outweigh the overall harm? Will this project make EVERYONE better off? I'm not sure what the right definition of 'right' is- How do I decide?
Well who am I with respect to this project? I am an international organization- my WHAT is decided 'democratically' in a large General Assembly. However, my HOW is decided by funding sources. This leaves me perplexed as I then seem to be bound by my funding agency who may/may not have the same ideological definition of 'right' as implied in my mandate. I need to clarify this with more experienced people who understand this.
b) If I assume my definition of 'right' is ensuring an overall positive, what policies/business plans do I recommend for this pilot project to take off? Who are my stakeholders and how much control do I have over them to ensure that they stick closely to recommendations?
Well I've descended into a tangle alright!
I'm going to forget about the fact that I'm a cog in a large organization, with a predetermined mandate- and try and think through point 1) without consulting the higher-ups. But before I can tell you what I think, I will give you a taste of the research that I have done that has informed my results. This will allow you to judge whether I have been biased by reading too much literature by a certain scholar/university/region.
Here goes.
The NGO, Sustainable Transport Africa, states that Africa has the highest potential for 2/3W growth, as compared to any other region for the following reasons:
1) Empirical evidence indicates that regions where the GDP per capita is US $1,000 have a high growth potential for two and three wheelers. This is probably because at this economic level, 2/3W become affordable. This is the case with Kenya and Uganda now.
2) The current penetration rates of 2/3W in Africa are very low (about 5%)
3) Growing urbanization (questionable as the Government of Kenya has supported 2 W as they can reach rural areas where there are no paved roads etc), favourable demographics (what does this mean? Does this mean that 2/3W are actively preferred by a particular demographic? If so what?), and swelling replacement demand
Given this demand potential it is worth encouraging people to take up E2/3W as opposed to conventional internal combustion powered vehicles (ICE).
What are E2/3Ws? It is interesting that when this is spoken about in countries such as the UK- a lot of people think of the small electric vehicles that people with disabilities use. I am not sure where these vehicles fit into the debate. However, I will give you the definitions that I have read about.
By appearance, e-bicycles have pedals as traditional bicycles do, and have 2 types:
1) Pedal-assisted (or pedelec), which has a torque sensor that engages the motor without the driver operating a throttle.
2) Throttle-controlled (or twist-and-go), which permits a driver to accelerate without having to pedal
E-bikes could also be defined on the basis of top speeds that their design allows them to reach. Different countries have different regulations. Among all regions, China sets the lowest top-speed (equal or less than 20 kilometers per hour) and weight limit (max weight being 40kg); While in North America, an e-bicycle can drive as fast as 32 kilometers per hour.
E-bicycles belong to non-motorized vehicles in China. Note that e-bicycles are different from e-scooters and e-motorcycles, both of which belong to motorized vehicles and are regulated.
Why encourage people to switch to E2/3W from ICE vehicles?
Environmental factors.
Electric motors are more energy efficient- such a switch would greatly reduce air pollution as well as GHG emissions. It is wrong to say E2/3W are zero emission vehicles (ZEV). Generating electricity to power these vehicles leads to CO2 being emitted. The GHG emissions of E2/3W are primarily determined by the energy mix from which they are charged. This energy mix may vary spatially and over time. In addition, transmission and distribution losses must be factored into calculations.
Note: An E2/3W could be a ZEV if it is powered by renewables (Note energy is still required to manufacture the car, so by ZEV- I only mean its ZEV during the time of operation).
A downside of E2/3Ws however, the problem of lead pollution. Lead acid batteries are still the dominant battery technology adopted by 95% of E2/3Ws.
The large scale production and recycling of lead acid batteries in China is a major public health concern. Frequent accidents of lead poisoning forced Chinese government to launch a nationwide crackdown of sealed lead acid (SLA) manufacturing facilities in 2011. Currently, in spite of explicit regulations on SLA battery disposal and recycling, illegal recycling and disposing of SLA batteries widely exist in China. In August, 2011, there was only one qualified company in Beijing for SLA battery recycling and disposal.
Given the short life circle of SLA batteries, one or two years’ use before replacement, together with SLA battery’s vast application in E2Ws, an estimate of 30,000 ~ 50,000 ton SLA batteries need to be recycled and processed in Beijing every year. This is way beyond the capacity of the qualified company, and hence it is estimated that 80% of recyclable SLA batteries in China went to illegal channels. This is an issue of major concern.
Nevertheless E2/3Ws have clear environmental advantages as compared with competing motorized modes. Even compared to a loaded bus, E2/3Ws emit less CO2, CO and NOx. However, if powered from a coal heavy energy mix such as in China, they emit more PM, SO2 and HC than buses, but are still better than conventional motorcycles
Now that we have established from an environmental standpoint that E2/3Ws are better than conventional 2Ws, how do we get people to shift from ICEs to E2/3Ws?
The World Bank did a survey to understand why E2/3Ws had not taken off in India and Thailand and came up with the following list of axes that informed demand.
1) Purchase price: price of vehicle not including registration tax, sales tax, or VAT
2) Refuel or recharge range: the number of kms that can be traveled on a full tank of gas or a full charge before needing to refuel or recharge
3) Refuel or recharge time: the amount of time in minutes required to fill an empty gas tank or to recharge a battery from zero charge to full charge
4) Fuel or electricity cost: operating cost stated in terms of Vietnamese dong/100 km, and Rs/km in India
5) Maintenance cost: routine costs of maintenance such as battery replacement (D/month) or (Rs/15,000 km)
6) Acceleration: Measured relative to a standard motorcycle as a %, where the acceleration of the std motorcycle is 0-40 km in 10 s in Vietnam. (in Ahemdabad it is expressed as time to reach 30 km/h)
7) Top speed
8) License requirements
9) Sales and registration tax: combined sales and registration tax (independent of purchase price) expressed in millions of dong, and owned upon purchase (in Ahemdabad it is the VAT expressed in Rs)
10) Transmission: manual or automatic transmission
11) Carrying capacity
At the moment E2/3Ws have a much lower top speed/acceleration than conventional bikes. They also have a long charging time, and are more expensive. For these reasons, they haven't been popular in India and Thailand. Note that this result has to be dis-aggregated further. In India, for example, men prioritized acceleration/speed far more than women did.
Also, factors such as the weather was found to be significant in deciding if people used E2/3Ws on a particular day. This has important implications for the planning of public transport systems on days of bad weather.
Note the assumption here is that E2/3Ws will be a substitute for conventional motorcycles. However, in some cities in China, where E2/3Ws are very popular it was seen that in some cases E2/3Ws acted as a substitute for public transport. This is not desirable. I'm still not sure about what could be done to ensure that this does not happen. However, the above list could be useful in understanding transport choices.
Okay, this is a mess. Let's look at a China- a place where E2/3Ws have seen exponential growth in the last few years to see how this has happened.
The rise of electric two-wheelers in China has been fueled by two notable policies from the central government:
1) In 1999, the government designated certain electric two-wheelers as bicycles. To be considered a bicycle, an electric two-wheeler was required to have a bicycle-design with functioning pedals, weight less than 40 kg, and have a maximum speed of 20 kmph. However, according to China’s Law on Road Traffic Safety (2004), e-bicycles in China belong to non-motorized vehicles, and the top speed limit for non-motorized lanes is 15 kmph. This classification meant, among other things that qualifying electric two-wheelers could travel in the bicycle-right-of-way that they did not require licensing and registration and the users did not need a driver’s license. This made motorized travel available to people who would otherwise have been unable to use it.
2) Many cities severely restricted the ownership and use of gasoline motorcycles in their urban cores. In a country with crowded roads and restrictions on gasoline motorcycles, it is perhaps not surprising that a low-cost vehicle that ran on electricity and could travel in bicycle rights-of-way became popular.
Note that countries like Taiwan which has spent NT$1.8 billion to subsidize electric scooters has not managed to achieve the same uptake of scooters as China has. This is because it did not restrict the use of gasoline scooters. In addition, initial glitches in the new e-bike technology resulted in consumers losing faith in the technology.
There were additional factors that contributed to the rise of E2Ws in China.
During the 1980s and 1990s, China began using its pool of surplus labour to build cycle lanes parallel to roads throughout its cities. Today all cities, even tier 4 and tier 6 towns have segregated bicycle lanes.
China invested heavily in programs to develop technology for alternative vehicles such as '863' which focused on the development of fuel cells.
Over the next decade, a slew of subsidies and policy measures - subsidized land and monetary grants - propped up the industry. Consumers got cash incentives. The subsidy was hiked repeatedly when new and powerful models were introduced and was upgraded last year to a maximum of 3,000 yuan for a 1,000-watt two-wheeler costing up to 10,000 yuan.
These policies have led to China accounting for 92% of the E2W market in 2012. According to the chairman of China Bicycle Association, there are currently 142 million e-bicycles in China today.
However, this rapid expansion has come at a cost. Regulations are lax and many so called 'e-bikes' routinely violate the speed limit, which has led to a surge in road accidents. In addition, Chinese law does not require bicycle riders to wear helmets/use lights/horn. This too, has contributed to a number of road accidents. E-bikes thus run of the risk of being banned in as many as 9 major Chinese cities. Thus, any pilot program introducing these vehicles, must have road safety at the core of its agenda.
Thus the above has given us a tantalizing glimpse of what it takes to get E2/3Ws on the market. The next section shall structure policy recommendations under 4 main categories
1) Charging Infrastructure
2) Fiscal Incentives
3) Technology Support
4) Non-fiscal Incentives
1) Supporting Charging Infrastructure:
For electric vehicles (not 2 wheelers)charging infrastructure has bee seen to be very strongly correlated with EV adoption. However, the support of such charging infrastructure is necessarily a 'chicken and egg' problem, especially given the fact that the government has to make a choice between a vast number of 'alternative vehicle' technologies.
The Kenyan electrification rate is only 23% (50% in urban areas and 5% in rural areas). Therefore the development of charging stations is a point of concern. The development of decentralized charging stations could be one way around the issue.
If we consider an e-bike having the following specifications:
power is less than 500 W
lightweight - less than 60 kg
max speed is less than 40 kmph
The average solar radiation in Nairobi is 1200 kWh/sq m
Therefore the area of a 15% solar cell required to power the batter is
1200 kWh/sq m x 15% x Area = 500 W x 3600 seconds/hour
Area required = 1.67 sq m
This is of course assuming that the solar panel alone is powering the battery. The cost alone of this will be very high and will have to be subsidized by the government.
High battery costs could make the battery swapping model a viable alternative. However, this would require compatibility between models of EVs and their battery systems and would require technology standards to be developed.
The same standardization requirements go for conventional charging infrastructure.
2) Financial Incentives
BCG 2009 has noted that consumers are most heavily swayed by purchasing price when making consumer decisions. E2/3Ws are more expensive than conventional alternatives (note the alternatives/the real substitutes of E2/3Ws has to be carefull identified- what are E2/3Ws competing with? Motorcycles of the same specifications?
There are 2 types of financial incentives
a) Incentives for consumers: eg tax credits, tax reduction, tax exemption, direct subsidy, free road tax, cheap electricity prices, free parking.
b) Incentives for manufacturers: eg reduction of sales tax depending on CO2 emission level, subsidies for the production of EVs
I compiled a list of the financial incentives given in the US. Europe and China. I will summarize some of the interesting categories here
The US has a 'Car Allowance Rebate System'- known as 'Cash for Clunkers' which allows people to exchange their less fuel efficient vehicle for a more efficient one.
The US ‘Energy Independence and Security Act of 2007’ not only provided financial incentives, but also provided low loan for automobile manufacturers to develop EVs. President Obama also announced the plan of the ‘next generation electric vehicle’ which aimed to fund $1.5 billion to manufacturers to produce high efficiency batteries and their components. The plan was also to provide $400 million to produce other components needed for EVs, such as electric motors and other key components
All financial incentives proposed in Europe are mainly based on CO2 emissions, no matter what the incentive object is. European Union (EU) legislation sets mandatory emission targets for new cars, with a fleet average of 130 g·CO2/km by 2015 and 90 g·CO2/km. To achieve this goal, the manufacturers have to pay an excess emissions premium for each car registered. What is more, they could gain “super credits” if they produce vehicles with extremely low emissions. The “super credits” are that each low-emitting car will be counted as 3.5 vehicles in 2012 and 2013, 2.5 in 2014, 1.5 vehicles in 2015 and then one vehicle from 2016 to 2019, but not the money nor subsidy.
In Japan, Ahman (2006) describes how, under the Environment Conservation Programme in 1995, the government announced the replacement of 10% of its public vehicles by 2000 with vehicles producing lower emissions. Since 1978, Japan has promoted several leasing programs and other incentives to encourage the purchase of cleaner electric vehicles.
In China, local protectionism hinders the development of EVs in major cities in which pilot projects have been initiated. The government has invested CNY 100 billion for the development of the whole industrial chain of new energy vehicles. Of this, 30 billion are reserved for demonstration purposes and the diffusion of new energy vehicles.
3) Technology Support
Battery cost is the key factor that will determine whether EVs will become competitive. Given this, several manufacturers have initiated R&D projects in conjunction with battery producers aimed at improving production of this key element.
The International Energy Agency report (2008) recommends that governments provide backing for battery producers, especially the most innovative in the sector. Such support should enable the construction and expansion of battery production plants ensuring that investment requirements are not an obstacle to progress. Access to materials such as lithium in the medium and long term makes it increasingly necessary to develop R&D programs that promote the use of materials and innovative designs that can reduce the production costs of electric vehicles. Production costs can be further reduced if battery producers and electric vehicle manufacturers can operate together.
4) Non fiscal policies
a) A reduction in the time and financial costs of travel. Permission for electric vehicles to use the High Occupancy Vehicle (HOV) lanes and a differentiation in the tolls charged according to levels of contamination would help achieve these objectives. In 2009, London’s mayor proposed reviewing the possibility that electric vehicles might use the HOV lanes, as introduced in the city of Oslo (Norway).
b) Establishment of “Park & Ride” sites at interchanges. Such car parking facilities, sited in city outskirts, would allow owners of electric vehicles to leave their cars charging while they are at work.
c) Agreements with private companies to install charging stations in firms’ car parks.
d) Financial support from the Institut Català d'Energia for the implementation of pilot programs that improve the energy efficiency of companies’ transport systems. These companies receive up to 60% of the investment, provided they demonstrate an increase in energy efficiency of at least 5% in the displacement of workers from their homes to the workplace. Here, electric vehicles offer a competitive advantage in attaining this saving.
e)An information system designed for electric vehicle owners that allows them to quickly identify the nearest charging points. The introduction of clear, visible and uniform signs to help identify the recharge points is also useful in reducing the “anxiety” of the owners of electric vehicles.
Thus, to conclude, in order to establish a pilot in Kenya and Uganda, further research needs to be done on the factors that influence citizen's transport decisions- this has to disaggregated in order to understand the preferences of women.
The right policies then have to be espoused within the four policy categories mentioned above, within the context of the pilot countries. For example, in Kenya and Uganda, 2 wheelers are currently mainly used for public transport (boda bodas). Thus a policy, that first focuses on targeting the boda boda union to incentivize them to switch to E2/3Ws might be the best first step.
Finally, charging infrastructure, a road safety campaign and lead acid battery recycling needs to be addressed from the outset and the required capacity building needs to be initiated
Post script:
My organization's mandate is the following:
1) Promoting international cooperation in the field of the environment and recommending appropriate policies
2) Monitoring the status of the global environment and gathering and disseminating environmental information
3) Catalyzing environmental awareness and action to address major environmental threats among governments, the private sector and civil society.
4) Facilitating the coordination of UN activities on matters concerned with the environment, and ensuring, through cooperation, liaison and participation, that their activities take environmental considerations into account
5) Developing regional programmes for environmental sustainability.
6) Helping, upon request, environment ministries and other environmental authorities, in particular in developing countries and countries with economies in transition, to formulate and implement environmental policies
7) Providing country-level environmental capacity building and technology support
8) Helping to develop international environmental law, and providing expert advice on the development and use of environmental concepts and instruments.
Within this, my Division has the following mandate:
UNEP’s Division of Technology, Industry and Economics (DTIE) works with international and non-governmental organizations, national and local governments, business and industry to develop and implement policies, strategies and practices that are cleaner and safer, incorporate environmental costs, use natural resources efficiently, reduce pollution and risks for humans and the environment, and
enable the implementation of conventions and international agreements.
The division promotes sustainable consumption and production patterns and energy and transport policies for sustainable development, and encourages investment in renewable energy and energy efficiency. The OzonAction branch supports the phase out of ozone-depleting
substances in developing countries and countries with economies in transition, while the Chemicals branch catalyzes global actions and builds national capacity for the sound management of chemicals and the improvement of chemical safety worldwide.
DTIE’s Economics and Trade branch strengthens the ability of countries to integrate environmental considerations into economic and trade policies and promotes the greening of the finance sector, while the International Environmental Technology Centre, based in Japan, implements integrated waste, water and disaster management programmes,focusing in particular on Asia.
