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Michael McDonald

Michael McDonald

Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance…

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Will Germany’s 100% EV Plan Actually Reduce Emissions?


Germany currently has a plan to usher in renewable energy: 100 percent of cars on the streets will be electric. However, as it stands, the plan to create the world’s first 100 percent electric vehicle country would actually increase emissions – an unintended consequence of what appears to be a good-natured piece of legislation. Indeed, if Germany reaches their goal of 100 percent EV, their emissions would increase by the amount produced by present day Uruguay or the entire state of Montana.

The plan to phase-out all gasoline vehicles by the year 2030 is not official governmental policy. The Bundesrat, Germany’s legislative body, called for bipartisan support of this phase out in October 2016, in accordance with the Paris agreement. Even without official legislation, the headlines alone send a clear message to the German auto industry; it takes 10 times more staff to manufacture a carbon-based vehicle when compared to its electric counterpart. Thousands would be out of work if such legislation existed and if automakers did not adapt accordingly.

Moreover, such a plan would not achieve the decrease in emissions it seeks. Environmentalists, of course, are eager to see such a resolution banning carbon-based vehicles from German markets, as they comprise a large portion of total emissions. As with all politics, however, it isn’t that simple.

An electric car creates more emissions than a car burning petrol fuel if the power to charge that car was generated by coal or gas, in the first place. Currently in Germany, it would be. For this ban to be effective at reducing emissions on a net level, a switch to an entire grid of renewable energy must first occur – this is unlikely to happen anytime soon.

Angela Merkel announced that the country would be slowing down their expansion into new wind turbine farms, as they were creating too much intermittent power, creating an unstable grid. Furthermore, Germany is retiring its entire nuclear reactor fleet by 2022, a result of the Fukushima travesty. Related: Iran And Iraq To Ramp Up Oil Production Despite OPEC Cuts

While electric vehicles are indeed more efficient than petrol vehicles, the transition would require an enormous amount of energy to be added to the grid – 258 terawatt-hours. It seems that the government is opposed to further expansion into renewable energy sources, and the country has already maximized its potential in hydro, geothermal, and biomass.

Therefore, the gap would likely have been filled by coal or natural gas, each of which would produce 260 million tons or 131 million tons of carbon dioxide, respectively. For comparison’s sake, current road transportation in Germany contributes approximately 156 million tons of carbon dioxide. Unless the 258 terawatt-hour gap is filled entirely with renewable energy, Germany could very well experience a net increase in emissions as a result of this carbon-vehicle ban.

Even if half of the gap was filled by coal, and the other half by natural gas, and even if both increased their efficiency by 25 percent, analysts still expect total emissions to increase by 20 percent. This is the most likely scenario for Germany’s future if a ban is indeed implemented. If Germany is truly intent on reducing the amount of emissions they contribute to the atmosphere, this policy needs to be rethought.

By Michael McDonald for Oilprice.com


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  • Bob Langabeer on March 12 2017 said:
    With gasoline there is generally, throughout the world, a tax that was started to look after roads.

    Does this mean that the price of electricity will also be increased to take the place of the "gas tax"?

    Or will the Government of the day add taxes elsewhere so that electricity does not have to be increased?

    The money for the roads MUST come from somewhere!!!!!!
  • Steveoh on March 12 2017 said:
    The claim that EVs emit more than gasmobiles, is false. In Germany EV is equivalent to a 47 MGP car in 2009. But the renewable fraction has gone up a lot since then:
    The grid will get cleaner over time and EVs today cause fewer net emissions than average gasmobiles, and will only get better over time as the grid gets cleaner.

    Germany is slowing down their wind fleet rollout because they've maxed out their transmission grid. A new HVDC line is being constructed from the Baltic to Southern Germany, where they need to send the power. Massive new wind farms in the middle of the Baltic are being planned and will move forward once this line is in place. The line itself will take awhile, as they are under-grounding it. China is also building a national HVDC grid. We should be doing the same.

    Natural gas is already losing out to wind in Texas and will be far cheaper than Russian gas over the long term, plus no geopolitical risk.

    Batteries are at their nascency, but already beat gas peaker plants on economics and rapid installation, they will start taking market share at the top and as costs fall, will gradually take a bigger slice of the peaker market.
  • Jörg Dürre on March 12 2017 said:
    From my German perspective I assume early e-car drivers to maximise on self sufficiency. If! I do it, i`ll do it right.
    Self sufficiency would mean for the business owner to put some solar on the roof of the business building, harvesting cheap kWh for the business trips or as a reward for your employees,
    or as a private car owner in the suburbs have your own carging solar carport, probably with a home storage system added.
    -> near to zero coal on the road
    But that is just the people I talk to. The only point is the "if", most are waiting.
  • Rebel44 on March 12 2017 said:
    1. Your calculation for extra power needed is complete nonsense (and since whole article stands on it sa is this article) - normal EV consumes around 20kWh per 100 km and normal car drives around 15000km per year - so you need extra 3MWh per EV per year (its actually less since gasoline refining consumes a lot of elctricity, but for simplicity sake we will ignore that). Germany has 45 000 000 cars on the road - that multiplied by 3MWh is 135TWh / year.

    2. Energy companies already motivate (via lower price of electricity) users to run power hungry equipment (like charging EVs) at the time when they have excess capacity (usually at night, but can happen at different times in places like Germany that get large % of electricity from wind) so very littler extra generating capacity would be needed, since almost all EVs would charge when the price is low - peak power demand would stay similar.
  • Jonas on March 12 2017 said:
    Cars running on gas will use 100% fossil sources.
    Cars running on electricity would be 29% renewable (Germany 2016).
  • J P DeCaen on March 12 2017 said:
    Since building ev's will require fewer labour requirements, it's almost a given that manufacturers will make a wholesale switch to this technology. The auto jobs can be replaced by renewable energy and battery making/recycling jobs. What the writer is suggesting is that technological efficiency will not win out in the end, but historical evidence suggests otherwise. It's misleading to suggest that innovators like Tesla and others will simply "give up" on the energy storage/peak power problem. Clearly that underestimates the capabilities and resolve of people like Elon Musk and his associates.
  • Stephen Sykes on March 13 2017 said:
    I would like to see the calculations on the emissions. As a Naturally aspirated car does not burn the fuel as efficiently as a Large coal or gas fire boiler that integrates FLue gas recirculation, economizers, air heater, etc etc....
  • John Scior on March 13 2017 said:
    Excellent article with interesting facts to contemplate as the world rushes to attempt to quash oil as an energy resource. I feel it might be interesting if geothermally rich countries might be able to export hydrogen to be used as a fuel resource in other countries as a replacement fuel. For example in the case of Germant, Iceland might use geothermally generated electricity to convert seawater into hydrogen and then export via gas tankers the hydrogen to generator stations that could then power the vehicles being taken off of oil. In areas of water scarcity , these plants could also have the benefit of clean water as a byproduct of electricity generation.'

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