Growing Demand for Electric Cars Poses a Challenge for the Energy Sector

Research

The increasing number of electric cars on the road is posing a new challenge for power supply in Germany.

If the German government wants to massively increase the amount of electric cars on German roads, this will present new challenges for the energy sector. One particular problem are the distribution grids, which are currently ill-prepared for the additional demand that would be generated by an increased number of households with electric cars. This is the central finding of the latest ZEW Energy Market Barometer, a survey carried out by the Centre for European Economic Research (ZEW), Mannheim, among energy market experts.

Electric cars are largely seen as a new source of hope in the battle to curb emissions.The German government has therefore declared its intention to get a million electric cars on Germany’s roads by 2020 and six million by 2030.However, these government goals regarding electromobility look unlikely to be met in the near future – or at least until the 2020 deadline.Although the surveyed experts were confident that there was no need for additional investment in generation capacity or transmission grid capacity if the government succeeds in putting 4.5 million electric cars on the road by 2025, many of them predicted bottlenecks in the distribution grid. While the (high-voltage) transmission grid ensures that electricity is transmitted over long distances, the (low-voltage) distribution grid delivers electrical power via the “last mile” to the point of use.In total, 67 per cent of the energy market experts were of the belief that the distribution grid’s existing and planned capacity will not be sufficient to support such an increase in the number of electric cars unless greater investments in the network, particularly in upgrading transformers and electrical cables, are made.By contrast, the majority of the surveyed experts saw no need for additional investment in generation capacity (79 per cent) or transmission grid capacity (73 per cent).

The greatest barriers to the wider use of electric cars in Germany, according to the surveyed experts, are the limited range and high purchase price of electric cars. The range of electric cars has been increasing steadily over recent years and most can now go for 250 kilometres without charging. While this range is enough to cover day-to-day commutes, most car journeys are much longer, which is why a vast majority of 64 per cent of the experts believe that there is still need for improvement in this regard. With the price of an electric car currently being several thousands of euros more expensive than that of a car with a combustion engine, a majority of 52 per cent of the surveyed experts consider the price as a major obstacle to electromobility.

Electric car technology and the infrastructure of charging stations are still in need of improvement

Furthermore, the energy experts considered the long charging time of electric cars (35 per cent) and the poor existing infrastructure of charging stations (45 per cent) as significant obstacles. Meanwhile, only around 20 per cent saw a lack of trust in electric cars on the part of consumers, a lack of standards for charging stations as well as lacking stability and capacity on the distribution grid as very significant obstacles.

“Overall, energy experts in Germany see electric car technology itself as well as the infrastructure of charging stations as the areas most in need of improvement,” explains Dr. Wolfgang Habla, researcher in the ZEW Research Department “Environmental and Resource Economics, Environmental Management” and co-author of the survey. “Integrating car batteries into the power supply system and improving the charging process for electric cars, however, will give companies in the energy sector, the IT sector and car manufacturers the opportunity to access new markets,” says Habla.

ZEW Energy Market Barometer

The ZEW Energy Market Barometer is the only panel of its kind in Germany made up of experts in the energy industry. The survey has been conducted every six months since 2002 and reflects the participants’ assessments regarding current issues in the energy industry and in energy policy. The current survey (November 2017) is based on 168 responses from German participants.

For more information please contact

Dr. Wolfgang Habla, Phone +49 (0)621/1235-155, E-mail wolfgang.habla@zew.de