The transportation sector is one of the largest sources of greenhouse gases, which are a leading culprit in climate change and negatively affect the air quality index. One potential solution to this problem is to eliminate the use of fossil fuel vehicles (FFVs) by switching to electric vehicles (EVs).
EVs have been around for several years, but recent developments in technology and policies suggest that they are starting to achieve mass adoption in many countries across the globe. Recently, Norway announced a plan to encourage EVs and ban the sale of all FFVs by 2025. Similar policies have been adopted by other countries, including The Netherlands, which set 2030 as its target year, and the UK and France, which plan to impose a complete ban on FFVs by 2040. Many developing countries are also adopting similar plans – for example, India plans to use only electric buses by 2030.
Should Pakistan also follow suit and strive to increase the penetration of EVs? In a country that has been hit hard by electricity crises in recent years, would it be prudent to put the additional burden of the transportation sector on an already shaky electricity power industry?
Estimates suggest that a power supply of around 1000 MWs can fully charge half a million EVs. A recent report on the potential of electric vehicles in Pakistan reported that Pakistan already has around 42 TWh of excess electricity generation capacity that remains unused due to transmission and distribution losses, intra-day and seasonal variations in electricity demand. This much electricity is sufficient to convert the bulk of the country’s transportation fleet to electricity.
In addition, the National Transmission and Dispatch Company (NTDC) also anticipates considerable addition in generation capacity in the next few years, which means availability of an excess 15,000 MW peak generation capacity in the system by 2025.
It is important to note that most of the power generation in the country is covered by the principle of guaranteed capacity payment, which implies that even if the government does not buy the power, it still pays a hefty amount in capacity charges. Utilizing this excess power to charge electric vehicles can be a prudent way to avoid these charges.
On top of that, Pakistan’s transportation sector heavily relies on oil-based fuel, most of which is imported. According to estimates, the import of oil costs over $13 billion USD annually, and by 2025, this cost is projected to reach $30 billion USD in the business-as-usual scenario. Increasing the use of EVs over the next few years can at least help to maintain, if not completely abolish, this expense.
However, the availability of excess electricity is not the only factor in the smooth transition toward EVs. For example, charging an EV demands a substantial amount of electricity. So an increase in the use of EVs will create additional demand requirements, which might be more challenging during peak times. Meeting and managing this demand will require an increase in financial, operational, field, and planning resources in distribution, transmission, and generation channels.
Therefore, while EVs are transforming the way we drive and get deliveries, the utilities sector also needs to shift from the role of energy producer and retailer to that of a full-service provider. In this regard, modern information technology can help electric utilities adapt to these revolutionary changes and meet the demands of consumers (digital prosumers) by facilitating:
- Separate billing mechanisms and/or differential rates and tariffs from regular household use
- Device management
- Sales and distribution management
- Customer relationship management (CRM)
- Integration with smart grids
- Mobility solutions
- IoT, AI, and ML solutions and integration
- Predictive analytics and business intelligence
Challenges in the adoption of EVs will continue to grow, but with the right technology, utilities should be able to address these challenges for the long-term without the need for third-party solutions.
For more on sustainability in the automotive industry, read Better, Safer, Cleaner: Mobility And Detroit.