System Innovations: The Case of Electric Cars

Replacing conventional cars with electric cars falls in the category of system innovation. This requires a long period of time and huge investments. Recently I have found out about the European Parliament’s decision to interdict conventional car sales starting with 2035.

“The European Commission welcomes the agreement reached last night by the European Parliament and Council ensuring all new cars and vans registered in Europe will be zero-emission by 2035. As an intermediary step towards zero emissions, the new CO2 standards will also require average emissions of new cars to come down by 55% by 2030, and new vans by 50% by 2030. This agreement marks the first step in the adoption of the ‘Fit for 55′ legislative proposals tabled by the Commission in July 2021, and demonstrates ahead of COP27 the EU’s domestic implementation of its international climate commitments.” (see here).

This is a necessary political decision in terms of reducing pollution, but are we ready to meet this desideratum? I was curious to see what this involves in terms of investments for the case of Romania. I have taken off the shelf my skills as a graduate of a European MSc in Energy Management to see the implications. Today Romania has about 7.4 million cars. To replace a whole lot of cars in Romania with electric cars, Romania needs to produce 3.5 times more energy than today. If we take as a reference today’s installed capacity in Romania of about 18830 MW, we need to have an installed capacity in 2035 of about 65905 MW. And we will have to produce this energy from clean sources, such as hydro, solar, wind, and nuclear. Wind solutions are not quite the best case for Romania, but we can consider solar, hydro, and nuclear.

The number of electric charging stations that Romania would need to support a transition to electric cars depends on a range of factors, such as the number of electric cars on the road, the distance those cars typically travel, and the charging habits of drivers. Assuming that all 7.4 million cars currently on the road in Romania were replaced with electric cars and that each car required an average of 25 kWh of electricity to travel 100 km, this would require a total of around 124 TWh of electricity each year to power the cars. Assuming an average charging time of 8 hours per day per car, this would require at extreme around 27 million charging points nationwide. However, it’s important to note that not all cars would require charging at the same time, and some charging could be done at home or at work, reducing the need for public charging infrastructure. Thus, we might consider about 8 million charging points nationwide (home, public services, private services). In addition, the distribution of charging stations would need to be carefully planned to ensure that drivers had access to charging points when and where they needed them. This could involve installing charging stations in public parking lots, at shopping centers, and along major highways and roads.

Assuming that all of the additional energy needed to power the electric cars will come from renewable sources, Romania would need to add around 48300 MW of renewable energy capacity by 2035 to meet the increased demand. This would require a significant investment in wind, solar, hydro, nuclear, and geothermal power, as well as improvements in energy efficiency to reduce overall energy demand. Increasing renewable energy capacity alone may not be enough to meet the increased demand for electricity from electric cars. Energy storage systems, such as batteries, will also be needed to ensure that electricity can be provided to charging stations and cars as needed. This will require additional investment and infrastructure development.

The amount of surface area needed to install solar panels in Romania will depend on a number of factors, such as the energy demand, the available land or roof space, and the efficiency of the solar panels. However, to provide a rough estimate, we can use some typical values.  A typical solar panel has a size of about 1.6 square meters and a power output of around 300 watts. To generate 1 MW of power, you would need to install around 3333 solar panels, which would cover an area of approximately 5333 square meters (or 0.53 hectares). Assuming that Romania needs to add around 48300 MW of renewable energy capacity by 2035 to meet the increased demand for electric cars, and all this energy has to generate only by solar panels, this would require the installation of approximately 161 million solar panels. If we assume an average panel size of 1.6 square meters, this would require a total surface area of approximately 257.6 million square meters (or 25760 hectares), or about 2.5% of Romania’s total land area. This is a very rough estimate, and the actual surface area needed will depend on a number of factors such as the solar panel efficiency, the available land, and the specific energy demand. Additionally, solar panels can be installed on rooftops, which would reduce the amount of land needed.

The investment required to install enough solar panels to meet Romania’s increased energy demand from electric cars would depend on several factors, such as the cost of the solar panels, installation costs, and maintenance costs. According to the International Renewable Energy Agency (IRENA), the global weighted average cost of utility-scale solar photovoltaic (PV) systems has fallen by around 82% between 2010 and 2019, reaching a cost of around 0.068 USD/kWh. However, the cost of solar panels can vary widely depending on the type of panel, the manufacturer, and the installation location. Assuming a conservative estimate of 0.10 USD/kWh for the cost of solar PV systems, and assuming that Romania needs to add around 48300 MW of renewable energy capacity by 2035 to meet the increased demand for electric cars, the total cost of installing enough solar panels would be around 48.3 billion USD.  This estimate is based solely on the cost of solar panels and does not include other costs such as land acquisition, installation, and maintenance. However, it should provide a rough estimate of the investment required to install enough solar panels to meet Romania’s increased energy demand from electric cars. It’s important to note that the cost of solar panels is expected to continue to decrease in the coming years, which could make solar power even more cost-effective as a source of clean energy. Additionally, there may be opportunities for Romania to access funding from the European Union or other sources to help finance the transition to clean energy.

Hydropower is another important renewable energy source that Romania could use to meet its clean energy goals. The amount of energy that can be generated by hydropower depends on the flow rate and head (height) of the water, as well as the efficiency of the turbines used to generate electricity. In Romania, the Danube River and its tributaries, including the Prut, Siret, Olt, and Mures rivers, offer significant hydropower potential. According to the Romanian National Energy Strategy 2018-2030, hydropower currently represents the largest share of renewable energy in Romania, accounting for about 26% of the country’s total energy mix. The potential for further hydropower development in Romania is significant, and the country has plans to expand its capacity in this area. However, it’s important to note that hydropower can have environmental impacts, particularly if large dams are built, which can affect fish populations and alter the natural flow of rivers. Therefore, any expansion of hydropower in Romania should be done carefully and with consideration for environmental and social impacts.

If Romania is to rely primarily on hydropower to meet the increased energy demand from electric cars, it would likely require significant investment in the development and expansion of hydroelectric facilities. This investment would include the construction of new dams and hydroelectric power plants, as well as upgrades to existing facilities. The costs of building a hydroelectric dam can vary widely depending on factors such as the size and location of the project, the type of dam, and the environmental and social impact of the project. For example, in 2018, the cost of building a new hydroelectric dam in Romania was estimated to be around 1.5-2 million euros per megawatt of installed capacity. If Romania were to add 48300 MW of renewable energy capacity by 2035 through hydropower, this would require an investment of approximately 72-96 billion euros.

Nuclear energy is another potential source of low-carbon electricity that Romania could consider as part of its transition to clean energy. Currently, nuclear energy accounts for around 18% of Romania’s total electricity generation. Romania has two nuclear power plants, Cernavoda-1 and Cernavoda-2, which together have a capacity of 1400 MW. There are plans to build two additional reactors at the Cernavoda site, which would add another 1400 MW of capacity. Nuclear power has the advantage of being a low-carbon source of electricity that can operate continuously, providing reliable baseload power. However, nuclear power also comes with a number of risks and challenges, including concerns about the safety of nuclear reactors, the management of nuclear waste, and the potential for nuclear proliferation. In addition, nuclear power plants are very expensive to build, and construction can take many years. For example, the two new reactors at Cernavoda are expected to cost around 7 billion euros and take more than a decade to build. While nuclear energy can play a role in Romania’s energy mix, it should be balanced with other sources of low-carbon electricity, such as wind, solar, and hydropower, to ensure a diversified and secure energy supply. Any plans for new nuclear power plants should be carefully considered, taking into account the potential risks, costs, and benefits of nuclear energy.

The cost of building new nuclear facilities in Romania to meet the increased energy demand from electric cars would depend on several factors, such as the type and size of the reactors, the location, and the regulatory environment. If Romania were to build additional nuclear facilities to meet the increased energy demand from electric cars, the costs could be significant. According to a report by the International Energy Agency (IEA), the cost of building a new nuclear power plant can range from around 5500 USD/kW to 12500 USD/kW, depending on a range of factors. Assuming a cost of 7500 USD/kW, and assuming that Romania needs to add around 48300 MW of renewable energy capacity by 2035 to meet the increased demand for electric cars, the total cost of building enough nuclear facilities would be around 75 billion USD.

To achieve the target of replacing all traditional cars with electric cars by 2035 in Romania, a significant number of batteries will be needed. The production of electric vehicle batteries is a complex process that involves the extraction and processing of raw materials, such as lithium, cobalt, and nickel, as well as the assembly of the batteries themselves. The cost of electric vehicle batteries has been steadily decreasing in recent years and is expected to continue to decline as production scales up and new technologies are developed. However, the cost of electric vehicle batteries is still a significant portion of the overall cost of an electric car. One issue with the batteries used in electric vehicles is their end-of-life management. Electric vehicle batteries have a limited lifespan and eventually need to be replaced. While some batteries may still have significant remaining capacity at the end of their life, others may no longer be suitable for use in a vehicle. The recycling and recovery of materials from these batteries is an important issue, as the materials used in the batteries are often scarce and valuable. The recycling of electric vehicle batteries is currently in its early stages, and there are still many challenges to be addressed. The recovery of valuable materials from the batteries, such as lithium, cobalt, and nickel, is a complex and energy-intensive process. In addition, the collection and transportation of used batteries can be challenging, as they are often heavy and require special handling. Another issue related to the production of electric vehicle batteries is the environmental impact of mining and processing the raw materials used in the batteries. The mining of lithium, cobalt and other materials used in batteries can have significant environmental and social impacts, including deforestation, water pollution, and the displacement of indigenous communities. While the transition to electric vehicles offers many benefits, there are still significant challenges to be addressed, particularly in the area of battery production and end-of-life management. It will be important for manufacturers, governments, and other stakeholders to work together to address these challenges and ensure that the transition to electric vehicles is as sustainable and responsible as possible.

The lifetime of an electric vehicle (EV) battery can vary depending on a number of factors, such as the type of battery, the climate in which the vehicle is operated, and the usage patterns of the vehicle. However, most EV batteries are designed to last for several years and many thousands of kilometers of driving. Typically, the lifetime of an EV battery is measured in terms of its “cycle life,” which refers to the number of charge and discharge cycles that the battery can undergo before its performance begins to degrade significantly. Most EV batteries are designed to last for between 1000 and 2000 cycles, which can translate to anywhere from 100,000 to 200,000 km of driving, depending on the battery’s capacity and the driving conditions. The lifetime of an EV battery can be influenced by a number of factors, such as the temperature at which the battery is operated, the rate at which it is charged and discharged, and the overall state of the battery’s health. In addition, some manufacturers offer warranties on their EV batteries, which can range from 8 to 10 years or more, depending on the manufacturer and the specific battery.

Clarification: It is important to highlight the fact that from 2035 we will be still allowed to drive traditional cars up to the end of their useful life. This means, in 2035 will not happen to replace all cars with electric ones. For Romania, it might be possible to see traditional cars long after 2035, maybe until 2060, but less and less. In addition, it will be extremely expensive to maintain traditional cars and there will be all kinds of traffic restrictions with traditional cars, in the sense that in certain countries or cities you will not be allowed to drive with internal combustion cars. With the appearance of bans on the sale of internal combustion cars after 2035, car manufacturers will have an interest in doing things of such a nature as to hasten the abandonment of traditional cars in order to increase their market again.

What do you think? Is Romania capable to make the transition from conventional cars to electric cars by 2035?

What a responsible administration should do in the next decade?  Achieving a balanced mix of clean energy sources would be a top priority in achieving the target of replacing all traditional cars with electric cars by 2035. To achieve this, I would take the following steps: