As in the case of alpinists, who are climbing another eight-thousander, there are moments of doubt, external conditions change, sometimes you have to turn back or change the route, but finally the moment comes when the goal is reached. I assume that this will also be the case with the development of electromobility in Poland and ambitious plans for this project,” said Ryszard Biernacki, General Manager for Production Engineering at KGHM.
The challenge will be to achieve the target set by the government – one million electrical cars on our roads in 2025.
The copper conglomerate wants to take advantage of the emerging business, because it sees potential in it. Not because it is obliged to do so by the Act on the development of electromobility and alternative fuels (of 11 January 2018). “We are working on the regulations implementing this act and the second one, which established the Low Emission Transport Fund. From the second quarter of next year, we will be offering real support and programmes, e.g. for the construction of charging infrastructure, co-financing the purchase of electric vehicles for self-governments and entrepreneurs, and thus for individual customers,” says Szymon Byliński, Director of the Department of Innovation and Technology Development at the Ministry of Energy.
The support from the Low Emission Transport Fund and other regulations are to encourage the construction of charging stations on commercial terms already in 2019 and 2020. Private entrepreneurs will have their chance first, followed by energy distributors (regulated by the Act).
At the moment, there are many people willing to participate, and energy companies such as PGE or Tauron are announcing their plans. The latter has signed a letter of intent with KGHM. The map with the network of charging posts at the motorway service points has also been drawn up by GDDKiA. “We have a law and money, which activates many players. Thanks to the legislative intervention, a whole system of regulations is being created, outlining a corridor for the development of electromobility in Poland, both for future owners of alternative fuel vehicles and for entities developing infrastructure,” emphasizes Rafał Stroiński from JSLegal law firm.
According to Marcin Mazur, Managing Director of the Polish Alternative Fuels Association (PSPA), efforts should now focus on improving the law. This will enable a more dynamic development of the market. “The market was waiting for this law. Even if it needs to be amended, today we are at a completely different point than a year ago. When we were talking then, we could safely say that we have nothing,” adds Mazur.
Now the network of chargers is gradually expanding. And not only thanks to the activities of public companies, but mainly private companies. It is enough to mention GreenWay, which in the coming years will build several hundred charging posts, which means doubling their current number. “We have about 700 charging points, and there are about 3 thousand new and used electric cars on the roads. This is not bad for the initial phase of market development, which does not mean, however, that we should not try to increase their number faster,” explains Mazur.
The development of infrastructure is hampered, among others, by too long waiting time for a connection (from several months to even two years), and in the case of the number of electric cars – their price, which is too high. Such a car is on average twice as expensive as its equivalent with an internal combustion engine. Therefore, experts postulate the introduction of purchase surcharges and tax reliefs, which will eliminate the difference.
“Economic advantage is the only way to achieve economies of scale. This will be the case when the cost of using an electric car over its entire life cycle approaches the cost of maintenance of a combustion car,” adds Mazur.
Opportunities and threats
Thanks to electromobility, Poland has a chance to make a civilizational and economic leap, as well as to improve the condition of the environment. Vehicles equipped with combustion engines are one of the two main reasons for smog in large cities. “The main benefit will be the reduction of crude oil consumption,” says Krzysztof Bolesta, Vice-President of the Foundation for the Promotion of Electric Vehicles (FPPE). “Last year we spent 12 billion dollars on its import. This money could remain in our economy,” Bolesta argues.
Although 100% electric transport seems to be out of the question, gradual transition to electric cars will, with time, reduce dependence on imported oil.
The analysis of Cambridge Econometrics and FPPE shows that most of the money saved by Poles would be spent on services, which would boost the economy. On the other hand, however, it would mean losses for the Treasury, which could look for new measures, e.g. in new taxes imposed on the price of electricity. According to Bolesta, the state should be concerned about the protection of companies supplying parts for the automotive industry, but also about refineries because their revenues will shrink with the development of e-mobility. “If, for example, automotive companies, sometimes employing several dozen or more people do not receive state aid to switch to another type of business, they will gradually lose their traditional market,” explains Bolesta.
Electrification of transport will create opportunities for bus manufacturers. According to experts, they can become our export specialty. Especially that already today on the Vistula river there is an impressive manufacturing base (with Solaris, Ursus, MAN or Volvo brands).
Batteries for electric cars could come next. The global race for this piece of cake does not surprise anyone because the battery is the most expensive part of an electric car today. Competition is particularly fierce between China and the European Union. The first one holds half of the world’s production. “The European Union is devoting huge resources to the development of battery factories and battery components in Europe. At the same time, however, every EU country would like to have a large Chinese battery factory at home,” says lawyer Stroiński, pointing out the paradox. “If we manage to build a value chain around them, a hub related to energy storage technologies will be created in Poland itself, just as the Aviation Valley was created,” predicts Bolesta.
“Remembering the great popularity of the Street Scooter that belonged to the German Post, we should focus on niches and vehicles profiled for a specific group, like the Polish Melex, rather than making some very ambitious plans to create a Polish electric car,” says Mazur, referring to the intentions of ElectroMobility Poland, a company established by energy concerns.
Cities as the pioneers of change
Electrification of urban transport will take place naturally in the first place, as cities are obliged by law to introduce zero-emission buses with batteries and low-carbon buses on the roads, e.g. with hybrid propulsion or using LNG/CNG.
Jan Kuźminski, President of Miejskie Zakłady Autobusowe sp. z o.o. in Warsaw, argues that the cost-effectiveness of a public transport electrification project should not only be seen in the light of the need to bear certain costs, but also in the context of saved expenditure on treating the health conditions triggered by smog. The second point is the actual calculation of what pays off and its clash with reality.
In Kuźmiński’s opinion, the savings resulting from the reduction in oil imports do not necessarily have to be so obvious because electricity prices are also rising. As a result, the calculations made five years ago with regard to the electrification of the capital’s rolling stock are no longer valid.
The break-even time is also extended due to the incorrect estimates regarding the utilisation time of vehicles. MZA in Warsaw assumed that such an e-bus would run around the city for 80,000 hours a year. The first week already showed that due to the downtime associated with charging, the maximum mileage is 40,000 hours per year, which doubles the break-even time assuming that prices are maintained,” Kuźmiński estimates. Meanwhile, electricity prices have soared dramatically, as the cities and municipalities of the Upper Silesian-Silesian Metropolis (GZM) have learned, whose electricity bills will increase by more than 60% next year. The Union of 41 cities and municipalities will pay a rate of 343 PLN/MWh instead of 210 PLN/MWh, as in the last two years.
It is important not only to maximize the time of use, but also to balance the proportion between the capacity of the battery (which is associated with its weight) and the number of passengers travelling by bus.
Realising its needs and capabilities, Warsaw’s MZA considers it reasonable to replace half of its fleet with electrical busses. It plans to buy about 130 e-busses. They are to service only the routes in the city centre, such as Krakowskie Przedmieście and Nowy Świat. There will be chargers at the end bus stops, so that the drivers can use the break to charge the battery.
Lack of policy hampers development
The company is afraid of power supply problems, and therefore it intends to install a 1 MWh power bank at the Wilanowska end bus stop next to six charging points. Although there are not many e-cars on the roads so far, with the development of the market, there may be a lack of power supply capacity. In case of shortage, buses will be charged with energy accumulated at night.
Research into storage in addition to that conducted to increase battery capacity to ensure 300-500 km range (about 160 km today, and up to 80 km in winter and in traffic jams) has been identified by experts as key to the success of electromobility development. “If warehouses are built, then we will have a chance to become independent from oil imports. Otherwise, we will become dependent on imports of rare earth elements for battery production, i.e. on China, which is a tycoon on this market,” notes Grzegorz Kwitek from GZM. As he explains, electrification of transport in this region would not bring such spectacular results as in the capital. Because traffic is distributed among the largest cities of the GZM and not accumulated in city centres. Emissions from car exhaust fumes account for only about 25% of the city’s total emissions. (compared to over 50% in Warsaw). “If we wanted to electrify the whole area, we would have to invest in chargers even in small towns, and one costs at least PLN 0.5 million,” notes Kwitek. However, he is afraid that public transport may become isolated in its quest for electromobility. The development must also proceed in the passenger car segment.
In the case of buses, standardisation of charging points is considered of crucial importance. However, attempts to standardise them may result in an intervention of the European Commission, as it was the case with mobile phone chargers.
Kwitek considers financial support from the government to be crucial to the success of the project. However, he stresses that the economic viability analysis that local and regional authorities have to carry out by the end of 2018 is not possible without knowing the country’s long-term energy policy.
“If we take into account the life cycle of the bus and its battery, as well as the high prices of energy generated from less and less competitive coal sources, it turns out that it is not as beneficial and ecological as it seems,” argues the representative of GZM.
According to Biernacki, already at this stage of electromobility development it is necessary to seriously consider the management of the network of charging points for electric cars in order to avoid overloading the network and to use the periods with surplus energy in the system for charging cars in order to avoid chaos and an unplanned local black-out. “If nothing changes, we will only have peaks in demand and no low-demand periods. There is no energy policy in place and this is becoming a major hurdle on the road to electromobility,” notes Bolesta. This subject will translate into consumers’ postponing the decision to buy an e-car, as well as delaying construction of charging stations by the companies concerned. He also finds the long waiting time for a connection to the grid unacceptable.
Penalties and awards
“Business has to see that it pays off. Otherwise it will not switch to electricity, but choose another car using petrol or diesel. Because companies can be sure that by doing so, they can deduct fuel from operating costs. In the case of electricity, this is not so obvious,” stresses the deputy head of the FPPE. “Such small things make electromobility difficult to apply in practice,” he adds.
“We should learn from the mistakes of those who are several lengths ahead of us. We should also adjust the pace of market development to the expectations of its participants,” advises Mazury. The dynamic changes on this market are evidenced by the fall in prices of lithium-ion batteries, which reached 80-90 percent over the last few years. The batteries themselves have also become more efficient. They make it possible to travel more kilometres without the need to recharge. However, there is still a long way to go. Because owners of e-cars would like to use them not only in traffic jams in the city, but also in the countryside or in the mountains. They also want to treat the batteries of the car as an energy store, from which the house could be powered in case such a need should arise.
The administration is open to introducing changes in the law and they will take place. “The definition of a bidirectional charging point is introduced by the draft amendments to the Energy Law, which are the subject of public consultations. Some things – like this one – can be done relatively quickly, while others require more time,” says Byliński, pointing out that electric vehicles are exempt from excise duty or that the specificity of charging points for electric buses and fast chargers is taken into account in energy tariffs.
Experts also agree that the development of electromobility will not be possible without stopping the influx of cheap diesel cars from abroad. “When, in two years’ time, hundreds of thousands of old diesel-powered cars cross our western border, only the administration and local governments will drive e-cars, and this is because the law specifies such an obligation. And the average Pole with low or medium income will switch to cheap and well-equipped diesel cars from abroad, available in excess,” says Stroiński. Therefore, he sees the need not only for rewarding the purchase of an electric car, but also for a wise policy of creating financial incentives to discourage the mass purchase of cars with obsolete technology. But this will not be possible without an earlier reduction in the price of electric cars. So far, however, as Bolesta points out, the idea of increasing the excise duty on cars emitting the most pollutants has been put in the drawer.