Increased EV uptake and use—benefits and challenges
This chapter outlines the benefits and challenges associated with
increased uptake in electric vehicles (EVs) and manufacturing opportunities in
There are a range of economic, environment and social benefits that would
result from an increased uptake in EVs that are widely known and have been
canvassed in a number of recent reports.
These impacts are briefly summarised below.
A number of submissions highlighted the broad economic benefits of an
increased uptake in EVs for both owner-operators of EVs, and the mining and
A report titled Recharging the economy: the economic impact of accelerating
electric vehicle adoption (PwC Analysis) was recently completed by PwC on
behalf of the Electric Vehicle Council, NRMA and the St Baker Innovation Fund.
This report found that if EVs made up 57 per cent of new car sales by 2030
there could be an increase in real GDP of $2.9 billion and an increase in net
employment of 13 400 jobs, and an additional investment of $3.2 billion in
charging infrastructure. These projections were based primarily on consumer
savings and the rollout of charging infrastructure; however, the report did not
consider the economic benefits to local manufacturing or investment in
Australian electricity generation and transmission assets.
The Australian Electric Vehicle Association (AEVA) of Victoria also
claimed that significant savings would be made available to the economy as a
reduction in liquid fuel costs:
Direct fuel cost savings of $500M per year and $100M in
maintenance costs for every 1 million electric cars in the national fleet. A
potential $7.8 billion per year saving for 80% penetration. Up to $15
billion per year in fuel import replacement and benefit to the balance of
payments, with $8 billion transferred to the local economy, and a
subsequent improvement to fuel security against disruption.
The economic impacts associated with an increased uptake of EVs, as
projected by the PwC Analysis, are summarised in Figure 3.1.
Figure 3.1: Projected
economic benefits of high EV uptake in Australia between 2018 and 2030
The Queensland Government cited the opportunities for 'new green jobs'
such as those created at local Queensland EV charging infrastructure
The EV owner-operator
There are also a number of economic impacts at the EV owner-operator level.
Currently, the upfront cost of an electric car exceeds the cost of an internal
combustion engine (ICE) equivalent. The Victorian Department of Environment,
Land, Water and Planning (DELWP) acknowledged the comparatively high upfront
cost as a significant barrier to EV sales.
Mr Daniel Hilson, Founder and Managing Director at Evenergi, explained his
company's research on the cost of owning and operating an EV:
Our research has shown that there's about a $5,000 gap in
terms of the total cost of ownership of electric vehicles over five years, and
that's based on quite an extensive model that we've built.
Notwithstanding this, the purchase price of EVs is expected to fall in
line with expected decreases in the costs of lithium-ion batteries.
The Victorian Automobile Chamber of Commerce (VACC) reasoned that on current
trends in battery pricing, consumers could expect price parity by 2025 and
could be 'up to 15 per cent cheaper than equivalent' ICE vehicles by 2030
based on EVs 'having a lower cost to produce based on raw materials and a less
Bloomberg New Energy Finance projected that EVs would reach price parity with
ICE by 2024.
In their recent report, the Electric Vehicle Council made the following
observation in relation to projected purchase prices of EVs:
Over the coming year, Nissan, Renault and Hyundai will join
Tesla in introducing new electric vehicle models in Australia priced between
$35 000 and $50 000. While a new car is not affordable for many
Australians, the increased availability of vehicles at these prices will
broaden the market, with fleet vehicles then entering the secondary market.
The Committee also heard evidence that EVs are subject to greater
depreciation of value than their ICE counterparts because of concerns about
rapid technological development rendering older models obsolete and concerns
about the longevity of battery life.
Mr Behyad Jafari, Chief Executive Officer of the Electric Vehicle Council
stated that the global experience is that these issues are resolved with
increased EV uptake:
Depreciation is an issue because there's not a lot of data
available, and people are asking questions like: what is the risk associated with
reselling an electric vehicle? These are things that are being overcome
globally that haven't been overcome in Australia.
However, once a motorist has purchased a vehicle, the on-going operation
and maintenance costs of an EV are significantly less than that of an ICE
vehicle. The Tesla Owners Club of Australia noted that an EV has 'around 20
moving parts' as opposed to closer to 2000 in an ICE vehicle.
The Electric Vehicle Council found that drivers could save $2 326 per
annum in ownership costs as 'EVs are less costly to maintain and run'.
Associate Professor Tim Nelson, Chief Economist at AGL Energy remarked:
Over a 10-year ownership period, UBS estimate the total cost
of ownership to be $5,000 less for EVs relative to internal combustion engine
vehicles by 2021, and $11,000 less by 2025 as battery prices fall. This translates
to projected savings of $1,700 per annum by 2030. Total consumer savings over
the entire period are estimated to reach $14 billion.
Fuel costs are a significant driver of the savings—an EV will cost
around 3 cents per kilometre compared to around 10 cents per kilometre for
an ICE equivalent (see Figure 3.2 below for more costs). Depending on the
electricity price sensitivity (low to high pricing) and based on current petrol
prices, the savings can range from $4.72/100km (high electricity price) to
$11.04/100km (low electricity price) or the equivalent of $0.50 per litre.
Regenerative braking also brings about operating and cost efficiencies
for EV owners as the car is able to recover battery charge through braking.
Mr Karl Gehling, Head of Corporate Communications and
Government Relations at Mitsubishi Motors Australia explained:
Basically what happens is, if the car is ever on a downhill
descent or in a coastal situation, then it collects the kinetic energy from the
electric motors and puts that back into the batteries. That increases the EV
driving range, which is amazing technology.
Although these vehicle operating savings flow to the consumer, it does
result in less business for automotive service and fuel retailers, which is discussed
later in the chapter.
The Committee also heard that EV owners and drivers were being penalised
through the application of additional demand charges on the use of public
charging infrastructure. Mr Rodger Whitby, Chief Executive Officer of St Baker
Energy Innovation Fund argued that if an EV 'plugs in at home versus down the
street, it should aggregate to only one payment and not be two separate
Furthermore, Fast Cities Australia reasoned that a demand charge exemption for
public chargers would assist in encouraging EV uptake.
3.2: Projected electric vehicle operation costs and savings for Australian motorists
Mining and manufacturing
The Committee has heard that Australia has a number of natural
advantages that could support mining and manufacturing opportunities in
relation to EV lithium-ion batteries. In its submission, the Association of
Mining and Exploration Companies highlighted that Australia has large reserves
of the minerals required to make lithium-ion batteries and outlined the
advantages that Australia has in this area:
Australia currently mines over 60 per cent of the world's lithium
Australia has all of the other minerals necessary to progress
further down the lithium ion battery value chain;
Lithium spodumene, which is mined in Australia, is over 10%
cheaper to process to lithium hydroxide than brine, which is more common
The economics of developing further lithium hydroxide processing
facilities in Western Australia is sufficient for four companies, including two
of the world's largest lithium companies (Tianqi and Albermarle), to have
Currently, independent research suggests 89% of the battery precursor
material processing occurs in China, thus Australia may stand to benefit from
any international interest in geopolitical diversification; and
The processing and manufacturing of battery precursors,
components and final products is dependent on quality, precision and robotics
rather than cheap labour and assembly line processing.
Professor Peter Newman affirmed this view, and expanded on the
value-adding opportunities beyond commodity mineral extraction and export
activities, referring to a 2018 report titled Lithium Valley: Establishing
the Case for Energy Metals and Battery Manufacturing in Western Australia:
The need for quality battery metals means that processing of
minerals is now happening in WA close to the mining so that shipping is minimised
and high quality product can be made through highly automated production
systems. Three new plants are being built.
The next phase of this remarkable opportunity for Australia
is to continue to develop the full value chain of battery metals from mining
and processing to battery manufacture, battery use and battery recycling as set
out in the report.
The Committee also heard about the development of lithium-ion battery
manufacturing facilities in the Northern Territory and Queensland (Townsville).
Mr Brian Craighead, Director of Renaissance Energy, spoke optimistically about
the advantages that Australia has and the future of manufacturing in this
I have personally been in several different electronic
vehicle start-up manufacturing facilities around the world. They're small,
they're lean, they're clean and they are more about smarts [than] design
beauty. Scale isn't the advantage it once was. It's intelligence and design and
customisation for market. For me, that works perfectly with the advantage here
in Australia, We have very smart folks. We have the raw materials we need all
within our walled garden. Pretty much every single raw material required to
construct an electronic vehicle is within our walled garden of Australia, and
that's quite unique. We've got the smarts, certainly. So, for me, it was really
about: if the opportunity is there, the demand is there.
Several witnesses and submitters expressed a view that Australia should
look at its advantages and strategically manufacture in areas of competitive
advantage in the supply chain.
Professor Mainak Majumder, Department of Mechanical and Aerospace Engineering
at Monash University argued:
The next question is: should we manufacture EVs in Australia?
My opinion would be no, because there are already companies rolling out
products, but we can be selective about this opportunity. We can identify and
support areas of strength instead of joining the mass manufacturing bandwagon.
In summary, I believe opportunities may lie in leveraging the strengths we have
in our innovation and intellectual capability by finding and developing niches
which can play well in this upcoming world.
Throughout this inquiry, the Committee has visited and heard from a
number of successful Australian manufacturers associated with the EV industry. The
Victorian Branch of the AEVA highlighted that electric trucks and buses were
currently being assembled in Australia by companies such as Victorian-based
AVAAS and SEA.
The issues in relation to developing mining and manufacturing industries
associated with EVs are explored further in chapter 4.
Environment—reducing greenhouse gas emissions
The Department of the Environment and Energy stated that 'transport,
predominantly light vehicles, is the second largest source of greenhouse gas
emissions (GHG) in Australia behind electricity', contributing about 19 per
cent of Australia's total emissions.
The department further noted that:
Under current policies, transport sector emissions are
projected to steadily increase to 112 million tonnes CO2-e by 2030 (a 15 per cent increase from present levels)...due to
population and economic growth, with cars and light commercial vehicles
projected to remain the sector's
largest source of emissions.
Primarily these emissions reflect the combustion of petroleum-based
fuels with 58.4 per cent of fuels being used by light passenger vehicles; and
the balance, 41.6 per cent, being used by commercial and heavy vehicles.
The PwC Analysis observed that Australia's transport sector would have
to reduce its emissions profile in order for Australia to meet its commitments
under the United Nations Framework Convention on Climate Change as agreed in
Paris on 12 December 2015:
Assuming the electricity sector meets its target emissions
reductions, further contributions from transport and other sectors would be
required to meet the overall national Paris commitment, as emissions from the
electricity sector make up one third of total emissions.
The PwC Analysis found if 57 per cent of new cars were EVs by 2030,
there would be a cumulative reduction in CO2 emissions of 18 million
tonnes—the equivalent of removing 8 million petrol vehicles off the road.
Analysis from the International Energy Agency noted that in Europe, electric
cars 'emitted about 50 per cent less than gasoline cars and 40 per cent
less than diesel cars' when their fuel use (electricity or gasoline) was taken
into account. Importantly, when the entire life-cycle of the car (including
manufacturing, use and disposal) was considered, there was a reduction in GHG
emissions of 30 per cent for EVs.
The Queensland Government submitted that 'EVs charged on Queensland's
current electricity grid, emit around 25 per cent less than a fossil fuel
vehicle' noting that this will improve as Queensland 'works towards its target
of 50 per cent renewable energy by 2030'.
Although increased uptake of EVs leads to a reduction in GHG emissions
from direct fossil fuel combustion as alluded to above, an important
consideration becomes the source of electricity used to recharge the EVs. A NSW
Parliamentary Research Paper highlighted that currently 'electricity generation
in Australia is highly reliant on coal and other fossil fuels'.
Furthermore, 'charging EVs from high fossil fuel electricity networks generates
more GHG emissions than charging EVs from low fossil fuel electricity
In the Australian context, Tasmania emits the lowest GHG emissions due to its
high reliance on hydroelectricity and other renewable sources for its
Whilst Victoria is the only jurisdiction where an EV's GHG emissions slightly exceed
that of an average ICE due to the state's high reliance on brown coal
The Australia Institute (TAI) acknowledged the impact of electricity
generated from brown coal on EV emissions:
Critics of electric vehicles claim that they would perversely
increase emissions when compared with business as usual, when the vehicle fleet
is overwhelmingly dominated by internal combustion engines. For example, a very
powerful electric vehicle [Teslas] charged in Victoria today will be
responsible for relatively high emissions compared with the national fleet
average for internal combustion engine vehicles, because brown coal burned in
that state produces a lot of carbon dioxide per unit of energy generated.
TAI has put forward the counter-argument noting that an increased demand
for electricity stemming from increased EV uptake would lead to a requirement
for additional or marginal electricity production. TAI observed:
What we do know is that almost universally around the world
new generation capacity is mainly renewable and old coal-fired power plants are
being junked. So to the extent that new generation capacity is required to meet
increases in demand (and to replace coal-fired generation) then the marginal
response to an increase in demand has a very low emissions intensity and may
well be zero.
Air pollutants and public health
The Committee has heard that increased use of EVs can also lead to a
reduction in local air pollutants. Hobsons Bay Council noted that 'electric
vehicles due to their electric motors emit less air pollutants than' ICE
The Centre for Air pollution, energy and health Research expanded:
Conventional vehicles with internal combustion engines are a
major source of ground level air pollutants such as carbon dioxide (CO2), nitrogen oxides (NOx), and particulate matter (PM). Air pollution has severe adverse
effects on health that can lead to premature mortality. The replacement of
conventional vehicles with electric vehicles may result in a range of
environmental, health, and climate benefits due to possible reductions in
ground level pollutants as well as greenhouse gas emissions.
Dr Liz Hanna set out the impact of air pollution on health at a global
The World Health Organisation (WHO) reports that over 4.2
million deaths a year are linked to exposure to outdoor air pollution, and
children are particularly susceptible. The WHO 2018 Fact Sheet on Air Pollution
finds 9 out of 10 people worldwide breathe polluted air, almost all urban
residents on the planet. Air pollution causes 24% of all stroke deaths (1.4 million
deaths annually), 25% of global heart disease deaths (2.4 million deaths
), and 43% of all lung disease and lung cancer deaths (1.8 million deaths every
Dr Ingrid Johnson stated that 'air pollution from vehicle emissions
results in thousands of deaths and yet the technology exists to massively
reduce this pollution through the use of no-emissions [EVs]'.
ClimateWorks referred to research demonstrating the impact reduced vehicle
emissions could have:
Through reducing air pollution, the transition to electric
vehicles will also have benefits for health. In their submission to the
Australian Government's discussion paper on fuel quality standards, the Clean Air
and Urban Landscape Hub and the Melbourne Energy Institute estimate that air
pollution due to vehicle emissions caused 1 715 deaths in Australia in 2015, a
number larger than the national road toll for the same year. Given that
electric vehicle adoption is likely to be concentrated in metropolitan areas of
Australia, where population densities are at their highest, there is strong
potential for reductions in urban air pollution and meaningful benefits to
Dr Hanna estimated that the economic cost of air pollution from the
transport sector to be as high as $17.4 billion in 2018. This cost takes
the economic burden on families for days, weeks and years and
from premature deaths. It means (a) they lose their earning capacity (b) the
society misses all the effort and cost that was put into their training and
expertise, and (c) the society misses the additional contribution that people
make to society not only as productive workers but in mentoring, parenting and
caring et cetera.
Dr Hanna noted that some of the long term negative effects of air
pollution on humans still remain unknown:
You can draw the corollary to lead and lead petrol.
Initially, we thought blood lead levels were okay and kiddies wouldn't have
cognitive impairment. Of course, as more and more research came out, the safe
levels in the regulations came down and down. We realised that exposure was
harmful even at lower levels. Again, it gets back to...actually needing the work
to be able to do it. It would be impossible to think that, as new research was
done, we'd find out that it's actually less harmful. Without question, with
everything we do, when we go and find out we find it's not as safe as we
Concerns were expressed that the benefits of using no-emissions EVs may
be reduced if the electricity were sourced from fossil fuels. The panel argued
that if the power generated to recharge the EVs is from fossils fuels, then
'that's only going to remove the health effects from one site [roads] to
another site [fossil fuel power generator]'.
Many submitters and witnesses pointed out that EVs have the benefit of
emitting less noise than their ICE equivalents.
A NSW Parliamentary Research Paper also highlighted the potential for reduced
traffic noise due to increasing EV uptake:
EVs at slower speeds are virtually silent, as they have no
internal combustion engine and the only noise emitted from their electric motors
is a barely perceptible high-pitched frequency. EVs do produce noise from wind
resistance and tyre-road contact, but this noise only becomes perceptible at
However, low levels of noise may 'pose an additional risk to pedestrian
safety'. A recent paper identified that EVs are 'very difficult for [pedestrians
who are vision impaired] to detect and respond to as they are unable to rely on
their other sensory modalities such as hearing, to navigate when it is safe to
cross roads. Similarly, detection concerns have also been raised about
The paper also put forward a broad range of recommendations to address this
issue including regulatory reform to fit acoustic alert systems and advanced
driver assistance systems to EVs in order to avoid collisions with pedestrians.
Fuel security—national security and
A number of submitters highlighted the economic and national security
implications of Australia's current reliance on imported oil.
The Victorian Government Department of Environment, Land, Water and Planning (DELWP)
noted that 'Australia is increasingly reliant on imports for its liquid fuels'
with 91 per cent of transport oil and 67 per cent of total oil imported. This
makes 'Australia vulnerable to potential supply disruptions and to unexpected
changes in demand from other customers in Asia'.
DELWP described the impact of EV uptake on Australia's reliance on oil imports:
Electric vehicle adoption can help address the issue of fuel
security. As Australia is vulnerable to a disruption to transport fuel supplies
due to the current and increasingly high oil and fuel import dependency, local
production of electricity as [a] fuel source for electric vehicles will
decrease our international reliance on oil and enhance our fuel security.
Analysis developed by ClimateWorks in its 2016 report, The path forward for
electric vehicles in Australia[,] indicates that the increase of
electric vehicles into the Australian fleet, consistent with the pathway to
zero net emissions by 2050, would increase fuel stocks from 18 to 21 days in
2030, and 16 to 20 days in 2050 compared to a business as usual baseline.
Oil/fuel imports would decrease 16% in 2030 and 28% in 2050.
Air Vice-Marshall John Blackburn AO (Retired), a noted fuel security expert,
told the Committee that:
Electric vehicles could play a significant role by improving
our energy security by reducing the demand for foreign sourced oil and fuels
and by providing a significant increase in the transport system resilience in
the event of a fuel supply disruption.
Notwithstanding the considerable benefits of increased EV uptake, there
are a number of associated challenges including range anxiety, a declining fuel
excise revenue base, changes to demand and supply on the electricity grid, and
industry transition including a reshaping of the job market.
Concerns have been raised about range anxiety linked to limited charging
infrastructure, particularly in non-metropolitan areas.
Although it is expected that most EV recharges are undertaken at home or at a
workplace, concerns stem from the relatively shorter driving ranges of current
model EVs—ranging from 150km to 489km on one charge—and the current dearth of
charging infrastructure, both geographically and in total—there are 783 public
charging stations compared to 6 400 petrol stations with multiple bowsers.
The majority of these stations are 'slow charging AC stations', with a little
under one-tenth being 'fast charging DC stations'.
As noted in Chapter 2, newer fast charge stations enable close to full charging
in as little as 15 minutes allowing travellers to recharge and undertake the
next leg of their journey.
Mr Ali Asghar, Senior Associate at Bloomberg New Energy Finance told the
Committee that many automakers are 'introducing more cars with longer driving
ranges', further noting that 'greater model availability and reduced range
anxiety should attract a larger consumer base for electric vehicles'.
The Committee notes the imminent release to market of a number of more
affordable, longer range EVs such as the Hyundai Ioniq Electric, Nissan Leaf,
and the Volkswagon I.D.
Plug-in Hybrid Electric Vehicles (PHEV) can be seen as a viable
transition technology to alleviate range anxiety as public charging
infrastructure is built:
PHEVs with electric range aligned with the typical day-to-day
usage of the vehicle should be given especially close consideration in this
respect. They will deliver the vast majority of benefits (economic,
environmental, and social), without any issues around range anxiety caused by a
lack of public charging infrastructure in the early days of the transition.
Beyond its electric range, a PHEV functions very much like a typical petrol
vehicle. The PHEV can be considered a stepping-stone on the journey to a future
which is more fully electric.
The issue of public charging infrastructure and consumer education will
be discussed later in the report.
Fuel excise revenue
The Committee heard that one of the consequences of an increasing EV
fleet and the corresponding reduction in liquid fuel consumption would be a
decrease in the federal fuel excise tax. Mr Adrian Dwyer, Chief Executive
Officer of Infrastructure Partnerships Australia noted that more EVs would 'drive
a rapid and terminal decline in the major funding base for Australia's road
Mr Dwyer noted recent trends associated with fuel excise:
According to the [Parliamentary Budget Office], fuel excise
has fallen from 1.6 per cent of GDP in 2001–02 to one per cent in the year
2016–17. At the same time, the number of vehicle kilometres travelled on
Australian roads has increased to 250 billion. In short, revenue is going down
while consumption is going up. This is the exact opposite of a good funding
model. While fuel excise is not directly hypothecated, it's clear that a
declining revenue base will not support the investment required to meet
increasing demand for our road networks.
Mr Steve Bletsos, Senior Research Analyst at VACC highlighted that fuel
excise is 'roughly $16 billion per annum and that money has to come from
somewhere' if it is not coming from excise.
The Committee has received evidence on a replacement scheme known as a road
user charge—a distance based tax that would apply to all vehicles regardless of
The federal government has acknowledged the challenges around revenue in
this space, and, in 2016 instigated a study into how road user charging might
be implemented as a replacement to fuel excise.
The Committee has not received evidence indicating significant progress since
Dr Jake Whitehead of the University of Queensland identified 'public
resistance' as the main challenge to implementation of a road user charge.
Dr Whitehead explained the current system and how it would translate into
a road-user charge, and the challenges that a road user charge would need to
At the moment we have fuel excise in terms of standard fossil
fuel vehicles, and that effectively is a proxy for both how far people travel
and how fuel-intensive their vehicles are. With electric vehicles, obviously
they don't pay fuel excise, so there's been a lot of discussion about bringing
in a per-kilometre charge. But what you see is that, in cases where that has
been undertaken, you can have some pretty significant equity impacts.
Obviously, in a country like Australia, where we have a significant population
outside of urban areas, if we are charging them purely based on how far they
travel, that's going to have a much more significant financial impact on them
as opposed to those individuals who are driving in urban areas. The reality is,
though, that it's those drivers in urban areas who are causing the greatest
cost to society through congestion but also much higher emissions through that
kind of stop-start-idle traffic.
Road user charging will be discussed further in Chapter 5.
The electricity grid—energy demand
and grid stability
An increased uptake of EVs would displace the transport sector's fuel
source from petroleum to the electricity network, placing a range of
unprecedented demands on the grid. The International Energy Agency made the
point that 'power demand and road mobility demand are both characterised by
peaks during morning and evening hours and a period of low demand during night
The former Minister for the Environment and Energy, Hon Josh Frydenberg MP
quantified this extra demand:
An extra one million electric cars is the equivalent of 5.2
terawatt hours of power demand. This is about a 2 per cent increase in overall
In its supplementary submission, Infrastructure Australia (IA) stated
that EVs will have 'negligible effects on grid consumption' over the next five
years, but that this demand is then expected to grow over the next 5–10 years:
[Australian Energy Market Operator] AEMO [forecasts] that
electric vehicles will begin to have sizeable impacts on consumption. In this
period, consumption is forecast to increase at an annual average rate of
approximately 1.3%. [The Independent
Review into the Future Security of the National Electricity Market
conducted by the Chief Scientist Dr Alan Finkel] found a 20% EV uptake could
account for 4% of grid demand. Extrapolating on that figure, 100% uptake could
account for [an additional] 20% of grid demand.
It is likely that most of the power for EVs will be drawn from the
grid—unless it is powered by on-site solar panels and batteries. During week
days, most of the charging events are likely to occur when people return home
from work for the day, potentially resulting in peak EV charging coinciding
with the peak energy use period of the day.
This raises questions about additional generating capacity and how EV owners
can be incentivised to charge during off-peak periods.
In addition to the abovementioned issues there will also be an impact on
the transmission system as more electricity is demanded by households and
public chargers. This may push the grid to its operating limits, hence
requiring upgrades to substations and transmission infrastructure. Equally,
this may lead to, and require a more coordinated approach to vehicle charging.
Energy Networks Australia (ENA), the peak national body representing gas
distribution, electricity transmission and distribution businesses, noted that
'Australia's distribution networks were not designed for any significant uptake
of electric vehicles and the consequential demand for charging'. ENA flagged mass EV charging events at
existing peak times such as when people arrive home from work at 5–6pm on an
extremely hot day as a potential issue with the following effects:
Exacerbation of electricity consumption peaks.
Exceedance of low voltage (suburban) network capacity, causing
poor reliability or restrictions on EV charging.
IA stated that 'making sure EVs do not contribute to peak demand is
crucial to keeping network costs down for consumers and taxpayers'.
AEMO stated that the lack of visibility on the location of distributed
energy resources (DER) such as EVs, solar panels and home batteries make it
difficult for AEMO to 'manage power system security in the short term and
Impacts of lack of visibility include barriers to operational
planning and inefficiencies in asset utilisation, market operation, or
investment decision-making, which ultimately lead to additional costs borne by
AEMO is currently 'undertaking a broad [DER] work program to assess and
address the challenges and opportunities of changing consumer behaviour'.
There is an expectation that increased small-scale and large-scale solar
photovoltaic (PV) will lead to an accentuated generation peak during the day.
There is also a potential role for EVs to charge during periods of low demand
and discharge battery power into the grid at times of high demand.
In an answer to a question on notice, AEMO provided the Committee with a graph
that outlined how the use of batteries (both stationary and mobile EVs) could
assist in flattening out the demand and supply curve.
Graph 3.1: National Energy
Market battery charge and discharge profile overlaid with PV generation
IA flagged that by 2030, there would be significant residential
(small-scale) generation and storage:
By 2030–31 AEMO estimates that consumers could have as much
as 33,136 MW of solar PV and 4,969 MW of battery storage, as well as the
battery capacity of their electric vehicles.
ENA advised that changing consumer behaviour around charging would need
to involve the use of incentives through changes to tariffs. For instance, modifications
to flat tariff structures are required to incentivise consumers to move away
from convenience charging at peak times to making vehicle batteries available
for both charging during peak generation times and discharge during lower
generation and higher demand periods.
In addition to a projected increase in peaking requirements and overall electricity
demand AEMO also raised the challenges in locating and establishing public
charging equipment. 
Using fast chargers 'requires on-demand power similar to an industrial
For example, 'a large, fast charging station in a rural area will have a much
greater impact on the surrounding network than charging stations in
metropolitan areas' noting the following considerations:
The planning of public charging infrastructure needs to be
closely coordinated with AEMO and network operators in order to:
Understand any limitations on the local network.
Determine technical requirements to effectively interface with
the network at each location.
Understand requirements for any supporting technical
infrastructure such as batteries.
Identify network areas where public charging infrastructure may
Determine efficient network connection processes.
Standardise regulation and technical standards for
In its submission, TAI affirmed this view focusing on the need for
coordinated EV charging to optimise the supply and demand of electricity.
Coordinated charging would prevent [EV] charging from increasing the size of
afternoon and evening peaks' and would 'shift the charging periods overnight to
"fill" the demand "valley", when electricity is cheaper'.
The Electricity Network Transformation Roadmap: Final Report found
'that there is a need to redefine the structure and architecture of the
electricity system to meet the requirement for flexibility and agility in the
IA highlighted that 'there could be a need for an [electricity sector]
investment between $2.2 billion and $9.7 billion by 2046'.
With the right frameworks in place, electric vehicles will be
useful grid assets whose benefits will increase the more electric vehicles are
adopted. EVs used in a smart network could be used as a short-term storage of
excess, off-peak electricity generated from renewable sources that could
flexibly be dispatched [to] counteract peak demand. They could also be used for
local, residential consumption.
Transgrid suggested that by 2040 EVs could provide up to 350GWh of
storage, and observed:
If aggregated effectively, this level of storage could play a
significant role in providing grid stability and ancillary services, with 350
GWh[,] equivalent to the proposed capacity of the Commonwealth Government's
Snowy 2.0 project.
The impact of EV charging on the grid will be explored further in Chapter
Earlier in the report, the Committee highlighted the projected net
increase of 13 400 jobs as a result of an increased uptake in EVs.
Notwithstanding the increased job opportunities in EV sales, servicing,
components and charging infrastructure, the paradigm shift away from an oil-based
logistics, parts and servicing transportation system will result in job losses
and negatively affect some businesses in these sectors.
Motor Trades Association of Queensland (MTAQ) explained the fundamental
changes to the automotive sector resulting from the uptake of EVs:
Business models in most cases will require profound changes
to adapt to the progressive change in vehicle propulsion technology. There is
likely to be extensive structural change needed within the automotive value
chain that will have repercussions for the transport sector and the national
One submitter described a 'seismic shift in the fuel distribution
network in Australia' arguing that major fuel retailers will be significantly
Fuel retailers will have difficulty competing with the
convenience and cost of cheap home charging even if they install DC charging
stations in local service stations. Most local service stations will disappear
because electric cars will charge in homes.
An August 2018 report from Infrastructure Victoria into automated and
zero emissions vehicles infrastructure found that there would be a 25 per cent
reduction in ongoing maintenance requirements for battery electric vehicles and
nearly 11 000 job losses nationally in the fuelling sector.
The VACC submission put forward a Victorian perspective on projected job
losses of up to 6 000 as EV uptake increases and lower demand is
experienced in sectors associated with ICE vehicles and then not replaced in
the sectors associated with EVs. VACC highlighted that nearly 6 000 job
losses and 2 000 automotive business closures are projected by 2030 if
there is a high uptake of EV (20 per cent). These losses are projected
across fuel retailing (910 jobs), automotive repair and maintenance (1 900
jobs), motor vehicle parts retailing (1 370 jobs) and car wholesaling and
car retailing (1 200 jobs). The projected losses and closures are about
halved under a scenario where 10 per cent of new cars are EVs by 2030.
The primary reasons for the net loss of jobs relate to lower liquid fuel demand
and lower servicing requirements for EVs discussed earlier in the chapter.
Noting the risk of job losses, the City of Adelaide highlighted the
importance of supporting and encouraging the 'motor trades sector to transition
to electric vehicle sales, servicing and potentially business models, such as
car share and mobility as a service, which may result in lower levels of
private car ownership'. Notwithstanding this commercial and industrial
transformation, MTAQ was mindful that there would be significant new opportunities
through the new propulsion technologies combined with emerging trends such as
automation and car sharing.
Australia is on the cusp of the most significant disruption and
transformation of our transport system since the advent of the internal
combustion engine. Taking into account the evidence received during this
inquiry, the Committee is optimistic about the environmental, economic, public
health and national security benefits that increased uptake of EVs will bring
to Australia. Reductions in greenhouse gas emissions, cost savings for vehicle
owner-operators, increased job opportunities and economic growth, improved
health outcomes and increased fuel security are just some of the benefits that
Australia can realise as EV use begins to climb.
Notwithstanding the overwhelming benefits of increased EV use, the Committee
is cognisant of some of the challenges that are emerging as Australia moves
away from an oil-based transportation system towards EVs. A continued erosion
of the fuel tax excise, questions about how we plan and manage our electricity
generation and transmission, and transitional arrangements for employees and
businesses reliant on the ICE vehicle are just some of the challenges that need
to be met.
The Committee considers that the benefits of EV uptake are not to be
taken for granted; likewise, the challenges that we now face will also not be resolved
in the absence of a coordinated strategy. The pathway forward that seizes the
opportunity and manages the risks of an EV future is discussed in Chapter 5.
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