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Electrifying last-mile delivery: A total cost of ownership comparison of battery-electric and diesel trucks in Europe

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Europe’s increases in online shopping and delivery over the last two years show no signs of waning. Parcel delivery vehicles make up one of the most significant heavy-duty vehicle segments by volume in Europe, recording a market share of 11% in 2020. Fortunately, their predictable schedules and relatively short routes make last-mile delivery vehicles a prime candidate for electrification. In fact, electric delivery trucks will soon be cheaper to use than diesel trucks.  

The International Council on Clean Transportation and RAP break down the various vehicle costs for electric trucks, the energy and network expenses for charging them, and the availability of purchase premiums in six major European cities. In some scenarios, electric trucks reach cost parity with diesel vehicles yet this year. Without the support of these premiums, parity is delayed until 2025 or even 2030 in some cities. 

Based on this comprehensive analysis, the authors conclude that battery-electric trucks are economically viable today, given the currently availability of purchase premiums. Other important aspects to consider when electrifying last-mile delivery fleets include choosing the appropriate battery size and reducing operational costs through smart charging of the vehicles. 

Policymakers have the ability to advance electrification of electric delivery trucks by: 

  • Implementing a national bonus-malus tax scheme to finance purchase incentives for zero-emission trucks. 
  • Imposing emissions charges on all diesel vehicles entering low- and zero-emission zones in city centres. 
  • Deploying ‘smart’ charging infrastructure in urban logistics depots. 
  • Requiring Member States to implement time-varying electricity and network tariffs to ensure affordability for logistics operators electrifying their fleets. 

Power System Blueprint

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Accomplishing climate neutrality by 2050 requires a zero-emissions power sector by the mid-2030s. Securing a decarbonized power system early will unlock pathways for the whole economy. One of the biggest challenges to accomplishing this ambitious goal is time—we have a need for speed if we want to meet decarbonization goals by 2035.  

This is why RAP has created the Power System Blueprint, an interactive website that allows visitors to view different options for decarbonizing Europe’s power system. The Blueprint lays out how to design the regulatory context to achieve a clean, reliable, equitable and affordable European power system by 2035. RAP pulled together the latest insights for supporting regulators, NGO’s, governments and anyone interested in the decarbonization pursuit. 

The Blueprint is designed as a schematic of regulatory solutions linked to six important central principles. In the suite of regulatory solutions (also known as factsheets),you will find comprehensive information, the most important regulatory steps and further reading. 

The decarbonization of the power sector can be done by 2035 but will require a rapid and systemic rethink of the existing European power system regulatory landscape. Within the Power System Blueprint website, you’ll find solutions to some of the some of the largest tasks we face working within this tight timeframe.   

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The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe

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To meet its 2050 climate goals, Europe will need to purge its power sector of carbon emissions by the mid-2030s. This means integrating renewable energy resources such as wind and solar at an unprecedented scale and pace. Only one path allows for rapid decarbonisation while maintaining a reliable energy system, minimising system costs and increasing energy democracy. We must ensure that customers have the incentives and tools they need to adjust the flexible portion of their electricity use in ways that are beneficial for the system.

Flexible resources are essential to balance supply and demand and make best use of renewable generation.

In addition to climate impacts, the most recent energy price crisis has underscored the urgent need to release Europe from gas dependency — and therefore from exposure to gas price volatility — by progressing swiftly to a clean, efficient and electrified energy system.

This paper focuses on the greatest untapped source of flexible demand across Europe: household flexibility. Households can increasingly shift how and when they use electricity, without compromising utility or comfort, thanks to new digital technologies and storage. Yet, as the users with the lowest individual electricity use, they often face the greatest barriers. If enabled effectively, through inclusive access to flexible assets, markets and retail offers, there is an opportunity to improve energy services and reduce costs, which is particularly important for low-income and vulnerable households.

For household demand-side flexibility to take its rightful place in the energy transition, swift and concurrent effort is needed on multiple levels of policy and regulation. Underpinning this process is the principle that demand-side flexibility is more than an individual customer right; it’s a vital, cost-effective power system resource that should be valued as such.

Europe needs a cohesive regulatory strategy to create the infrastructure that will enable large-scale, aggregated customer flexibility. As a starting point, this paper presents a five-point action plan for scaling up household flexibility in Europe, with specific recommendations for carrying out each action.

  • Action 1: Create robust tools for measuring and valuing customer flexibility.
  • Action 2: Incentivise flexibility through energy market price signals.
  • Action 3: Ensure a level playing field for demand-side resources.
  • Action 4: Accelerate installation of flexible assets in homes.
  • Action 5: Make flexible actions easy and safe for customers.

By investing now in strategies that wholeheartedly embrace household demand-side flexibility as a power system resource, Europe can avoid paying a much higher price later.

Owning the future: A framework of regulations for decarbonising owner-occupied homes in Scotland

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Scotland’s recent Heat in Buildings Strategy sets out a plan to achieve the ambitious target for all Scottish buildings to be decarbonised by 2045. In practice this means replacing the heating systems of nearly 90% of Scotland’s 2.5 million homes that are currently heated with fossil fuels. As part of its regulatory framework, the Strategy states that all homes should achieve a minimum energy performance, defined as Energy Performance Certificate (EPC) C, by 2033. And all fossil fuel boilers will be phased out beginning in 2025. In short, there’s a lot to do over the next 20 years.

In Owning the future: A framework of regulations for decarbonising owner-occupied homes in Scotland, authors Dr. Catrin Maby and Louise Sunderland take a deep dive into the Strategy, focusing specifically on the owner-occupied building stock. The proposals in this report aim to identify and fill gaps in the framework of regulations, as well as ensure that implementation is well timed and staged so that fabric improvements are completed before heating systems are changed. The proposals also take into account different building types and the need to decarbonise higher carbon fuels first. Regulations alone, however, do not guarantee successful renovations, so the report outlines essential funding, finance, practical support and safeguards for affordability that must come alongside.

The authors put forth a number of recommendations on how to best strengthen the Strategy. Although specifically designed for Scotland, these recommendations may be applicable to any government designing an efficient, effective and fair regulatory framework:

  • Remove uncertainty on the decarbonisation options for buildings to ensure all actions are no regrets
  • Enable effective standards through changes to EPCs and the Standard Assessment Procedure (SAP)
  • Introduce a fabric energy efficiency standard to enable efficient, flexible heating
  • Phase out fossil fuels for heating through early incentives, and regulatory triggers and backstops
  • Enable alternative compliance routes for more complex, multi-occupancy buildings
  • Utilise existing compliance structures and resource local authorities to enable and enforce

You can find the report’s executive summary here.

The time is now: smart charging of electric vehicles

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The transition to zero-emission mobility and a decarbonised energy system are best planned in tandem, and electric vehicles will play a key role in both shifts in the coming years. Automakers are already committing to phasing out internal combustion engine vehicles, making Europe’s transport future electric. EVs are more than a cleaner vehicle; they are a powerful resource for consumers and power sector actors. It is critical, therefore, to draw the most value from charging electric vehicles through so-called smart charging. Smart charging means charging a vehicle flexibly to lower costs for EV drivers and grid companies, to accommodate the integration of renewable energy sources and to minimise EVs’ collective impact on the power system.

Now is the perfect time to lay the groundwork for a robust regulatory framework that fosters a market for smart charging tariffs and services. By designing policy measures in a consistent manner across Europe, legislators can help ensure that the EV services market can prosper and capture the benefits smart charging offers. To this end, RAP analysed 139 tariffs and services available across Europe that specifically involve smart charging to highlight best practices and innovative approaches.

To ensure that all Europeans can charge smartly wherever they are on the continent, RAP recommends that policymakers:

  • Make smart charging the default everywhere.
  • Make public charging smart too.
  • Empower consumers to make informed choices.
  • Improve rewards for consumer flexibility.
  • Stack multiple services for smart charging to increase individual and system benefits.
  • Make local grids ‘smart charging ready.’

The perfect fit: Shaping the Fit for 55 package to drive a climate-compatible heat pump market

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Removing fossil fuels from heating is a goal of policy makers around the world in order to decarbonise energy systems and to remove exposure to fossil fuel imports. Alongside efficiency measures, the key technology to replace fossil fuels for heating is heat pumps. In the EU, where fossil fuels — mostly gas — dominate the heating mix, rapid action on heat is needed and the share of heat from heat pumps is expected to grow at lightning speed. Heat networks, which simultaneously need to grow rapidly, are also expected to see much of the heat they transport produced from heat pumps.

This report — a collaborative effort between RAP, Agora Energiewende, CLASP, and the Global Buildings Performance Network — makes the case that the Fit for 55 package can drive a robust heat pump market in the EU, and that reform of the proposals is needed.

With decades of support given to fossil fuel heating technologies, the rapid deployment of heat pumps will need support. The report identifies the current barriers to making that happen, as well as the six areas where the Fit for 55 package can go further in supporting heat pumps at the scale needed:

  • Development of ETS 2 in the ETS directive, which would include buildings as well as transport sectors.
  • Revisions to Energy Taxation Directive to ensure electricity is always taxed lower than other fuels, which will have tax levels linked to environmental damage.
  • Recast Energy Efficiency Directive in which proposals are set to disallow energy savings from boiler installations, as well as introduce a standard for ‘efficient heating and cooling’ networks.
  • Revised Renewable Energy Directive, which includes higher targets for renewable heat use in buildings.
  • Revisions to the Energy Performance of Buildings Directive, which include the need for Member States to set out policies for fossil fuel heating phaseouts by 2040 and the need for new, zero emission buildings by 2030. Revisions also include uplifts to minimum energy efficiency standards.
  • Modifications to energy labelling and ecodesign regulations for heating appliances are being reviewed and rescaled in parallel to the package.

The report also details how Member State-level policy reforms can move ahead of the Fit for 55 changes in the shorter term. These policies need to be supported by clear government heat pump strategies and joined-up heat and buildings governance. Immediate action is needed to reform heat pump policy across the EU. The Fit for 55 package provides a window of opportunity for policy change that must not be missed.

Read our two-page summary here.

The Clean Heat Standard

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Vermont’s Global Warming Solutions Act requires that greenhouse gas emissions from thermal end uses (heating and hot water) be reduced by at least 15% below 2018 levels by 2025 and then by 40% by 2030 and 80% by 2050. This report, published by Energy Action Network, describes a performance-based program, the Clean Heat Standard, that would create a path for Vermont’s heat suppliers and local enterprises to work to reduce greenhouse gas emissions and fossil heating costs over time.

Smart Rate Design for Distributed Energy Resources

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Net metering with monthly netting — a simple billing mechanism for distributed energy resources (DERs), often primarily solar PV — has existed since the early 1980s. In recent years, there has been a wide-ranging national debate about the best methods to reform rates for distributed energy resources, driven by the inefficiencies of traditional rate designs, concerns around cost shifts, and the potential to use customer-sited resources to lower system costs.

This paper was produced for the Michigan Public Service Commission as part of a Distributed Energy Resources Rate Design working group process under the state’s MI Power Grid initiative. Michigan already transitioned from monthly netting to the “inflow/outflow” model over the past few years. This paper examines the trade-offs involved in updating approaches to DER rate design. It then suggests three possible pathways for further reform to help residential DERs fulfill their promise as a key part of the grid of the future in Michigan.

  • Gradual evolution: This pathway would entail modest improvements to the efficiency of pricing for new distributed generation customers and overall rate design, along with associated cost allocation improvements, with a minimal need for new customer education efforts, process reforms or administrative burdens.
  • Advanced residential rate design for DERs: This pathway would be an aggressive effort to enlist a large segment of residential customers in more sophisticated time-varying rates on a default or mandatory basis to optimize their usage, storage and generation patterns to lower overall system costs while ensuring fair cost recovery with new rate structures. This effort may require significant new analysis and process reforms, as well as customer education and assistance with energy management.
  • Customer choice and stability: This pathway would create a simple and understandable set of options for customers that are fair to nonparticipating ratepayers, with stable payment schemes that may lower barriers for both customers and DER companies. This model requires significant administrative efforts to determine and update value-based credits and set the grid access charge.

 

 

 

 

Participating in Power: How to Read and Respond to Integrated Resource Plans

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Traditionally in planning power sector investments, utilities have been focused on two metrics for success: reliability and affordability. These metrics remain important, but they do not effectively account for the climate, environmental, and human impacts of fossil fuels, which disproportionately affect marginalized communities. To address climate and equity challenges, utilities will have to transform the way they plan – ensuring that a full range of resources are considered to meet utility customers’ needs. This should include both supply- and demand-side options, as well as distributed energy resources.

One of the most important opportunities to advocate for such outcomes is via integrated resource plans, or IRPs, which regulated utilities submit to their public utility commission (PUC) to plan how they will meet consumer needs over longer time scales of 10 to 20 years. PUC processes need public input, but participation has historically been limited because of the technical and legal expertise required. Participating in Power, the product of a collaboration between RAP and the Institute for Market Transformation, aims to address that barrier. It is intended as an educational resource for local governments and other entities who are advocating for advancing clean energy and equity priorities via intervention in the IRP process.

Participating in Power describes the structure of an IRP, how modeling and demand forecasts are constructed, and the process by which portfolios of energy resources are developed, compared, and selected. It walks readers through how to read and analyze an IRP with social justice and clean energy priorities in mind, and then how to develop comments in response. The guide aims to give stakeholders an understanding of IRP modeling and the process so that they can effectively engage with PUCs, and offer alternative solutions to the traditional, fossil-fuel-based assumptions that the utility may present.

Zukünftige Anforderungen an eine energiewendegerechte Netzkostenallokation

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Mit fortschreitender Energiewende werden fluktuierende Erneuerbare Energien immer zentraler bei der Energieversorgung. Für ein kosteneffizientes Energiesystem müssen die bestehenden industriellen und größeren kommerziellen Verbraucher sowie deren anstehende Elektrifizierung der Wärme- und Produktionsprozesse (Sektorenkopplung) darauf reagieren. Strompreise signalisieren dabei die Knappheiten und Überschüsse der Erzeugung. Auch das Netz ist schon heute sehr unterschiedlich ausgelastet. Trotzdem gilt, dass auch Knappheiten, die nur über kurze Zeiten auftreten, maßgeblich über einen kostenintensiven Netzausbau beseitigt werden. Kosteneffizient wäre es, auch die neuen und bestehenden Verbrauchseinrichtungen im industriellen Bereich und zur Schnellladung von Elektromobilen (Verbraucher mit registrierender Leistungsmessung) für eine Netzoptimierung einzusetzen.

Hier gewinnt die Frage nach Anreizwirkungen, einschließlich möglicher Hemmnisse und Fehlanreize, die von Netzentgelten (neben anderen Umlagen und Abgaben) ausgehen, stark an Relevanz: Es geht nicht mehr allein um eine „gerechte“ Kostenallokation, sondern um die Frage, ob energiewenderelevante Entwicklungen durch ineffiziente Bemessung und Strukturen der Netzentgelte unangemessen behindert werden.

Dieses Projekt betrachtet, wie die heutigen Regelungen zu problematischen Wirkungen bei der Netzkostenallokation führen können. Geeignete Weiterentwicklungen können sich dabei jedoch nicht auf kleine, kurzfristig umsetzbare Anpassungen und Ausnahmen beschränken. Deshalb werden hier grundlegendere Optionen andisktutiert. Das Ergebnis der Ausarbeitung soll dabei einen Impuls geben und keine konkret und detailliert ausgearbeiteten Vorschläge unterbreiten. Es soll vielmehr einen grundsätzlichen Diskussionsprozess anstoßen, der in die konkrete Ausarbeitung von Details und Implementierungen in der nächsten Legislaturperiode münden soll.