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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. 

Electrifying last-mile delivery: Battery-electric delivery trucks soon cheaper to use than diesel trucks in Europe

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Decarbonisation of the heavy-duty vehicle segment in Europe is crucial to curb greenhouse gas and pollutant emissions from the transport sector. Last-mile delivery trucks for city logistics are a promising application for electrification given their low daily mileages and the opportunity to recharge at depots when not in use. However, it is still unclear how these electric delivery trucks compare to their diesel counterparts from an economic perspective, considering overall cost of usage. Moreover, the large-scale deployment of electric delivery vehicles raises questions about how this additional charging demand can be integrated into local power grids and what it will cost. 

A joint study from the International Council on Clean Transportation and RAP quantifies the total cost of ownership of battery-electric last-mile delivery trucks in six European cities and compares it to existing diesel truck fleets. The analysis considers the cost of the trucks, purchase premiums, and a detailed breakdown of charging expenses, including power and network tariffs. The study also provides policy recommendations to overcome the cost difference between these two vehicle types and to foster the use of electric delivery fleets. This fact sheet offers a brief overview of the report’s results.

Boosting the EU energy savings obligation

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As part of the Fit for 55 legislative package, the European Commission proposed a recast of the Energy Efficiency Directive in July 2021. The recast includes significant changes to the Directive’s cornerstone article on the energy savings obligation, Article 7 (now Article 8). As a next step, EU legislators – the European Parliament and the Council of the EU – have to agree on a common text. The energy savings obligation in Article 8 requires EU Member States to trigger a certain amount of energy savings among end users. Getting the specifics of this obligation right is vitally important for Europe’s energy transition.

RAP’s Marion Santini, Samuel Thomas and Louise Sunderland analysed the negotiations on Article 8 on 15 June 2022, to assess three critical requirements: the energy savings rate, the exclusion of fossil fuel technologies and the energy poverty sub-target. They identify the important issues and options for decision-makers who are looking to align the Energy Efficiency Directive with climate neutrality, energy security and equity goals.

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.

The time is now: smart charging of electric vehicles (Webinar)

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European policymakers and car manufacturers are increasingly committing to the phaseout of internal combustion engine vehicles. With this shift to electric transport, tariffs and services for so-called smart charging of EVs bring significant value to consumers and the power sector. Now is the time to build a robust regulatory framework to expand the markets for these offerings consistently across the entire continent. 

On 25 May, the Electrification Academy welcomes Jaap Burger and Julia Hildermeier of the Regulatory Assistance Project (RAP) to share the findings of their study The time is now: smart charging of electric vehicles. The authors, who analysed 139 smart charging tariffs and services across Europe, will share: 

  • A brief overview of the benefits of smart charging for users and the power system. 
  • Innovative approaches and best practice examples of dedicated EV tariffs and services. 
  • Recommendations to accelerate the use of smart charging.

For an introduction to smart charging, check out our earlier Electrification Academy webinar with Frank Geerts and Michael Hogan, Smart charging puts the pedal to the metal on emobility. 

We will allow ample opportunity for participants’ questions following the presentations.  

 

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.

Duncan Gibb

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How much insulation is needed? A low-consumption, smart comfort standard for existing buildings

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National and local governments are increasingly turning to regulated minimum standards for the energy performance of buildings to kick-start the renovation of the stock. But how can these standards be used to define the most efficient pathway for buildings to fully decarbonise? RAP outlines a standard that defines the minimum insulation, airtightness and ventilation levels needed to enable a building to be heated efficiently with renewable sources, via lower flow temperature water.

The zero-emissions heat solution for the majority of buildings will be either a heat pump, district heating or shared heating. Heat pumps run much more efficiently when they deliver lower flow temperature water. Running district heating at lower flow temperature could result in cost reductions of 14 billion euros a year across Europe. Buildings meeting the standard can also have their heating schedules operated flexibly at different times of the day to provide flexibility benefits to the electricity grid and cost savings to the occupiers.

This briefing draws on the recently developed Dutch home insulation standard that is designed to support households to adapt their homes in advance of the area-based phaseout of the fossil gas system, and transition to sustainable heat sources, by 2050.