Greek government aims for cleaner transport

Greece on June 5 unveiled the legal framework and tax incentives to promote the use of electric cars, motorcycles and bicycles, as part of its 10-year climate plan for lower carbon emissions.

Greece now has only about 1,000 electric cars – 0.3% of its fleet – on its roads, a very low rate compared to other EU countries, such as Germany, where they account for about 10% of the fleet.

The plan

Presenting the country’s plan for moving to low-carbon mobility, Prime Minister Kyriakos Mitsotakis, said that Athens will aim for one in three new vehicles to be electric by 2030. “We are subsidising the purchase of new types of cars with 100 million euros for 18 months at the first stage,” Mitsotakis said. “This is expected to cover 25% of the cost for about 14,000 new electric cars.” The plan also includes subsidies for the purchase of electric taxis and motorbikes and for setting up charging stations across the country. Drivers of the new vehicles will be also exempted from any parking fees for two years.

A recent study showed that carbon emissions dropped by about 40% in Athens amid a coronavirus-prompted lockdown from March to April as most Greeks stopped commuting by car. To meet EU-wide climate targets by 2030, Greece has also vowed to close down all but one of its coal-fired electricity plants by 2023. The plants use lignite, a highly pollutant brown coal. Most of them operate in northern Greece and the southern Peloponnese. Mitsotakis announced tax breaks for new factories that will produce electric cars in those regions.

Eco friendly transportation

The government has been keen to promote electric vehicles as part of a broader push for environmentally friendly policies as the cars on Greece’s roads are among the oldest in Europe.

The average of a car in Greece is 15.5 years, putting the country fourth from the bottom of the list of 27 European Union member -states, ahead of Romania, Lithuania and Latvia. The average car age in the EU is 11 years.

Greece is in the same spot, fourth from last, among its EU peers when it comes to sales of low-emissions vehicles, with a rate of 0.5 per 1,000 residents, just ahead of Bulgaria, Latvia and Romania.

According to government projections, between, 4,500 and 5,000 electric cars will be o Greek roads by next year. The aim is for one in three cars sold in Greece by 2030 to be electric.

A major study on electric vehicle market

IENE completed a major study which deals with the prospects for the Electric Vehicle Market in Greece and SEE and potential business opportunities. This study, which commenced in November 2017, has been conducted as a multi-client study project backed by some of Greece’s leading energy companies including Systems Sunlight, the Mytilineos Group, Hellenic Petroleum, HEDNO S.A. (Hellenic Electricity Distribution Network Operator S.A.) and KG Law Firm. The study was presented to the above group of companies on June 14 in a closed session organized by IENE and held in the offices of KG Law Firm, a long standing corporate member and supporter of IENE.

The study describes the current developments in the electric vehicle architecture and battery technology focusing on the current trends of the EV market in Europe and globally. In addition, it identifies the obstacles,which Electric Vehicles (EVs), as a disruptive technology, face in their path towards adoption. These challenges are mainly the current EV technology limitations resulting to a high cost of acquisition, limited electric driving range, limited charging infrastructure availability and long charging time. On the other hand,aggressive support policies, zero-energy-vehicle mandates and fiscal incentives have been identified as the main drivers for EV expansion and adoption globally. Observation of the EV market has shown a very high learning curve, which prominent analysts estimate that it could lead to deployment 60 million new EVs per year by 2040. This is expected to occur as a result of the rapid decline of the cost intensive EV battery component and its technology development towards higher energy density, which consequently will make EVs more competitive against conventional ICE vehicles.

In addition, the study explores the EV market development in Greece, which has performed poorly the first years of its existence. However, market initiatives have been on sight, with the most important one being the proposed development of a nationwide charging network system by Greece’s DSO, currently under review by the Regulatory Authority for Energy. The legislative framework governing EV adoption in the country, which is currently under development, is being thoroughly reviewed.

Also, the introduction of EVs is considered as part of the solution, coupled with the high penetration of RES, for the decarbonization of the on-road transportation. Avoided tailpipe GHG emissions and other air pollutants by substituting conventional ICE vehicles, while it is one of the main environmental benefits of EVs,it is not the only one. Noise pollution mitigation, avoided life cycle emissions of vehicle components as well as the avoided primary energy use, wastewater generation and emissions from the fuel refinery process are some significant environmental contributions of electric mobility.

Energy reconstruction

A key finding of the study is that EV adoption mandates partly the reconstruction of the energy sector. Charging technologies are developing rapidly towards standardization and interoperability, while different charging schemes and strategies will be used by new market entities, PEV aggregators, aiming in providing optimal charging services from a cost-benefit perspective, while performing temporal allocation of EV charging loads to provide ancillary services to the grid. Moreover, new installed power generating capacity will be required in the region to facilitate EV penetration, while events during mass EV charging like harmonic distortion and distribution congestion must be thoroughly considered and mitigated in each system separately.

The aim of this latest IENE study has been to provide an indication for the present and future of EV markets in Greece, South East Europe and globally and describe latest trends especially with regard to investment opportunities. Such opportunities are to be found following the impact of EV adoption in the automotive manufacturing sector and the mass expansion of the energy sector caused by the electrification of transport. Consequently, this study will provide a much needed reference to market participants in order to assess market development with regard to power generation, power distribution and socioeconomic cost allocation for infrastructure installations.

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