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Why EVs might cripple New Zealand

23 May 2018

Electric vehicles (EVs) look set to take over from dino-juiced personal transport within the next decade or so.

Advances in EV technologies, combined with ever-increasing prices for petrol and oil means that the writing is on the wall for the internal combustion engine as our primary means of propulsion when taking a trip down to the shops or making the daily commute to and from our place of employment.

It is already possible to buy EVs "off the shelf" that deliver excellent range, amazingly low cost of operation and a smooth, near-silent ride. The ability for an EV to totally trounce its dino-juiced competition in a drag-race is often just the icing on the cake.

Since the original GM EV1 was canned back in 1999, the production of fully electric vehicles has been undertaken almost exclusively by "no-name" manufacturers seeking to establish a niche in the marketplace. Indeed, today's most well-known EV manufacturer, Tesla, was once just such a company.

But now of course, most people consider Tesla's EVs to be market-leading and largely responsible for giving EVs the street-cred they have lacked for so long.

So now we have most major vehicle manufacturers rolling out (or planning to roll out) EVs of their own and it seems almost certain that the days of the dino-juicer are well and truly numbered.

Here in NZ, although they are still very much a rarity on our roads, EV numbers are expected to double every year for quite some time to come and the point where they match or begin to outnumber their internal-combusting peers is probably less than a decade away.

So all is looking good for the EV... right?

Well maybe not... at least not in New Zealand.

Although we have some of the highest transport fuel prices in the world, something that should make the EV a sure-winner, we also have an electricity infrastructure that has seen very little investment in new generation capacity in recent times.

Thanks to improvements in the energy efficiency of our homes and businesses, electricity demand has remained static -- or even fallen of late. Given the emphasis on profits, it's no wonder that energy companies have seen little point in investing in new generation capacity or even setting aside money for such projects in future.

Just the switch to LED lighting in houses, businesses and for street-lighting alone has produced massive reductions in demand so why spend money on capacity that clearly won't be needed -- or at least that was the case until the EV came along.

If EV sales grow at the predicted rate in NZ, we run the very real risk of finding ourselves on the back foot when it comes to generating enough power to run them.

Energy generation projects tend to take a long time to build... especially if they're renewables like hydro. They're also incredibly capital-intensive and given that most of our power companies seem to prefer to pay their profits out as dividends to shareholders and bonuses for CEOs, there's not much in the kitty to cover such expenditure.

What does this mean for NZ?

Well I would not be surprised if we end up with power shortages due to an inability to meet the demand imposed by a massive growth in EV use. I would also not be surprised to see power prices skyrocket -- as the generation companies scramble to raise the money necessary to pay for new generation capability.

The bottom line is that EVs may be great for motorists... but they're probably going to cause huge problems for householders and businesses who have budgeted on relatively constant power prices and a stability of supply.

There's not much use in commuting to work in an EV if, when you get there, the lights are out or the doors are closed because power prices have put your employer out of business.

Once again, our politicians seem to be stuck in "short term" mode, failing to plan any further forward than the next election. Sadly for us, things such as planning and managing critical infrastructure requires significant long-term planning that extends far beyond the next three years.

Look out folks, we could be in for a bumpy ride, no matter how good the suspension on our new EV works.

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