Will the current energy crisis help drive a change to renewables in transportation?

Due to increasing gas prices, owning and operating a vehicle is getting really expensive. This does not only include private households but also freight transportation. Prices not only increase because of supply chain problems and inflation but increasingly also due to high transportation costs,, a side effect of very long transportation periods of products that are being shipped globally.

Will the current energy crisis help drive a change to renewables in transportation?

According to the New York Times, gas prices may stay incredibly high for the next couple of years. It seems like a now-or-never possibility for alternative energy sources has arisen. Even though this crisis was never intended to boost climate friendly solutions, it might be the only benefit we are observing from it. But is that really the case? And are we ready for the big renewables’ revolution? 

 

What are the chances of green energy against traditional fossil fuels? 

While the demand for green energy is definitely rising, there is still a lack of investment in green infrastructure in order to fully replace fossil fuels. This actually pushed another development: increasing demand for coal energy, which is even worse than fossil fuels. In emerging economies coal supply increased by 10% in 2021. Especially in these countries, the energy crisis causes increasing harm to people and the environment. More and more people lack complete access to energy and at the same time governments rely on existing coal plants. Coal plant shutdowns worldwide are being delayed. At the moment, the investments in clean energy only account for 5 percent of that needed to replace oil and gas.  

Nevertheless, the IEA’s World Energy Investment Report 2022 reveals that investments in clean energy see a new high this year with a global growth of 8%. Even though this is not efficient to tackle the climate crisis, it is a great start and a development that would have probably not been visible without the rising prices for fossil fuels. Between 2015 and 2020 the renewables sector has actually only grown by 2%, but since 2020 it accelerated to 12% growth. Hence, the overall power investment of renewable energy including storage and grids now accounts for 80% of investments. This is also partly related to government subsidies. In the US, clean energy investment accounts for three quarters of overall growth in energy investment. Especially technology that is needed for transportation has seen an immense growth. 

A green transportation revolution is on its way - Are we ready? 

Talking about private households first, a survey revealed that every second household wants the next car purchase to be an EV. This trend is driven by climate conscientiousness as well as increasing prices of fossil fuels. One problem still remains concerning everyday use. The average EV battery lasts for around 300km which makes longer car trips difficult considering the uneven distribution of charging stations as well as a missing standardization for different cars. While Germany boasts the highest amount of charging stations, they are especially rare in Eastern European countries. Germany, the Netherlands and France on the other hand account for two third of all charging stations. The Netherlands, Luxembourg and Sweden account for the highest density of stations in relation to the population. But there’s also some good news: Tesla charging stations are starting to open also for other car producers and at the same time, there’s a huge supply of new charging stations adding to the existing network on a constant basis. 

Additionally, if governments keep subsidizing EVs through tax reliefs, EVs also become more accessible for families with lower incomes, not only protecting them from the ongoing fossil fuel crisis but also indirectly pushing them to more climate friendly solutions. 

 

While EVs mark a great invention for household transport and lighter freight transportation, green hydrogen has been emerging as a solution replacing fossil fuels in heavy transportation, including aviation, deep-sea transport and heavy trucking. Lots of investments went into hydrogen research lately, especially in order to cut the still rather high costs. Soon, hydrogen can replace fossil fuels in the respective use cases for transportation for a cheaper price. 

 

So, what can expect from the transportation sector in the future? 

There are still many challenges with renewables and alternative energy sources that need to be solved. Due to the lack of engagement in alternatives in the past, many barriers like missing infrastructure are evolving slowly, but on the other hand, money as well as demand is there. Hence, we are convinced: The future of transportation is green and the revolutionary change in the transportation sector will happen in the next couple of years. 

 

Photo by Ivana Cajina from Unsplash