Laying the Groundwork: The Opportunities and Challenges of Promoting Electric Vehicles in Saudi Arabia
Electric vehicles (EVs) were once an afterthought, a concept that sounded great in theory but impractical compared to their combustion alternatives. Today, electric vehicles are the most exciting sector in the whole automotive segment. Ownership costs have dropped markedly – a 2018 study from the University of Michigan's Transportation Research Institute found that EVs cost less than half as much to operate as petrol-powered cars. And their performance isn’t anything to laugh at either – just ask any Tesla owner about their acceleration. Many EVs are able to travel over 400 kilometers on a single charge.
It’s no surprise that many drivers are considering a switch. Global adoption of EVs has accelerated remarkably in recent years. According to McKinsey, EV sales grew by around 60% worldwide between 2014 and 2018, to hit 2.1 million vehicles. Even the oil and gas sector is taking note – BP has estimated that EV sales would reach 350 million by 2040, which would be equivalent to around 15% of all cars globally.
Awareness of EVs and what they can do has grown in Saudi, thanks in part to events such as Formula-E. The Kingdom’s Vision 2030 also spells out the importance of this energy transition. I expect that the EV market will grow rapidly, following the decision by the Saudi Standards, Metrology and Quality Organization to allow the imports of commercial EVs and charging stations. One of the reasons the Saudi government is focused on EVs is its potential to reduce environmental pollution. Another is the opportunity to reduce gasoline usage – as of 2018, the Kingdom’s transportation sector was consuming almost a quarter of the country’s total energy consumption.
EVs offer significant potential for reducing pollution, improving the environment, and also creating new industries. The country will need a network of electric charging stations, and the traditional gas stations will have to adapt by adding new services to cater to EVs and their drivers. Power companies will also have a new segment to sell into, and new firms will be created that will offer maintenance, production and services for EVs and their owners. The deployment of EVs will speed up the adoption of next generation technology such as 5G telecommunications and Edge Computing. The electric vehicle sector isn’t just greener, it’s more high-tech than the alternative, and it’ll drive economic growth too.
There are challenges to address. The first is the charging infrastructure. There are a few dozen public charging stations in the Kingdom (the first was unveiled last year) – this compares to almost 80,000 in America alone. The Middle East lags behind Europe by as much as ten years in the roll out of charging infrastructure.
The good news is that much of the technology to provide charging infrastructure already exists – in fact the technology is mature and stable. What we need is partnerships, collaboration and co-ordination between the government, energy utilities, real estate developers and technology providers such as Schneider Electric – to transform the EV driving experience by creating a nationwide infrastructure of charging stations.
The other challenge is electricity load factors. At peak load, both the Kingdom’s Central and Southern regions have insufficient capacity. EVs would put additional pressure on the electricity grid. Research by two researchers at the King Abdullah Petroleum Studies and Research Center, Amro Elshurafa and Nawaz Peerbocus, has highlighted the need for renewables to be built and deployed as part of a wider strategy to promote the EV industry. Renewable energy projects will amplify the environmental and economic benefits of using EVs, namely to replace our dependency on gasoline and to reduce carbon emissions. Their research estimates that if 100,000 combustion vehicles were replaced by the same number of EVs, carbon emissions would decrease, on average, by around 0.35%, or 266×103 tons. They’ve calculated that if all of the vehicles in Saudi Arabia were to be replaced with EVs, emissions would reduce by half, by 35 million tons.There are short-term solutions that will minimize the impact of EV charging on the national grid. Load Management Systems (LMS) can be designed to maximize energy utilization at off-peak times, so that EVs are charged when there’s the least amount of stress on the utility network. These systems are simple to design, and can be applied site-by-site, to reduce the cost, especially for EV owners. Even using this solution would be greener than driving a combustion vehicle.
The world over, the two main reasons that consumers choose to purchase an EV are the availability of a charging network, and the distance the vehicle can travel on a single charge. Today’s EVs can travel several hundred miles within the need for a recharge. But in a country the size of Saudi, the charging network will be key.
There’s also the question of related technology. Many EVs offer autonomous driving, and that requires a complementary high-speed data network to enable autonomous vehicles to assess their location and communicate with surrounding vehicles. We’re seeing the deployment of nationwide 5G networks, powered by Edge computing and micro data centers, which are small, self-enclosed facilities that can be installed just about anywhere, including outdoors.
I’m excited about the future of EVs in Saudi Arabia. The Kingdom’s telcos have invested heavily in 5G networks that are perfect for autonomous driving. The government is committed to promoting high-tech industries, and a greener economy that’ll create new jobs and more economic value. And SASO has moved to allow the commercial importation of EV vehicles and charging stations.
The missing link is a national charging network, that’s primarily powered by renewable energy and supported where needed by the national electricity grid. Saudi can benefit from a high-tech, more environmentally-friendly future driven by electric vehicles. I want to see Saudi Arabia taking a lead in the EV industry. The government is playing a leadership role in laying the groundwork for EVs – now it’s time for others to see the potential and invest to create the infrastructure that will win over Saudi drivers.
About Schneider Electric
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