In En-ROADS, the adoption of electric vehicles and equipment is tied to market, financial, and policy drivers. Users can subsidize new electrification technologies, build charging infrastructure, and restrict fuel-based alternatives. Watch the video below for a summary:
The main sliders for electrification in En-ROADS add a subsidy to the purchase cost of either electric vehicles (in the case of the Transport Electrification slider) or electric equipment (in the case of the Buildings and Industry Electrification slider). Additionally, increasing the main Transport Electrification slider also scales up infrastructure to charge electric vehicles. The best graphs for exploring the effects of the Electrification sliders are the four ones under Graphs > Final Energy Consumption–Totals > Share of Capital.
To increase electrification, either focus efforts on boosting electrification or discourage the alternatives.
Encourage electrification
Electrification can be scaled up in three ways in En-ROADS:
- Subsidize purchase costs. Apply a subsidy to the purchase cost of new electric vehicle sales or building and industry equipment sales with the main Electrification sliders, or in the advanced view by using the “Electric transport subsidy” or the “Electric equipment subsidy” sliders.
- Develop charging infrastructure. While not a limitation for electric equipment in buildings and industry, charging infrastructure is essential for electric transport that relies on batteries. In En-ROADS, charging infrastructure develops to support the current demand for electric vehicles. However, delays limit the attractiveness of electric vehicles due to the time it takes to build charging infrastructure. Users can build charging infrastructure ahead of the growth in demand by using the “Build charging infrastructure to meet future demand” slider, found in the detailed settings for Transport Electrification.
- Lower electricity costs. A final way to promote the development of electrification is to lower the cost of electricity through subsidizing sources of electricity such as renewables, nuclear, and new zero-carbon energy.
Discourage alternatives to electrification
En-ROADS includes two options to discourage fuel-based alternatives to electrification:
- Restrict fuel-powered alternatives. Sales of new fuel-based vehicles (e.g., internal combustion engine vehicles) or equipment in buildings and industry (e.g., oil and gas furnaces), powered by fossil fuels or biofuels, can be restricted by using the “Fuel-powered transport sales limit” and the “Fuel-powered equipment sales limit” sliders.
- Raise the cost of fuels. Taxing oil, natural gas, bioenergy, and coal or implementing a price on carbon can increase fuel costs. As a result, these indirect approaches increase the relative attractiveness of electric end-use technologies and boost their share of new sales.
The following sections provide more detailed context.Dynamics of the Baseline Scenario
Three factors account for relatively slow growth in global sales of electrified transport in the En-ROADS Baseline Scenario:
- Charging infrastructure. Transport electrification grows more slowly in the En-ROADS Baseline than in other estimates due to the steady, yet slow, deployment of charging infrastructure. Fuel-based transport doesn’t face the same limitation due to the abundance of gas stations and fuel distribution networks worldwide. The deployment of charging infrastructure relies on a reinforcing feedback loop connecting current electrified transport demand and investment in infrastructure. Without policy intervention, this reinforcing loop unfolds slowly.
- Economic decision-making. The total cost of ownership of electric end-uses such as cars are generally cheaper than their fuel-powered alternatives. The total cost of ownership (TCO) includes the sum of the purchase cost, energy cost, and other operations and maintenance costs. In En-ROADS, the choice between electric and non-electric alternatives depends 50% on purchase cost and 50% on TCO. This can be adjusted under Simulation > Assumptions > Electrification > Attention to total cost of ownership.
- Policy assumptions. The En-ROADS Baseline Scenario conservatively assumes that current policies that promote electrification will not strengthen in the future. Sliders can be adjusted, however, to encourage electrification and see the impact of additional action relative to the Baseline Scenario.
Energy costs and electrification
Electrification in En-ROADS responds to economic forces such as energy costs. Two scenarios that illustrate the relationship are 1) low-cost electricity from a breakthrough in new zero-carbon energy; and 2) high-cost fossil fuels due to a price on carbon.
In the first scenario, shown in the graphs below, a significant breakthrough in new zero-carbon energy occurs (New Zero-Carbon slider is set to its maximum), yet the rates of electrification for transportation (the yellow line in the left graph) and buildings & industry (the yellow line in the right graph) remain modest. The attractiveness of the electric transport and the equipment depends more on the purchase costs than on electricity costs.
The second scenario explores the effect of a $250 price on carbon. Rates of electrification are much higher across both transportation (the yellow line in the left graph below), with oil prices making internal combustion engines less attractive, and buildings & industry (the yellow line in the right graph below), as heating and cooking with gas and oil becomes less attractive.
In both scenarios above, the total cost of ownership (TCO) plays a crucial role in determining the attractiveness of end-use alternatives. Use the “Cost Ratio of Electric Equipment to Alternatives” graph under Graphs > Financial to demonstrate how the relative TCO between electric and non-electric end-uses changes across the scenarios.
Key graphs
Key graphs related to electrification are located in several graph categories:
- Graphs > Final Energy Consumption–Totals > Final Consumption by End Use–Area
- Graphs > Final Energy Consumption–Totals > Share of Capital
- Graphs > Financial > Cost Ratio of Electric Equipment to Alternatives
The “% Transport Sales by Carrier” graph shows the percentage of new transport sold each year that is powered with fossil fuels and biofuels, electricity, and hydrogen. The “% Existing Transport by Carrier” graph shows the distribution of the total transport fleet (old and new) across all energy carriers.
The “Cost Ratio of Electric Equipment to Alternatives” graph illustrates how the total cost of ownership for electric vehicles and buildings and industry equipment changes compared to the weighted average costs of alternatives, such as fuels or hydrogen. The dotted line represents cost parity—the level at which electric options cost the same as the average of the alternatives. For example, when “Transport - Road & Rail” intersects with the cost parity dotted line, it indicates that, on average, the total cost for electric transport (e.g., EVs) is equal to the average cost of all alternatives (e.g., internal combustion engine cars and other traditional oil-powered transport). A line below the dotted line indicates that the total cost of electric vehicle or equipment ownership is lower than the average total cost of the alternatives. When that occurs, electric sales will increase steadily because they will be more attractive to consumers.
Electrification assumptions
To explore alternative electrification scenarios, you can adjust the following assumptions under Simulation > Assumptions > Energy > Electrification:
- “Attention to total cost of ownership” determines the distribution of a consumer’s focus between total cost of ownership (TCO) and purchase cost during purchasing decisions. By default, TCO and purchase cost have equal weight.
- “Time to build transport charging infrastructure for future demand” indicates the amount of time required to construct additional road and rail transport charging infrastructure to meet future demand. The default amount of time it takes to build additional charging infrastructure is 30 years.
- “Capital cost reducible by progress ratio” specifies the portion of initial capital costs that can decrease through learning, experience, and economies of scale at a rate determined by the progress ratio.
Hydrogen as an alternative to electrification
In the advanced views of the Electrification sliders, users can simulate the growth of the hydrogen energy economy. This includes exploring hydrogen's potential as an alternative to electrification—particularly in sectors like aviation, shipping, buildings, and industry. Read the Hydrogen in En-ROADS Explainer to learn more.