A UITP report explains how to make the energy transition concrete
The green renewal of public transport is a central element in the decarbonisation of developed societies, but still presents many critical issues.
For this reason, the International Public Transport Association UITP (Union Internationale des Transports Publics) has published the report “The Road to Sustainability: Transition to Renewable Energy in Public Transport” which provides guidance on how public transport companies can implement an energy transition successfull.
As highlighted in the report, the transition of public transport towards renewable energy has a huge impact on various social partners. The public transport sector is in fact among the most active in decarbonisation and covers a pioneering role in the energy transition.
On the other hand, no citizen would accept restrictions on their mobility without first having a concrete example from the public sector.
The green renewal of this sector sheds light on a problem that is still underestimated: the energy transition is the path to follow, but at present it is still incomplete. In fact, while we work on replacing current fuels with sustainable ones, in the strategies of transition, the right weight is not yet given to the supply of renewable energy. This is an issue raised several times by political parties skeptical of the European Union’s green transition plans.
Procurement, the report explains, requires different actions based on contexts; therefore, it is important to understand the legal and market context where one intervenes.
When an energy is (really) clean
The International Public Transport Association, in accordance with the EU Clean Vehicles Directive, defines “clean vehicles” as those powered by:
– natural gas (e.g. methane);
– biofuels (mostly not mixed with conventional fossil fuels);
– liquefied petroleum gas (LPG)
On this basis, the report highlights that the majority of bus, water vehicle and shared car fleets are still made up of not classified as “clean”. One barrier to the transition is upfront costs such as purchasing or refurbishing vehicles, building supporting infrastructure, and purchasing renewable energy. We must also consider that the production of renewable energy has costs that vary widely depending on the context.
Here, then, what are the challenges of the energy transition identified by The Road to Sustainability: Transition to Renewable Energy in Public Transport
– the alignment of the production of renewable sources with the responsible consumption of electricity by consumers;
– issues relating to the use of land to build additional assets;
– the reliability of the electricity grid in some countries;
– the capacity that the electricity grid will have to have in the future;
– fluctuations in electricity prices due to crises and problems in global energy supply chains;
– administrative and legislative difficulties in obtaining construction permits for new power generation plants in some countries;
– the availability of raw materials;
– energy storage.
To these aspects must be added another of transversal significance: the way renewable energy is produced, which affects carbon emissions. For example, we read in the report, the energy supplied to a natural gas vehicle has different implications on the overall carbon intensity of the operation, depending on whether it comes from natural gas (non-renewable) or biomethane (produced from agriculture or domestic waste , considered renewable).
Simply put, a vehicle identified as clean from a regulatory perspective can be powered by non-renewable energy.
So what is considered renewable energy and what is not?
The report provides a table about this
Therefore, electricity, hydrogen and biofuels are not necessarily renewable as we are used to thinking. Their sustainability depends on the energy chosen for production, which can be renewable or non-renewable.
The role of electricity in the energy transition
Over the last 10 years, the production of renewable electricity has increased steadily, thanks to the large-scale deployment of solar panels and wind turbines. While droughts impacted hydropower generation in 2021, electricity generation from renewable sources grew 7% during the year.
However, a large misalignment between countries. In 2021, for example, the electricity produced in Norway was generated almost entirely from hydropower, with an average emissions intensity of 26g of CO2 per kilowatt hour. For comparison, electricity produced in India comes mostly from coal and has an average emissions intensity of 633g of CO2 per kilowatt hour.
The enormous difference in impact between the various countries reveals how talking about sustainable energy tout court makes little sense.
Progress has been made in recent years, but despite increasing by 40% globally in 2021, electric bus sales represented just 4% of the global bus fleet.
China has the largest electric bus fleet in the world, with 54% of battery-powered vehicles in the national city bus fleet. In Europe, new battery electric bus registrations were 22% higher in 2021 than in 2017 (22% of new registrations in 2021 were for battery buses). Numbers in hand, to achieve the objectives set by Fit for 55, the fleet of electric vehicles in the EU will have to increase significantly.
The International Public Transport Association explains that the adoption of electric buses has proven to be very effective in reducing CO2 emissions.
The report, however, invites us not to consider only direct emissions. In fact, if direct operations are zero emissions, this does not mean that public transport is not impacting the environment in any way. In essence, there are other sources of emissions that should not be overlooked but accounted for:
– Energy supply, where carbon emissions can vary greatly depending on how the electricity is generated;
– Vehicle production, which can be more intensive than other vehicles due to battery production.
How to increase the electricity supply of public transport
In light of the various considerations, the International Public Transport Association comments: “if public transport operators want to accelerate the energy transition, they cannot rely only on national ambitions and the energy sector. They must actively seek solutions to decarbonise electricity supply and collaborate with electricity suppliers to purchase low-carbon energy or enter into agreements.”
The advice is to follow market-based schemes to calculate emissions due to electricity consumption (Scope 2 emissions). However, it is important to note that some laws do not allow market-based reporting (which relies on location) or require expensive remedies to calculate emissions reductions.
The report focuses on two patterns:
– Power Purchase Agreements (PPAs)
– Energy Attribution Certificates (Eac);
Both allow the tracing and certification of the origin of the electricity produced.
A Power Purchase Agreement (PPA) is a long-term contract to purchase clean energy from a specific asset at a price or according to a predetermined formula. The agreement is made between a renewable energy developer and a customer, which is usually an organization with high electricity consumption, or between a developer and a supplier who then resells the energy.
The signing of a PPA can be understood as the sale of environmental attributes of a project to another contractor. These attributes provide assurance about the origin of the energy purchased. In this way, the renewable energy developer makes an investment decision aware of the risk and expenses involved. The PPA scheme is becoming increasingly common globally.
With these new schemes not only the opportunities increase but also the complexity of the contracts. For this reason, the Association advises the public transport sector to recruit expertise on how to draft the contract and involve different departments, including legal and financial ones. “The final selection of the model – reads the report – depends on the objective the organization is trying to achieve; for example, greater stability but at higher prices or lower prices with greater risk.”
A different function, however, is that of the Eacmarket instruments that verify that one megawatt hour of renewable electricity has been generated and added to the grid by a green energy source. The main purpose of these certificates is to allow buyers to make their sustainability efforts transparent. Indeed, these certificates are used to demonstrate that the electricity consumed comes from a specific renewable energy plant, which can be precisely identified through each certificate.
The UITP highlights how at the moment the resources to implement a complete mobility revolution are still insufficient. For this reason, it becomes crucial to have a long-term strategy that includes the self-production of renewable energy, forge commercial agreements between the public and private sectors and evaluate the environmental impact of the entire production cycle.
In the final part of the report, we remind you that the transition to renewable energy may require the implementation of alternative fuels, and that this is a complex process that requires:
– Evaluation of available technologies;
– verifying the potential of a technology in achieving objectives;
– the search for an adequate financial scheme to cover the investments necessary for the energy transition.
Until now we have been thinking (almost) exclusively about the energy produced. Now we need to broaden the horizon to all the aspects that can facilitate a concrete ecological transition in public transport.