Category: The Electric Fleet

Articles and calculations focusing on the impact that the electric fleet will have once it reaches New Zealand.

Submitting a test case to the Green Fund for consideration

The $100 million Green Fund was announced last year in order to showcase the coalition’s commitment to finding scalable ways to fight climate change.

But since then, not a lot has happened. On the 1st of March I received an update on the progress of the Green Fund. The update read as follows.

Good afternoon, 

You are being sent this email because you have asked to receive updates on New Zealand Green Investment Finance (NZGIF). The following update has been placed on our webpage : https://treasury.govt.nz/information-and-services/commercial-portfolio-and-advice/new-zealand-green-investment-finance and also on our LinkedIn page.

What now?·       NZGIF is in its establishment phase. This follows the appointments to the board late last year of Cecilia Tarrant (Chair) and David Woods (Director). There is a lot to do before NZGIF will be fully open for business.·       

The next step is to complete the Board appointments.  Applications have closed and are being considered. Appointments will be completed by mid-May.·       

We’re also working on company incorporation. We are in the process of developing the company constitution and other foundation documents, which will enable NZGIF to be incorporated by mid-May. ·       

When will NZGIF be operational? Exact timelines will depend on decisions directors make; however, we expect to see NZGIF fully operational by the middle of the year. Thank you for your continued interest in NZGIF.  We will provide further updates on the priorities and the process for applying for investment as this is made publically available. 

Regards,New Zealand Green Investment Finance

I guess that from an avid viewer’s standpoint, who has read the headlines but who is as yet uncertain how the fund will work, I am a bit worried from the above email that the fund may be losing traction. Which is a shame, because I desperately need some money to go green. 

I recently realised by way of a spreadsheet that I can reduce my travel emissions working as a sales consultant by as much as 20% by switching to a hybrid electric car. The decision was first of all a financial one: switching to a hybrid would pay for itself over ten years in the cost of fuel savings that I would achieve alone, essentially providing close to a 10% ROI. (The return on investment is so high because I am looking at second hand hybrids in the $7k range. A new hybrid will not achieve this.) I need soon to update my car anyway, so this seems to be a wise way to go about things.

In my view, this is the sort of investment that the Green Fund should be exploring – environmentally friendly initiatives that also achieve a return on investment in excess of the long term government bond rate. But it remains to be seen in practice whether this would ever happen. The nature of the second hand car market is that it is rapidly moving, with good deals disappearing off the market every day. The fund, on the other hand, seems to be moving fairly slowly. 

So I am going to test the waters by sending them an email with the spreadsheet attached. I am interested to hear whether they respond at all, and if so, whether they will be able to assist at all in my scenario. 

How buying a second hand hybrid can yield a 15% ROI

The bane of my existence has become the bridges in and out of Levin. Having accepted a new and challenging role in the Horowhenua region, I now am forced to relinquish my good habits around cycling to work (which have netted me an 8kg weight loss in the last few months in addition to hundreds of dollars in savings) in exchange for driving the admittedly slightly shorter distance, simply because the bike cannot negotiate the challenging high speed bridges in and out of Levin safely.

This is a big step backward for my plans to reduce my environmental footprint and lower my petrol costs. Not to mention that with my new role, I may be expected to travel great distances each week. But with each change comes the opportunity for positive adjustment.

I basically need to replace my car anyway. There’s no rush, but there has been an unsightly bit of cosmetic damage that would cost almost as much as the car is worth to repair. The main question is what type of car do I aim to get next – a petrol car or a hybrid? My main focus is to drive a car that at levels of high (read: sales career) usage, realistically pays for itself over time. There’s no point buying a car that’s cheaper upfront if the operating cost is over $1000 or more extra per year. If this leads to a reduction in carbon emissions that is all well and good as well. 

The main problem with hybrids has been cost efficiencies. Hybrid cars have often been reviewed negatively in the past, particularly in the US where many of these reviews originate from, simply because the economics do not stack up – the comparatively miniscule savings in fuel does not offset the higher capital cost of the new product. But this is not so much the case in NZ, and in particular is not so much the case in the second hand hybrid market, which is now flooded with apparently reasonable quality vehicles available for even less than $10,000. Part of the reason for this is that New Zealand taxes fuel far more heavily than the US, meaning that many of the reviews you read about hybrids ought to be discounted in the New Zealand context. 

I’ve scoured online sites and found a number of second hand hybrid cars for what I would consider good value – there is even one currently on sale for $2.50 with no reserve, although it has over 170,000 kms to its name. But, more to the point, there are a range of cars in the $6,000 to $8,000 price range, available for immediate purchase. It’s not like there’s just one or two of these options – there are dozens in this price range, each with well under 100,ooo kms to their odometer. Of course, with Trade Me, you’ll almost certainly need to make a trip up the line to get to it. 

I’ve done a spreadsheet which covers the calculations to justify a ROI of over 15% at the price point of $6995. It’s important to note that this calculator assumes continued fuel price inflation of 2.2% per year (around about the 10 year average in NZ). Because I’m replacing my car anyway, all I’m really doing is stripping the operating cost in a way that saves me money and pays for the new investment.

https://www.balancetransfers.co.nz/wp-content/uploads/2019/03/Jazz-vs-Hybrid.xlsx

The next thing to look at is how I can finance it, or if I have to pay cash. That is a question for another article, but one of the benefits of having a profitable business is that I can potentially put a lease through it. 
A car that pays for itself in six years that’s significantly more eco-friendly for a traveller? Hard to say no to. 

Reducing the mass of vehicles on the road might contribute to a climate change win

This little epiphany occurred to me when I was reconsidering some of the past work I had done on ebikes. Ebikes are incredibly eco-efficient when compared to petrol cars and even electric vehicles, not just because they utilise electric power as well as pedal-assist, BUT ALSO because the vehicle itself has a far lower mass than virtually all motor cars. In fact, I calculated in a previous blog article that an electric bike is roughly 21 times more eco-efficient than a Nissan Leaf. 

Currently, most climate change goals focus on switching petrol cars to the electric fleet. An equally valid goal might be to reduce the overall mass of motor vehicles on the road by a certain date. 

But if you think about it, what really does the damage when a car drives is not the fuel type that a vehicle consumes, but the amount of mass of that vehicle. The greater the mass, the more energy required to motor the vehicle. 

Putting incentives in place to get people to switch down from large gas guzzlers to smaller, more eco-efficient vehicles, even if those vehicles still run on petrol, could in some ways be very effective and another way (on top of the switch to renewable energy vehicles) that one could compound the reduction in carbon emissions from more efficient vehicle use. 

Switching to an ebike has reduced my carbon emissions from travel by around 900 kilograms last year. It has also saved me a pretty penny in fuel expenses. 

The point is that there are vectors to reducing carbon emissions through motor vehicle use that are not currently being considered and that ought to be forefront of people’s minds. 

How Much Extra Energy Supply Will the Electric Fleet Require from NZ?

The phasing in of the electric fleet could be a momentous occasion for New Zealand, enabling us to switch from fuel consumption to electric vehicles powered primarily by renewable energy. But the process also comes with a series of economic effects, most notably the need to construct additional sources to power this fleet. In this article we look at what the electric fleet could require from NZ in terms of additional power sources.

Continue reading “How Much Extra Energy Supply Will the Electric Fleet Require from NZ?”