Electric vehicles could bring $20 million savings

by Marlon Madden

Barbados could be saving close to $20 million annually and cutting back on hundreds of thousands of metric tons of carbon dioxide emission (CO2) by increasing its use of electric vehicles (EVs) to around 20 per cent.

This assessment from Professor Winston Moore, Deputy Principal and Professor of Economics at the University of the West Indies (UWI), Cave Hill Campus, as he gave an insight into a recent study on the impact of electric vehicles (EVs) on the local economy.

According to Moore, out of every $1 spent by the country on imports, 20 cents was for fossil fuel, and the transport sector accounted for a “large portion” of that 20 cents.

“The typical electrical vehicle uses approximately 2.9 megawatts per year. If you look at other countries, the number is around 2.9 to maybe 3.8 megawatts per year for lighter vehicles. If you translate that into the amount of CO2 emissions that we are saving, we are approximately saving around 294 metric tons of CO2 emission in 2020.

“If we can get to around a 20 per cent penetration rate of electric vehicles into the vehicle stock, that would mean around 33, 000 vehicles and we would actually reduce the CO2 emissions in Barbados by about 665, 000 metric tons. That means cleaner air for all of us.
It also means that we can go to the international community and say ‘look at what we as a small country have done in terms of our emission. What are you doing to contribute to CO2 emission reduction as well?’ So it has a fundamental impact on our country as a whole,” he explained.

It is estimated that there are just over 700 electric vehicles on the roads of Barbados, which include some 49 electric buses operated by the state-run Transport Board.

Barbados is said to import just over $600 million in fossil fuel per year.

“When you crunch the numbers, again, if we have a 20 per cent penetration rate of EVs in Barbados, we would be saving around $18 million per year in foreign exchange. If we can save around $18 million per year in foreign exchange through EVs, we are creating a new foreign exchange generating industry… So the potential for EVs is quite amasing when you start to crunch the numbers and look at it,” said the economist.

He also pointed to the scope for job creation should the island transition to EV, pointing out that there would be a need for trained mechanics and the installation of new EV charging stations.

“These are going to generate additional employment opportunities, generate additional economic activities. It is going to save foreign exchange, and it’s going to be a really important and dynamic part of our economy going forward,” he stressed.

Moore made the comments as a panelist during the recently held Barbados Sustainable Energy Conference, which was held in conjunction with the 7th biennial Caribbean Sustainable Energy Forum.

He was speaking on the topic of Electric Mobility Transition. He suggested that savings derived from having an electric vehicle should be put aside to purchase new batteries.

“There is also the room for life insurance companies to start leasing batteries as well. So there are lots of really interesting finance issues that you can get into,” he added.

Joanna Edghill, Managing Director of Megapower, a leading supplier of electric vehicles, agreed the country and individuals could realise significant savings from greater use of electric vehicles. However, Edghill said one way to help bring about the desired change was to have greater public awareness about the benefits of such vehicles.

“There are the savings in terms of the fuel running costs. It is a third of the cost of gasoline vehicles typically,” she said, pointing out that her company has already started working with at least one insurance company to put specific policies in place for the EV industry. What is important is that public awareness piece,” she added.

Edghill said prices on electric vehicles have started to come down in recent years, making it more affordable for residents to own one. She also pointed out that financing options for the electric powered transportation have improved, with some financial institutions offering interest rates as low as 3.5 per cent, about half of what it was over eight years ago.

Edghill said what was still a challenge, however, was getting more models of electric vehicles on the island, which she said could easily be solved if the demand would increase.

Professor Moore suggested greater public awareness on the benefits of owning an electric vehicle and driving down the upfront purchase costs to encourage the demand for these types of vehicles.

“These should be part of any roadmap for EVs in Barbados,” said Moore, adding, “I think we also need to set a date at which the use of fossil fuel vehicles will no longer be utiliSed in Barbados.

“I am not saying that after that date we have to use only EVs because there are other options out there besides EVs that you can utilise. But we have to set a date in Barbados to say ‘after this date we are no longer going to be importing any fossil fuel-based vehicles’. If we do those things, we are going to see a significant uptake in the use of EVs in Barbados.” 

marlonmadden@barbadostoday.bb