Qatar Promotes Sustainable Mobility Solutions

01 Jan 09:13 AM

Sector : Transport & Infrastructure Country : Qatar

 By Dr Andrea Masini

Environmentally friendly transportation systems are receiving increasing attention in Qatar, and highlights the gas and oil rich state’s willingness to lead the way towards sustainable mobility. Several recent initiatives aimed at promoting electric vehicles (EVs) testify to this commitment.

 

QATAR Ag, a private investment initiative, is promoting a campaign to introduce new automotive technologies to the Qatari community and has brought the first fully electric sports vehicle to the country. Powered by SolarWorld’s innovative solar energy technology and presented by Qatar Solar Technologies (QSTec) and SolarWorld AG, the Tesla Roadster has become a major feature in the Qatar Sustainability Exposition held on the sidelines of the United Nation’s Climate Change Conference (COP18) in Doha in November, 2012.

The Gulf Organization for Research and Development (GORD) is also contributing to promoting the electric car in Qatar and recently launched an eco-hybrid concept. Designed and developed in Qatar, the engine of this low-emission vehicle utilizes thermal waste energy to produce electric energy to run hydrogen fuel cells.

European manufacturers look at Qatar with increasing interest too. In 2010, Qatar and the Volkswagen Group (VW) decided to strengthen their cooperation in the area of sustainable transportation research. It is not a coincidence that the VW XL1 – the futuristic plug-in hybrid electric vehicle prototype with a 261 miles per gallon (mpg) fuel consumption target – made its first official debut at the 2011 Qatar International Motor Show.

Indeed, the show has become an important event for some Italian car designers too. The Pininfarina Nido, a small, light and fully electric city car that received the Compasso d’Oro Award in 2008, was the centerpiece of this joint effort and demonstrated the commitment of manufacturers to sustainable mobility as well as its consideration of Qatar as a potentially valuable market for electric vehicles.

Electric Vehicles: a Promising Solution for Sustainable Mobility

These initiatives demonstrate that electric vehicles are emerging as one of the most promising mobility solutions, even in hydrocarbon rich countries. EVs are based on a reliable technology that is way more efficient and better suited for transportation purposes than the internal combustion engine (ICE). And they present clear environmental advantages both at the global and the local level, due to their ability to reduce local air pollution and noise in densely populated areas.

Yet, numerous technical, organizational and social challenges question the viability of the electric vehicle as a short-term alternative to the ICE. High total cost of ownership, long recharging times, changes in industry dynamics, as well as the stability problems that a massive penetration of EVs may cause to the electric grid, are all potential barriers to adoption. Our research team at HEC Paris is engaged in a number of projects that aims to shed light on these challenges and to identify strategies to accelerate the market diffusion of EVs both in Europe and in the Gulf countries. Our work suggests that Qatar may be at the forefront of the ongoing shift toward sustainable mobility.

Smartgrids Facilitate Vehicle-to-Grid Integration

One appealing option that has recently being envisaged to reduce the total cost of ownership of electric vehicles and to limit the disruption they may create to electric grids, is the use of EVs with vehicle-to-grid (V2G) capabilities to provide regulation services to grid operators. Under such a scheme a fully charged EV connected to the grid supplies electricity to the grid (as opposed to absorbing it), while the vehicle owner receives payments for the service rendered. Despite being conceptually attractive, such a scheme presents several operational challenges: it requires a dedicated business model, different payment schemes and, especially, a very effective system to manage the charging/discharging process to guarantee high service levels to both parties (i.e. to minimize electricity shortages for the grid operator and maximize vehicle autonomy for the vehicle user). The implementation of such a model requires the development of smartgrids and the use of a bidirectional real-time communication system that can foster coordination between EV users and grid operators.

Our research suggests avenues for optimizing such a process through the use of intermediary agents who can aggregate battery capacity from vehicle owners and resell it to grid operators. It also indicates that newly developed and fast-growing cities like Doha have an incredible opportunity to lead the way towards the integration of EVs into smartgrids because in such cities a fully dedicated infrastructure can be designed from scratch and optimized to suit electric mobility needs.

Reorganizing the Industry Value Chain

The envisaged electric and hybrid revolution will transform the competitive landscape of the automotive industry, creating challenges and opportunities for established players as well as new entrants. Alternative and often antithetical approaches to the industrialization and the commercialization of EVs are emerging, based on different technologies, different business models and very different industry architectures.

In some countries the industry is consolidating around a few big companies which, through massive investments, are acting as ‘anchor’ firms. In other countries, clusters of small entrepreneurial firms seem to be the preferred development model.

A dominant product architecture has not emerged either. Some firms prefer to retrofit existing ICE vehicles to profit from the economies of scale already achieved by incumbent car manufacturers, and accept the disadvantages of marketing vehicles not explicitly designed to be electrified. Other companies invest in the development of new electric platforms, betting on a quick rise in demand for EVs to achieve the required economies of scale.

The fact that none of these approaches has yet become dominant, let alone widely diffused, indicates that the EV industry is still in its infancy and that profits are up for grabs. Like any other fast growing sector, the EV industry offers appealing investment opportunities.

Qatar Can be at the Forefront of the Sustainable Mobility Revolution

The diffusion of the EV as a large scale sustainable mobility option requires the redesign of an entire industrial ecosystem, with obvious social and organizational consequences. Policy makers, both at the national and at the local level, have a fundamental role to play in this process. By shaping the competitive, organizational and social environments, they have the ability to facilitate or hamper investments and to orient the choices of industry players.

Qatar has the opportunity to be at the forefront of this transformation. On the one hand the flat geography of the country and the rapid development of Doha make the capital a fertile ground for promoting the integration of V2G technologies into smartgrids. On the other hand, with investments estimated at $300 billion by 2020, the EV industry as a whole offers appealing opportunities to Qatari investors in addition to generating environmental benefits for the local community.

The recent initiatives undertaken by both the government and private investors, as well as the public interest raised by the various EVs showcased at the recent Qatar Sustainability Exposition, clearly indicate mobility in Qatar is turning green.

 
 
Dr Andrea Masini
Associate Professor, HEC Paris
 
 
Andrea Masini is an Associate Professor in the Operations Management and Information Technology Department at HEC Paris. Prior to joining HEC Paris, Masini was Assistant Professor of Operations and Technology Management at the London Business School. He is currently engaged in a three year research project aimed at designing optimal incentive structures for sustainable energy solutions funded by QNRF under the 5th NRPR cycle.

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