Article summary
- Before electric vehicles are deployed on a wide scale in developing countries, there must be an efficient electricity market.
- Developing countries face many power systems challenges that will drive significant infrastructure investments and policy regulations.
- Nigeria plans to have 30% locally produced electric vehicles by 2033. However, in emerging economies, electricity markets are already poorly designed and require fundamental reforms
The World Bank has said that developing countries need well-designed electricity markets for electric vehicle services.
This was stated in a 2023 report by the World Bank titled; Electric Mobility and Power Systems: Impacts and Mitigation Strategies in Developing Countries.
According to the report, developing countries face many power systems challenges that will drive significant infrastructure investments and policy regulations. So, enabling the flexibility of electric vehicles and their widespread deployment can be an instrument in addressing challenges while providing long-term technological and economic benefits.
Recall that before completing his tenure, President Muhammadu Buhari approved the adoption of the National Automotive Industry Development Plan (NADIP) to increase local production of vehicles and promote electric vehicles. The target was set at 40% local content and 30% locally produced electric vehicles by 2033.
Meanwhile, some challenges that could hamper the realization of these goals include lack of electricity access, infrastructure, and public awareness about electric vehicles. Although Nigeria has 100% solar-powered, off-grid electric vehicle charging stations in Sokoto, Lagos, and Enugu, there is still a need to ensure grid power reliance as the country plans to increase EVs in the long term.
Electricity markets in developing countries are poorly designed
The report highlighted the fact that the implementation of smart charging strategies requires appropriately designed electricity markets. Market designs will need to be adjusted, and new regulation needs to emerge to provide well-functioning, competitive, and efficient frameworks for electric vehicle grid services.
A part of the report stated:
- “In emerging economies, electricity markets are already poorly designed and require fundamental reforms. Studies from Nigeria and India have shown that transformer failure rates could reach up to 15% compared with less than 1% in developed countries, many of which occur at an early age, due to frequent and extended overloading combined with high ambient temperature, which accelerates the aging process.
- “Poor power quality is another distribution network issue widely present in developing countries. This is caused by several factors. There is a lack of management strategy to cope with power quality issues, which often results from the multifaceted group of end-users connected to one distribution network including residential, agricultural, industrial, or commercial customers.”
The report explains further that power quality standards that ought to be followed by the utilities and manufacturers are often inadequately defined, outdated, and not consistent with international standards. Also, there might be a lack of awareness of power quality issues among customers and utility employees leading to disturbances and failures.
It highlighted the fact that many developing countries face power generation issues, causing difficulties in providing constant, reliable, and affordable electricity supply and consequently affecting economic growth and competitiveness. Due to extensive investment requirements and lack of financing, many developing countries are prone to regular power crises caused by inadequate power capacity.
What you should know
Meanwhile, large-scale EV deployment, especially when combined with rising electricity demand from other sectors, can cause additional economic and technological stresses. Moreover, developing countries are often characterized by poor electricity conversion efficiency, deriving from aging and inefficient power units or bad quality fuel input.
The report says that emerging economies can have the abundant potential for renewable resources, which should be comprehensively considered when assessing the EV load impact in such regions.
