More Tesla on the streets

Published in Icelandic in Morgunblaðið on December 5, 2013.

“Thirteen billion would be saved every year if the passenger car fleet were three-quarters electrified and powered by Icelandic electricity”

Electric cars are increasingly gaining ground in many countries. In the UK, BMW, Mini, Nissan, Renault, Smart, Tesla and soon VW offer electric cars that are comparable in cost and performance to most cars powered by conventional hydrocarbon fuels, gasoline and diesel.

Iceland has an abundance of environmentally friendly energy, a large part of which is electricity from hydroelectric power plants. It is interesting to estimate the impact if the country’s car fleet were to switch from hydrocarbon-powered vehicles to electric cars. Below is a simple example.

There were 210 thousand passenger cars in Iceland in 2012. Let’s assume that three out of four cars are switched to electric cars, most but not all regular cars. Each car is driven 10 thousand km per year. The energy capacity of a Tesla car is 85 kWh, it can travel 500 km on a tank according to European tests. The total energy consumption of electric cars would then be 270 GWh per year. For comparison, Landsvirkjun’s annual production is 12.5 TWh. The energy consumption of electric cars would be 2.1% of Landsvirkjun’s production.

What would be the cost? Landsvirkjun’s average wholesale price in 2012 was ISK 3,427 per MWh. The electricity for three-quarters of the car fleet would cost ISK 917 million, ISK 1.1 billion with Landsnet’s transportation.

What would be the savings? The purchase price of gasoline and diesel plus transportation costs is about half the retail price or ISK 120 per liter. If each regular car consumes 7.5 l/100 km, hydrocarbon fuel for three-quarters of the car fleet costs ISK 14.2 billion in Iceland, based on 10 thousand km of driving per year. The difference is ISK 13.1 billion.

Thirteen billion would be saved each year if the passenger car fleet were three-quarters electrified and powered by Icelandic electricity, about 43 thousand krónur per inhabitant of the country.

Unlike many other recent economic measures, switching to electric cars involves net savings, not cuts, lower costs for the same use. Not to mention the savings and improved quality of life due to reduced air pollution and its effects on people’s health and the balance of the ecosystem. Not to mention the savings if trucks and buses were electrified. Not to mention the “image value” and other intangible benefits that Iceland would gain from being the first nation to electrify its car fleet largely with environmentally friendly energy. Perhaps a portion of ships and boats could follow in due course?

The energy is there, the cars too, calculations indicate that electrifying car fleets would save significant amounts of money and significantly reduce pollution, it pays to get more electric cars on the streets powered by clean and cheap, Icelandic electricity. Voters want reforms in economic, environmental and energy matters. What is the government waiting for?

Sveinn Valfells