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Optimal policies for electromobility: Joint assessment of transport and electricity distribution costs in Norway

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  • Brevik Wangsness, Paal

    (School of Economics and Business, Norwegian University of Life Sciences)

  • Proost, Stef

    (Department of Economics-KULeuven)

  • Løvold Rødseth , Kenneth

    (Institute of Transport Economics)

Abstract

We observe a rapidly rising share of the passenger car fleet becoming electric as policy makers keep making the purchase and use of electric vehicles (EVs) more favorable in the pursuit of reducing pollution. The electrification of transport will make the transport and energy systems more intertwined: EV-friendly transport policies increase the demand for power, thus challenging the distribution grid’s capacity, while electricity policies immediately impact on the generalized costs of driving EVs. This paper develops a stylized economic model for passenger transport in the greater Oslo area where the agents’ endogenous choice of car ownership, transport pattern and EV home charging is determined jointly in equilibrium. If enough EV-owning agents charge during power peak hours, costly grid expansions may be needed. We examine how the distribution grid company can respond in order to mitigate these costs with different pricing schemes and how this in turn affects the transport equilibrium. We find that applying peak tariffs for the grid will help strike a better balance between investment costs and EV-owners’ disutility of charging during off-peak hours.

Suggested Citation

  • Brevik Wangsness, Paal & Proost, Stef & Løvold Rødseth , Kenneth, 2019. "Optimal policies for electromobility: Joint assessment of transport and electricity distribution costs in Norway," Working Paper Series 1-2019, Norwegian University of Life Sciences, School of Economics and Business.
    • Handle: RePEc:hhs:nlsseb:2019_001
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    2. Roman Chinoracky & Natalia Stalmasekova & Tatiana Corejova, 2022. "Trends in the Field of Electromobility—From the Perspective of Market Characteristics and Value-Added Services: Literature Review," Energies, MDPI, vol. 15(17), pages 1-19, August.

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    More about this item

    Keywords

    electric vehicles; climate policy; urban transport policy; transport modeling; electricity distribution costs;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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