Electric charge for EVs in Norway
The electric vehicle market is expanding rapidly in Europe but a lack of sufficient infrastructure remains a problem. Christina Bu, Secretary General of the Norwegian Electric Vehicle Association explains all
Q: Why has Norway managed to expand its fleet of electric vehicles (EVs) so rapidly since the 1990s?
A. Norway has taken a very simple measure, of creating demand through changes in our tax system. The country has very high car taxes, especially for new vehicles, and VAT (value added tax) is 25%. We have had that [tax level] for many years, and people are used to it. It's an important source of income for the state. So the government removed taxes and VAT on electric cars. Now, they are more or less the same price as fossil fuel cars. You can't expect consumers to pay more for a car when they are unsure of the technology. On top of that, there are quite a few local incentives. Electric car drivers don't have to pay toll roads, and electric car sales are the highest in areas where we have toll roads. They have access to bus lanes, parking in cities and can take their vehicles on ferries. It's a whole package. When they try the cars, consumers love them, and say they don't want to go back to a diesel or petrol car. We have a market share of 19% of new car sales, and 15% plug-in hybrids in Norway. In the city of Oslo, it is close to 50%. This has happened really quickly. We have seen that in about five or six years, it can happen. In Norway's second biggest city, Bergen, one in 10 cars is electric.
Q. What climate benefits has Norway experienced from this expansion?
A. If you replace a fossil fueled-car with an EV, that saves two tonnes of CO2 in a year. Last year we had 100,000 EVs-200,000 tonnes fewer emissions. Norwegian politicians have decided on the goal of selling only zero emissions cars by 2025. It is ambitious, but if you reach that goal, 40-50% of cars in 2030 will be zero-emissions vehicles. That will mean a more than 2m-tonne reduction by 2030.
Q. What can other countries learn from Norway's experience?
A. The most important lesson is that this can happen very fast. It will probably happen even more quickly in Europe. Most people who come to Oslo are pretty amazed at seeing EVs everywhere. It helps them to understand that this is not some far-off, futuristic thing. It is happening now. Seeing is believing. A lot of policymakers, oil companies, petrol station companies and car manufacturers—not only from Europe, but worldwide—are learning from Norway.
Q. Is there anything on the horizon in terms of technology that can solve the problem of impractical charging infrastructure?
A. The charging issue is high on the agenda here in Norway. The normal way is for people to charge their electric car at home, by plugging it in at night and removing it in the morning. One of the challenges is that a lot of people in cities live in apartments. The City of Oslo is taking that on with street chargers, but it is going to be an issue in the big European cities. Private companies are interested in taking on the challenge and developing new technologies. To accommodate the increase in demand, Norway has stipulated one fast charger per 100 cars, so if we have 400,000 electric cars by 2020, we need 4,000 chargers. We have 850 now.
Q. How is Norway's generating capacity suited to cope with the massive load increase that EVs will bring? And how would the UK and France need to adjust theirs?
A. Cars can deliver electricity back to the grid. Government agencies are now looking at how they can be charged only when the electricity is available. But we have to build more capacity in the years to come. EVs will have a major role to play in helping us managing the peaks. Norway is one of the countries which can test this, as we already have so many. If it works in Norway, it will definitely work in other countries, as electricity is very cheap here.
Q. What proportion of the electricity needed for charging stations will be produced by renewables in a) Norway, b) the rest of the world?
A. Norway will reach 100% electric power generation from renewables in a couple of years, and there is going to be a surplus. Even if every single one of our 2.6m personal cars in Norway were electric, charging them would still take up only 5-6% of our total electricity requirements, so the proportion globally is less than people often imagine.
Q. How will EVs affect the electricity supply over the next 10, 15 and 20 years?
A. That is difficult to answer. The short answer is, it is not going to be a problem. You can store energy in cars, and deliver it back to the grid. Storage is an issue for renewables in the long-term, but it's a global challenge. This is a positive story, and something people can do about emissions. If we are to succeed, we have to have people with us.
Q. What are the biggest obstacles to the expansion of EVs?
A. What is going to be a challenge is that demand is going to increase ahead of supply. In Norway, some models you can order now won't be available until 2019. At the moment, global demand is low, but it is still increasing in other locations at the same rate as it did in Norway five years ago. Charging is going to be a challenge on a global basis. But there is a lot of money being poured into this. There is a race to be part of this new industry, and there is lots of money to be made in offering fast charging facilities for all. The biggest challenge is going to be in the most remote areas. Globally, we have to learn while this industry is still developing.
Q. Outside of Europe, how do you see the EV industry expanding? Where will be the areas of fastest growth?
A. India and China have ambitious targets, but in India, more than 1m people die from [air] pollution every year, so they have a lot of reasons to make this shift. It's going to be pretty interesting to see how this will develop in the years to come.
Q. What kind of investment will be needed?
A. It will be private as well as public money going into that. We are seeing more and more competition coming into this area, more new players entering into the market. We are just at the beginning of a huge change.
Q. What more can and should governments be doing to speed up the expansion of EVs?
A. Governments should do what they can, as we really need to hurry when it comes to reducing our CO2 emissions. Consumers also have to adapt. In Norway, we have high car taxes which we can remove, and in Germany for example, subsidies have been introduced for EVs. Perks such as free parking or access to bus lanes can help. They don't have to be forever, only to introduce the new technology and help it happen as fast as possible. It is smart to be in the lead, otherwise your country will be lagging behind when it comes to the creation of new jobs. It is foolish not to embrace the transition to electric cars—for economic reasons as well as for the environment.
Q. When will EVs take over from fossil fuel vehicles in sales? Can we expect to see that happen over the next 10, 15 or 20 years?
A. A good comparison is smartphones, which happened very quickly. Eventually, electric cars will be cheaper than fossil fuel cars—though cars are a bigger purchase than phones. Bloomberg New Energy Finance says this will happen by 2025. It will certainly happen in some markets more quickly than in others.
This article appears in the annual issue of World Energy Focus, the magazine of the World Energy Council, with content produced by Petroleum Economist. For more information and to read the annual in full, visit worldenergy.org.