Implications of Fiscal-induced Electro-mobility Transition on - - PowerPoint PPT Presentation

Implications of Fiscal-induced Electro-mobility Transition on Iceland’s Energy-economic System

Ehsan Shafiei Iceland University & Finnish Environment Inst. Brynhildur Davidsdottir Iceland University Hlynur Stefansson Reykjavik University, Iceland Eyjolfur Ingi Asgeirsson Reykjavik University, Iceland Reza Fazeli Iceland University Jonathan Leaver Unitec Institute of Technology, New Zealand

16th IAEE European Conference, Ljubljana, Aug. 27, 2019

Electro-mobility transition is of great interest to Iceland:

• high vehicles-per-capita, rising fleet size, and GHG emissions
• isolated energy-system with abundant renewable resources
• low-cost electricity from renewable resources

Transition challenges/consequences:

• major energy-economic challenges for small economies
• changes in government revenue and consumer costs

Essentials and requisites:

• implications of EV transition for energy-economic system
• efficiency & effectiveness of policies to support EV transition

Transition to Electro-Mobility: Essentials & Challenges

Analytical Tools: Integrated Energy-Transport Model

A Simulation model based on the System-Dynamics approach Partial equilibrium modelling framework Detailed representation of resources & technologies Incorporating fuel supply infrastructure, fuel prices & consumers Endogenous analysis of energy market dynamics Energy market sectors: Electricity, Hydrogen, Biofuels Yearly time points with bi-weekly steps (~2000 variables)

System-Dynamics Model of Energy-Transport System (UniSyD_IS)

Basic Stock-Flow Model Structure

Refueling Infrastructure Fuel Demand + R New Vehicle Adoption + Vehilcle Stock + +

Fuel Demand Fuel Price ? + New Vehicle Adoption +

• Vehilcle Stock

+

Model Implementation

Resource Conversion Transmission & Distribution End-users

Hydro Resources Hydro Power Plant Electricity Transmission & Distribution

Electricity Demand

• Residential
• Commercial
• Industrial

Recharging Stations Geothermal Power Plant Diesel Transport Geothermal Resources Diesel Import H2 Stations Diesel ICE (LDV & HDV) Diesel HEV (LDV & HDV) Gasoline PHEV (LDV) Battery EV (LDV) H2 FCV (LDV & HDV) Diesel Stations H2 Production (On-site Electrolysis) Gasoline Transport Gasoline Import Gasoline ICE (LDV) Diesel PHEV (LDV & HDV) Gasoline HEV (LDV) Gasoline Stations Biogas Transport Dual Fuel Biogas ICE (LDV) Biogas Stations Digestion & Treating Transesterification Oil Seeds & Waste Oils B20 ICE (LDV & HDV) Biodiesel Stations Biogas ICE (LDV & HDV) MSW, Fish wastes Manure, Sewage Hydrolysis & Fermentation Cellulosic Biomass E85 ICE (LDV) Bioethanol Stations Wind Resources Wind Turbine H2 ICE (LDV & HDV) H2 HEV (LDV & HDV) Biodiesel Transport Bioethanol Transport Diesel Generator Marine Fuel Demand

Assumptions on Excise Duty Tax on Vehicles

Scenarios

Scenarios Tax on fuels & vehicle use Tax on vehicle purchase BAU

Current fuel & vehicle usage tax Equal VAT rates + current excise duty

Proposal

New tax proposal assumptions New tax proposal assumptions

Premium

New tax proposal assumptions New tax proposal assumptions + VAT exemption for BEVs

Banning

New tax proposal assumptions Ban on the new ICE and HEV from 2030

Scenario Tree Generation

Share of BEVs within Light-duty Vehicle Fleet

Share of BEV in New Vehicle Fleet Share of BEV in Total Vehicle Stock

BAU Proposal Premium Banning

GHG Emissions Reduction Share of Electricity in Transport Fuel Demand

Government Tax Revenue

Transition Cost/Benefit

Conclusions

The more the electrification, the more will be the long-term benefit Tax-induced policies will not be sufficient to achieve short- term climate targets Deeper electrification (or other measures) are required to meet Paris agreement objectives

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