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The Impact of Electric Vehicle Density on Local Grid Costs: Empirical Evidence from Norway

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  • Paal Brevik Wangsness
  • Askill Harkjerr Halse

Abstract

While a rapid shift towards electric vehicles (EVs) will contribute to reducing carbon emissions from the transport sector, there are concerns that uncoordinated charging of EVs might impose challenges for the local electricity grid. Our study is the first to investigate this empirically in a country-wide analysis, using data from the country with the highest market share of EVs, namely Norway. We present the regulatory framework in which Norwegian grid companies operate and discuss the possible impact of EV charging. Using panel data on 107 grid companies over the period 2008-2017, we then estimate the effect of local growth in EVs on local grid costs. We find that increases in EV stock are associated with increases in costs which are both statistically and economically significant. However, there is a lot of heterogeneity in these results, where the effect on grid costs are higher for small grid companies in rural areas.

Suggested Citation

  • Paal Brevik Wangsness & Askill Harkjerr Halse, 2021. "The Impact of Electric Vehicle Density on Local Grid Costs: Empirical Evidence from Norway," The Energy Journal, , vol. 42(5), pages 149-168, September.
    • Handle: RePEc:sae:enejou:v:42:y:2021:i:5:p:149-168
    DOI: 10.5547/01956574.42.5.pwan
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    as
    1. Ramteen Sioshansi & Paul Denholm, 2010. "The Value of Plug-In Hybrid Electric Vehicles as Grid Resources," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-24.
    2. Wangsness, Paal Brevik & Proost, Stef & Rødseth, Kenneth Løvold, 2018. "Vehicle choices and urban transport externalities. Are Norwegian policy makers getting it right?," Working Paper Series 2-2018, Norwegian University of Life Sciences, School of Economics and Business.
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    Cited by:

    1. Sherzod N. Tashpulatov, 2022. "Modeling Electricity Price Dynamics Using Flexible Distributions," Mathematics, MDPI, vol. 10(10), pages 1-15, May.
    2. Wangsness, Paal Brevik & Proost, Stef & Rødseth, Kenneth Løvold, 2021. "Optimal policies for electromobility: Joint assessment of transport and electricity distribution costs in Norway," Utilities Policy, Elsevier, vol. 72(C).
    3. Floris Montfoort & Peter T. Dijkstra & Machiel Mulder, 2024. "The impact of energy transition on distribution network costs and effectiveness of yardstick competition: an empirical analysis for the Netherlands," Journal of Regulatory Economics, Springer, vol. 65(1), pages 85-107, June.
    4. Steinbach, Sarah A. & Blaschke, Maximilian J., 2024. "Enabling electric mobility: Can photovoltaic and home battery systems significantly reduce grid reinforcement costs?," Applied Energy, Elsevier, vol. 375(C).
    5. Iliana Ilieva & Bernt Bremdal, 2021. "Utilizing Local Flexibility Resources to Mitigate Grid Challenges at Electric Vehicle Charging Stations," Energies, MDPI, vol. 14(12), pages 1-15, June.

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    More about this item

    Keywords

    Electric vehicles; DSOs; Local grid costs; Local grid capacity; Fixed effects regression; Peak power tariffs;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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