From Iceland — Steering Revolution

Steering Revolution

Published October 12, 2009

Steering Revolution

Late-night Laugavegur revellers may be forgiven for walking in ignorance past the two green parking spots located near the intersection of Ingólfsstræti. Designated as an electric car refilling station, the set-up is, for the most part, symbolic—on a recent visit, neither of the cars parked in the spots were hybrids (much less electric) and the charging post had been peppered with graffiti. But for energy professionals, this little corner on the drunkest street in Reykjavík is the tip of the iceberg: the first sign of a nationwide reform.
As politicians, environmental organisations and private investors are keen to share, and there’s a long list of reasons why Iceland is one of the best suited locations for the first national alternative-energy transportation network. That’s fine and dandy, but the pressing questions of when, what, and how a transportation revolution will take place are still itching to be addressed.
Your Mercedes will be powered by my gas
The 3rd Annual Driving Sustainability Conference, which wrapped up a few weeks ago in Reykjavík, attempts to address the subject both in Iceland and abroad. Roughly 200 delegates, 20 nations and dozens of organisations including representatives of environmental organisations, engineering firms, ministries of industry and heads of state gathered to discuss the topic.
One of the primary conclusions of this and the last two conferences is that the future will be a multi-energy society, conference co-founder Teitur Þorkelsson told me over coffee.
“All different sources of energy and fuels will be used, depending on where you are,” Þorkelsson said. “I’m not a believer in monotheism.”
For Iceland in particular, Þorkelsson is a believer in biogas as an inexpensive and immediate option. The island already produces a considerable amount of biogas from waste material—enough to power 2.500 to 3.000 cars, he estimates. It’s a surprising figure when you consider there are only about 120 biogas equipped vehicles in Iceland today. The unused majority of biogas is wastefully burned up in flares.
The situation is different in Sweden for example, where biogas is harnessed from sewage, sludge, landfills, and industrial refuse, Þorkelsson says: “You solve two problems at once: you get rid of waste in an environmentally sound manner, and you make domestically produced fuel.”
“There’s been a growing hype about electric cars too,” Þorkelsson adds with some hesitation. The problem is that for the next five to seven years, electric cars will continue to be expensive, Þorkelsson estimates. Secondly, the Icelandic government, which has generally supported the transformation, has lagged behind on providing the sort of incentives necessary to create a viable business platform. Unlike biogas vehicles, electric cars in Iceland are still susceptible to the VAT, or the Value Added Tax. Short-term tax breaks, which the Icelandic government approves yearly, don’t foster a business environment that attracts long term investment.
Furthermore, Iceland hasn’t offered the consumer perks other Nordic countries have in order to get drivers out of their gas-guzzlers. For instance, Norway lifted the VAT and offers electric car owners free use of bus lanes and electricity. This spring the Norwegian Socialist Left Party even floated the idea of a ban on fossil-fuel vehicles as soon as 2015. That kind of proactive approach has put 3,000 electric cars on Norwegian roads.
Whether biogas or electric, any kind of transportation revolution is still at least a few years away Þorkelsson argues:
“The standard number for exchanging the fleet takes about ten years. So from 2022 to 2030 at least half, and by 2030 possibly a majority, of our cars will be running on electric or biogas….Realistically, we will not see any significant electric car purchases in Iceland for the next two years.”
I’m not afraid of the buses
That just won’t do for Gísli Gíslason of Northern Lights Energy (NLE), an investment company built around the goal of transforming Iceland into an electric, and electric only, transportation network in a matter of years, not decades. With charging stations slated for instalment as early as next year, NLE hopes to have 50.000 electric cars on Icelandic roads by 2012—though they admit they’d be satisfied with 20.000.
To reach Gíslason’s even more modest estimate, Iceland would need to buy 19.989 electric cars in the next three years, since today there are only 11—with the 11th being Gíslason’s own. In other words, Gísli Gíslason, who today owns just over 9% of all electric cars in Iceland, only wants to own .005% and he wants Icelanders to help.
Big numbers don’t scare Gíslason or the investors he claims to have lined up because, he argues, going electric isn’t part of a multi-energy solution for Iceland; it’s the only solution.  
Iceland has more than the required 50 megawatts of electricity it would take to transform the network. Secondly, NLE believes that the complicated engines found in gasoline and biofuel cars—with over a thousand moving parts—will inevitably be replaced by the simplicity of electric engines (with only four moving parts). Lastly, Gíslason and his managing director, Sturla Sighvatsson, argue that despite the economic collapse, there’s never been a better time to revolutionise: there’s a surge of talented but unemployed engineers and the drastic drop-off in car sales since 2007 will translate into a fleet that needs renewal by 2011 or 2012.
But even though NLE’s goals are national, the company will work independent of the government. “There’s been a lack of leadership within the Icelandic government,” Sighvatsson said. “We’re making a decision for the government.”
For example, since Iceland lacks any kind of comprehensive regulations for taxing electricity meant for vehicles, NLE plans to install GPS units and onboard computers in all cars sold. This will enable NLE to track not only what roads the driver takes, but how much and from where the car is being charged. Once the government wakes up to the energy revolution, the argument follows, they’ll be free to tap into a pre-established data base for tax purposes.
However lucrative leading the government with a carrot and stick might be, it doesn’t always sound very scrupulous: One of NLE’s immediate projects is to import 10 city buses for the Reykjavík system even though they’ve yet to sign a contract with the city itself. I asked Gíslason if he was nervous about the purchase.
“I’m not afraid of the buses” he responded with a smile. “If the city of Reykjavík doesn’t want [to buy] the buses, they will never be able to say that they want to go green again.”
“It’ll be in the papers,” the managing director added, grinning my way.

Why Iceland?
Iceland is an island, stupid

Which translates into an isolated transportation system with a quantifiable number of vehicles, somewhere in the 220,000-240,000 range. Unlike in, for example, Luxemburg, where a system overhaul would have to include neighboring communities, Iceland can transform its system independently.
Ain’t nobody dope as me, I’m just so fresh and clean
Iceland is already a world leader in green energy production and consumption: 90% of homes are heated by geothermal energy; 80% of the country’s energy comes from hydropower stations; and 75% to 80% of the technically and environmentally feasible reserves of hydro- and geothermal energy reserves have yet to be tapped for heavy industry. Yet.
Icelanders like to get cozy
Consider the fact that as of January 1, 2009, roughly 320,000 people live in Iceland. Nearly 170,000 of them live in the Reykjavík metropolitan area and 120,000 live in the city proper. Seventy-five percent of this population lives within 50 km of two hypothetical alternative energy refueling stations.
Energy Revolution? No thing but a chicken wing
Iceland has already undergone one energy revolution and is well-equipped to do so again. In the 1920s and 30s, a majority of Iceland’s energy demands were met by imported coal and oil – an unsustainable system that rendered the island dependent. The government-backed energy transformation that successfully weaned the island off imported energy was encouraged, and highlighted, by the oil crisis of the 70s. 

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