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The economics of electric roads
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics.ORCID iD: 0000-0001-9235-0232
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics.ORCID iD: 0000-0001-6520-3253
Nature Associates.
2020 (English)Report (Other academic)
Abstract [en]

In this paper we present a method for evaluating social benefits of electric roads and apply it to the Swedish highway network. Together with estimated investments costs this can be used to produce a cost benefit analysis. An electric road is characterized by high economies of scale (high investment cost and low marginal cost) and considerable economies of scope (the benefit per kilometre electric road depends on the size of the network), implying that the market will produce a smaller network of electric roads, or charge higher prices for its use, than what is welfare optimal. For this reason, it is relevant for governments to consider investing in electric roads, making the cost-benefit analysis a key decision support. We model the behaviour of the carriers using the Swedish national freight model system, SAMGODS, determining the optimal shipment sizes and optimal transport chains, including mode and vehicle type. We find that if the user charge is set as to optimize social welfare, the revenue will not fully cover the investment cost of the electric road. If they are instead set to optimize profit for the operator of the electric road operator, we find that the revenue will cover the costs if the electric road network is large enough. Electric roads appear to provide a cost-effective means to significantly reduce carbon emissions from heavy trucks. In a scenario where the expansion connects the three biggest cities in Sweden, emissions will be cut by one-third of the overall emissions from heavy trucks in Sweden. The main argument against a commitment to electric roads is that investment and maintenance costs are uncertain and that, in the long run, battery development or hydrogen fuel cells can reduce the benefit of such roads.

Place, publisher, year, edition, pages
Stockholm: VTI , 2020. , p. 23
Series
CTS Working Paper ; 2020:1
National Category
Infrastructure Engineering Economics
Identifiers
URN: urn:nbn:se:vti:diva-15091OAI: oai:DiVA.org:vti-15091DiVA, id: diva2:1413826
Available from: 2020-03-11 Created: 2020-03-11 Last updated: 2020-03-11Bibliographically approved

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fulltext(531 kB)20 downloads
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Type fulltextMimetype application/pdf

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Börjesson, MariaJohansson, Magnus

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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  • de-DE
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Output format
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