Iceland Switching Gears from Hydrogen Fuel Cells to Electric Cars

President Olafur Grimsson of Iceland at Bessastadir. (Jim Motavalli photo)

Bessastadir is the historical residence of the President of Iceland. To visit, one makes an appointment over the phone and knocks on the door. An aide opens up, and leads you into a cozy library lined with Icelandic books. It is very quiet.

The white-haired President, His Excellency Ólafur Ragnar Grímsson, enters without an entourage. He has been in office since 1996. Mention him to Icelanders and they invariably bring up his second wife, Israel-born Briton Dorrit Moussaieff, who is quite popular for her promotion of Icelandic arts (she is herself a jewelry designer) and her game attempts to learn the notoriously difficult Icelandic language.

The setting was traditionally Icelandic, but the President is quite up to date about the fast-moving efforts--showcased at the "Driving Sustainability '09" conference, where he spoke--to turn Iceland into a showcase for electric cars. Its unique combination of political will, a concentrated population of just 310,000 people and abundant, low-cost geothermal electricity could, in fact, lead to the first national charging network in the world.

Mitsubishi will be one of Iceland's first partners. According to Grímsson, the company's relationship to Iceland goes back to the early 1970s, when it began supplying turbines to the country's emerging geothermal industry. Two years ago, Mitsubishi came to the table to talk about bringing its i-MiEV electric car to Iceland. Examples were brought over last year, their first visit outside Japan. "Given our involvement in clean energy, it made sense," Grímsson said. "And we also had an ideal combination of rural roads, cosmopolitan settings and all kinds of weather for testing."

Iceland's financial crisis hasn't derailed the Mitsubishi agreement, but it remains unclear when the fleet--initially a few dozen vehicles--will arrive. Mitsubishi representatives were at the Driving Sustainability conference, where they unveiled an ambitious clean energy agenda for Iceland, but the timetable wasn't clarified.

Iceland has also flirted with a hydrogen energy economy, and Shell operates a filling station for fuel-cell cars. Jon-Bjorn Skulason of Iceland New Energy said at the conference that there are now 10 hydrogen cars in the country, including eight Toyota Priuses modified to burn hydrogen and Ford Focus and Explorer fuel-cell vehicles.

But Grímsson and many other Icelanders have become skeptical about hydrogen for Iceland, largely because fuel-cell vehicles remain in short supply. Meanwhile, plug-in electric cars are scheduled to hit the world's roads in significant numbers next year. "There seems to be a slowdown in the development of hydrogen cars from the big players," Grímsson said. "We believe that electric cars may be better suited to transform our transportation fleet in a short time than hydrogen."

The President is also bullish on a concept advanced at the conference: A united Nordic market for EVs. "The five countries have a population of 25 million people and constitute a significant market," he said. "We could evolve unified laws and regulations for electric transportation."

Also possible is final assembly or outright production of EVs in Iceland or its Nordic partners. (Norway has a significant player already in Think, which makes the City EV.) Grímsson points out that Iceland is already assembling its own ambulances and fire engines in the north of the country.

Grímsson gestures expansively. "Look at our activity and bustling traffic," he said. "Does this look like a country in crisis? A key reason we're able to weather our financial collapse is the low cost of electricity and home heating here. A family pays only a couple hundred dollars per year to heat their home with geothermal energy. Our difficulties would be much worse if we were still heating and creating electricity with imported oil and coal. Clean energy is good for the well-being of individuals and companies--it's a pillar of the economy." 

With its ultra-cheap electricity (as low as 2.5 cents per killowat hour), Grímsson estimates that consumers will be able to drive their EVs for a year on what it now costs to fill their cars up once or twice with gasoline. "Our greatest stumbling block is getting the EVs actually on the road here and on the world market," he said. "The car producers are not yet able to meet the growing demand."

Iceland does have entrepreneurs such as Gisli Gislason of Northern Lights Energy trying to fast-track the country's EV transformation. "He is shaking things up in a very entrepreneurial way," Grímsson said. It was Gislason's Tesla Roadster parked at the Driving Sustainability conference.

There are a few other EVs in Iceland. I was able to take an Indian-made Reva for a short spin. But it's not hard to imagine a major transformation, led by enthusiastic politicians--including Reykjavik's mayor and the country's Prime Minister--and jump-started by the country's green energy infrastructure.

I was picked up by a Mercedes taxi from the President's front door, and I asked the driver if he thought his next car would be electric. "Maybe so," he said.