We know that electric vehicles (EVs) can deliver extensive economic, power system, environmental and climate benefits, which is what makes the EV revolution so valuable. Whether these benefits will be realised, however, depends largely on how well the vehicles are integrated into our power grids. If we get integration right, EVs can make the transitions to clean energy and clean transport both cheaper and mutually beneficial.
Many people know that EVs are less polluting than conventional cars, but are not aware that they have an additional advantage: they can be a flexible load on power grids. In other words, they can be charged when it is beneficial for the grid — for example, at times when there is excess wind and solar generation available and when demand for electricity is low.
The great news is that we are starting to see promising practices emerge in Europe and the US to help make these opportunities a reality. In our new report, we find that three ingredients are needed to integrate EVs into the grid cost-efficiently, with benefits for everyone: smart pricing (the “software”), smart technology (the “apps”) and smart infrastructure (the “hardware”).
Smart, time-varying pricing for both energy and for use of the network helps consumers to charge their EVs intelligently, shifting charging to times when the costs for producing and delivering electricity are lower — without compromising their driving needs. Evidence suggests that, in the absence of pricing incentives, EV owners are more likely to charge their vehicles at times when demand for electricity is already high. Charging EVs on top of existing peak demand aggravates stress on the power system and leads to higher costs for everyone.
Smart pricing can have different designs. Even the simplest form, time-of-use tariffs, that commonly offer lower prices for certain hours at night, can deliver significant benefits to the power system, EV drivers and consumers as a whole.
In Spain, Iberdrola has introduced an EV tariff for energy, offering an 80% discount for owners who charge their cars during predefined hours of the night. A customer owning a Nissan Leaf would save approximately €170 a year compared to the standard flat tariff by charging only at night (assuming the car is driven 10,000 kilometres a year). More sophisticated price designs, such as prices that vary every half hour based on grid conditions, can help absorb increasing levels of low-cost renewable power and lower peak demand on the grid.
Shifting EV charging to hours in which the grid is less stressed also helps to make better use of the historically underused existing power networks, as shown in our 2018 study. Currently, network charges are generally a flat rate (not varying with time) or a fixed fee that represent 27% of an average European customer’s electricity bill.
Radius, a distribution company in Denmark, offers a promising approach for incentivising behavioural change. Customers with a smart meter pay a surcharge for using the network during three predefined peak hours, from 5pm to 8pm daily, during the winter months. By shifting demand away from these hours, the distribution company can avoid or contain expensive grid reinforcements. The resulting, more efficient, use of the existing network saves all consumers money.
The availability of smart technology is crucial to maximising the benefits from smart charging. Electricity demand during peak hours can be reduced even further with the use of intelligent technology, as evidenced by time-varying pricing pilots. Smart technology ranges from smart meters that can monitor and communicate a customer’s real-time energy consumption, to technology that can automatically control how and when an EV is charged, based on prices or other signals such as emissions criteria.
These technological capabilities can be built into a charging station, a power cable or a car itself. Smart technologies, in particular those that support more sophisticated time-varying pricing, will be crucial to future grids. This is important for traditional peak-shaving and for enabling necessary demand flexibility and integrating increasing amounts of renewable energy.
Several companies, such as Dutch startup Jedlix, have developed apps that assess the optimal charging profile for an EV. They assess the driver’s needs, such as planned travel times, and aim at shifting charging to times when there is sufficient capacity on the grid, a significant amount of renewable energy generation available and low electricity prices. A meter developed by MyEnergi in the UK can even detect and communicate when a consumer’s system has excess renewable energy available and limit the source of electricity for charging accordingly.
Smart pricing creates a business case for these technologies, while smart technologies enable consumers to take advantage of lower tariffs without compromising quality of life by requiring constant attention.
The third ingredient to cost-efficient EV grid integration is the hardware, or strategic planning and siting of charging infrastructure. The siting for various types of charging must also address drivers’ needs and anticipate future demand, whether this is workplace charging, car-sharing, delivery services or electric city buses.
Promising approaches in the US, Canada and the UK show how utilities, grid operators and transport departments have mapped out optimal charging locations that meet drivers’ needs, while using existing grid capacity in cities and along highways.
In urban areas, residential parking and charging solutions can offer cost and efficiency benefits by using existing urban infrastructure, such as lamp posts. Where fast-charging is needed, but grid expansion to meet the charging point’s demand would be too expensive, battery-assisted mobile fast chargers have emerged as alternatives in Norway and Germany.
More EVs will be on our roads in the coming years. Consumers, innovative businesses and cities have already seen first hand the numerous benefits they offer to address our mobility demands and the needs of an increasingly flexible and decentralised electricity grid. Their experiences make it clear that smart tariffs, technology and infrastructure are crucial to advancing the energy and transport transitions effectively.
Photo: ESADEgeo-Center for Global Economy and Geopolitics
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