Author: Shane Touhey, Commercial Analyst, Electron
Electric vehicles (EVs) are consistently hitting headlines. In just one example from the wealth of articles this past month – I counted six on a single UK energy news site alone – the Society for Motor Manufacturers and Traders revealed that the uptake of EVs has contributed to a 2.1% dip in UK car emissions. It highlights an even bigger drop of 11.5% for company car emissions.
That percentage is a little behind target to help us keep pace with our Net Zero requirements – all new cars and vans will be required to be fully zero emission at the tailpipe by 2035 in the UK. However, it illustrates the important impact that EVs can have.
Those EVs all need to connect to the grid. This is adding to the abundance of other Distributed Energy Resources (DERs) already connecting and exacerbating congestion issues. Among these resources, EVs stand out as a promising contender for providing low voltage energy flexibility to the grid.
The traditional way to manage those would be building out the grid’s physical infrastructure to cope with these extra demands. Another way is to use responsive pricing in flexibility markets.
EVs and energy demand management
Dynamic price signals can help incentivise EV users to change their electricity consumption patterns through demand response programme. Those EV users are becoming “flexibility service providers” (FSPs), charging their cars when there’s an abundance of electricity available.
By shifting charging times to off-peak hours, EVs can help alleviate strain on the grid and reduce electricity costs for consumers.
When aggregated together, EVs can also provide ancillary services such as frequency regulation or voltage support to enhance grid reliability and resilience.
EVs offer energy storage too, if they have vehicle-to-grid (V2G) capabilities. They connect loads (no pun intended) of huge batteries to the grid. Handling those bi-directional energy flows is exactly what we need to manage the increase in variability from renewable energy sources.
When there’s too much energy available, they can charge their batteries, and when there’s too little available, they discharge.
Sizing the electric vehicle domestic flexibility opportunity
EVs blow most other DERs out of the water for their flexible potential in the domestic space because of their battery size or capacity, and how many of them there are going to be.
The International Energy Agency’s recent research shows that one in five cars sold worldwide in 2024 is expected to be an EV. In the US, 1.4 million new EVs were registered in 2023, up 40% year on year.
In Europe, new EV registrations reached nearly 3.2million in 2023, increasing by nearly 20% year on year.
The kWh ratings for EVs can vary widely depending on the make, model, and year of manufacture, as well as its battery technology and size. However, here are some typical kWh ratings for EVs across different segments:
- Compact EVs: typically ranges from 40kWh to 66Wh
- Midsize EVs: typically ranges from 50kWh to 88kWh
- Luxury EVs and SUVs: typically up to 100kWh
It is not clear how many of the EVs referred to above as newly registered in 2023 (4.6million in Europe and the US) will have V2G capabilities. However, even if a small percentage (10%) had this capability, it could mean an additional 18GWh of flexible capacity could be available to help manage the grid by the end of 2024.
The challenges for EV flexibility
Despite these potential benefits to the grid, there are challenges to realise them fully. A lot of this flexibility hinges on the bidirectional charging capability of EVs with V2G technology.
The concept is really starting to take off. Octopus Energy as one of the most recent suppliers to release a cheaper tariff for V2G compatible EVs to offer their energy capacity back into the grid.
However, while any EV users can turn up or turn down their consumption, the ability to discharge back into the grid is currently only available for a small number of vehicles. Investment in both hardware and software is needed – yet standards and regulations are still playing catch up.
Improving access to that flexible capacity
Connection processes are compounding the issue. The grid treats the connection of assets capable of exporting very seriously (rightly so), and it’s quite complicated. Octopus is also a relative outlier in providing financial incentives to participate through tariffs, beyond trials.
The grid infrastructure needed to support this additional demand will require significant investment and will take time before it is available.
Consumer charging preferences may mean that grid congestion issues are also experienced at new times by grid operators, presenting new operational challenges that will need to be overcome.
Incentives need to be structured to encourage EV use that helps grid operations – and consumers need to be educated on the benefits to them too.
Making EV flex trading easy
EVs therefore have the potential to be a cornerstone of the energy transition, and flexibility markets can help realise this opportunity.
Given the huge amount of data to manage it – from how much charge there is to where the EVs are (since they can move about) – adding in a flex market platform can streamline that market trading process.
Thanks to automation and APIs, market platforms, like ElectronConnect, can scale and facilitate EV participation more easily than via traditional flexibility procurement processes.
Yet, for EVs and their aggregators, one of the most valuable aspects of a market platform is the ability to run those trades at day-ahead or close to real time.
Aggregators of EVs that want to bid into markets are unlikely to know the flexible capacity they’ll have available to offer a year or half year-ahead of time. Car users may not know when they need to charge their car for a long journey that far in advance.
To make sure that we can drive the right volume of flexibility into markets with accuracy on the amount available – and to make it worth the while of the aggregators – the move to near real time comes into its own.
