Electric vehicles are coming to the UK and the energy industry needs to start preparing today. Though there are plenty of challenges for us to discuss in the industry, too much discussion focuses on what we can’t do and not how we can embrace this new energy vector as an opportunity. Electric vehicles (EVs) give our industry the opportunity to show consumers what is possible. They will help the UK solidify its rightful place as a leader in the worldwide movement toward clean energy and a sustainable future.
Improvements in technology and efficient manufacturing are driving down EV car costs to price points that are nearly on par with petrol-powered vehicles, leading some analysts to predict dozens of EV models being available by 2020. In a report earlier this year by the Society of Motor Manufacturers and Traders, consumer adoption in the UK has surged, with EV registrations ranging between 1.3 percent and 2.9 percent each month over the past two years. In 2017, more than 47,000 EV cars hit the motorways. This compares to 37,000 in 2016 and 28,000 in 2015, bringing the cumulative total to more than 140,000.
Incentives are in place to drive adoption. In London, all-electric vehicles and eligible plug-in hybrid vehicles qualify for a 100 percent discount on the London Congestion Charge. The rest of the UK could and should consider similar incentives and mechanisms to accelerate adoption.
All this means charging infrastructure will need to be available more quickly than some may have anticipated. That begs the question: Can the RIIO (Revenue = Incentive + Innovation + Outputs) framework and government investment priorities support the actions the UK network operators need to take?
“It’s the critical infrastructure that’s key,” according to Graeme Cooper, project director of electric vehicles for National Grid. “It’s about future-proofing the network so it has the capacity to charge cars as quickly and efficiently as possible.” A short time later, Cooper was queried if National Grid could support the EV transition if sales of fossil fuel-powered cars were banned in 2030. He emphatically responded, “Absolutely, no problem at all.” This is the passion and leadership our industry needs at this critical inflection point.
Facing Energy Challenges
Here are some challenges the energy industry and regulatory authorities must address:
- How will the UK make up for the loss of petrol taxes and value-added taxes (VAT) as EVs gain increasing market share?
- How will the electricity networks respond to the changing mobility of storage (charged EV batteries) as a resource?
- Is the edge of the electrical distribution network the right place to integrate chargers? We don’t fill our petrol vehicles at home today, so could a better-connected service center provide the capacity we require?
- How do we build a ubiquitous charging platform that allows standardized connection and payment methods for vehicle charging or vehicle-to-grid (V2G) power flow?
- What market models need to be enacted that incentivize and compensate V2G or vehicle-to-vehicle (V2V) participants?
- What is the most beneficial ownership model for the charging infrastructure the UK requires?
- How do we reuse or recycle batteries that are no longer serviceable in vehicles? Do they have a second life, such as in battery storage applications?
- Is the current RIIO regulatory framework suitable for transmission and distribution network operators to confidently deploy the infrastructure we require? For example, are we rate-basing technology that only a percentage of participants are using but all are getting the air quality and carbon benefits of?
Cost is still king for consumers considering an EV. This includes both direct, upfront costs of purchasing the EV and ongoing charging and maintenance costs. Technology has advanced rapidly, driving down costs in all three categories. Still, the energy industry is mired in jargon when it comes to helping consumers understand and evaluate costs. We must stop talking about the cost of energy as price per kilowatt hour and adopt units consumers understand, such as distance, capacity and utilization. In other words, how many kilometers can I drive before I need to charge again? Will there be power available? Will I have access to a fast charger or will I need to wait several hours when only a Level 1 or Level 2 charger is available? These are simply unnecessary barriers to entry that we need to break down to derive the outcomes we desire.
Engaging Consumer Understanding
Consumers already buy two commodities — electricity and petrol — without fully understanding all the variables that impact the prices they pay. The transition to EVs presents an incredible opportunity to flip the entire system for the better. What if consumers came to think of their cars as an energy platform with the possibility to provide a service? What if the car is bought with a certain number of charge cycles or miles that come free, with the condition that you must plug it into the grid for a V2G power flow that supports periods of peak demand? Instead of looking at energy as a product, what if we flipped the view and considered energy as a service?
One key to addressing this issue is to consider EVs and their batteries as a grid resource, making transportation an energy vector that can be drawn on to enhance flexibility within the grid.
Range anxiety is perhaps the biggest barrier to wider EV adoption by UK drivers. It’s the same challenge faced elsewhere in the world and can only be addressed by developing sufficient scale in the charging network.
Energy retailers are understandably excited about the transition to EVs. The current regulatory model gives them an opportunity to make more money based on volumetric sales. The Office of Gas and Electricity Markets (Ofgem) is an economic regulator but certainly understands it must project some consideration for EV growth when the current RIIO ED1 period ends 31 March 2023. If they get it wrong, who will be held accountable?
Electrical Distribution System Effects
There is no question the distribution system operators (DSOs) are already facing challenges. Distribution systems throughout the UK are engineered with the expectation that most domestic appliances are only switched on for short durations and not all at the same time, creating system load diversity. This ability to apply diversity factors in calculating load is the reason we are able to connect more than 400 amperes (amps) per phase of potential load to typical low-voltage (LV) feeder circuit.
Now, with more and more households having one and sometimes more EVs charging continuously for many consecutive hours, diversity factors decline significantly whilst simultaneous loads go up proportionately.
Without proper planning and system modifications, the ultimate result will be exponential growth in faults and loss of customer supplies. That begs another question: Is charging an EV at home the right answer, or was this just an early solution to sort out range anxiety for car manufacturers?
There is little doubt EVs can have many beneficial impacts on a macro-grid scale. However, there could be problems at the hyper-local/distribution level due to legacy design issues. The network planning philosophy for most legacy assets installed on secondary networks (22-kV and lower) was based on expectations of cyclic load ratings throughout the day and the annual seasons. This has allowed network engineers to up-rate assets to connect additional loads on the basis that there will be periods within any 24-hour cycle when assets will get a thermal reprieve.
However, with additional EV loads, the demand curve will flatten nearer to peak load. This means many local distribution assets will be operating outside their ratings and consequently must be de-rated to comply with their new operating regimes. Barring this, there will be more network faults. Do we give consumers the power to make the decision about intermittent car charging vs. neighborhood network outages? The obvious answer is charging must be intelligent and reward the flexibility the consumer gives the network. But will consumers buy in at the scale we need?
Creating Advanced Control Systems
Many believe a crucial part of the solution is to install “smart chargers” that only allow EVs to draw power when the regional grid is at a state of low load and when prices are correspondingly low. However, this creates a scenario where the only way for this to work is for all chargers to be “smart” —able to communicate with all other chargers on the network and automatically controlled at a neighbourhood level in conjunction with the local substation. Clearly, this system would require advanced controls. The technology, practically speaking, does not readily exist today. It also will not negate the need for some level of network reinforcement when we move beyond 50 percent EV penetration.
V2G charging could help offset some of the variability in system demands and strengthen potential arguments in favor of a DSO-led supply market. V2G is simply power flow going the other way, which could be beneficial in helping the UK system manage daily demand curves from normal domestic and commercial loads. However, there are challenges to this scenario as well.
Even though the vast majority of EVs are not equipped for V2G use, this may become the next generation of EVs. Studies throughout Europe have shown that when V2G is controlled by a smart grid algorithm, owners see greatly reduced battery degradation in addition to the revenue they realise by sending power back to the grid.
Still, even with economic incentives, it is far from certain that the V2G concept will be accepted by the consumer. This will take a radical shift in thinking. Most people buy cars for the independence and freedom of being able to get from Point A to Point B without complication. Will they accept the inconvenience of sometimes finding they can’t use their car to get somewhere urgently because they have made a commitment to export power to the grid? This may require a big shift in cultural adoption. Further, are car manufacturers prepared to issue the same type of warranties for V2G batteries for the extra-duty cycles? This is far from certain as well.
A further question of this “smart” automated approach is whether consumers will accept the loss of control over when they charge their vehicles. Of course, they could choose to pay premium rates for charging during peak periods but the automated controls required to allow this setup would mean that the distribution network operators (DNOs) and DSOs would have to be involved in setting dynamic energy prices. Current regulation does not allow them to be involved in any pricing schemes.
Many cultural barriers can be overcome as technology advances to allow faster charging cycles. When charging cycles begin to match the time it takes to refuel at a petrol station, consumer acceptance is likely to skyrocket.
Of course, we are still a long way from this point with respect to both battery and charger technology. Ultra-fast charging would mean very high loads at any commercial access point, which may only be addressed by installing high-capacity services directly from the transmission network. This could require 400-kV and 275-kV connections at key locations such as motorway junctions and service stations. Given the physical plant size, insulation requirements and cost of the equipment, is this a viable option?
Calling for a National Strategy
All of the above point strongly to the fact that there needs to be a national strategy specifically for EVs. There are too many far-reaching problems, and it is essential original equipment manufacturers (OEMs), EV manufacturers, transmission and distribution network operators and the system operator are all on board if we are to reach a comprehensive solution.
But what a future this could be. Imagine a fully automated world where our cars are synced with our calendars and all devices are fully connected to the utility network, communicating precise charging requirements. Along with this, we might see pricing signals for buying or selling power. These signals might be based on smart contracts with utilities or with peers to provide a service either to the grid or directly to our neighbours using a blockchain-based technology. This might even involve buying excess solar energy from a neighbour’s PV panel across the public or private networks.
Futurists have all talked about the smart grid, distributed network and smart homes — all interacting and determining when we buy services or run appliances in our homes. Realistically, that scenario is still a long way in the future, but no matter the time frame, it appears EVs will drive many of these structural changes.
Plenty of work remains, but EVs are here to stay and will only become more prevalent. They are already a disruptive force, and the only question that matters is what we will do to prepare to enable the carbon-free future we all desire.
Technologies and the holistic planning of a whole system approach will play a big role in building the smart cities of the future.