How smart charging can accelerate the energy transition
Electric vehicles (EVs) can solve some of the world’s most pressing climate challenges. They are a gateway to carbon-neutral transport and can accelerate the transition to cleaner, renewable sources of energy.
But as millions of EVs come onto European roads, they add to the pressure on an already-strained electricity grid. Charging vehicles in a ‘smart’ way is essential to relieve this burden and promote the adoption of green transport.
Relieving pressure on the grid
Demand for electric vehicles is rising rapidly. Battery electric vehicles (BEVs) and plug-in hybrids (PHEV) jointly accounted for 18.9% of new car sales in the EU in the third quarter of 2021.
The appetite for alternative modes of transport is only predicted to increase, as the European Union continues to stimulate EV sales through subsidies, grants and perks like free charging. The EU’s carrot-and-stick approach also involves banning the sale of fossil-fuel cars by 2030 to further increase the uptake of EVs.
In fact, a recent forecast by BCG suggests that EVs could account for more than half of light vehicles sold globally by 2026.
While such levels of EV uptake are unlikely to cause more than a 5% increase in total electricity consumption, significant grid upgrades may be required to handle increased charging demand in certain locations, especially those where EVs are all charged at the same time of day.
In these areas, distribution system operators (DSOs) will be compelled to invest in circuitry, substations, and distribution cables to carry electricity from the transmission system to the EV chargers.
According to research by BCG, a representative DSO would need to spend between $1,700 (1,400€) and $5,800 (4,700€) in grid upgrades per electric vehicle through to 2030. These additional costs would then be passed on to customers through higher grid connection fees.
Smart charging – a cost-friendly alternative to grid upgrades
Instead of investing only in expensive grid upgrades, DSOs could also encourage EV drivers to adjust their charging patterns to the real-time constraints of the local electricity grid. Price incentives, such as lower connection tariffs in exchange for a dynamic grid connection, could help shave extreme peaks and spread consumption more evenly throughout the day.
While these incentive schemes currently are not supported by legislation, they would allow DSOs to rely on fewer substations, powerlines, cables, switches, and service transformers to meet the local energy and/or power demand as electrification continues.
Minimising congestion and local outages
Unless DSOs ramp up the speed at which they upgrade and reinforce existing connections, we are, at least in some EU regions, quickly moving towards a scenario where the only way to prevent local outages will be to forbid the placement of charge stations without prior approval of the grid operator.
This would, of course, slow down the adoption of electric vehicles, but with the help of smart charging, the number of charge stations in one location could be increased without congesting the grid.
Regular smart charging, by which charging sessions are spread over a larger time interval, could support 10 to 20 times more charge stations in a single location.
These numbers are achievable if the load of the (grid) transformer is monitored, and the smart charging algorithms take the load per individual phase of the grid into account (thereby distinguishing between three- and single-phase charging EVs). This would reduce the extent to which the local grid becomes a barrier to the installation of charge stations. As a result, charge point operators could install and manage more charge stations on a single grid connection, while also deploying them faster and at a lower cost.
Accelerating the adoption of EVs
In reducing grid connection fees, smart charging can drive down expenditure and reduce the total cost of operations for CPOs. As a result, locations with a previously low expected ROI could suddenly become more attractive for the building of new charging hubs.
When CPOs decide to deploy public chargers in these areas, that could have a positive ripple effect on electric driving, as the uptake of EVs is closely linked to the availability of suitable charging infrastructure.
Reducing the cost of carbon-neutral mobility
In addition, smart charging can make buying and driving an electric vehicle more financially attractive. This can happen if utilities decide to implement time-of-use incentives, meaning that they reduce the charging price per kWh, or even give away electricity for free, at certain times of day when supply exceeds demand.
In the long run, this can make driving an EV cheaper than driving a traditionally powered car, which may encourage consumers to switch to a greener form of mobility.
This financial incentive, coupled with attractive government stimuli for the purchase of EVs and charge stations, can speed up the transition to carbon-neutral transport.
The widespread adoption of EVs, in particular, would reduce CO2 emissions, as most European countries already source a sizeable chunk of their energy from renewable sources. And as the transition to clean energy speeds up, the beneficial effect will only become more noticeable.
At GreenFlux, we help utilities navigate the shift to clean energy and mobility by leveraging smart charging as a strategic revenue source – even before electric driving becomes the norm.