Exponential growth in electric vehicles (EVs) and associated charging infrastructure is widely predicted over the next 20 to 30 years. Balancing electric grid demand with supply pressures will become ever more complex as EV adoption moves into the fast lane. By 2040, Bloomberg forecasts more than half of all new car sales and a third of global fleet vehicles will be electrified. Similarly, the International Energy Agency’s (IEA) latest Global EV Outlook reports that 1 million electric cars were sold in 2017, a rise of more than 50% from 2016.
This surge in electrification will exert growing pressure on global power networks. So far, expanding electric vehicles numbers have had limited impact on electricity demand. The IEA estimates electricity demand from EVs accounted for just 0.2% of the world’s electricity consumption in 2017, the equivalent of 0.38 million oil barrels per day. But if Bloomberg’s prediction is correct – that electrified buses and cars will displace a combined 7.3 million oil barrels per day by 2040 – then the assurance of grid capacity and resilience is critical.
Electricity Consumption Comparisons
The IEA presents two scenarios for 2030:
- Global electricity consumption from EVs reaches 404 TWh in the less ambitious scenario
- Consumption reaches 928 TWh under the more ambitious scenario
Compared to the electricity consumed by EVs in 2017, these values represent a 7- to 17-fold increase!
This means a number of issues must be solved if sufficient generation capacity is to increase. These include preventing interruptions to power supply, such as blackouts at times of peak demand, and ensuring any new electric vehicle charging infrastructure will be fit for purpose over time. Advances in smart technology and consumer engagement both have a role to play here.
EV Charging Flexibility
To avoid local demand surges, especially in densely populated areas where EV adoption is swift, it is necessary to encourage fast, off-peak charging. This requires the flexibility to offer different charging models through a variety of infrastructure – on-road/off-road hubs, motorway forecourts and smart-enabled chargers in the home. All are needed to make charging both convenient and publicly accessible. Government policies – like the UK’s Road to Zero strategy that proposes installing EV chargers in every new home and lamppost – will help accelerate such rollouts, as will China’s plan to build a network of 12,000 charging stations to match the demand of 5 million electric vehicles by 2020.
As EV charging infrastructure becomes more commonplace, new ways for consumers – or “prosumers” – to meet their energy needs opens up. The most likely future state: simultaneously producing and storing energy. Home and office power storage systems that can assist with time-of-use pricing may become standard. Integrating these systems with vehicle-to-grid technologies would allow users to use solar and wind power to charge their EVs at times to avoid peak-hour charges. EVs could then be used to earn rebates by storing excess energy and providing electricity back to the grid at peak demand.
As the grid evolves to accommodate these decentralized electric vehicle power solutions, traditional utility models will have to find new ways to compete. Energy providers such as OVO are already using vehicle-to-grid technologies as a way of promoting EV ‘power stations.’ This diversification means energy retailers can start to offer end-to-end solutions, such as fixed tariffs for EV charging, free access to EV charging points and smart chargers for EVs.
The Changing Energy Landscape
Significantly, these trends (and others) are forcing larger oil and gas companies to review their own service offerings. Total has entered the French retail market and started to supply electricity and gas to consumers under its Total Spring brand, while BP and Shell are both investing heavily in EV charging services to complement their traditional supply channels.
There’s no doubt electric vehicles play an active role in shaping a new type of energy landscape. But what will the future look like 10, 20, even 30 years from now?
Stay tuned for the second part of this blog series, which will look at the evolution of grid supply and demand patterns.