The transport revolution will accelerate the transition to clean and smart energy systems.
Download the full report here.
The transport system is about to undergo a revolution. Just as steam replaced horsepower and oil has replaced steam, 21st century transportation will be revolutionised by low carbon and low emission technologies. The government has banned sales of new petrol and diesel vehicles from 2040. This is a radical step, which even a few years ago would have been unthinkable, especially from a government with such stock in the automotive industry. Suffice to say, something seismic is happening which will require a fundamental shift in how we think about transport and energy.
Today Regen have launched a new market insight paper highlighting how the growth of the electric vehicle (EV) market will create new opportunities for consumers and generators of electricity, and accelerate the transition towards cleaner and smarter energy solutions.
The paper – Harnessing the electric vehicle revolution – looks at the key factors that are driving the UK towards a transport revolution, and assesses both the challenges and opportunities that this will create.
It concludes with thirteen recommendations for policy that would harness the EV revolution, before which it addresses two key energy questions:
- At an energy system level, how can EV charging be integrated with overall energy demand and supply to ensure a secure and balanced system?
- At a local level, how can multiple vehicle charging be supported by a distribution network which has been developed to provide low voltage electricity to meet diversified demand?
The prize for solving the energy challenge is massive – a cleaner, healthier environment – a new industry and new commercial opportunities for transport supported by a transformed and decarbonised energy system. The following sections explore some of the opportunities discussed in the paper.
Optimising the value from renewable energy
A fleet of millions of batteries is a natural fit with a high level of renewable generation in our energy system, potentially providing a range of services. With the right cost signals new operating models that realise this value will become viable.
Vehicle to grid
The potential value from millions of batteries that can be drawn on at times of electricity system stress has received enough interest to warrant its own acronym, V2G. V2G has a number of potential value streams, including price arbitrage, demand side response, local constraint avoidance, frequency response services. This would include consumers using the storage in their cars to power household demand during high price periods.
However, having paid retail price for the power in your car battery the business model for putting it back onto the grid is challenging. More work is needed on the value V2G can provide.
Regen analysis suggests that a targeted approach may be a good starting point for V2G. Situations in which V2G could be best suited in the near future are fleet chargers, workplace chargers, and long stay parking.
Supporting local supply models
With households, business and communities across the UK generating their own power locally a natural next step is to sell that power to others through peer-to-peer trading or as part of a local community energy scheme.
Regen’s paper on ‘Local supply: options for selling your energy locally’, explores how local energy schemes could better balance supply and demand for power at a local level, trading with electricity markets for the imbalance and providing flexibility services to the local network. Bringing EVs into local energy schemes will provide a source of flexibility that could help improve the business model.
Maximising consumer value
An EV provides consumers with the opportunity to be flexible in when they use electricity, opening up potential new sources of value. Electricity suppliers are already responding, offering new services to EV owners. Ovo Energy, Ecotricity and Good Energy all have specific EV tariffs.
Key to consumers accessing value from these tariffs will be automated control systems that charge at cheap periods (and possibly discharge at high price periods). The Regen managed Sunshine Tariff innovation trial, found that automation is crucial to enable consumers to achieve a significant shift in electricity use away from peak time. EVs could be the factor that incentivises consumers to install smart automation controls that can then maximise the opportunities of dynamic tariffs.
The central conclusion is that the energy challenge can be met, and that solving this issue will in turn open up a myriad of new commercial opportunities and new business models within a new energy and mobility service sector.
Far from being a barrier, smart and flexible solutions that provide power for transport will also help make optimum use of renewable energy sources. The goals of clean energy and clean transport are complementary.
‘Harnessing the electric vehicle revolution’ has been sponsored by Scottish and Southern Electricity Networks, Burges Salmon and Zero Carbon Marine as well as 20 industry players through interviews and roundtable discussions.
You can download the press release here.
You can download the report here.