In March 2023, the Council of the European Union is expected to approve the ban on selling combustion engine cars from 2035 onwards. This will drive a surge in electric vehicle uptake already within this decade, and critically - increase demand for electricity. Gridio has used the data available from its fleet of smart chargers to estimate the impact on peak power requirement. The outcome makes it clear that, without smart charging, this ban is not feasible.
Based on estimates from Bloomberg New Energy Finance, EY and Eurelectric, around 150 million electric will be on EU roads by 2035. Gridio actively manages around 6,000 electric vehicles' smart charging and we have very detailed insight on when cars charge and how much power and energy they need. For example we know that users mostly plug in between 16:00 and 21:00, they charge about 2.2x per week and the average charging power is 10kW. Interestingly, about 20-25% of of the EV fleet gets plugged in every night.
50% increase in peak electricity demand
By scaling up our userbase to 150 million, we project electric vehicles will require around 300 gigawatts of power at peak times - assuming no smart charging, thus cars get plugged in after they arrive home. To put this into perspective, the highest electricity demand in the EU has been recoreded on 18 January 2017 - at 542 gigawatts. So all else equal, peak demand is set to increase by 50%, just from the additional electric cars.
Smart charging can lead to even higher peaks
Today, smart charging (call it version 1.0), works by Gridio scheduling the charging of its users electric vehicles to the periods of the lowest spot electricity prices - which usually also coincide with the lowest carbon intensity. By doing so, we concentrate the charging of cars to the most sensible hours - reducing strain on the grid during evening peaks, when the cars would normally have charged. While knowing what hourly electricity prices will look like in 2035 is impossible, it is likely that we will continue to have low price periods at times of high renewable penetration. In such cases, smart charging would further exacerbate the peak demand to as high as 375GW - a further 25% increase. Therefore to avoid that we will need to shift to smart charging 2.0.
Smart charging 2.0 - intraday planning, self-consumption and grid constraints
In order to facilitate the surge in electric vehicles they absolutely need to be smart charged. To accompany that, the EU energy community has to start preparing for a more advanced version of energy markets - on the wholesale, retail and distribution grid level. There are three key challenges that come with the above electric vehicle scenario.
Challenge #1: we need intraday planning for electricity markets.
It is likely that the current day-ahead electricity market model, whereby supply-and-demand is scheduled once day-ahead could fail. We will have several hundred gigawatts of new wind and solar power entering the market, pushing down electricity prices. However, if smart chargers all schedule their EV charging (300GW+) to the windiest and sunniest hours, that free renewable power will be gobbled up quite quickly. It is therefore likely, that we may have to 'replan' the electricity demand a few times. For example the may first schedule millions of electric cars to charge at 2:00-4:00 at times of high low-cost wind power. But if it turns out that the demand from EVs is higher than the wind output (leading to a surge in prices), then some of the electric cars should be re-scheduled to charge at the next windiest period, and so on and so forth, until the EV demand is distributed across the day. Using just day-ahead prices may no longer be enough.
Challenge #2: solar self-consumption.
Together with the electric vehicle boom, the rooftop solar boom is also continuing. This means that a lot of the new demand (electric cars) and as well as supply (solar) will be generated at the 'end' of the grid - at homes and offices which are connected to limited distribution lines. To avoid the cables getting congested, it will be vital that solar generated on-site is used as much on-site or nearby, and that's where electric vehicles are becoming a great bedfellow. Automatically charging cars when solar panels are generating avoids the need to both export and import huge volumes of power from the central grid, meaning less substation and distribution grid upgrades are required. To do that, cars, solar panels and batteries (from different brands) need to communicate with each other and be co-optimised and scheduled. That's why we at Gridio are building a multi-device, multi-brand solution for our EV customers and this will become even more vital.
Challenge #3: local grid constraints
With so much additional wind and solar power entering the grid, we at Gridio are somewhat less worried about the required power generation being available, but more about how the copper cables connecting our homes and offices to the large grid can handle the extra strain. While maximising the aforementioned solar self-consumption, it is likely that the pricing mechanism of using the distribution grid also needs to change to be more dynamic. In order to avoid one neighborhood full of EV's clogging up the entire distribution grid, it is likely that the grid fees will need to actively fall when demand is lower and sharply rise when the grid capacity is getting close to the maximum. Given the dynamic nature of EV charging, rates for fixed time periods (e.g. peak at 18:00), will no longer be enough - real-time grid pricing will be potentially needed.
These challenges require collaboration between market players, regulators, electricity customers and even device manufacturers. We take it as our mission in Gridio to help the world navigate this energy transition by offering a platform and an app that makes electric vehicles use energy when it makes most sense. The when makes most sense will become an increasingly more complex question though as illustrated above, but we accept the challenge!
Onwards with the transition, downwards with emissions!
Konrad
