Utility Week

10 | 20TH - 26TH JULY 2018 | UTILITY WEEK Policy & Regulation Analysis I n Japan, a company is showing how the grid of the future could work. But it's not a utility, it's Nissan. Chris Wright, chief technology officer of battery supplier Moixa, has seen how the multi-national motor manufacturer gets its employees to plug in their electric Leaf models to help deal with peak loads at one of its plants. Around 60 to 70 per cent of Japanese Leaf owners possess a vehicle-to-grid (V2G) charger, he says. By contrast, Wright says he is one of a "handful" of UK electric vehicle (EV) enthusiasts who have one of the devices. Bringing the UK up to speed in the EV revolution is the declared aim of The Road to Zero paper, which was issued last week by the Department for Transport (DfT). But will it deliver the EV dream? The omens weren't good in the run-up to the paper's publication about how strongly the government would push the rollout of EVs. Last summer, the government's air pollu- tion strategy included a pledge that the sale of all petrol and diesel vehicles would be banned by 2040. Demand increase The big concern for utilities is whether the distribution and transmission system will be able to cope with the increase in demand for electricity, sparked by National Grid's estimate this time last year in its annual Future Energy Scenarios (FES) report that an extra 18GW of generation capacity might be required. The Road to Zero states that the govern- ment is "confident" that existing electricity market mechanisms will be able to meet additional electricity demand from EVs. National Grid, in its latest update to FES published on the day aer the DfT's EV paper, cuts the predicted increase in electricity peak demand by 2040 to as little as 8GW. Northern Powergrid's modelling suggests the average EV-owning household's electric- ity use will roughly double, says the north east distribution network operator's (DNO's) policy and markets director Patrick Erwin. But this increase is manageable, given other factors such as declining household demand for electricity as a result of more efficient appliances and light bulbs, he says: "As long as that is smeared out throughout the day, our network can cope." Key to keeping peak demand down will be a combination of smart charging tech- nologies, consumers charging vehicles at off- peak times and the use of V2G technology, which alone could reduce additional peak capacity demand by 8GW, according to the FES. Clustering problem However, this relatively rosy prognosis doesn't address concerns about the short- term impact that rapid EV adoption will have on neighbourhood networks. Pointing to feedback from DNOs that have mapped the impact of increased EV use, Wright says: "The first few per cent of EVs will be absolutely no problem, but once you hit 10 per cent, it's not the case. "At a 1 per cent penetration rate they couldn't see it at the substation, at 5 per cent they could see a different profile and at 10 per cent the system was broken – my concern is that we will hit that 10 per cent very quickly." This so-called clustering problem also Getting up to speed with EVs The Road to Zero sets out the government's next steps to cleaner road transport. David Blackman asks if the report goes far enough or whether the UK is in the slow lane over electric vehicles Energy UK and National Grid have both publicly stated that the electricity system can cope with bringing forward an outright ban on the sale combustion engine cars and vans to 2030. But The Road to Zero set out a more modest ambition: that at least half of cars and 40 per cent of vans sold in the UK must be ultra-low emission vehicles (ULEVs) by the end of the next decade. And this target, as well as the 2040 phase-out of combustion engine vehicle sales, will not apply to hybrid models, according to the paper. Chaitanya Kumar, senior policy adviser at the Green Alliance umbrella group of environmental NGOs, thinks fragile business confidence in the run-up to Brexit lies behind the government's reluctance to push motor manufacturers harder. But letting car companies off the hook is short-sighted, he says: "Twenty-two years is way too long. If it is 2030, it becomes more material and they will start retooling." Baringa's Rix agrees. "If you set a really clear long-term stake in the ground, people will work to that. It feels like a shame to take a clear statement and essentially blur it." The government should also set more interim targets to guide the motor industry towards the cut-off date, says Kumar: "In China and Cali- fornia, these are providing a strong market signal for operators to align their product lines to meet those kinds of targets." The document has also generated uncertainty over the future of the plug-in grants, which currently subsidise the cost of buying EVs. Moixa's Wright is concerned that the government has given no guar- antee about the future of these subsidies aer October. The concern is that the government will pull the plug on these grants before the cost of owning such vehicles drops into line with petrol and diesel engine cars and vans. With such cost parity unlikely to be reached until the mid-2020s, the government appears to be unwinding its support for EV purchases "too soon", says Rix: "It's great news that costs are coming down, but they're not there yet. We are some way from a point where consumers can get an equivalent vehicle for the same cost." Pointing to the Netherlands, where sales of hybrids halved following the axing of subsidies, he says: "If you remove those direct financial incentives early, the danger is you lose the momentum and get a drop off in sales. It doesn't seem consistent with the targets." The Road to Zero report: modest ambitions and long-term targets

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