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UTILITY Week 8th September 2017

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16 | 8TH - 14TH SEPTEMBER 2017 | UTILITY WEEK Policy & Regulation Analysis E lectric vehicles (EVs) dominated many of the headlines over the summer. Their rapid rise over recent months has caused a mix of jubilation and slight panic. Green groups have welcomed the development. Meanwhile network compa- nies, though they recognise the importance of moving to a low-carbon economy, have expressed concern that if the take-up of EVs were to happen in a haphazard way, the grid could become overloaded. National Grid published its Future Energy Scenarios report in July in which it predicted that peak power demand could hit 18GW as EVs become more common. This deluge of news was rounded off with government's surprise announcement that it would ban the sale of all new petrol and die- sel cars by 2040. The first rollout of forecourt EV charg- ing was announced at the end of August, as ChargePoint Services and Motor Fuel Group – the second-largest independent forecourt operator in the UK – signed a deal to roll out EV charging across Motor Fuel Group's 413 stations. So what are the key points that have emerged from this flurry of news over the summer? 1) The rise of EVs will be rapid National Grid has predicted that EVs could add as much as 18GW, or 30 per cent, to peak power demand by 2050. The latest Future Energy Scenarios report – published by National Grid on 13 July – suggested that without smart charging, peak demand could grow by as much as 8GW by the end of the next decade due to a "dramatic rise" in sales. The rapid take-up of EVs is widely expected, and forecasts by National Grid suggest that as many as nine million EVs could be on the UK's roads by 2030. By 2050, EV sales could account for more than 90 per cent of all cars. Even the lowest estimate of EV growth set out by National Grid – in its "Steady State" scenario – will require infra- structure investment and innovation to sup- port charging peaks. National Grid's report warned: "This year's analysis shows us EVs could drive large increases in peak demand if we con- tinue to see the sharp uptake past the 2030s and if there is no management of when charging occurs." 2) The government is all for it The government has a long-standing goal in place that EVs should make up 9 per cent of the country's fleet by 2020 – a target it says is critical to achieving the required shi to a low-carbon economy. On 10 July, the Department for Business, Energy and Industrial Strategy (BEIS) and the Office for Low Emission Vehicles jointly announced £20 million of funding to support the development of smart charging technolo- gies, which will enable EVs to help balance the power grid. A competition has kicked off to allocate the grants, and the idea is to notify winners in December, allowing suc- cessful projects to start in early 2018. Overall, the government has vowed to double financial support for energy innova- tion by 2021 and according to BEIS, £600 million is already being invested in ultra-low emission vehicles. At the end of July, the government made the surprise announcement that it would ban the sale of new petrol and diesel cars by 2040. This is a bold move, and a sure sign that the government wants to see the uptake of EVs (and ultra low emission vehi- cles) increase. Around 2.7 million new cars were registered in the UK in 2016. From 2040, all such vehicles will be required to qualify as zero emission, with EVs likely to be dominant. 3) EVs won't require a huge increase in generation Former Npower boss Paul Massara dismissed dire warnings that the UK would require massive increases in electricity generation to cope with the phasing out of internal com- bustion vehicles. Critics of the government's plan had held up the findings of National Grid's Future Energy Scenarios report, which predicted that peak hour demand for electricity could increase by up to 50 per cent, requiring addi- tional investment of £200 billion. Massara – who is now chief executive of North Star Solar – claimed the government's announcement of a ban on new petrol and diesel car and vans in favour of EVs had led to "wild claims" of increased electricity demand. "Assertions that UK demand could increase by 50 per cent, and could cost £200 billion, have been bandied around in the media," he said. "But this projection of increased demand is the most extreme forecast from the National Grid. In reality, demand is likely to go up by a much lower amount, perhaps as little as 10 per cent, par- ticularly as the UK moves to a more smart, flexible power grid. Likewise, the £200 bil- lion figure assumes using the most expen- sive technology to meet peak demand when many lower cost alternatives are available." 4) The energy system will need to transform to cope with EVs No matter how it is handled, the uptake of EVs will have a fundamental effect on the energy sector, and the government and Ofgem's smart systems paper proved that policymakers largely agree about how the energy system of the future will look – with heavy penetration of EVs, flexible local energy systems, demand responsive storage and much greater renewable generation. Simon Skillings, a senior associate at energy think-tank E3G, tells Utility Week: "There is a lot of consensus around what the world will look like. The interesting issue is how we get there." Skillings does not feel the paper goes far enough, and says it fails to fundamentally rethink the regulatory struc- tures which will be needed to meet the scale of the EV revolution. Baringa Partners' Oliver Rix agrees: "The smart system paper is a helpful first step in recognising the needs around managing flex- ibility in the system but steps beyond are needed." He added that the longer-term strat- egy relies on a vision of decarbonising the power sector that is not there yet. "Every- EV revolution gathers pace A great deal has been written and said about EVs over the summer, including cage-rattling over their impact on future energy security. Lois Vallely rounds up five things we've learnt.

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