Utility Week

28 | 2ND - 8TH FEBRUARY 2018 | UTILITY WEEK Customers Market view I n a future where 50 per cent of all cars, buses and motorcycles are "all electric" across the 28 countries of the European Union, the annual electricity demand would be 330TWh higher than today . To some this may not seem much but it is equivalent to adding a country the size of Italy to the electricity demand of the EU28. If the 330TWh was considered on a standalone basis, it would require 45GW of baseload plant, which is equivalent to 14 Hinkley Point Cs. But what does it mean for the exist- ing system and the generation and distribu- tion of electricity? The fact that people use electricity at dif- ferent times means the capacity of the sys- tem is lower than it would need to be if they used it at the same time. In Great Britain, with spare capacity on the current system, additional energy demand could in theory be accommodated overnight without the need for new capac- ity (see graph). However, the situation both today and in the future is not well repre- sented by this characterisation for a number of reasons, not least because of the continu- ing increase in non-dispatchable generation such as solar and wind, and the growing potential of flexible demand. As the amount of wind and solar grows in the electricity system, the shape of electricity demand will no longer be the main driver for when to charge an EV, because low electric- ity prices will not necessarily coincide with periods of low demand overnight. With non-smart systems it does not mat- ter to the residential consumer when their electricity demand occurs because settle- ments are based on half-hourly or hourly profiles rather than on actual demand. But in a world in which flexible demand is chasing low electricity prices, there is an incentive for consumers to charge their vehicles at the same time. Natural diversity will reduce and distribution systems will need even greater levels of investment. The cost of distributing electricity will be low most of the time and then increase significantly when grid capac- ity grows scarce. There will exist at times a tension between the cost of electrical energy and the cost of distribution. The cost of delivered electricity will vary significantly with time and location. A solution One way to reflect this is a system of dynamic pricing that reflects the cost of electricity at a specific location. The pricing option could be a variation on nodal pric- ing, common in many electricity markets, but which is extended down to the local distribution level, even to a price at the top of a city street. Whatever the form, the key will be reflecting the cost of electrical energy and the cost of distributing electricity to an appropriate degree of temporal and geo- graphical resolution. In addition, an electric vehicle's (EV's) ability to inject energy back into the grid could lead to lower costs. The economics of EVs re-injecting electricity into the system could end up being based on the cost of storing energy in, and re-injecting energy from, an EV (or static) battery versus the cost of grid reinforcement. So when you want to charge your EV at a specific time and there is local grid congestion you will charge from other EVs that are discharging energy in your local street or area. So we may find that the problems EVs cause in the future are actually solved by EVs themselves. Matt Brown, vice president, energy – Western Europe, Middle-East and Americas, Pöyry EVs: who's in charge? The widespread take-up of electric vehicles will require much more generation capacity, unless a smart solution sees the vehicles themselves being used to balance the grid, says Matt Brown. FILLING THE OVERNIGHT TROUGH: A WINTER DAY Source: Pöyry 60 50 40 30 20 10 0 120 100 80 60 40 20 0 GW £/MWh 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours 21GW EV charging demand Hourly demand Wholesale prices (right axis)

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