Energy Transition Handbook - Flipbook - Page 32
Hogan Lovells
32
Electric vehicle and vehicle to grid (V2G)
More than 120 million full battery and plug-in electric vehicles (EVs) are forecast to be
on the road in the UK, Asia and the USA by 2030. These EVs will need access to power
through a network of millions of chargepoints and a smart new EV charging ecosystem
that manages the impact of that charging demand on the national electricity network.
When and where those chargepoints are needed (and how fast they need to be)
remains uncertain.
The pace of EV uptake remains unclear and
is influenced by a range of factors including
national government policies, in support of the
transition to low emission vehicles, and broader
decarbonisation targets; the length of time it
takes to reach price parity between EVs and
traditional internal-combustion engine (ICE)
vehicles; vehicle range and range anxiety (ie public
perceptions about the ability to use EVs for longer
distance journeys); and availability of public
charging stations (ie public perceptions about
the availability of cost and time effective public
chargepoints in the right locations so that a lack,
or perceived lack, of charging infrastructure is not
an impediment to consumer decisions to switch
from ICE vehicles to EVs).
The speed (slow, fast, rapid, ultra-rapid) and
location (home, work, destination and en route)
of the charging ecosystem required to support
the growth in EVs also remains uncertain.
Most forecasts assume a fundamental shift from
fuelling en route (as we do now) to charging for
a significant portion of the time at home, but the
optimal charging hierarchy will vary from country
to country and, within countries, from cities to
rural areas driven particularly by the extent of
residential access to off-street parking and the
prevalence of commuting journeys by car to office
locations with available workplace parking.
The charging ecosystem that we plan today
will also need to take account of the emergence
of “ride-sharing” models, where personal car
ownership levels reduce and mobility becomes a
service and of the anticipated shift to autonomous
vehicles. In both of these cases, annual mileage
per vehicle (and therefore charging demand)
is likely to increase significantly and optimal
charging footprint (speed, frequency and location)
will change.
A major potential source of potential additional
revenue for home, workplace and some
destination charging solutions (such as long term
airport car parks) is the supply of power from
vehicle to grid (V2G), vehicle to business (V2B)
and vehicle to home (V2H).
V2G revenues could be generated through the
software aggregation of EV batteries (combined
with co-located static battery storage), operating
the EVs as a virtual power station and seeking to
arbitrage the power price and to sell balancing
services, such as frequency response, to the grid.
V2B revenues involve the sale of EV battery power
to corporates behind the meter (ie off-grid). V2B
is often part of a wider energy as a service (EaaS)
solution and creates an opportunity to arbitrage
the wholesale and retail price of power, to avoid
system costs (for example by using EV power
supply to “peak shave”: taking the corporate offgrid at times of peak load where systems costs are
highest) and to generate revenues through a share
of energy efficiency savings arising from effective
energy management.
V2H revenues are similar to V2B opportunities,
but targeted at residential rather than commercial
users, for example by offering an integrated solar,
battery and EV energy management solution to
households. Although the sale of EV power to
the grid or behind the meter offers a potential
new and additional revenue source for EV
charging providers, bi-directional power flow
through an EV battery requires a more expensive
bi- directional EV chargepoint and has the
potential to degrade performance and lifespan on
the EV battery. It remains to be seen if and how
the vehicle or battery owner will be insulated from
this risk and rewarded for its role in facilitating the
sale of power and power services to third parties.