Smart Charging Solutions Could Slash EV Running Costs
Running costs for electric vehicles (EVs) could be significantly reduced thanks to smart charging solutions, according to a new study by EY and Eurelectric.
The research indicates that smart charging solutions, such as time-of-use (ToU) tariffs and selling surplus energy back to the grid through bidirectional vehicle-to-grid (V2G) and vehicle-to-home (V2H) charging, could lead to substantial savings for EV owners.
Potential Savings for EV Owners
The study revealed the potential savings across different EV sizes. Owners of compact EVs could save over £700 annually, while those with medium-sized EVs could save more than £1,000 per year. Electric SUVs could potentially save as much as £1,475 annually by using optimized flexible charging solutions.
EY and Eurelectric’s findings also highlight how evolving smart and flexible charging solutions can help balance grid capacity across the day as EV adoption continues to rise. This will be crucial to accommodate the growing energy demands of increased EV usage.
Maria Bengtsson, UK head of mobility at EY, stated, “This study provides a compelling case around how V2G and smart charging solutions could enable consumers and electricity transmission and distribution grids to collaborate, helping to reduce EV running costs and optimise grid capacity.”
She added, “One of the key hurdles facing the EV transition in the UK is a lack of adequate infrastructure to accommodate more rapid uptake, so ensuring grid capacity is less stretched through smart charging solutions is a step in the right direction. V2G solutions are still in their infancy, so it will take time for their impact to be seen on a significant scale.”
The Energy Storage Potential
Based on projected EV uptake and battery size, the study estimates that EVs in the UK could provide the equivalent of up to 24 terawatt hours (TWh) of battery capacity to the grid by 2030. This represents 7.5% of the UK’s overall electricity demand in 2023, figures which could mitigate energy usage during peak charging times. However, the full potential hinges on all EVs having the capability to send energy back to the grid, and consumers having the necessary expertise.
Lee Downham, energy and resources lead at EY in the UK, commented, “With the UK’s EV market share still not quite keeping pace with regulatory requirements, this study highlights the critical role that smart charging could play in helping more households make the switch to an EV.”
He continued, “Furthermore, with storage of clean energy increasingly a limiting factor in the UK achieving its net zero ambitions, technologies like this could provide essential access to the significant capacity that EVs provide to the grid.”
Challenges and Opportunities
Despite the clear benefits of bidirectional charging methods like V2G, the study points out that barriers persist in the UK. V2G infrastructure remains relatively scarce and costly, with significant ramping up needed for a successful EV transition.
Additionally, the UK is dealing with challenges linked to the double taxation of energy storage, which currently impedes V2G and bidirectional charging progress and deployment.
In contrast, other European countries like Spain and Sweden have already removed this tax. The study emphasizes the necessity of considering the value proposition of EVs beyond just financial costs. Robust business models that demonstrate the financial viability of V2G are vital, and for consumers, solutions need to be easy to use with clear, accessible benefits.
