Smart Charging: A Path to Cheaper Electric Vehicle Ownership
Running an electric vehicle (EV) could become significantly more affordable thanks to smart charging solutions, according to a recent study by EY and Eurelectric. The research suggests potential savings of over £10,000 over seven years, a welcome prospect for current and prospective EV owners.
The study highlights how various smart charging strategies can drive down costs. These include time-of-use (ToU) tariffs and the innovative approach of selling surplus energy back to the grid. Technologies like bidirectional vehicle-to-grid (V2G) and vehicle-to-home (V2H) charging are key to unlocking these savings.
For compact EVs, the research estimates annual savings of over £700. Medium-sized EVs could see yearly savings exceeding £1,000, while electric SUVs could benefit the most, potentially saving as much as £1,475 annually by leveraging these optimized, flexible charging solutions.
“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,” said Maria Bengtsson, UK head of mobility at EY.
Smart Charging’s Role in Grid Optimization
The findings from EY and Eurelectric also underscore the role of smart and flexible charging in balancing grid capacity. As the adoption of EVs accelerates, the demand on the grid will increase. Smart charging can help manage this growing demand, ensuring a more stable and efficient power supply.
Bengtsson further explained, “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.” However, she also noted that V2G solutions are still in their early stages, and it will take time for significant impact to be felt.
Potential for Energy Storage
The study projects that by 2030, EVs in the UK could supply the equivalent of up to 24 terawatt hours (TWh) of battery capacity back to the grid. This represents 7.5% of the UK’s overall electricity demand in 2023, according to government figures. This capability could help to mitigate energy usage during peak charging times.
To realize this potential, widespread adoption of V2G technology and consumer education are crucial. This requires all EVs to have the capacity to return energy to the grid and for consumers to learn how to optimally utilize V2G technologies.
Lee Downham, energy and resources lead at EY in the UK, pointed out the crucial role smart charging plays in supporting EV adoption. “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,” Downham stated. He added, “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 Ahead
Despite the clear benefits of bidirectional charging, challenges remain, according to the study. In the UK, V2G infrastructure is still relatively undeveloped and expensive. Its expansion is vital for a successful EV transition.
Additionally, the UK faces challenges with the double taxation of energy storage, creating a barrier for V2G and bidirectional charging deployment. Other European countries, such as Spain and Sweden, have already eliminated this tax.
The study also highlights the importance of clearly demonstrating the value proposition of EVs, focusing on factors beyond just financial costs. This includes the development of robust business models to showcase the financial viability of V2G and ensuring solutions are user-friendly with easily understood benefits for consumers.
