Can Australia's electricity grid cope with electric vehicles?

Brief Can Australias

Yes it can, and ‘smart charging’ systems will lower the cost.

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Australia’s electricity grid is subject to infrequent but extreme periods of very high peak demand. These peaks are typically a result of households switching on air conditioners (which have very high power consumption) on hot summer days.

As the market penetration of air conditioners has grown, so has the level of peak electricity demand. Across Australia, the level of peak electricity demand is growing around 50% faster than total power consumption. Peaks are generally most acute in the evening when people have returned home from work, usually from 5:00pm to 10:00pm. The load duration curve below for South Australia illustrates the extent of the problem. It shows that the grid must cope with massive peaks in demand for just a very small percentage of the time (shown on the horizontal axis). To enable the grid to cope with these extreme but infrequent peaks, electricity distribution and transmission network operators have been required to invest significantly in new capacity (i.e. sub-stations, lines).

Under pricing rules, the cost of providing this extra capacity is passed on to all electricity consumers so everybody pays via higher network tariffs on electricity bills. This is not an optimal outcome. It has been estimated that across Australia around 10% of our grid only gets used1% of the time,2 representing about $3.5 billion in network assets sitting largely idle.3

As Australians begin to switch to electric vehicles, there is a risk that their charging could further exacerbate peak demand and require unnecessary and costly investments in the grid. While being recharged, an electric vehicle (EV) draws around 3 kW of power. This is about 3 times the electricity consumption of a small, single-room, wall-mounted air conditioning unit.4 Studies of EV owners’ charging habits have shown that the vast majority of charging occurs while the EV is at home (rather than in public charge spots or at work) and that this charging happens as soon as they arrive home from work – i.e. right in the middle of the evening peak (5pm to 10pm).5

As the number of EVs on the road grows and if drivers’ charging habits follow the same pattern, we can expect a repeat of the air conditioner problem described above. Without careful planning and management, the transition to EVs will likely further increase Australia’s peak electricity demand (at a higher rate than total consumption) and result in further costly increases in electricity network capacity which all consumers will pay for in higher electricity bills.

‘Smart charging’ systems can balance the needs of EV drivers with network constraints. Unlike air conditioners and most other appliances, EVs have battery storage which gives them flexibility as to when they draw power. The key to EV charging flexibility is that most EVs, when they are parked and plugged in, will have batteries that are fairly full (three quarters full or more).

graph aus grid cope with ev note

In those circumstances, while it is ideal to complete a final top-up of the battery immediately, there is no disservice to the driver if the final top-up is somewhat delayed. It is this flexibility that creates huge benefits in the electricity system. But in order to achieve this, you must have in-vehicle intelligence that can communicate the state of charge of the battery, intelligence in the EV charge spot that allows a charge spot to be turned on over the internet, and network-wide intelligence that can manage charging to meet both drivers’ needs and the needs of the electricity system in an optimal way.

Without individual vehicle/ charge spot level control, ‘one size fits all’ charging regimes across all vehicles will either prioritise drivers at the expense of the electricity system or vice-versa. For example, while most EV owners will typically plug in as soon as they get home in the middle of the evening peak in electricity markets, the majority – those with nearly full batteries – could have their last top-up delayed until the peak has passed, but the smaller number with significantly depleted batteries will need to be charged immediately.

 A ‘smart charging’ system will therefore ensure that:

– An EV battery that needs charging gets it immediately and automatically;

– Charging of batteries which are only slightly depleted can be delayed if necessary;and

– An EV driver can manually override the system if they wish – for example, by using their mobile phone.

The technology to enable smart charging of EVs is now widely available. Better Place and other EV charge network operators have developed customer-centric smart charge systems featuring intelligent, communications-enabled EV charge spots and sophisticated network management software. Modelling of large scale adoption of ‘smart charging’ has found that it significantly reduces how much new investment is required in electricity network capacity to service EVs. For example, a 2008 study by the Israel Electric Corporation found that running the entire Israeli car fleet as EVs on an unmanaged basis would require an estimated $4.5 billion in new transmission, distribution and generation assets6.

By contrast, putting in place a smart charge system for EVs resulted in no additional transmission or generation capacity investment and a much smaller increase in distribution capacity ($0.5 billion). Studies in the US have come to similar conclusions7. In Australia, given the size of our population and the peakiness of our load profile, the difference between unmanaged and smart EV charging would perhaps be ten times larger than Israel. The Ministerial Council of Energy has recently requested that the Australian Energy Market Commission (AEMC) undertake a review of energy market frameworks to identify barriers to the efficient uptake of electric vehicles in Australia. This is an important opportunity because EVs are the only major electrical appliance with storage and can therefore be treated differently to other appliances. California’s Public Utilities Commission is currently undertaking a review to determine the appropriate regulatory approach to smart charging of EVs. The European Union has commenced similar work.

Examining these issues in depth now before EV adoption accelerates will help ensure that EVs don’t have the same impact as air conditioners, and that we avoid unnecessary investment in additional grid capacity and the resultant hikes in electricity bills.

References

  1. ETSA Utilities, Direct Load Control Presentation, July 2008
  2. Presentation to IEA Workshop by demand side response aggregator Energy Response, 11 November 2005.
  3. The asset base of distribution network businesses in the National Electricity Market is approximately $35bn (AER, State of the Energy Market, 2009, page 157)
  4. An average 3 star-rated reverse cycle, single split system air conditioner with output range of 3kW to 4kW has a power input of 0.9kW. (Source for power input www.energyrating.gov.au)
  5. UK Department of Transport, Investigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plugin Hybrid Vehicles, 2008. CABLED Consortium, Press Release: UK’s Largest Electric Vehicle Trial – First Findings, June 2010. BMW North America, Mini E Field Trial Report, 2010.
  6. Israel Electric Corporation, Feasibility Study for Better Place Israel – Impact on the Electricity Network, November 2008, No. 2008-1095
  7. Stanton W. Hadley and Alexandra A. Tsvetkova, ‘Potential impacts of plug-in hybrid electric vehicles on the regional power generation, The Electricity Journal, Volume 22, Issue 10, December 2009, Pages 56-68. ISO/RTO Council, Assessment of Plug-in Electric Vehicle Integration with ISO/RTO Systems, March 2010