What does “well behaved” EV charging look like?

Managing the impact of electric vehicles on our electricity system as our transport system transitions from combustion engines to EVs is an important issue that many parties – consumers, charging network operators, distribution networks, governments, and regulators – have an interest in.

With so many – at times competing – interests at play, “managing the management” of these issues is often just as important as the issues themselves.

Here’s the situation: The transition from combustion engines to electric vehicles will add about 40 per cent to Australia’s total electrical energy requirement.

Managed well, this will deliver benefits to everyone. Managed poorly, the transition will cost more than it needs to, and consumers will wear the cost.

Key to this question is when charging will occur and what impact the timing of that charging will have on the grid. That’s because one of the fundamental principles that informs the cost of electricity from distribution networks is “peak demand.”

Each network needs to be built to support the peak demand that is present, at the highest demand time of the year.

Managing the peak

To manage that peak, networks use a principle called ‘long run marginal cost’, that practically means that the cost of each extra kilowatt of network capacity has a certain dollar value per year – this is the cost of building and maintaining a network that’s able to deliver more peak power.

This long run marginal cost varies from one network to another – one example is $110 per kilowatt per year. These costs are passed on to consumers as a component of our energy bills.

So if all, or even most, of that new demand from EVs adds to peak demand, costs will go up. However, if the growing EV charging load doesn’t turn up at peak time, it won’t drive up network costs.

Instead, the additional energy requirement of EVs can be delivered efficiently through existing poles and wires that don’t need to be upgraded.

By making better use of the assets we’ve already built, EV charging can drive down the network component of energy bills for everyone.

Indeed, a future where overall electricity demand increases by 40 per cent, but most of that usage turns up outside the existing peak demand times, would be an excellent outcome.

So that’s the billion-dollar question: When do Australian EV drivers generally charge their cars?

When do we charge our cars?

Fortunately, we’ve already started to take a deep look at this. The federal government, through ARENA, has already funded multiple trials and several energy networks have done their own studies too.

Much of this data has been made public and the EVC also has access to a range of commercial-in-confidence data sources.

The evidence indicates that the contribution to peak demand from Australian homes with EVs, is about 0.25kW per EV. So, while a consumer might have 7kW or 11kW EV charger in their garage, only a small fraction of that is adding to the peak.

This is because drivers are generally choosing to charge their cars in the middle of the day from their own solar or setting their cars to charge in the middle of the night on off-peak rates.

If you’re not familiar with EVs – this is really easy to do. Setting your preferred charging time in your car is similar to setting your preferred radio station. And of course there are apps too, if that’s what you prefer.

Basically, EV drivers need very little nudging to set their vehicles to charge during non-peak times, because it already serves their interest and is incredibly easy to arrange.

Based on data the EVC has seen so far, it appears that giving consumers time-of-use pricing signals can drop the contribution at peak time of the average EV at an domestic home to about 0.1kW.

At this level, it takes about 40 EVs to add up to the impact on the energy network of one domestic oven, cooking dinner.

Should the networks take control?

Of course there will be some people who will charge their car at home at peak time. The irreducible minimum is likely on the order of 0.05kW, based on what we’ve seen so far.

If we want to drive that peak demand impact down, then orchestration of EV charging could play a role. This is where the energy network takes control of the power supplied to EVs, managing the EV charging on behalf of the consumer.

We know from surveys that average consumers aren’t particularly keen on mandated orchestration of their EV charging. They’d generally prefer to charge their car when they need to, rather than when the energy network gives them permission – and that’s understandable.

Like solar has empowered households by letting them generate their own electricity, EVs give consumers a valuable convenience in refuelling their car at home. Taking that away comes at a cost, by removing something the consumer values.

It’s still worth exploring the potential value of managed charging, so long as we’re clear about the limited potential benefits, as well as the consumer trade-offs.

If we start with the 0.25kW per EV peak demand impact number – the average consumer behaviour today – the cost impact to the network of home charging of an EV is about $27 per year. This is worked out by taking the power level – 0.25kW – and multiplying it by the long run marginal cost – $110/kW/year.

An EV driver will be paying a few hundred extra dollars each year on their energy bill to refuel their car, about one third of which will be network costs – so they’re going to more than cover this $27.

Scheduled charging sessions

But encouraging EV drivers to increase the degree to which they schedule their charging – prioritising day time charging where possible, and middle-of-the-night charging where it’s not – can comfortably get us down to the 0.1kW per EV number. At this level, the impact on the network per EV is about $11 per year.

By comparison, if we mandate orchestration of EV charging equipment in all homes to drive the average impact on peak demand per EV down to 0.05kW, the cost becomes about $5.50 per year.

Let’s be clear, that’s a total of $5.50 a year in cost impacts saved by forcing consumers to accept external control that they don’t want and reducing the value they see in an EV.

That’s the benefits, now for the costs. To manage this charging in the first place, the EV charger would need to be smart, connected, and cybersecure.

The software system conveying the energy network’s instructions to the chargers would need to be built and maintained. Consumers would need to consent at wide scale to make it worth setting the system up and integrating it with the energy
networks.

The participating consumers need a helpdesk to call in the event that something doesn’t work correctly – if they change their wifi password, for example, tech support will need to be available to make sure their EV charger keeps talking to the control system.

Based on the programs run so far, the EVC would expect that the cost of securing the $5.50 per year benefit would be, at minimum, several hundred dollars per year.

Given the substantial cost, in both financial and intangible terms, for a relatively modest benefit, you would expect there to be limited enthusiasm for mandating this option. But unfortunately, we’re seeing examples of good intentions gone wrong.

Getting the assumptions wrong

One recent report from Jemena remarkably overstated these benefits by concluding that each EV charger, if orchestrated by the network, would save the networks between $400 and $800 per year – obviously a much bigger number than $5.50 per EV per year!

How could such a massive discrepancy exist? It appears from the ARENA report that Jemena mistakenly looked at contribution to network cost of a whole house at peak time, not just the contribution of the EV charger at peak time. And certainly, if whole homes were orchestrated massive savings could be achieved.

But I don’t think consumers would be very happy about intermittent blackouts each evening. Why does this matter? Because we’re already seeing what happens if you get the assumptions wrong.

Regulatory efforts aimed at using rules to take control of EV charging in domestic homes are occurring now in South Australia and Queensland.

These examples serve as a timely reminder that we must be very clear-eyed about the size and nature of the problem we’re trying to solve – allowing and enabling EV charging orchestration, for consumers who want it? Great idea!  Forcing participation? Not so much.

So much consumer behaviour around EV charging is already positive. And so much more can be easily changed without requiring forcible control.

Vehicle to grid

The EVC believes mandates of this nature are entirely unnecessary and would only serve to reduce confidence among people considering an EV.

Of course the flip side to this issue is arguably more interesting: the prospect of vehicle to grid charging.

Longer term, many of our cars may be able to export to the grid. A person may get home from work and start discharging their car’s battery into the grid. This would work much the same way that solar export currently works – but at peak time, when extra energy is actually needed.

This export would continue for hours, until the demand starts falling away at around 10pm.  After a brief rest, the energy will flow the other way, recharging the battery from the grid to full for the next day.

Importantly, the consumer would be well paid for offering energy to the system when it’s needed and drawing energy from the system when there’s a surplus. And, if they didn’t want to participate they wouldn’t have to.

Typical vehicle-to-grid inverters would be able to deliver 5-7kW to the grid meaning a single EV participating in vehicle-to-grid could offset the energy consumption of 50 to 70 EVs during peak time if those other drivers are following the incentives – or 20 to 30 EVs behaving under today’s business as usual conditions.

The transition from combustion engines to EVs is a massive net positive under current policy settings and there is ample room to improve. We will soon inhabit a future under which Australians don’t spend $50 billion a year on petrol and diesel for road transport any more.

About $20 billion of that will shift to electricity and pay for generation and transmission assets. And the $30 billion left can be divided between extra taxes and consumer savings.

There’s nothing to fear from the electrification of Australia’s fleet.

Ross De Rango is head of energy and infrastructure at the Electric Vehicle Council