Transport is currently the largest emitting sector of the UK economy, responsible for 27% of total UK greenhouse gas emissions; within this, cars are responsible for 55% of transport emissions. Falling costs, widening availability, and support from policy-makers, have spurred a recent rise in sales of electric vehicles (EVs). But as EVs become more common, electricity demand will inevitably rise and potentially create new challenges for grid operators.
The biggest challenges are around demand volume and time of charging. This will create new opportunities for commercial EV fleets. Ultimately, it could help turn what is currently a cost centre
– refuelling – into a potential revenue stream through optimisation of electricity use.
With charge timing, the challenge is when consumers will charge their vehicles. In most grids, the peak hours are the ones right when people are arriving home from work, so if business fleets finish operations at 5pm and immediately plug their EV fleet in to charge, that is going to be difficult for the grid operator. However, with challenge comes opportunity. Given EVs are essentially a battery on wheels, they can be utilised as an energy storage system.
As more fleet operators transition their fleets from conventional fuels to electric there are a set of challenges to consider including: how to charge multiple EVs while keeping within the site’s maximum import capacity, how to minimise the cost of charging and how to meet ESG and sustainability targets.
Price dynamics are already creating an opportunity for EV owners to take advantage of smart charging mechanisms, but by going beyond optimisation and enabling grid services schemes through aggregators these customers could send electricity back to the grid or reduce their site load at times of peak demand. This creates a new revenue stream, by providing flexibility services when the price is right.
It is economic for businesses to make the transition to EV’s now, provided they take action to optimise their fleet and energy purchasing strategy. If you’re on a flat tariff like most people are today, it’s probably marginally economic at best to install an EV fleet. But if you purchase through the wholesale market and put in a smart charging system, you will end up saving money, as well as helping with the transition to a zero-carbon economy. To fully capture the opportunities from energy markets, EV fleet owners and operators need access to price signals from the energy market to enable real-time decision making and an intelligent management system to optimise charging in alignment with operational requirements.
Another solution for businesses would be to purchase electricity directly from off grid generation facilities, through a Power Purchase Agreement (PPA) especially those powered by renewables, which could yield significant cost savings, thanks to the difference between retail and wholesale energy prices (without accounting for avoided demand charges). However, for long term resilience to rising prices and security of supply investment in on-site generation, such as solar power possibly co-located with a battery storage system could be a viable option for many EV fleets, provided that the assets are co-optimised to ensure full participation across energy markets while ensuring your EVs are charged and ready when you need them.
Join GridBeyond’s experts at the ITTHub, stand 1033, for more EV Fleet insight.