The Australian Energy Market Commission is thinking about how EVs will affect the grid.
About ten years ago when I first heard about the idea of grid-integrated electric vehicles, I thought it was far-fetched. It seemed odd to think that someone would charge an EV only to send that electricity back to the grid.
The world’s moved on a lot since then. We know from South Australia’s experience that just 100MW of battery capacity has a significant impact on the energy market in that state. EV grid integration isn’t just a boffin’s proposal any more, it’s a looming reality.
That’s why last week the Australian Electricity Market Commission (AEMC) released an issues paper to get input on how this can happen. Submissions are open until March 19, 2020.
The media release quotes AEMC acting CEO Suzanne Falvi as saying with growing EV sales:
“we need to lock in lower cost ways to support consumers who want them”,
and
“make sure this technology makes a positive contribution to our future power system and doesn’t become another cost driver”.
So we’ve decided to give the issues paper a read.
The high points of the issues paper are:
- the opportunities EVs offer electricity retailers (beyond selling more electricity, we guess)
- what regulatory changes might be needed; whether retailers currently offer deals for electric vehicle owners, and what barriers might exist to creating offers
- the development of (and barriers to) non-residential charging products and services
- what EV value streams might exist now and in the future
Grid Integration Business Models
While last in the issues paper, potential EV value streams offer what I think are the most interesting possibilities – it’s where the AEMC discusses the different ways EV batteries can push power back into the grid.
Of course, the physical operation is the same: the car has stored power, and the grid needs to draw on stored power when “the sun doesn’t shine and the wind isn’t blowing”. What’s interesting is the business models the market might create to make this economic.
The issues paper offers two possible models:
- America’s Enel X, which aggregates EV charging loads, manages its 30MW/70MWh collection of customer batteries as a virtual battery, and gives customers reward incentives in exchange for their electrons;
- Simpler EV-as-battery solutions, using vehicle-to-grid (V2G) or vehicle-to-home (V2H) technologies built into the vehicles (apparently new Nissan Leaf EVs have this capability). This is being trialled in the UK by OVO Energy with 1,000 Leaf-owning households.
The Commission’s question for respondents to the paper is whether there are other possible business models for electric vehicles supplying home or grid power, and what regulatory barriers stop this from happening.
Government Policy Holding EVs Back
It’s still early days in the rollout of EVs. The issues paper says two million electric vehicles were sold globally last year and there are 5.1 million now on the road. Australia’s sales it describes as “modest” – 6,718 sold last year, but that segment grew by 203% over 2018 while the motor vehicle market overall shed 7.8% of sales between 2018 and 2019. Prices, the report noted, are falling, and charging stations are turning up all over the place.
The paper noted that because of the government’s outright hostility to electric vehicles (politely described as “a lack of supportive policy”), AEMO’s forecast for Australia is pretty limp between now and 2030: the market won’t reach a million EVs by 2030 as things now stand. Consumers retain their range anxiety and are worried about price.
The Magic Numbers: 500 km, $50,000
However, when car-makers can offer 500km range EVs for less than $50,000, the AEMC believes the market will start to take off.
Charging infrastructure is another matter: providers are well ahead of the curve it seems. There were more than 1,900 fast charging stations in the country in July 2019 (we guess that’s passed 2,000 by now).
Charging Levels
The most important charging question if EVs are to be integrated into the energy system is charging behaviour – in particular the split between:
- Level One (trickle charge through a standard 240V outlet: up to 10 A, or approx. 2 kW),
- Level Two (a full overnight recharge from a dedicated outlet: 15-32 A, up to 8 kW single phase or 22 kW three phase)
- Level Three (DC rapid charge stations 30-300 kW).
You can learn more about the different levels of EV charging here.
It’s important because access to a fast recharge will influence owners’ willingness to send electrons back to the grid, depleting their EV batteries.
Fast charging in action (61 kW)
Research by Energia found people who could charge at home and at work are currently about 70% of the market, and they hardly ever use public charging stations; while the other 30% of the market use public charging stations for all their charging needs.
Another big influence on the market is consumers’ growing interest in automating some of the decision-making around their electricity consumption – the ability to take a “set-and-forget” attitude to when their EV chargers, pool pumps, home batteries and air conditioners operate. For example, the Zappi home charger from MyEnergi can be set to only charge your electric vehicle from excess solar energy.
EV Charging (And Discharging) Tariffs
Consumers will only get the most value out of grid-integrated EVs if retailers have products ready, though. As the issues paper puts it:
“The electrification of Australia’s passenger vehicle fleet is expected to materially increase electricity consumption in Australia and will change the underlying residential demand profile”,
so regulators should be able to:
“efficiently realise and deliver value streams from the charging (or discharging) of EV batteries”.
The AEMC asks what’s the role of regulators in helping electricity retailers craft products and services for the two-way market.
Should You Be Able To Choose A Separate Retailer For Your Car Charging Electricity?
The main regulatory change canvassed in the issues paper is whether consumers should be able to sign up with a second retailer for their controlled loads (Referred to as MTR, Multiple Trading Relationships). The AEMC has in the past allowed MTRs only if the customer has multiple network connection points installed, but the increasing penetration of distributed energy resources (DER) might justify revisiting that regulation.
Non-residential fast-charging currently used by a minority of EV owners could rise sharply, the issues paper suggests. For example, shared vehicle operators will probably take up EVs faster than residential customers, and they’ll pretty much exclusively use public charging facilities.
Get Your Submissions In!
If you want to have a say in the future of EVs and the grid, any individual, group or organisation can make a submission here.
Scroll down to the form, select ‘Market Review Submission’ in the first dropdown, then ‘RPR0012 – 2020 Retail Energy Competition Review’ in the second dropdown. Then fire away with your vision of Australia’s EV future.
About Richard Chirgwin
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Thanks for this article, Richard.
Your opening comment: “It seemed odd to think that someone would charge an EV only to send that electricity back to the grid….” caught my immediate attention.
My ‘thought response’ was: “Why would any West Australian sell energy back to WA’s grid at just 7.135c per kWh?” We’re charged three times that amount at best.
In fact early this morning my wife asked me if our proposed new 6.6 kW solar system would allow us to go off-grid; or alternatively, could we somehow simply decline to sell excess power to the grid(?)
That’s how p*ssed-off we are with the miserable FiT rebate in WA!
How about returning your FIT back at peak hours for 10x the FIT … or 1000x the FIT …
I ask because the peak wholesale prices soar in summer.
“…peak hours for 10x the FIT … or 1000x the FIT …”
Sorry, Daniel. I don’t understand your comment… but I’d really like to… .
At present there’s a standard 7.135c / kWh FiT rebate. It doesn’t vary at all night-or-day… and the most we’re ever charged is a fixed ‘anytime consumption’ rate of 26.2c per kWh.*
Our bills aren’t high, considering we have two houses on our property… but we _have_ ‘tuned’ each house, to ensure each is highly energy-efficient. We use a total less than ten units per day (9.37 units), regardless of seasons.
* I guess that Synergy’s ‘fixed’ 26.2c rate may be commendable. We’d consider selling excess power to Synergy at _half_ that rate: 13c / kWh.
Just to clarify My understanding is that a consumer might be able to sell power to the grid only at peak hours when the electrons are very valuable. Does the grid supply a signal indicating to my solar system what the current price is? Could I set up a bit of software that would say sell when they are paying AUD50 per kwh for my electricity. If I had a 3 phase system I could charge my battery at 22kw which would cost me AUD23 X 0.22 equals AUD5.06 per hour. I could then sell it back at peak time and they would pay me 100 (or 1000) times that amount ie AUD506 to AUD5060.
To be really smart I could program the controller to buy electricity for some price (say) less than AUD0.05 per kwh and then sell when the offered price is AUD0.23 x 1000 or AUD230 per kwh so my electrons would sell for AUD5060
In reality I presume that this looks too much like capitalism for the average user to be allowed to do.
How often would this sort of difference in buying and selling prices occur on a normal summer day? If they happened three time per summer it would pay for the whole PV system in a year
Could be worse. The UK had no FiT at all last year and this year I believe it only applies to new installations.
Where else is the UK going to find the £117 billion pounds* to decommission their nuclear power facilities, John? Yes, things could be worse… .
* Close to A$230 billion a/c to Currency Converter.
“UK’s nuclear clean-up cost estimate dips to US$154 billion. The cost of cleaning up the UK’s historic nuclear sites has decreased slightly from last year’s estimate, the Nuclear Decommissioning Authority (NDA) said in its Nuclear Provision corporate report, which it published 13 July.Jul 15, 2016”
Why are you pissed off? 7c is actually a pretty fair price. It equates to $70/MWh which is a decent wholesale price at off peak when there are thousands of others also feeding PV into the grid.
Do you really think you should get paid retail prices for your PV generation? In what universe does that make sense?
It certainly makes sense to buy from us at 7.135c… and sell to West Aussies for 26.2c, doesn’t it?
In fact, all our _male_ tenants are actually paid 47.135c / kWh and all _male_ tenants have been paid that much for over eight years.*
WA and the NT lag well behind ALL the other states and territories, paid just 7.135c / kWh in FiT rebates.
* In what universe does it make sense to pay male applicants 47.135c / kWh… and deny all female tenants… paying them zero? In which universe does it make sense to lie to a female applicant, telling her that her rental has NO solar panels… and that she’s ineligible for (our) ten-year contract?! Yes, WA is certainly a very, very strange universe… . 😉
One thing not mentioned in the article but that I find fascinating is that overnight in the UK wholesale electricity prices can drop into negative because of the amount of wind generation they have. So if you have the OVO cable they will actually “shed” this excess electricity by charging your EV battery and paying you for it. So whether your feeding back into the grid or charging, your vehicle is acting as a virtual battery and helping to stabilise the grid.
This saves a certain amount of infrastructure in the grid – where previously they either had to store this energy or waste it as heat in resistive loads, they can now keep everything nice and stable and make use of this virtual storage.
Im not an electrician so wonder if a normal household power outlet used to charge an EV at the maximum of 10amps from an oulet is actually ok?
What i mean is, are household outlets rated to provide 10 amps for a long period of time?
Especially considering in the average house there can be a number of 10A outlets all on the same circuit.
Yes, they are rated to handle the load. Think of people running electric heaters all day and night in the winter. (and getting big bills)
While there may be 10 or so power points on each circuit, and if each one was loaded up to a 10Amp load (heaters) then the breaker or fuse in the switchboard would trip. They’re often 20 or 30 amps total.
So my guess is that a 10amp load to charge up your car overnight, is not a problem at all load wise. They problem really becomes that the very slow rate of charge may not be enough for what you use the car for.
Because the average private passenger car is driven an average of less than 40 kilometers a day, 3 hours of charging a night from a power point will, on average, be enough. The drawback is this can be much less efficient that charging from a proper EV charger. It also makes it difficult to take advantage of short periods of low or negative electricity prices.
Hi ronald
What data are you basing your statement about charging efficiency on? We own an ev and like you say we only ever need to level one charge it. Typically twice a week for five hours. A level 2 charger installed is about $2k and with a 450km range i doubt we’ll ever need it. Richard
This paper mentions how the efficiency of chargers can drop when used at low capacity, basically to save money on the charger:
https://backend.orbit.dtu.dk/ws/portalfiles/portal/137328554/efficiency_paper.pdf
But the environment comes out ahead if the cost of an EV charger is instead put towards a larger solar system, as an extra kilowatt or two of PV will produce for more energy than low level charging of an electric car will lose.
Hi Ronald
I did some more research and most of the literature suggests that the difference in efficiency is not much (a few percent) for level 1 (2.3 kW) vs level 2 (7 kW). The results are quite variable and seem to depend a lot on the car (which is not a surprise I guess)
Surprisingly little specific data on car models!
I’m about to install a power monitor on the circuit I use for EV charging so that I’ll at least know what it is for my car.
Cheers, Richard
There is the story of one EV owner and his fast-charger, who was fined by his supplier for violating his contract as the fast charger was using two or more houses worth of electrons and that was outside the contract. So it pays to be vigilant.
Why hydrogen cannot be made cheaply with surplus electricity beats me. Germany was talking about it and feeding the H2 into the gas grid.
10 years ago when we first discussed this idea, it made a lot of sense. Now more than ever.
Well Lessor there is nothing stopping you from installing an Off Grid Solution on your property (as well as retaining your On Grid system in place currently).
If you have sufficient space available of course, and if so you can exploit both systems to suit your needs (independent and fully isolated from each other).
STC’s are also available for the additional Off Grid Solution.
Something for you to consider.
Lawrence Coomber
That is a good point Lawrence. Can even implement it on a ‘micro scale’. Online catalogues of suppliers of camping and caravan gear can stimulate thinking, and there is always EBay of course.
There’s no ‘one shoe fits all’ approach – the chances of me buying an EV are pretty much zero. Might be nice to have, but I can think of better things to do with my money than tie it up in an asset that will depreciate at a very rapid rate due to technological change. Lucky to average 7 km per day travel over a year
Slightly tongue in cheek – we need a ‘pensioner model’ – one that enables them to hook up their mobility vehicles, electric scooters, electric bikes and skateboards , and send a magnificent .75 – 1.5 kwh back into grid at night-time. There is also the well proven ‘walk to shop’ strategy for those that can, which has been around for centuries
The reality is though – OZ economy is ‘likely’ to take a rather large hit in near future for numerous reasons. As well, the electricity grid is in a bad state and supply for NEXT summer is not looking good, LNP coalition seems to be permanently in ‘basket case’ mode and we’ve got another 3 years to go before next Federal election, consumer and business confidence is currently declining, plus of course unknown random ‘POTUS’ factors.
So, best strategy for most, (for the time being), still seems to be – put as much solar PV on your roof as your Local Council, State and Federal regulations allow, forget about battery until that system has either fully paid itself off or is nearing that.
EV’s are probably worthwhile for some, depends on how much travel they do, family size, their job location etc, plus helps them reduce unexpected ‘oil price shock’ impacts due to sudden supply disruption.
Well for unqualified DIY practitioners – yes you are right Des Scahill in saying:-
“Online catalogues of suppliers of camping and caravan gear can stimulate thinking, and there is always EBay of course.”
But there won’t be any STC eligibility for going down that amatuer route, and for those who do, it is highly likely the odd head or two will be blown off once unqualified people start assembling higher voltage and capacity design battery stacks.
Definitely not recommended practice.
Lawrence Coomber
I don’t know if this is the right space but not thing hangs around my brain since we have a new car:
I have purchased the Solaredge EV Charging Single Phase Inverter 5.5kW and I own a Nissan Leaf 2020.
As the inverter is handling the charge for the EV and at the same time is capable of charging an added external battery (like the LG Chem) and can also manage the energy demand by using the saved energy from the external battery. In my opinion the inverter is just one app away from using the battery in the car (40kW) to run the house energy demand without using the much smaller external battery (8-13kW).
The Nissan Leaf is also the car that allows the use for EV2X or EV2Home.
I ca’t understand why SolarEdge not offer this opportunity/app that would make sense to (at least ) all Nissan Leaf owners? It’s a nobrainer.
What difference does is make to take the energy from an EV which is designated for it or the house battery pack to run the house energy demand when solar is providing not enough supply.