What do Energy Supply companies need to consider when selling Electricity to EV owners?

Car sales declined by 2.4% year-on-year in 2019 to 2.3 million units sold but despite that, the number of electric vehicles sold broke records.

Battery electric vehicles (BEV) registrations surged by 144% to 37,850. Total electric vehicle sales including hybrid EVs attained their highest ever market share of 9.9%.

Such an increase in sales is positive for hitting green targets but one concern is that the UK Grid might not be prepared to handle another sharp increase in demand for EVs.

The sale of BEVs beat forecasts made by the National Grid Future Energy Scenarios (FES) Consumer Evolution and Steady Progression forecasts.

A report released by the government-commissioned Electric Vehicles Energy Task Force shows that increasing demand for EVs could put pressure on electricity supplies and warned that the increase needs to managed by the industry or else the national grid will be unable to cope.

With the growth of EV use and an increasing focus on heating homes via electricity rather than gas means that the grid will need to expand its capacity to meet demand.

The report says: “The electricity system must be able to respond to changes in demand, as well as unexpected generation and network faults, in real time. It means that the electricity produced by generators, or supplied from storage devices, must exactly balance the demand for electricity on a second-by-second basis. If this balance is not maintained the system can fail. In August 2019, unexpected generation faults occurred simultaneously creating such an imbalance. This triggered emergency actions causing a million consumers to lose their electricity supply, whilst a wider loss of supply was averted. This is a challenge that is met in operational timescales by the energy system operator (ESO).”

The report also adds; “Unless a system of “smart charging” is introduced and properly managed – where cars are charged at periods of lower demand on the system throughout the day – there could be a failure of electricity generators.”

According to Ofgem , supplying electricity to EVs provides some unusual circumstances in that the rules say that an energy supply licence is required when supplying electricity to any land building or structure. EVs themselves aren’t premises but the supply of power to a charge point is as they are premises.

With most EV owners charging their vehicles at home it falls under the standard supply to a home where the owner can use said energy as they see fit.

When it comes to on street charging the definition gets a bit blurry, but energy suppliers could negotiate with the owners of said charging points to provide the electricity.

It’s likely that as the EV revolution gains more traction new rules and regulations will come into play or current ones will be updated.

With the rapid growth of the EV user sector, it provides opportunities for energy supply companies to take advantage.

The introduction of new tariffs aimed specifically at EV owners such as providing cheaper electricity overnight or those reward smart EV charging could be particularly enticing for members of this growing market.

Pushing 100% renewable electricity tariffs is likely to be far more attractive to EV owners as via their choice of vehicle they’ve already shown that they’re committed to reducing their carbon footprint.

With more charging stations set to pop up around the country energy suppliers could also get in on the action by providing new ones and helping to improve the charging infrastructure. Smart meters will also play a major role as energy suppliers will be able to use the data gathered by them to create new tariffs that can better support EV owners.

To find out more about how you can take advantage of the opportunities presented by the growing EV market contact us today

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