Nick Butlin - our resident Energy Guru dispels the myths and discusses the real opportunities and challenges of Electric Vehicles and demand management
The UK energy industry is undergoing its greatest challenge since electrification. As the energy market develops to support the wider uptake of low carbon technology, increasingly volatile supply and changing demand patterns, the infrastructure development required is changing the market landscape.
It is estimated that replacing and upgrading the electricity generation, transmission and distribution infrastructure will require significant capital investment and Smart Energy could save consumers £8bn a year to 2030 in deferred upgrades and replacement of traditional plant.
Warning: This article has a high Nerd content but is good for the health of the nation
The National Grid in the UK owns and maintains the grid that connects the UK’s generating stations through to the distribution companies (DNOs) that deliver energy to the consumer. They are responsible for balancing the UK network on a real time minute by minute basis and ensuring supply and demand are balanced, as well as maintaining frequency and voltage inside national tolerances.
With an increase in fluctuating renewable technology, combined with ageing generation plant, National Grid supports the transmission network with a number of balancing mechanisms or reserves. These reserves can be used to cope with unforeseen circumstances, major fluctuations in supply and demand or generation coming offline due to faults.
National Grid has recently shown a commitment to developing demand side and smart energy resources with the launch of the power responsive program.
Electric vehicle based demand flexibility services
Flexibility based business models are designed to reduce the cost of supply for both the customer and the supplier. Demand Side Response involves using the technologies of connected homes and the internet of things, alongside more traditional technologies such as building management systems, in order to directly manage loads on consumer sites and use these loads to manage peak demands and balance the system. This in turn can lead to cheaper electricity for the end user and ultimately the community at large.
Energy storage also presents opportunities for arbitrage and system balancing. They involve the installation of storage devices at the customer premises which are used to reduce peak demand, lowering the cost of electricity supply.
Electric vehicles offer an opportunity that cuts across the demand response and behind the meter energy storage use cases by creating an asset that has some of the characteristics of each. Electric vehicles have two main modes whereby they can provide flexibility – managed charging, which is a way of scheduling when energy is consumed and by vehicle to grid (V2G) which is when energy is provided to the grid by the EV battery. Both modes can take advantage of arbitrage and ancillary service opportunities.
EV Specific Considerations
With regard to EV asset, the following are key considerations:
Charging Windows: The EV will only be an asset for such services when it is connected to a charge point.
Guarantee on vehicle utility - Driver’s needs are the overriding priority and when connected, the driver’s needs must be met in the first instance.
Site power optimisation - The algorithm must take into account and manage charging in such a way as to optimise overall power use within the site, for example by not exceeding capacity limits.
What are the specific monetisation opportunities?
The real opportunities for the community are :
Real time avoidance of balancing mechanism charges
Reduce distribution and transmission network charges
Offer network constraint and fault management
Allow deferral of reinforcement expenditure
Provide system operator operating reserves
Create effective time of use tariffs
The specific markets that the Charge Together community will work with in future are:
Short term operating reserve market (STOR)
Demand Side Balance Reserve (DSBR)
Demand Turn Up (DTU)
Distribution Use of System Charges
The on-site systems must include appropriate metering, controls and relays. There is a potential with a domestic site to install a SMETS2 Smart Meter and Consumer access device, which could provide the interface to the EV and Charge point. There are a number of other potential configurations including direct communication with the vehicle and a bespoke integration to the charge post.
A full overview of on-site system set-ups will be outlined in a future article in this series.
Summary - opportunities for the Charge Together community
If you have got this far - congratulations - you are officially an energy nerd! So what can we do with, and for, the Charge Together community? We can see there is a need to reduce both the commodity and non-commodity costs of supply. It will enable a source of flexibility which can be used to reduce imbalance risk and potentially create a revenue stream from provision of the flexibility into ancillary services markets.
To do this, however, we need the community to work as a whole. Despite the hype of Vehicle to Grid and other technologies, the reality is that it will take thousands of customers in specific sub-regions to work together. That is the opportunity here - to come together and work for a better future, both for the EV community and the wider community as a whole when wider scale renewable generation technologies start to affect the market.