Aug 15, 2018

How we can save by Charging Together

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Daniel Hilson, our founder, talks about his vision for the UK's largest "virtual sustainable power plant"

 

If all the batteries in existing EV’s were put together they would represent the largest power station on the national grid, and that’s with less than 0.5% of cars being EVs today. Our goal is humble in comparison - to aggregate 5,000 EV drivers in the coming months - representing 35 MW - which would be the largest domestic virtual power plant in the UK!

What if the entire EV community could charge together, coordinating how all their power interacted with the grid? It’s not impossible to imagine a future where this community could become the largest most powerful energy producer and consumer (a “prosumer”) in the country, even the world.

 

 

 

That is our ultimate goal - we are investing in research and development that will help us to not only help you optimise how you use power, but also help the EV community as a whole to maximise the benefits of “charging together”.

Even before we realise this vision, there are a lot of smarts we can apply to ensure the entire EV community gets outstanding energy prices and environmental outcomes.

 

What’s so special about EVs?

Electric vehicles are very special, uniquely so. Certain properties make EVs a disruptive new player in the energy market and to energy companies. They:

  1. Use a lot of electricity

  2. Have large batteries

  3. Are smart, connected devices

  4. Are owned by people like you

 

High electricity use

There is no other piece of consumer equipment that uses as much power. Typically power consumption may increase 50% for a new EV owner, and that’s just with one new EV in the home. Customers who use more energy are much more profitable so obviously they’re highly desirable to energy companies.

 

We commissioned some research (which will be released in a future article) that sought to identify the potential load attributable to large numbers of electric vehicles in a particular region, and at different times of day.  This data is outlined below and represents 3000 homes in a concentrated community area with a 20% penetration of electric vehicles. 

 

 

Large batteries

EVs store large amounts of energy, meaning that energy-wise they operate more like a smartphone than any other large appliance in the home. That is, they don’t need to be “plugged-in” and drawing power to be used, and they can be charged at any time. To understand the value of this, observe that every 30 minutes in the UK energy market the wholesale energy price is reset. From an average of about 4.5p/kWh, prices can range from zero pence per kWh (or even gently negative) through to a dizzying 600p/kWh. When an energy supplier must buy this energy to then sell to you at a fixed or even semi-fixed rate, this creates risk for them - lots of it. Naturally your retailer will want to avoid buying too much energy for those high price periods. I’ll address this more in a future blog as it’s more complex and justifies more detail, but essentially once you have a smart meter retailers will strongly encourage you to charge at times of low wholesale energy prices. Naturally we think any value created by this activity should flow to you.

 

A computer on wheels

Next, and the smartphone analogy can be extended, EVs are really just large fast moving computers filled with sophisticated control technology and connected to the internet. Combining connectivity and control with a large battery is an energy nerd's dream. Expect in the future new businesses to pop up wanting to control how and when your car charges remotely to unlock the value discussed above. Again, we see it as our role to help you navigate this.

 

You’re special

EV owners are also special - you represent a very attractive type of customer to energy companies. EV drivers are on the whole driven by purpose and are early adopters of new technology meaning a chance to innovate together. Furthermore, you are generally more affluent than the average population meaning much lower “bad debt” risk.

 

So, EVs and EV owners are likely to play a critical role in our energy market, helping to shape how it will operate. Every energy supplier will want a piece of the action. That said, it is the first and last items above that are creating the most value for energy suppliers today. We think it’s strongly in EV owner interests to band together to take this value back.

 

Charge Together!

By Charging Together, EV owners can save significantly on their power bills. Immediate value will be created by:

  • Unlocking some of the money energy suppliers pay to acquire customers. If we go as a group that is an instant saving of between £50-100 per customer.

  • Unlocking some of the additional profit that a supplier will earn from an EV owning customer by negotiating cheaper rates.

  • Enabling suppliers to manage their risk with our unique detailed understanding of the EV market and charging behaviour based on real (but fully anonymised) data

  • Providing suppliers with ability to manage demand of our customers over time using our smart home Energy Hub (clearly only with customer buy-in)

  • Because you’re lower risk customers and more tech savvy (i.e. as a group you generally prefer online account management rather than calling), you’ll have a lower cost to service. This might be reflected in lower rates too.  

To unlock this value, Evenergi has obtained the first ever electricity licence called “license lite” that allows us to negotiate directly with suppliers on a wholesale basis on behalf of a community of customers.

 

In the next 5 years or so we will help you to unlock further value by assisting the community to manage your charging, thereby:

  • Avoiding peak energy price times and earning real time energy savings

  • Tapping revenue created by providing services back to the grid  

And all this is just for buying electricity! We plan to provide support for other products and services as well, including town gas, public charging, insurance, home chargers, solar, batteries and efficient appliances.

 

In conclusion…

EVs and EV owners are special, and there are many new and exciting ways that EVs can create new value for their owners. The key to unlocking that value is Charging Together!

New Posts
  • 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) Fast Reserve Frequency Distribution Use of System Charges On-Site Systems 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.
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