An EV fleet must be seen as more than a cleaner transport but as a potential new revenue creator.
Whether you manage a fleet of vehicles or are just considering changing that car in your drive to an EV, it is more than just a change in fuel.
Electric transport means purchasing your energy in a very different way in the future. The move to electrification offers vehicle owners a financial reward from an electricity grid where EVs will be giving wide benefits and helping solve some current grid problems. They will in fact make the electricity generation more efficient.
The transition to EVs is often framed as a burden rather than a benefit. It can be discussed in the context of a strain on the grid and the expense in the initial purchase of a vehicle. However it can instead be seen to help balance the grid, in a more flexible electricity market.
It is in this grid balancing, in providing flexibility and potential electricity storage, that the electric vehicle could create a revenue stream. Then the bigger the vehicle fleet, the bigger battery, then the bigger the revenue potential.
Renewable generation, such as from wind and solar are ever expanding, but with this there are issues raised, which must be addressed. These are difficulties such as the growing wastage of electricity through curtailment and constraints.
Curtailment is the deliberate reduction of wind or solar power, so is an oversupply of electricity at a certain point. Constraints are when the grid itself cannot transport the power generated. These represent wasted renewable energy and are a growing problem that ultimately costs the consumer money. With these issues there is also a substantial spend on electricity storage that aids in grid balancing by both supplying an on-demand power and also taking some excess electricity back through charging.
However electric vehicles can offer flexibility in charging, such as charging at times of low demand but high supply, and so using otherwise wasted electricity. This is saving the grid monies and greatly benefitting growing renewable generation by soaking up renewable electricity. Also in the future, EVs giving back power at times of high demand from vehicle storage results in another benefit.
What EVs give is the ability to react to changes in demand. Consuming or discharging as the system needs, moving with the variations in renewable generation and complimenting renewables. EVs can also mean a cheaper electricity storage option. They are as much a transport fleet as an immense storage source spread across the country. Again it means aiding electricity supply and reducing some of the current spend needed contracting largescale battery storage.
Using greater electric transport reduces electricity wastage and increases electricity storage. What is required is that grid operators treat electricity demand from electrification as also potential electricity supply.
So what financial rewards might be available in this flexible market for EVs?
There are monies available of €230 million every year for a part of the electricity market called ‘system services’. This element of the market aims to bring more renewables onto the electricity grid by addressing the changes in intermittent power from wind and solar. The grid operator contracts generators to provide instant power when renewable generation in going up or down on the grid and so giving a smooth, constant, electricity supply. EVs can aid this smoothing of supply and so possibly can gain payments from this part of the market.
There are other possible rewards back to the vehicle onwer, such as helping reduce wasted electricity from lowering curtailment and constraints. Also more flexible charging helps lower the overall need for as much generation on the electricity grid so a reformed capacity payment system could emerge. Lastly electricity storage from EVs offers a whole new energy source for grid operators.
Overall layers of possible revenue streams could be available for the flexible EV.
As well as payments from the grid, facilitating greater flexibility means access to cheaper electricity and bringing down the cost of an EV even further. So when wind and solar are over producing, EVs then charge and utilise what otherwise would be wasted electricity. This results in lower cost electricity and possibly even zero wholesale cost electricity at times.
Flexibility in charging and storage from EVs will need electricity market mechanisms in place for vehicle owners to gain payments. It will need policy and advocacy to fully grasp the potential coming.
The transport sector, personal EVs or fleets of vehicles will interact and gain from the electricity market in a way never seen before. It is now up to those representing the transport fleets in Ireland to advocate for the market ahead, to see the opportunities, and for electric transport to be rewarded for what it will provide.
About the Author:
Cathal Murphy has worked for a number of years in the energy sector, developing policy across various areas. He was involved in projects including electricity generation outlook to 2030, biomethane, Climate Action Report, electricity grid regulation, and electric transport and heat. Cathal was also involved in establishing Ireland Electrified, which is a trade association advocating for increased electrification of transport and heat.”
