James Johnston, chief executive and co-founder of Piclo, looks forward to the system benefits of electric vehicles
The electric vehicle (EV) revolution is finally upon us. EVs are now a common sight throughout the UK and this is reflected in the sales figures, with around 15% of new cars now being electric.
This shift cannot come soon enough, as transport is the most polluting sector in the UK – accounting for 27% of our total greenhouse gas emissions and hampering our ability to meet our net zero target in 2050.
The government has banned the sale of new petrol and diesel cars by 2030, and sceptics have warned of the impact this could have on the electricity grid, as drivers plug in their cars to charge at home and on the road. Here at Piclo, we have found the opposite: that the significant increase in EVs can support the grid at a local level by providing the essential flexibility to match the peaks and troughs of renewable energy supply.
Energy flexibility enables us to adapt to the fluctuating needs of the grid as well as providing power at a local level – ensuring security of supply and keeping the lights on.
As our energy system becomes greener and we shift away from fossil generation, the role of flexibility becomes more significant, as we will become more reliant on the variable levels of solar and wind generation.
According to recent estimates by OpenEnergi, EVs have huge potential to offer the flexibility required to enable this transition, and could provide over 11GW of flexible capacity to the UK’s energy system by 2030.
We need to shift perceptions, to view EVs as an opportunity to ensure a cost effective transition by providing the flexibility needed to alleviate the strains on our energy grids.
Enabling local energy flexibility with EVs
Smart charging is crucial to enable us to utilise EVs for flexibility, as it ensures that EVs are only drawing from the grid at times when there is low demand or surplus generation. That way, EVs are not putting strain on the grid by charging during times of low generation or high demand.
By doing this, EVs can assist regional network operators with real-time balancing and support growing levels of clean-technologies connect to the grid at a local level.
Piclo Flex is an independent marketplace for trading energy flexibility online, where flexibility providers can transact directly with system operators to provide flexibility. Our recent competitions demonstrate the value of EVs: 68% of successful bids in local markets have been from flex providers that bid with EVs. (See Piclo Flex historic bidding data here)
UKPN’s most recent tender awarded contracts for flexibility via Piclo Flex worth £30 million to innovators in the energy sector, and more than two thirds of the new capacity – 248 MW – will come from smart charging electric vehicles.
In order to ensure the continued rise of clean transport on our roads and clean-tech flexibility on our energy grids, barriers to participating in flexibility markets need to be removed.
These include removing the restrictions on the ability to stack revenues across flexibility markets and continuing industry efforts to standardise participation across DSO flexibility markets. Making these small changes will help to support the flexibility revolution that we have already started in the UK.
The future of the flex market
The UK’s flexibility market has shown incredible growth so far in 2021, as 1.6GW of flexibility has been contracted by DSOs to date. This is great news for net zero.
Recent growth has been driven in part by the fact that some flexibility contracts are assigned in advance and once awarded, can last up to seven years. This has meant that planned EV fleets can incorporate revenues from flexibility into their long term business models, particularly targeting areas where network constraints are present.
There is significant optimism in the UK that this growth can continue, following the government’s recently released Smart Systems and Flexibility Plan, which indicated that 13GW of flexibility could be provided to the system by 2030. To make this a reality, it is important to introduce greater standardisation in procuring flexibility, to simplify the process, improve access to participation and support real innovation in renewable energy and clean technologies.
Given that the market is still fairly young, the industry should combine that standardisation with the ‘learning by doing’ approach that has contributed to the recent growth in flexibility markets. For example, combining EV smart charging with flexibility markets can provide DSOs with more options for effective grid management, optimising the safe delivery of power to EVs without compromising on delivering electricity to offices and homes.
EVs have the potential to play an important role in the future of our power systems helping to balance the electricity network: helping to balance the electricity network by absorbing energy during periods of oversupply and to reduce demand during periods of undersupply. So the growth in smart-charging electric vehicles could be transformative for our energy grid.
Removing barriers for EV flexibility providers to participate in the industry is vital, and will play a major role in supporting the UK in its aim to reach net zero by 2050.
The impact of that will be a more flexible energy grid, able to support the continued growth in renewable energy at a local and national level, and a cleaner car fleet to reduce air pollution in our cities. It truly is a win-win
Mr Johnston, for EVs to “drive the flexibility market” requires that EVs become abundant and much cheaper. Indeed, until late year, lithium ion battery costs had been falling for at least twelve years and their energy density has been improving. Consequently, exponentially increasing demand for EVs of more than 50% per year has been realised.
Of course, this requires that the lithium ion battery demand must increase by the same amount annually and, in turn, the demand for the metals needed to build these batteries.
Either late last year or early this year, demand for the metals began to exceed the supply. The price of battery quality lithium, cobalt and nickel has doubled and it seems more than likely that the imbalance will worsen for the remainder of the 2020s, meaning that many EV factories may never produce planned production.
I might add that the ESG implications for mining these metals are also serious. Where ever these metals are mined, there are serious environmental and social issues.
Indeed, the gigantic increase in demand for special metals that are essential for the realisation of “net zero” threatens the realistic delivery of “net zero”. https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions This issue must be seriously addressed before COP 26.
Hugh Sharman, Incoteco (Denmark)