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Impact Of Electronic Vehicles On Energy Demand

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The global energy demand due to electric vehicles for the year 2017 is estimated to be 54 terawatt hours (TWh) (Figure. Xx). The country with most of the demand (91%) generated due to Electric Vehicles is ‘People’s Republic of China’. Two-wheelers and buses were the main contributers to this demand in China. When combined together, buses and two-wheelers account for 87% of Electric Vehicle demand globally. The demand from LDVs has increased at a faster rate (143%) since 2015 as compared to the demand from buses (110%) and two-wheelers (13%)reference.

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The electricity demand globally from Electric vehicles has increased by an estimated 21% for 2017 as compared to 2016. The electricity demand for 2017 makes upto 0. 2% of the global electricity consumption for 2017 (IEA 2018c). China has the largest Electric vehicle fleet whereas Norway has the highest Electric vehicle market share. The energy demand from these two countries is 0. 45% and 0. 78% of the total energy demand for 2017. There will be an increase in the electricity demand due to the growing market share of Electric in the European Union (EU-28). The electricity consumption due to EVs will increase from 0. 03% in 2014 to 9. 5% in 2050 in Europereference. the generation of electricity will have to be increased in order to meet the demands from the rising sales of EVs which will account for 80% of the vehicle share in 2050. These additional electricity needs should be integrated with the grids.

Hence, this requires grid infrastructure in Europe. The increased electricity demand, until 2030, will be limited and hence, there won’t be any significance influence on the energy industry. This is different in case of a long term vision. For 2050, the increase in electricity demand will be higher and will have a significant impact on the energy industry in Europe to meet the additional demand. The above figure shows that the electricity demand varies from 3% to 25% of the total energy consumption in the member states for the European Union.

Reducing the impact on Grids

The impact on grid due to EV sale is very limited but if we take in consideration the long term sales, then the impact will be greater and the need to reduce this impact will arise. This impact will more be due to fuelling of the EVs since the electricity network and infrastructure will grow with time. This section will focus on the steps that can be taken and are already been taken in Germany with respect to preparing for greater EV stock and shares.

Demand Side Management (DSM): Demand Side Management is a combination of two activities:

Activities through which the bulk load is shifted using the market mechanism. These activities are known as Explicit DSM2. Activities through which the bulk load is managed using the customer response to price signals, known as Implicit DSM. DSM is one of the most important tools used to reduce the impact on the grids, avoid costly grid upgrades and integrate the electricity generated using renewable energy sources into the grid. The cheapest form of DSM solution is the time when the vehicle is being charged. For example, the load on the grid can be shifted and the supporting services like balancing and frequency response can be provided reference. The opportunity with most potential that will arise due to the increase in EV share is the load shifting.

Demand-Side Management includes activities related to the time of charging. For example, elongating the time for charging to the time of the day/night when the power demand is low, increasing the speed or slowing it down etc. Shifting the load on the grid can be achieved by calculating the charging time of the vehicle with the required time for full charge which differs from vehicle to vehicle and planning the charging accordingly. The demand management should take place in such a way that large number of EVs can use the electricity for a specified capacity. This can take place only if the demand is managed in a coordinated and structured manner. Another opportunity provided by electric vehicles for a short time frame is to provide frequency response services for grid reliability and cost-effectiveness, also the electric cars can be used as distributed energy storage for backup capacity and flexibility at the minute to millisecond levelreference.

Another advantage of DSM can also be reduction of CO2 emissionsreference. This reduction can be achieved by reducing the frequency of charging during the peak hours. EV charging during non-peak hours can be encouraged by using this benefit of DSM. Reduction in impact on the grid can also be achieved by upgrading the grids, but this may prove to be costly. This is where DSM comes into play especially for short term. The areas where local grids are expecting bottlenecks can be solved by setting up large number of home chargers which will help in distribution of the load on local grids. This will help in avoiding the grid upgrade or delay it for a certain period.

In Norway, such upgrades which are requested by the first customer to increase the capacity which exceeds the capacity of the transformer are charged with upgrading costs. Several housing societies have implemented the Electric vehicle charging management system which charges the vehicles in a sequential order or at low power rates. This helps in keeping a control on the power requirement. The business model for such systems is still under construction but developing rapidly. Aggregators: Activities through which the bulk load is shifted using the market mechanism are carried out by an aggregator. An aggregator is a service provider who gathers a set of flexible demand units, such as EVs, to sell the flexibility of electric loads available from these units in electricity markets reference. the effectiveness of DSM is more in terms of cost and reliance of the grid, when a group or organisation combines and implements the actions required for DSM.

An aggregator oversights these actions. To achieve this, an aggregator has to negotiate with consumers from industrial, residential and commercial sectors and come to an agreement for aggregating their loads reference. Aggregators are also important to address a number of barriers to market response, including the lack of knowledge and experience by consumers to identify their potential for flexibility, or the limited potential for individual responses, given that the costs recovered with demand management may be too little to mobilise the interest from individual electric car owners nordicevoutlook. The aggregator has to carve out a strategy for controlling such activities in order to earn revenue for itself and reduce the cost associated with it. The strategy should be planned in a way as to provide incentives to the consumers. It is difficult for the aggregator to convince consumers for their cooperation and also retain them. The aggregator needs to convince the consumers for giving them direct control for dispatching the loads during peak hours. The effectiveness and implementation of the solutions provided by explicit DSM depends on the way national regulatory framework has been designed. Aggregators and consumers face difficulty for entering the system services markets set by the market itself under the rules of participation for particularly small consumers. In the present situation, participation of aggregators in the markets is allowed by few countries.

Dynamic electricity pricing

Dynamic electric pricing comes under implicit DSM. Pricing plays an important role in DSM and hence, dynamic electricity pricing will be influential in shaping the average electricity demands of small consumers. These demands will further be integrated with the needs and capabilities of the system. Dynamic electricity pricing will be used for setting flexible electricity prices with respect to the power demand. Basically, the aim of dynamic pricing is to discourage the consumer to use the electricity from grid when the power demand is high. This is will help in achieving peak shaving and shifting. The prices of electricity consumption will be less when the demand will be less for example during day time. Vice versa, the prices of electricity consumption from the grid will be high when the demand is high, for example, at night when the consumption and demand of electricity is high. Smart meters needs to implemented for these purposes. 2 Muhammad Babar, Talha A. Taj, T. P The conception of the aggregator in demand side management for domestic consumers, 2013European countries have developed a plan for implementing data management systems with the help of smart meters. Smart meter data can be used for three different applications:

  1. The retail market: Smart meter data can be used to simplify switching processes, to apply time-of-use tariffs and for billing processes as well. Furthermore, smart meter data can help to increase the efficiency of market party communication: the data exchange between retailers and network operators for billing and balancing processes.
  2. Grid operation: Smart meter data can help to operate the networks. The transmission and distribution grid operators can use the data to develop more accurate projections to balance the networks, contract flexibility etc.
  3. The Service market: Smart meters allow a much more detailed tracking of energy consumption and production. Developers can use this data to provide new services to the consumers that go beyond the established retail services. For example, the data could be used to provide energy efficiency applications or to develop virtual power plants on a small scale (e. g. a few households with electric cars).

Germany does not plan a full roll-out of smart meters. Rather, it plans to equip about 10-20% of all network users (consumers with high demand and generators above 7kW) with so-called intelligent metering systems (imsys). These imsys can exchange data with external parties via the smart meter gateway. 3Vehicle-to-gridVehicle-to-grid (V2G) refers to using the EV battery capacity to transfer electricity back to the grid in case of need (IEA HEV TCP, 2017). The EVs will act as a back-up energy storage for the grid, for example, the generators or invertors implemented in houses where there is shortage of electricity. This is an example of evolution that explicit DSM is going through.

  • Cost reduction for energy storage
  • Increase in the capacity of on-site renewable energyV2G is currently being investigated globally through various pilot projects and business models (IEA HEV TCP, 2017). The deployment of V2G concept is difficult examining the challenges it has to face:
  • For the EVs to transfer back the electricity to the gird, bi-directional charging will be required
  • For monitoring the amount of electricity needed or transferred, separate metering needs to be installed
  • The charging of electric vehicles needs to be controlled. This requires real-time communication between EVSE, EV and power retailer
  • Deployment of V2G will require the aggregator to provide incentives to the consumers. This is a similar problem faced by other Demand-Side management solutions. The cost of bi-directional charging is approximately four times higher than that of a conventional charger and compensation schemes for grid services to small consumers are not yet clearly defined (Thorbjørnsen, 2017).

Nordic EV Outlook 2018, International Energy Agency

Network Investments and planning: The increasing demand for electricity will require the grids to be prepared and ready for increased load. This section describes the actions that network operators should take in order to reduce the impact.

Grid Upgrades

The impact of EV load on the current grids is limited due to the limited number of EV share in the present market. But the scenario will change in next 5-10 years considering the shift of focus by automobile industry from internal combustion engine cars to electric powertrain. Hence, the load on the grids will increase resulting in the need for grid upgrades. Many of the European grids, supply cables are 80 years old. If many EV customers from the same area decide to charge their electric cars in the same period of the day/night, then it may lead to grid destruction. Hence, grid upgrading projects are being explored by car manufacturers.

For example, Audi’s Smart Energy Network makes use of the connected home device for interacting with the power grids. Another example of grid upgrades are in Norway. The Norway energy department have decided to invest USD 4billion in grid upgrades till 20256.

Stationary Storage

Creating a stationary storage from batteries is costly yet beneficial. Such storages will help in balancing the grid services. This is similar to EVs being used as storage systems but the difference here is, station storage will use only batteries for managing the load. Such solutions are being tested and developed. Such stationary battery storages need to be leveraged by an aggregator so that it will be more effective for grid reliability.

For example, Lyse AS, a conglomerate, which includes a utility business and a DSO among other enterprises, in Stavanger and Sandnes is running a pilot project that includes 11 chargers with battery packs and a solar system on the roof. Stavanger is also one of the five pilot sites of the EU-funded INVADE project.

15 July 2020

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