The benefits of optimizing EV charging
The energy ecosystem is undergoing a seismic shift. Since 2018, 40 energy retailers have gone out of business in the UK alone, displacing nearly 6 million customers.
That’s due to a combination of complex market trends. The energy supply chain has been disrupted by Russia’s war on Ukraine. At the same time, demand for clean energy has spiked, as customers have become more conscious of reducing their carbon footprint, and started adopting technologies like solar panels and electric vehicles (EVs) en masse. Energy costs skyrocketed, destabilizing energy retailers and their business models. Many went bust; all had to re-strategize.
EVs offer energy retailers an opportunity to future-proof
That period of disruption isn’t over yet. As the energy industry takes stock and restructures, it will continue to shrink. It’s going through a phase of significant consolidation, and only the energy retailers that adapt their business models will survive. To stay relevant in the future of energy, retailers need to find new revenue streams, and win customer loyalty.
EVs are perhaps their best asset in this battle for survival. EVs are inherently flexible and have considerable battery capacity. That means they can be leveraged in residential demand response programs that make money for energy retailers. What’s more, they’re being adopted at scale. Offering value-added services around EVs gives energy retailers the opportunity to capture more of the market and keep customers engaged.
The role of EVs in the changing energy ecosystem
Reducing reliance on fossil fuels in our most polluting industries will have the biggest impact in our ability to decarbonize the planet and meet our climate targets. The energy sector is the most polluting industry, followed closely by transportation.
Reducing reliance on fossil fuels in the energy sector is challenging for a number of reasons, but the intermittency of renewable energy sources is one of the biggest. Energy from wind turbines or solar panels is only available when the wind blows or the sun shines, and that’s incompatible with our need for on-demand energy 24 hours a day.
Reducing reliance on fossil fuels in the transportation sector exacerbates that problem. Uptake of electric vehicles is accelerating, and that’s positive – but it means there’s now more demand for electricity than ever before. If every household switches to an EV, and wants to charge that EV at home, their electricity consumption will increase by around 30%. That puts pressure on the grid, and makes balancing supply and demand even more difficult.
But it’s not all bad news. While EVs put pressure on the grid, they can also be pivotal in relieving it, and helping us get to a more sustainable energy system, faster.
EVs are flexible grid resources
What makes EVs so valuable is that their charging patterns can be moved, managed and optimized.
EVs are inherently flexible. They spend most of the day idle. They don’t need to be fully charged all the time – just charged enough to get drivers where they want to go, when they want to go there. That means their charging windows can be moved. At times of high demand, when there’s too much pressure on the grid, EV charging can be stopped. At times of high supply, when there’s plenty of renewable energy available, charging can be started again.
EVs also have significant battery capacity. Turning EV charging down when there’s pressure on the grid has a tangible impact, because they consume a lot of electricity. Aggregating that battery capacity has even more of an impact. With the help of cloud software, EVs can be bundled together to create Virtual Power Plants (VPPs) that respond to fluctuations in the grid. VPPs can not only be used to reduce demand, but also to create supply. They can capture and store large volumes of electricity from renewable sources, and release it back to the grid when it’s needed most.
The benefits of optimizing EV charging
As the transition to renewable energy sources creates more intermittencies, and electrification creates more demand, the flexibility that EVs offer is becoming more and more valuable. That value isn’t limited to balancing out the grid – EV flexibility also drives tangible benefits back to energy retailers and their customers.
New revenue streams
Energy retailers can leverage the EVs in their network to participate in lucrative flexibility markets and create new revenue streams.
When there’s too much demand on the grid or imbalances in frequency, Transmission System Operators (TSOs) and Distribution System Operators (DSOs) will offer incentives to energy retailers that can help them turn down demand. Till now, these demand response programs weren’t widely available to residential energy customers, because they didn’t consume enough energy to make a tangible impact. As more distributed energy resources (DERs) like EVs enter the home, that’s changing.
Those DERs are intelligent, too. They all have small computers inside them, which means energy retailers can communicate with and control them. Software like Enode’s makes it easy to connect all those DERs – including, but not limited to EVs– to energy retailer apps. And it offers out-of-the-box functionality to enable Smart Charging, so that DERs can be programmed to align their charging windows around fluctuations in energy supply.
Aggregate that functionality to create VPPs, and energy retailers can go one step further, creating further revenue streams by selling valuable renewable energy back to the grid or trade in the wholesale market.
More market share
In addition to giving energy retailers a new way to make money, it also helps energy customers save money. In a turbulent energy market, cost savings are front-of-mind for consumers – it’s why so many of them switched to EVs in the first place. Smart charging means they can avoid expensive peak pricing at the same time as they reduce their carbon footprint.
Offering this functionality increases the value of customers’ assets – their EVs – and the perceived value of energy retailer apps. They’re more likely to seek out the retailers that offer these kinds of benefits, and to continue to engage with them. With nearly 6 million displaced energy customers looking for new suppliers, energy retailers that provide smart charging and VPPs have a major competitive advantage. The market opportunity is huge: as the industry continues to consolidate, those that can create value for customers and win their loyalty could ultimately own the relationship with every household in the country.
EVs have enormous potential to accelerate our transition to a more sustainable energy system. And they’re a critical instrument as energy retailers re-strategize to survive in a rapidly evolving market. Building the functionality to optimize EV charging into energy management apps makes them more competitive, and will help energy retailers retain a strong position in the Future of Energy.
To find out how Enode effortlessly enables EV smart charging, get in touch.
