The ongoing transition from combustion engine cars to plug-in vehicles shouldn’t be ignored by the energy sector. The disruption of transportation can offer vast opportunities and be a lifesaver for energy utilities as the energy demand keeps decreasing.
1. EV’s boost electricity demand
A decreasing demand for energy is a good thing all in all, but for the industry of energy production it causes new hindrances. Thanks to enhanced energy efficiency and other technical improvements, electricity demand has stopped growing on par with GDP. Utilities are faced with a need to figure out new ways to prosper.
One of the saviours are electric cars, as they can reverse this trend.
Electrification transforms previously fossil fuel reliant industries, such as transportation, heating and cooling, onto the grid - to use electricity instead. According to forecasts, the global electricity demand of electric vehicles will rise even 300-fold. In total, this would mean a rise from 6 TWh in 2016 to 1 800 TWh in 2040. Electric transportation would thus cover 5% of total electricity demand.
In Europe, the share of electric vehicles is assumed to reach 80% by 2050. This would require an additional electrical capacity of 150 GW.
2. Renewable energy needs help
In addition to increased electricity demand, EV’s will become a tool for stabilising demand on the grid. Renewable energy sources are volatile and thus need more balancing – such as energy storages - than fossil fuels. Electric vehicles are essentially big batteries on wheels.
Electric vehicles will add up to over 30 TWh of installed battery storage capacity by the 2040’s. This means that EV’s offer energy utilities a cheap way to deploy energy storage, with no extra capital cost and relatively low operating costs.
When the renewable energy production increases, energy storage will play a big part in balancing the energy system. EV’s can be a significant component in the demand response mix, since charging power can be controlled based on the load on the grid, or energy even pushed back to the grid from the EV’s if necessary.
EV’s require new ways of thinking.
Electric vehicles cannot reach their full potential without the help of the energy sector – and the other way around. Today's energy utilities are faced with quite a unique opportunity to step into the new era of energy and transportation.