Large-scale EV uptake in NZ - issues and solutions

Two reports have been released over the past couple of weeks on the issue: Lines company, Vector, said in their report that there could be problems in the future if all EV owners chose to charge their vehicles during peak times or use faster charging options. While another report prepared by Concept Consulting Group Ltd (Concept) for electricity distributing companies, warned that a continuation of the current electricity pricing approach could result in higher costs and emissions. Current issues Concept and the three network companies who sponsored the report, think EVs have the potential to be a fantastic opportunity for New Zealand, however, they also believe that current electricity supply arrangements will frustrate the realisation of these benefits and could also result in EV uptake causing unnecessary costs. Concept's report stipulates that the current approach for charging for electricity, which is predominantly ‘flat’ $/kWh prices, will frustrate the achievement of the benefits of having an EV and also result in unnecessary costs being incurred. EV-owners will pay significantly more than they should for charging their vehicles. This will slow the rate of uptake of EVs, significantly increasing New Zealand’s emissions and increasing overall economic costs. "Those households who do purchase EVs will mostly adopt a ‘passive’ approach for re-charging their batteries: i.e. simply plugging-in and starting charging as soon as they get home. Unfortunately, early evening after getting back from work is also the time of peak electricity demand," says the report.  The scale of demand from EVs is such that this will soon start to trigger expensive network capacity investments in many areas. Plus, additional fossil-fuelled generation will be required if charging is done at times of peak usage. Overall, Concept estimates that a permanent continuation of current pricing approaches will result in unnecessary increased costs of approximately $4bn (in present value terms, or $14bn in future cost terms), and CO2 emissions from internal combustion engine vehicles (ICEs) being over one-third greater in 2050. Potential solutions EVs are a great opportunity for New Zealand  in terms of reducing emissions and delivering lower transport, but the current way we charge consumers for electricity means that EV owners are being charged too much for electricity. "Electricity pricing options which apply to the whole of a household will likely be inadequate to meet the special challenges of EVs," says the report. 'Time-of-use’ (TOU) pricing (e.g. having a peak/off-peak pricing structure based on preset times) will not deliver good long-term outcomes in relation to EV demand. TOU pricing will likely create new demand spikes with a majority of EVs simultaneously charging from the start of the off-peak period. "EV-specific managed-charging pricing" is the report's preferred option. "This would involve consumers agreeing to another party (e.g. retailer, load aggregator, or network company) managing their EV charging, in return for discounted network and/or energy pricing for such managed EV load." "This approach recognises the distinct nature of EV load, with its storage characteristics, and would deliver materially better outcomes of smoothed coordinated charging of New Zealand’s EV fleet and lowering the cost of EV charging to consumers, but in a way which has reduced risk of causing bill-shocks for consumers." Simon Coats, the author of the Concept Consulting Report, spoke with Radio New Zealand this morning about the issue and discussed how other countries are dealing with the problems arising with EV uptake. In Germany, Nissan have started trialling separate EV metering, vehicle to grid charging (V2G). German owners give Nissan the right to determine when they should charge their vehicle, and also to use their vehicle to feed the energy into their home or grid.  This means, once a nominal charge has been paid for the installation of a V2G charger there are no fuel or energy costs; just free power for your EV. ChargeNet's view However Steve West, head of ChargeNet, suggests that these reports may be anticipating a problem that there might not be. “Vehicle manufacturers have a vision of the future which is quite different to these reports. They foresee a replication of the petrol station experience,” said West to Radio New Zealand. "Very soon, we will see charging rates of 300kw plus in the public charging space, which means around 15 minutes to charge your car."  These charging stations are just about to be deployed in Europe, it is inevitable that they will end up in New Zealand in the next year or two says West.