Smarter power pricing needed for EVs

This story first appeared in the March issue of EVtalk – CLICK HERE to download the magazine FREE

A rapid mass uptake of EVs could overload New Zealand’s electricity network, two recent reports warn.

Research released by Concept Consulting says New Zealand will need to develop smarter electricity pricing options for consumers charging EVs as mass uptake happens.

The report, sponsored by electricity distributors Orion, Unison and Powerco, studies the long-term implications of EVs, including the need to develop smarter, more cost-reflective electricity prices specific to EV charging.

Concept director Simon Coates says under existing pricing, EV uptake will be held back and electricity supply costs will be higher than they need to be.
“Without electricity pricing reform, our research shows costs to consumers could be higher by about $4 billion over the next 30 years, and vehicle emissions more than one-third greater in 2050.”

Coates says the benefits of EVs could be better realised under a new approach to pricing that rewards consumers for charging their vehicles in a smarter fashion.

“Smarter charging can be achieved by rewarding consumers for charging in off-peak periods – such as 10pm to 6am – and using ‘managed charging’ options to stagger charging among households.”

That would make it cheaper to charge EVs and help avoid significant network investment upgrades.

The report notes that if all light private vehicles were changed overnight to EVs, annual residential electricity consumption would increase by about 50%.
Lines company Vector has released a 26-page “green paper” report on EV network integration, advocating the need for a robust strategy to deal with EV uptake and its impact on electricity supply.

Commenting on the Concept Consulting report, Vector strategic planning and technology integration adviser Steve Heine says cost-reflective pricing is an important tool to support EV integration and help customers make more informed decisions.

“However, EV charging behaviour is influenced not just by pricing but also convenience, daily routine, charging technology and electric range, so pricing is not a panacea for EV integration.

“Most importantly, the low-voltage network, where most EV owners connect when charging at home, can be constrained much earlier than the rest of the electricity system so we will need to look for a wider set of options.”
Faster charging of larger capacity batteries for longer range EVs and “clustering” of chargers in some areas necessitate the need for EV charging strategy that is future-proof, he says.

“The perception that networks can absorb the uptake of EV charging is only true for the short term while batteries have a short-range capability, customers are satisfied with long charging times and chargers are evenly distributed across the network.”

Managed charging empowers customers to actively participate in the market as they react to higher market prices by adapting their charging behaviour, Vector says.

“The local electricity network was not designed for, or envisaged, any significant uptake of EVs and the consequential demand for charging at home.

“Larger batteries, combined with customer demand for shorter charging times and increased affordability of high capacity chargers, mean a single EV household has the potential to increase its electricity capacity needs between 100% for very slow trickle charging and 2000% for rapid charging – essentially adding one to 20 additional ‘homes’ in terms of network capacity.
“Clustering” EVs in suburbs could bring forward constraints on existing network investments and households buying more than one EV could magnify the problems.”

Many electricity companies are already offering pricing plans for cheaper overnight electricity that encourage EV users to charge in a smart way, the Electricity Retailers Association says.

Mercury offers a package that discounts an EV user’s entire home usage between 9pm-7am by 20%. Meridian’s package includes cheap rates on an EV user’s entire home usage, also 9pm-7am.

Genesis Energy offers off-peak rates for EV users, Flick Electric provides spot pricing that gives access to the overnight wholesale market, and ChargeNet is exploring time-of-use pricing at its stations to further incentivise off-peak charging.

Data in recent reports reinforces that there is plenty of current capacity to handle a significant expansion of EV ownership and charging, a Mercury spokesman says.

Mercury’s own data suggests EV drivers respond well to price signals.
“So that is the most obvious mechanism for encouraging off-peak charging,” it says.

Visit www.concept.co.nz/publications.html and https://www.vector.co.nz/articles/ev-network-integration to see the reports.