While the future of mobility might be electric, there is a clear need for smart charging solutions and strategies that optimize Electric Vehicle (EV) charging and balance electric grid capacity. Key stakeholders in this process include utility/energy providers, EV charging station operators, governments, car Original Equipment Manufacturers (OEMs), and technology vendors. Above all, the future of electrification of mobility hinges on the assumption that EV owners, both in the consumer and commercial spaces, will play an active role.
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Below is an update on the EV market, highlighting the optimistic outlook for EV adoption, the average power consumption of electric vehicles, and the lack of public charging infrastructure. These insights make it clear that EV smart charging solutions are in dire need.
- Despite severe global supply chain disruptions, the EV market has performed very well recently, with the exception of 1H 2022—due to COVID-19 lockdowns in China, trade tensions stemming from the Russia-Ukraine war, and materials shortages.
- Total registered Battery Electric Vehicles (BEVs) will climb from 17.1 million in 2022 to 66.7 million in 2027, growing at a Compound Annual Growth Rate of 31% between 2022 and 2027; although this is still less than 20% of total registered vehicles worldwide.
- Accounting for all EVs worldwide, the total annual average consumption of EVs will surpass 500,000 Gigawatt Hours (GWh) by 2027—with the Asia-Pacific region accounting for almost 120,000 gWh alone.
- For the first few years, the average EV power consumption will improve at a rate of around 3%, then it will drop to roughly 2% as standardization for EV battery technologies becomes more common.
- Today, the average EV car power consumption in North America is 3,830 Kilowatt Hours ( kWh) annually, 2,938 kWh in Europe, 3,062 kWh in Asia-Pacific, 3,395 kWh in Latin America, and 2,373 kWh in the Middle East & Africa.
- In 2027, there will be 1.3 million vehicles shipped with Vehicle-to-Load (V2L) capabilities, 193,023 with Vehicle-to-Home (V2H) features, and just 47,000 with Vehicle-to-Grid (V2G) capabilities.
- New EV sales outpace the installed base of public EV charging stations by about 10X. Europe has a major problem, as the ratio of EVs to public charging points has increased from 5:1 in 2016 to 22:1 just 5 years later, in 2021.
- Worldwide, the number of public Alternating Current (AC) charging points will increase from 2 million in 2022 to 7.3 million by 2027—with the Asia-Pacific region accounting for 60% of these charging points.
- Public Direct Current (DC) “ultra-fast” charging points, a much-needed EV smart charging solution, are far less common than AC charging stations. With 882,000 DC stations by 2027, there won’t be a significant difference in the total between Asia-Pacific (453,000) and Western Europe (325,000), despite the former having a far larger EV installed base.
“In 2021, when consumer Battery Electric Vehicles (BEVs) constituted 0.9% of the total registered vehicles, the global energy consumption was around 24.1 million Gigawatt Hours (gWh). If 100% of the global consumer vehicle fleet were composed of BEVs, the total energy consumption would have been 13% higher in the same year.” - Maite Bezerra, Industry Analyst at ABI Research
Key Decision Items
Why Is EV Smart Charging Important?
Although EV adoption is primarily fueled by sustainability aspirations, the mass usage of EVs contradicts this notion because it puts an unbearable strain on the electric grid. For example, if a family were to purchase two EVs, their household energy consumption would jump 74% per day, proposing that 90% of vehicle charging takes place at home.
There is also the problem of power grids not being capable of meeting peak demands, which increases as EV charging increases. In many regions where EV adoption has taken off, the rapid transition to renewable energy sources (e.g., solar and wind) has left electric grids with an inadequate energy supply when demand is high. As a result, this raises the risk of power outages.
While broadening the power-generating infrastructure and re-energizing the existing electrical infrastructure seems like the obvious solution, this process would take 10 to 15 years due to the long lead times for components. For these reasons, governments, grid operators, utilities, and other energy and supply distribution stakeholders need to explore EV smart charging tools that will make the grid more intelligent, flexible, and, ultimately, more resilient.
Incentivize Customers or Residents to Conserve Energy
Demand Response (DR) programs, in the context of EV smart charging, incentivize users to reduce their energy consumption during extreme demand peaks. This may mean, for example, that an EV owner does not drive the vehicle during peak hours and, as a result, receives an energy bill rebate or other financial benefits.
In order to know when and when not to use a vehicle or a commercial EV fleet, a customer may sign up for the utility’s EV program. Through cloud software, a smart charging platform can dynamically change a vehicle’s charging rate and time, based on vehicle status and grid data.
In many cases, DR programs enable utilities to decrease power to home appliances or commercial building infrastructure during low peak hours to save energy, which could potentially be stored. Or the government may ask residents to conserve energy to avoid a blackout. As a positive sign, California successfully used its emergency Load Reduction Program (ELRP) four times in 2021, paying out roughly US$1 million to voluntary residents.
Smart Off-Grid Solutions for EV Charging Stations
The two off-grid smart charging features that EV charging station operators or businesses can leverage are dynamic power sharing and dynamic pricing.
- Dynamic power sharing allows operators with multiple on-site chargers to decide the amount of accessible energy for Plugged-in Electric Vehicles (PEVs), while ensuring that the maximum energy capacity isn’t eclipsed. Conversely, power is unavailable when demand is equal to or higher than the maximum permitted load.
- Dynamic pricing means EV charging station operators can lessen energy demand, prevent long waiting times, and keep infrastructure in good shape. So, during peak demand windows, this EV smart charging feature enables operators to increase the price per kWh to discourage customers from overburdening the electric grid. This strategy can also be applied to Direct Current (DC) chargers positioned along motorways by overcharging customers after a certain amount of time.
Bidirectional Charging Looks Promising for EV Battery Optimization
To many participants in the EV charging domain, bidirectional charging is synonymous with Vehicle-to-Everything (V2X)—as in, the energy can flow between the EV and “everything.” This smart charging solution can turn and EV into a Distributed Energy Resource (DER) via small-scale electricity generation and storage devices like the vehicle battery.
The three types of bidirectional charging are Vehicle-to-Load (V2L), Vehicle-to-Home (V2H), and Vehicle-to-Grid (V2G). While V2L and V2H are beneficial for charging home appliances or, in the case of the latter, keeping your home powered during a blackout, these features only do so much for alleviating the electric grid during demand peak hours.
On the other hand, V2G is the best bidirectional charging option to support the grid using EVs. Primarily used by commercial users, V2G temporarily stores excess energy from stationary EVs and sends it back to the grid for consumption elsewhere. This smart EV charging technology lessens the burden on utilities and maintains electrical output during extreme load demands.
V2G Is Best Used for Commercial Fleets
While V2L and V2H EV smart charging will find success in the consumer markets, V2G not as much. That’s because, besides the need for a tight regulatory environment, V2G bidirectional charges are better suited for commercial fleets, which possess vehicles with large batteries.
For example, there’s an obvious Return on Investment (ROI) for school bus fleets because electric buses have large battery wattage capacity. Moreover, school buses sit idle for most of the day, which is required when distributing EV energy to the grid.
As a case study from California, electrification leader Nuvve partnered with San Diego Gas & Electric in July 2022. With Nuvve’s GIVe EV smart charging platform, power will be sent from the electric school bus battery back to the grid when an Emergency Load Reduction Program (ELRP) event is triggered. Not only will this EV smart charging technology help maintain the electric grid load balance, but it will also create a new revenue stream for school administrations.
Address Ongoing Challenges to EV Smart Charging Uptake
The current enrollment rate in EV unidirectional energy management programs is a modest 20%. For V2G smart charging programs, that number is expected to be even lower.
There are a lot of moving parts that go into making V2G DERs more popular in the consumer EV space. Besides regulation and compatible hardware for smart charges, V2G charging will require standardization, financial incentives, grid and market access, stakeholder agreements, and customer consent to access device information. Furthermore, the following concerns must be addressed:
- Persuading EV owners to allow utilities to draw energy from their vehicles when they already have range anxiety.
- Demystifying the belief that V2G causes battery deterioration.
- Reassuring consumers that their vehicles will always have enough battery to power their journeys.
Battery Buffering Paves the Way for Ultra-Fast EV Charging
If you operate a fast charging station, a strong option to consider is battery buffered chargers. This EV smart charging hardware eases the pressure of Direct Current (DC) fast chargers on the grid.
Moreover, battery buffered EV chargers amass and draw energy during off-peak hours—counterbalancing energy costs during peak demand hours. When deploying this EV smart charging strategy, you can expect Capital Expenditure (CAPEX) and Total Cost of Ownership (TCO) to be approximately 18% and 30% lower than traditional DC chargers, considering grid upgrade costs.
Key Market Players to Watch
Dig Deeper for the Full Picture
In ABI Research’s Electric Vehicle Smart Charging Platforms research report, take a more in-depth deep dive into the current obstacles facing the EV charging spectrum—and how to overcome these challenges. This report provides a deep assessment of innovative EV charging tools, the market opportunity for forward-looking solutions, and the strategies that can alleviate the impact of EVs on the power grid.
Not ready for the report yet? Check out the following blog posts.
- Can the Power Grid Handle More Electric Vehicles?