Electric vehicles (EVs) are coming. And they bring with them tremendous opportunity for both the power sector and mobility because they form the nexus between two revolutions: decarbonising electricity and electrifying transport. The new legislative period in the European Union opens the door for a holistic regulatory framework to capture the potential of these transformations. The “start with smart” approach encompasses three key strategies for integrating electric vehicles into the power system cost-efficiently: smart pricing, smart technology, and smart infrastructure.
Electricity pricing has proven effective at encouraging consumers to shift their energy use to times that support efficient power system operation. This is known as demand response. In the case of electric vehicle owners, it means shifting charging to hours when there is less demand and stress on the grid, usually during the night. These are also the hours when the costs for producing and delivering electricity are low. One effective way to encourage and reward this behaviour is to lower the cost of charging during these hours. Policies can promote the use of smart pricing tools such as dedicated EV tariffs and time-varying pricing. At the same time, it’s important to monitor the effectiveness of retail markets to support the integration of electric vehicles.
Coupled with smart pricing, smart technology enables consumers and utilities to leverage the inherent flexibility of charging electric vehicles. But the availability of smart technology varies widely across Member States. Many vehicles are connected to chargers that do not adequately measure or communicate information. Or they lack the convenience and ease of use that are crucial to harvesting the customer and system benefits of smart pricing. A regulatory framework requiring smart functionality in all charging solutions can facilitate rapid innovation and deployment of the necessary products and services.
Effort invested in smart pricing and technology can be squandered without strategic deployment of the charging and grid infrastructure on which they must operate. A smart infrastructure strategy makes best use of the existing grid and transport infrastructure and considers evolving electric vehicle usage and users’ mobility needs. Joint energy and mobility planning can help meet these goals and boost the use of renewable energy. Ambitious policies for implementing public EV charging and legislation on infrastructure for buildings will also be critical. Finally, it is important to consider funding programmes that can phase in a functioning, innovative market for interoperable e-mobility charging services.
A comprehensive strategy to unlock value
Policymakers can unlock the vast potential that EVs offer by striving to decarbonise the transport and power sectors at the same time. A comprehensive, cohesive e-mobility strategy for Europe is the best way to achieve this goal and capitalise on the valuable opportunities associated with integrating electric vehicles.