5 December, 2023

EV owners could hold the key to lowering Australia’s future energy costs

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Our report produced in partnership with Veitch Lister Consulting (VLC) and Endgame Economics shows how Electric Vehicle (EV) batteries could be part of the solution of the energy storage problem hindering Australia’s transition to renewable energy.

Existing and planned rollouts of renewables like solar and wind across Australia are highly positive signs for the country’s transition to renewable energy. However, an ongoing question has been where this influx of renewable energy will be stored to enable consumption outside of generation peaks. Major investments in storage (such as large-scale batteries and pumped hydro) are expensive and require further enhancements of the distribution network.

Endgame Economics modelling finds evidence that supports an alternative to investing in costly energy storage methods to meet peak (times of day) energy demands: using EV batteries for distributed battery storage.

Most cars are stationary, most of the time

VLC analysed the Southeast Queensland Household Travel Survey data to determine the extent to which cars are used throughout a day. The survey, which covers a period from 2019 to 2022 showed that cars are stationary most of the time. In fact, the ‘average’ Southeast Queensland car spends more than 13 hours every day parked at a home and more than 7 hours parked at work.

When cars are driven, many of them aren’t driven very far

The most important determinant of car use is home location. For example, cars belonging to households in inner Brisbane travel around half the distance of households on the Sunshine and Gold Coasts. Even with longer drives, the majority of cars across the rest of Southeast Queensland travel between 8 and 35km each day – well within the current range of EVs on the market and significantly less than can be driven with a fully charged battery.

Households are highly receptive to financial incentives when choosing the time to charge EVs

To estimate what it would take to incentivise Australian consumers to connect EVs to the grid, we used NineSquared’s in-house synthetic population model. It provides price elasticity of demand with respect to electricity pricing by agent and agent population by location as shown below.

Research from Canada suggests that elasticities associated with charging time can be up to ten times higher than the elasticities for pricing that are shown in the figure. Applying charging time adjusted price elasticities to the target population shows that only small payments are required to shift charging to the time it is needed to meet the needs of a distributed storage strategy. With these incentives, on average, less than 4% of the EV fleet would have to be connected to the grid at any time to provide the required storage and generation capacity. Each EV would only need to contribute 7 kWh per day which could be charged and discharged in less than 2 hours.

Download the report here.

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