A transition to electric cars is inevitable, but where will the energy come from? Phil O’Neil looks at the possible effects on the renewables sector, from residential solar to charging as an employee benefit.

The world is on the verge of a major upheaval in how energy is produced and consumed, and a significant driver of this is the growing popularity of electric vehicles (EVs).

EVs have the potential to change our lives in ways few can imagine. Based on our research, Advisian believes there will be more than four million EVs on Australian roads by 2035.

Australians have always been early adopters of new technology, and as EVs become available at prices comparable to petrol-fuelled cars, we believe Australia’s enthusiasm for EVs will inevitably grow.

Despite its size, Australia is the most urbanised large country in the world, with the average car travelling just 38km each day. This makes Australia an ideal place for EVs.

Instead of refuelling at a petrol station on the way to or from work, EV owners will more likely drive straight home and plug their cars in for an overnight charge. As their penetration in Australia increases, more and more retailers will offer charging facilities as a means of attracting business. People will choose one cafe, or one employer, over another because it offers free or subsidised vehicle charging.

So what will this shift in consumer behaviour do to Australia’s transport energy markets? And will the much anticipated reduction in greenhouse gases be achieved?

The myth of greenhouse gas reductions

Many new EV owners will believe they are doing their bit to reduce greenhouse gas (GHG) emissions. Unfortunately they will be wrong, at least in the near term.

In Australia, as in most developed economies, EVs will use electricity that comes from coal-fired power stations, drastically limiting the potential GHG savings. EVs will save significant emissions only in Tasmania, where renewable energy currently plays a large role in the energy supply.

If EVs are to deliver the hoped-for GHG emissions savings, increased renewable energy will need to be used to charge them. Here, the most likely scenario seems to be that home solar systems, used in conjunction with large-capacity storage batteries, will drive GHG emissions reductions, and at the same time deliver savings on energy costs to EV users.

The prospect of vehicle owners charging each night from the grid or a battery attached to a home solar system suggests a drop in revenue for the petrol industry. But this is only one area where transport energy markets will see change.

For example, petrol stations could be pushed to offer EV-charging stations alongside liquid fuel pumps. Auto manufacturers could package energy supply with vehicles, the way Tesla does with its Supercharger network. Traditional sales and service centres could disappear in response to online sales and EVs’ low servicing requirements.

Can our infrastructure scale?

While the idea of a great global transition to the new energy future may sound straightforward, countless variables and external influences could slow uptake.

The first question is whether Australia can develop the infrastructure to support the widespread adoption of EVs.

Poor recharging options in Australia have led to doubts about whether EVs are suitable for this country. But Australians were early adopters of petrol vehicles before the installation of widespread refuelling infrastructure. Drivers simply carried extra fuel on long trips.

Similarly, early EV adopters will take home-charger cords with them to recharge at points along a journey. The next generation of affordable EVs will have ranges comparable to petrol vehicles, requiring only highway recharging stations for intercity and interstate trips for those drivers who charge at home.

We will likely see EV charging stations appear at workplaces and shopping centres as employers and retailers take the opportunity to provide a perk for employees or attract shoppers.

Will consumers be able to afford EVs?

Cost and the potential for savings are critical factors in the adoption of any new technology. Consumers need to be convinced of the savings resulting from owning an EV if they are to invest in one.

Using off-peak residential electricity to charge EVs costs less than filling similar vehicles at the petrol pump, offering a saving of more than $30 for 500km of driving.

EVs have large batteries that have the potential to become an energy storage resource and power source for households when the sun isn’t shining on home solar systems.

They also need less maintenance than petrol or diesel cars, making them cheaper to own in the long term.

Will recharging stay cheap?

Just as new manufacturers like Tesla are steppingelectric-car-battery into the automotive market, new players in the production and distribution of transport energy will push down recharging prices for EVs.

Tesla is already offering owners of most vehicles in its ra
nge free recharging using its Supercharger network. Electricity retailer AGL has announced EV charging for $1 per day.

The next wave of innovation could see vehicle leasing, servicing, energy supply and network support services using EV batteries, combined in an offer that could deliver low-cost, low-carbon motoring for car owners.

Energy independence

 

Of course, many consumers willing to invest in a new EV will have also committed to a photovoltaic (PV) solar energy system.

If the vehicle spends most of its idle time at home, and you have sufficient solar PV installed, you could provide a significant proportion of your EV charging using self-generated, renewable energy.

For example, a 6kW north-facing solar PV system in NSW could generate about 8,400kWh per year. Based on an average household daily demand of 15kWh, there will still be nearly 3,000kWh of energy available for EV charging. With this much energy you could travel 16,000km in a Tesla Model S.

However, many vehicles spend their idle, daytime periods away from home, at workplaces and in car parks. But this problem can be solved, and two potential solutions present themselves.

First, home-battery storage could match PV output to EV-charging demand. Storing solar-generated power to “time-shift” it to the evening, when EVs are parked at home, could contribute to the financial return on a home-energy storage investment. With declining access to generous feed-in tariffs, the desire to use self-generated electricity more effectively will accelerate the uptake of these “smart” options.

Second, workplace or destination car-park charging using renewable energy could distribute demand more evenly throughout the day. Workplace charging will allow a connection to be maintained potentially all day, while at public places such as shopping centres, a visitor is likely to get a useful top-up for a short period.

Regardless of when and where EV owners choose to charge their vehicles, the low cost of ownership will remain compelling. The highest-value uses for electricity will always be those for which the alternative is most expensive.

Displacing transport-fuel consumption by providing energy to an EV is one such use, with current fuels likely to be two to three times more expensive than off-peak electricity per kilometre travelled.

Phil O’Neil is senior associate, new energy at global advisory firm Advisian and co-author of the latest in Advisian’s New Energy Future series of white papers. This white paper is entitled Electric Vehicles: Disrupting The Energy Mix. Chapters of this paper can be downloaded at http://www.advisian.com/newenergyfuture#chapters