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PÖYRY POINT OF VIEW REPORT / 18 Dec 2017

The impact of electric vehicles on the generation and distribution of electricity

Electric vehicles (EVs) are winning the battle for the future of transport, but a major uncertainty still exists – how, when and where will people charge their EVs?

The answer has a huge impact on required investments in the electricity system. If we are too slow to bring about necessary changes to electricity markets, we risk making investments in both generating capacity and distribution grids that are unnecessary long-term and burden consumers with higher costs for years to come.

In a future scenario with 50% of cars, buses and motorcycles ‘all electric’ across the EU28, the annual electricity demand from these vehicles would be roughly equivalent to the demand of Italy. In isolation, the increased demand would need additional baseload plant capacity of 45GW, which is equivalent to 14 Hinkley Point Cs. But what will be the impact in the existing and future electricity system?

As wind and solar power supply grows, it will make sense to charge EVs during a sunny or windy period. Dynamic pricing of electricity could provide the right signal of when to charge an EV. However, locational pricing of electricity may be needed to signal where to charge, so we can avoid unnecessary investments in distribution grids. 

Read more on electric vehicles and their role in the future of electricity market in Pöyry’s Point of View report.

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Matt Brown
Head of Energy Markets & Transactions