PRESS RELEASE 18 Dec 2017
Pöyry Point of View report: Electric vehicles – who is in charge?
2017 was full of announcements on Electric vehicles (EVs) from both car manufacturers and governments. Whilst the current share of EVs is low in most countries, a rapid increase in uptake over the coming decade is a real possibility. What impact would such a rise in EVs have on the generation and distribution of electricity?
“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?” says Matt Brown, Vice President at Pöyry Management Consulting. “Our analysis shows that the answer to this question will have a huge impact on required investments in the electricity system.”
In a future scenario with 50% of cars, buses and motorcycles ‘all electric’ across the EU28, the annual electricity demand would be 11% of EU28 final demand in 2016 – roughly equivalent to the demand of Italy. In isolation, the increased electricity demand would need additional baseload plant capacity of 45GW, which is equivalent to 14 Hinkley Point Cs.
Given the growing potential of flexible demand in a smart, digitalised, decentralised system, additional energy demand from EVs could in theory – depending on what time of the day people charge – be accommodated without the need for any new capacity.
As wind and solar power grows further, low electricity prices will not coincide with periods of low demand overnight and it will make sense to charge EVs during a sunny or windy period. Dynamic pricing of electricity can provide the right signal of when to charge an EV, and flexible demand will allow for more wind and solar to be built on a profitable basis. Importantly, locational pricing of electricity may be needed to avoid unnecessary investments in distribution grids.
Matt Brown added, “If we are too slow to bring about 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.”
Read more on electric vehicles and their role in the future of electricity market in Pöyry’s Point of View report.
Vice President, Management Consulting
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Pöyry is an international consulting and engineering company. We deliver smart solutions across power generation, transmission & distribution, forest industry, chemicals & biorefining, mining & metals, transportation and water. Pöyry's net sales in 2016 were EUR 530 million. The company's shares are quoted on Nasdaq Helsinki (POY1V). Approximately 5500 experts. 40 countries. 130 offices.