Up to £133 million ($169.5 million) could have been saved in electricity grid costs during the lockdown period if the electric vehicle (EV) smart charging and smart tech adoption had been more wide scale.
This is the message from cleantech companies to UK regulator Ofgem, highlighting the important savings that could be made if the country had a more intelligent energy system.
A group of organisations across the energy sector have forecast that, in a system where flexible storage capacity from 6 million electric vehicles could have provided the grid with an extra 3.6TWh of energy, up to £133 million could have been saved.
This saving equates to a 27% reduction in balancing costs for National Grid and a subsequent bill saving of £4.82 ($6.15) for each UK household.
Jorge Pikunic, managing director of Centrica Business Solutions, said: “The solution to balancing the system of the future does not lie in curtailing renewables or indeed spending billions building out more central power generation as back up. Instead, we should treat renewable energy like a precious resource and encourage the use of flexible technologies such as Demand Side Response and storage, as this will allow us to optimally use this green energy, at the lowest cost to consumers.”
UK could have saved £100 million ($127.5 million) in COVID grid balancing costs
During lockdown, abundant renewable generation and record low energy demand have created balancing challenges for the national electricity system operator. In response, National Grid has increased balancing costs by £500 million ($637 million) this summer, extra charges that will ultimately fall on consumers as part of their energy bills.
Without modern systems in place for balancing the network which would pay consumers, National Grid are reliant on legacy solutions, such as paying renewable generation to switch off when energy is being produced in excess of what can be used at the time.
Throughout the lockdown period, consumers have saved hundreds of grams of CO2 per day by storing green energy in car batteries and other home storage systems and feeding it back to the grid when demand increases. Consumers with vehicle-to-grid devices have in fact been paid to sell surplus energy to the grid, with an increase in export rates of 50% throughout April. Over the last two months in Orkney, innovative technologies have enabled a further 7.5MWh of wind power to be generated when it would have been wasted.
Greg Jackson, founder, CEO, Octopus Energy commented: “The bank holiday weekends have been a wake up call. With a flexible, digital grid, cheap renewable power would have saved households money. Without it, they will be forced to pay billions in infrastructure upgrades and compensation payments. We need to fix this, fast.”
Electric vehicles are able to support the grid through intelligently charging during periods of low demand and carbon intensity, and could be helping to create a more resilient, lower cost system. In addition to EVs, there already exists a wide range of flexible technologies that could be supporting the grid while also delivering customer cost and carbon savings, such as smart electric heaters and home solar batteries.
“The technology works, the benefits are clear, and it’s now time to take some real action in rolling out a smarter grid,” said Marzia Zafar, head of customer policy and strategy, at OVO Group’s Kaluza. “These increased balancing costs demonstrate how important it is to lay the foundations for a flexible grid that places customers at the heart of the energy transition and leads to a more affordable system.”
Pilot and test projects have already demonstrated the value of smart, low carbon technologies across homes. Despite successful real-world results and commitments from Ofgem and the Government to create a more intelligent system, the market frameworks that would enable these smart technologies to support the energy system are not yet in place. While reforms are underway, it’s not certain they will go far and fast enough in delivering the signals that tell users when they should be charging for cheaper, greener energy.
The lockdown period has demonstrated the need for these technologies and why they will be so important as we move towards a more decarbonised system.
Colin Calder, chief executive, PassivSystems added: “The size of savings in the future energy system should not be overlooked. Smart devices will allow customers to receive tangible benefits for using their energy demand effectively, but by co-ordinating energy across households there can be even greater savings to the grid without affecting the experience of the customer.”