New distribution-level markets as an accelerant for EV uptake

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When viewed from the perspective of the electricity industry, EVs represent both a significant opportunity (e.g. to increase the value derived from the existing system) and risk (e.g. battery charging creating new and greater peak demands).

Successful integration of EVs onto Australian roads will require not only that new vehicles can access appropriate road and charging infrastructure, but also that they can draw and export power in an efficient and reliable way that minimises running costs and risks to the system, while maximising additional revenue streams available to customer. In this sense, EVs and their high-capacity batteries straddle both emerging mobility and distribution-level energy markets.

A consultation  by the Australian Transport and Infrastructure Council is exploring how heavy vehicle road infrastructure may become an economic service. This reform process is the logical starting point for a new approach to road usage charging and the allocation of investment funds in relation to mobility infrastructure. This year, Herbert Smith Freehills has drawn together a wide range of stakeholders to discuss the challenge associated with connected and autonomous vehicles, while more recently Infrastructure Victoria has published its advice on automated and zero emissions vehicles infrastructure, and Nissan has recently announced advances in its vehicle-to-grid technology.

In the energy space, the AEMO/ENA Open Energy Networks consultation is considering how integrated platforms may facilitate trading within distribution-level energy markets. The development of such platforms has the potential to significantly alter energy value chains by enabling consumers to use distributed energy resources to access additional revenue streams in a way that makes the energy system more efficient and cheaper for all stakeholders. At a recent MHC-sponsored CEDA event (summarised here), AEMO’s CEO Audrey Zibelman noted the potential impact of rapid EV uptake on grid planning and operations.

While EVs stand to play a central role in the emerging mobility and distribution-level energy markets, their uptake in Australia has lagged that of comparable countries. Policy makers are now considering direct incentives, including preferential lane access, reduced stamp duty, and registration exemption. However, more powerful incentives are arguably available within the rapid energy decentralisation process that is already underway. Deep integration of EVs into emerging distribution-level energy markets could provide both the best mechanism for managing any emergent risks to the electricity system, and a more compelling EV purchase proposition for prospective buyers, be they corporate fleet operators or private individuals. And by lowering the overall cost of both mobility and energy systems, EVs have the potential to simultaneously lower transport and power prices for all consumers.

It seems inevitable that the future will see integrated planning and operation of transport and energy – an exciting and complex opportunity.