This study builds upon the recently published Unplugged is inflexible report to explore one avenue by which EV drivers could be incentivised to:
- plug their EVs in for extended durations, and
- permit their vehicles to be charged flexibly.
While there are many avenues by which this could be done, we here explore the potential for EV drivers to be offered very simple, flat retail offers based solely on how often they plug in their EVs and how much energy their EV consumes. This approach entirely removes considerations of when in the day vehicles are plugged in, which lightens the mental burden on drivers and may contribute to greater acceptance of managed charging.
This concept is motivated by the belief that creating price-certainty, and ideally cost-certainty, is a core way in which electricity retailers create value for their customers. This EV charging arrangement engages customers (EV drivers) is a quid pro quo where retailers contribute their expertise and diversity of customers to manage pricing risk, and EV drivers contribute the flexibility of their charging demand.
Our modelling shows that doubling the amount of time EVs are plugged in for reduces the cost of charging by half. To be clear, this requires nothing of EV drivers other than having their EV connected to a charger for longer periods, which enables more flexibly charging behaviour.
To quantify the risk for retailers we conduct a statistical analysis in terms of the cost of EV charging per day or per kWh. This suggests that offering a fixed price per day may go beyond retailers’ risk appetite, making a fixed price per kWh the more attractive option. This is likely also fairer for customers as it charges for the precise amount of energy used.
The addition of vehicle-to-grid increases the benefits of longer plug-in times by facilitating market arbitrage. Vehicles that are driven less than 40km per day and are plugged in to chargers for more than 8 hours a day (with vehicle-to-grid) can, on average, be charged at zero or negative cost.
While outside of the scope of this study, we note that this same tariff concept (and simulation model) could be applied matching flexible EV charging with the generation of a collection of wind or solar farms. This would provide another way for a retailer to manage/fix their price exposure while simultaneously creating value for customers by charging vehicles with zero emissions power.
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