EV owners could save EUR 2,900 through smart charging, providing flexibility services

An electric vehicle owner in Europe could save EUR 450 to EUR 2,900 every year by utilizing smart charging – unidirectional and bidirectional charging, according to a new study by Eurelectric and EY.

Smart charging for electric vehicles (EVs) is a solution for the converging challenges on the supply and demand side of the power systems, Eurelectric said. On the supply side, the rapid shift towards renewables introduces new risks due to their variability. On the demand side, the growing load from the electrification of industrial processes, heat pumps, data centres and transport creates unpredictability and introduces new peaks at different times of the day.

Through smart charging, EV batteries can store excess electricity. With vehicle-to-grid (V2G) technologies, they can sell it back to the grid at times of peak demand, helping balance the power grid, reduce congestion and integrate variable renewables. However, the organization warned that consumers lack clear economic incentives to provide the service.

EV batteries could provide around 114 TWh of battery capacity by 2030

Unlocking this potential requires clear price signals, enhanced access to flexibility markets, and interoperable data across the e-mobility ecosystem, shows the study, produced as a collaboration between EY and Eurelectric – Union of the Electricity Industry.

EV owners can achieve savings by optimizing when and how they charge their EVs, through off-peak charging, unidirectional (V1G) or time-of-use (ToU) charging, and V2G charging. Off-peak charging is already available.

ToU requires data sharing and interoperability – implementation of article 20a of the European Union’s Renewable Energy Directive (RED III). V2G still requires a regulatory framework, surplus renewables capacity and grid improvements.

Flexibility needs are set to double in the next five years in Europe as more renewables enter the system and end-use sectors electrify. The study’s authors estimate EV batteries could provide around 114 TWh of battery capacity by 2030 – enough to power 30 million homes every year – equal to around 4% of Europe’s projected annual power demand.

“Electric cars are fun to drive. Our study shows they can help EV drivers make money while stabilising the power system, but customers need choice in the market and clear incentives to act,” Eurelectric’s Secretary General Kristian Ruby said.

The authors expressed the belief that V1G and V2G are not so much options but necessities. They turn EVs into integral components of the energy solution, rather than stranded assets sitting idle whenever they’re not being driven, 23 hours per day on average, the report underlined.

Colle: Easy-to-use smart-charging propositions with clear cost benefits are critical

Smart charging allows consumers, who sit at the heart of the energy transition, to participate directly in providing flexibility. They can play an active role in relieving grid congestion, which lowers, in turn, the cost of electricity and increases reliability and security for users. However, EV drivers who agree to participate must be able to trust the companies to which they provide flexibility and be rewarded for their contribution, the report reads.

“For consumers to play an active role in flexibility, the entire e-mobility ecosystem must help them consider EVs as something more than simply a means of getting from A to B. Easy-to-use smart-charging propositions with clear cost benefits are critical,” said Serge Colle, Global Power & Utilities Sector Leader at EY.

The total cost of ownership of EVs can be lowered significantly

The analysis reveals that by optimizing the time of charge and selling energy back to the grid, the total cost of ownership (TCO) of EVs can be lowered significantly.

It explored annual and lifetime costs for owning and charging an EV at home in France, Germany, the Netherlands, Spain, Sweden and the United Kingdom. The report also identified ways to reduce costs by shifting charging times with time-of-use (ToU) tariffs or V1G and selling energy back to the grid with V2G.

A straightforward TCO analysis compares the total running costs for two typical vehicle owners: one with an EV and one with an equivalent ICE vehicle.

EV owners could save up to EUR 2,900

When the total value of flexibility is accounted for in the TCO calculation, an annual 19% (compact) to 26% (large or SUV) total saving over the ICE vehicle equivalent could be realized in the UK (EUR 1,230 – EUR 2,700 a year). In the Netherlands, average annual savings could range from 9% (EUR 515) in the compact segment to 26% (EUR 2,700) in the large or SUV segment.

In Spain, annual savings would be 13% (EUR 780) to 25% (EUR 2,500). In Sweden and Germany, they range from 14% (EUR 800) to 29% (EUR 2,900). In France, average annual savings are 7% (EUR 450) in the compact segment, against 19% (EUR 1,850) in the large or SUV segment, the organization pointed out.

Consumers can achieve further cost savings by timing when and how they charge their EVs

Despite the increase in electricity demand that comes with EV ownership, the owner of a compact EV will make savings. They range from an average 2% (EUR 101) in Spain to 5% (EUR 347) in the UK, off the annual cost of the vehicle.

In the family car segment, the savings are larger. In the UK, the average is 6%, equivalent to EUR 485 per year. In Germany, the level is 11%, or EUR 850 per year. In the Netherlands, as much as 16% or EUR 1,375 per year can be saved.

V2G or V2H technologies provide the largest savings

With off-peak charging, by simply shifting charging from expensive peak hours (early evenings) to low-price periods (10:00 p.m. to 8:00 a.m.), an EV owner can save from EUR 21 to EUR 190 per year.

ToU charging amplifies savings because charging is automatically shifted to take advantage of expected market conditions and off-peak prices. Savings range from EUR 30 to EUR 110.

By using V2G or V2H (vehicle-to-home) and selling energy back to the grid, while also benefiting from a dynamic ToU tariff, the average owner of an EV could save between EUR 285 (in the Netherlands) to EUR 1,760, the calculation shows.