Future electricity networks: how smart EV charging can help hedge against long-term uncertainty

electric car refueling at a charging station

Stefan Borozan, a doctoral researcher in the Control and Power Group at Imperial College London, discusses the role of EV smart charging options (G2V, V2G, and V2B) in hedging against uncertainty and providing wider system benefits in long-term network expansion planning. This work, which is part of the IDLES programme, demonstrates how strategic investments in smart chargers can facilitate the shift to a net-zero electricity sector.

Electricity demand is expected to increase in the near future, in large part due to the electrification of the transport sector. Large and expensive investments in the UK’s electricity networks are needed to accommodate electric vehicle (EV) charging. However, uncertainties around long-term developments in power systems create challenges in decision making and increase the risk of premature commitment to flawed network expansion plans. Consequently, there is a real need for investment options that offer the opportunity for flexibility in the timing and scale of investment and a planning framework that can exploit it.

The ability of optimised, or ‘smart’, EV charging to reduce extreme demand peaks has been widely recognised. Smart charging means you can intelligently manage how your EV charges, taking advantage of cheaper electricity prices outside of peak hours, thus helping to reduce carbon emissions and pressure on the power grid. 

We have recently had work published that proposes the integration of smart chargers as an investment option in a multi-stage network expansion planning model which can consider the impact of uncertainties. This multi-stage model means that several investment decision points throughout the planning horizon are included, allowing strategic actions to be taken in response to partial resolution of uncertainty, making it highly desirable for long-term planning.

We show that strategic investments in smart chargers, aggregated under concepts like Grid-to-Vehicle (G2V), Vehicle-to-Grid (V2G), or Vehicle-to-Building (V2B), could be used to hedge against uncertainty and lead to several investment and system operation benefits.

Our paper presents a large-scale case study for the expansion of the GB power system under realistic assumptions on uncertainty over a 40-year horizon. The expected net economic savings of planning with smart charging concepts were quantified as Option Value (OV). In summary, it was found that G2V could achieve an OV of £1.2bn, while the OVs of V2G and V2B could amount to £10.8bn and £10.1bn, respectively. 

These savings can be understood by thinking about several benefits that are unlocked with smart charging:

Investment flexibility: having the option to invest in G2V, V2G, or V2B allows the planner to delay commitments to expensive and irreversible infrastructure projects until (partial) resolution of uncertainty, thus mitigating the risk of stranded investment costs. Figure 1 shows that certain network reinforcements can be avoided altogether when planning with smart charging options.

Figure 1: Transmission corridor investments (red lines) in the GB power system up to 2050 for 16 distinct uncertain scenarios and different investment portfolios. More details about the scenarios and investments can be found in the paper. 

System flexibility: optimal charging of EVs enhances the system integration of renewable generation, thus contributing to lower system operation costs and higher environmental benefits. In fact, a large proportion of the previously cited OVs is due to the expected reduction in electricity generation costs.

Enhanced asset utilisation: optimal charging contributes to grid congestion mitigation, i.e. preventing power lines from overloading when too many EVs are charging at once, which is fundamentally what enables G2V, V2G, and V2B to act as an alternative to conventional grid reinforcement. For example, one potential future scenario for the development of the GB power system envisages a sharp increase in electrical demand, followed by its reduction towards 2050. Without smart investments, the demand increase would need to be accommodated solely by network capacity upgrades, which would later remain largely underutilised. 

In summary, we show that G2V, V2G, and V2B are viable and highly valuable alternatives to conventional network reinforcements. They help the planner hedge against uncertainty, reduce the risk of stranded investments, and lead to wider system and environmental benefits. Considering the anticipated mass uptake of EVs, there could be great merit in including smart charging options as investment alternatives in state-of-the-art power network planning frameworks, ultimately contributing to the cost-effectiveness of the energy transition.

Figure 2: An illustration of the challenges of future EV uptake and long-term uncertainties as part of decarbonization efforts, highlighting the benefits of the proposed solution (green) compared to the conventional approach (grey).

To find out more, join Stefan for the Energy Visions Seminar hosted Applied Energy and Mälardalen University, 11 May @ 11am BST (Zoom code: 768917)

S. Borozan, S. Giannelos, G. Strbac, “Strategic network expansion planning with electric vehicle smart charging concepts as investment options,” Advances in Applied Energy, Vol. 5, February 2022, https://doi.org/10.1016/j.adapen.2021.100077.

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