The Australian Energy Market Commission says Australia needs a forward-thinking plan to get the energy system ‘market ready’ for an electric vehicle future.

In a new issues paper released today as part of its 2020 retail energy competition review, the Commission says planning ahead for the boost in energy use from electric vehicles will ensure this new technology has a positive impact on the energy market.

“Electric vehicles will boost demand for electricity and could have a big impact on the energy market said Commission Acting Chief Executive Suzanne Falvi.

“Sales of electric vehicles increased by more than 200% between 2018 and 2019 and we need to lock in lower cost ways to support consumers who want them. If we get ahead of the curve, we can make sure this technology makes a positive contribution to our future power system and doesn’t become another cost driver.

“We’re starting a conversation today with this issues paper to generate ideas and identify what barriers to innovation there might be that could stop new electric vehicle products and services reaching consumers.”

The Commission’s issues paper gives public charging stations as one example of how electric vehicles can have a large impact on the grid. One charging station built in Adelaide in 2017 with eight chargers was equivalent to the connection of 100 new homes.

The paper also says that while electric vehicles have an obvious value as a mode of clean transport, they could also benefit the market by promoting more efficient use of the infrastructure we already have.

“Electric vehicles have potential to put energy power back in the hands of consumers and help keep the system reliable and secure,” Ms Falvi said.

“With the right systems in place, households can charge their vehicles when energy is cheap and have the option to sell power back into the grid when it’s more expensive.

Along with solar PV and smart appliances, electric vehicles can be part of a consumer’s future toolkit to reduce their energy output when prices are high.”

The AEMC issues paper says digitalisation will see smart and flexible charging systems benefiting consumers without any conscious effort. It also says that if given the right market signals, electric vehicle charging load could provide a significant demand response resource for the system.

In California for example, Enel X is aggregating electric vehicle charging loads, providing a 30MW/70MWh resource in energy markets. This ‘virtual battery’ of more than 6000 chargers can ramp up and down to meet energy market needs, with customers involved receiving incentives.

Technology developments might also mean greater potential for households to use electric vehicle batteries ‘behind the meter’ to soak up excess rooftop solar generation and then discharge electricity to their own home or to the grid.

But so far, limited uptake of electric vehicles means there aren’t many retail products targeting this market.

“Electric vehicles are an opportunity for retailers or new energy providers to innovate with new residential products,” Ms Falvi said. “While existing consumer protections must apply to new products and services, we need to make sure that existing rules and regulations don’t stifle innovation.”

The Commission wants to know what products and services are being developed, both for residential and public charging — for example, in workplaces, shopping centres and car parks.

It also wants to know whether retail market competition is resulting in innovation in this space. In asking stakeholders for feedback, the Commission is considering whether any existing retail regulation is creating barriers to electric vehicle use.

Submissions to the issues paper close 19 March 2020.

Electric vehicles: fast facts
– More than 5 million sold worldwide to date
– More than 6700 sold in Australia in 2019 
– 22 models currently available and nine more expected in 2020
– 1930 public vehicle charging stations in Australia as of July 2019; a 140% increase in the year to July 2019
– 70% of vehicle owners are likely to have access to dedicated charging stations at home or work