PWC report: seven barriers to optimal use of smart charging and V2G

The number of electric vehicles has increased rapidly in the last ten years and will increase significantly in the coming years. This brings challenges – but also opportunities – to the (overloaded) electricity grid. Electric vehicles can assist to relieve the burden on the grid through smart charging, when charging takes place outside grid peak times as much as possible. In addition, electric vehicles can be used for electricity storage when using bidirectional charging technology (also known as vehicle-to-grid or V2G-charging). This means the batteries in electric vehicles are used as temporary electricity storage that is returned to the grid when there is demand, for example during evening peak hours. In this way, smart charging and V2G use can also – in addition to reducing the grid load and congestion issues – contribute to better use of locally generated sustainable electricity and lower charging costs for the user: charging when electricity prices are low due to a large supply of sustainable electricity and discharging when prices are high due to high electricity demand.

Previous research shows that Dutch EV drivers are optimistic about these possibilities, and PwC has now calculated that if all electric vehicles in the Netherlands could also charge back to the grid, around €1.5 billion in grid investments can be avoided between 2025 and 2030. At the same time, the EV driver can generate additional income of 7-13% of his total charging costs.

Seven barriers

To optimally utilize the opportunities of smart charging and V2G, remaining barriers will have to be removed. PWC has identified seven barriers. These seven barriers can be divided into two categories: (i) creating the right incentives for the user and (ii) implementing infrastructural adjustments. To remove these barriers, action from and cooperation between grid operators, governments and regulators will be required in the coming years. Required action includes:

1. Regulators (in NL: ACM) can investigate how differentiated network tariffs can provide the right incentive for smart charging and V2G reverse charging.
2. Regulators, legislators and relevant Ministeries (in the Netherlands: ACM, the Second Chamber and the Ministries of Infrastructure, Finance, and Energy/Climate) can jointly look at adjusting energy taxation so that smart charging and V2G charging is encouraged, and at schemes that encourage investments by the grid operators in the grid infrastructure.
3. EU working groups with representatives from regulatory bodies, such as ACER, are advised to implement clear standards for smart charging. They can collaborate with, and benefit from, the experience and expertise of Dutch charging infrastructure parties, such as ElaadNL, charging infrastructure companies and research institutions to implement a robust communication standard.
4. At the same time, it is important that the Road Authorities (in NL: RDW), ACER and EU working groups take steps to address interoperability issues. They can ensure that all charging points and electric vehicles will be required to be compliant with ISO standard 15118-20 by including clear guidelines in existing regulations and/or by setting up an appropriate governance structure. In this way, an industry standard can be created and the smart use of electric vehicles can be prevented from going unused, for example because the vehicles turn to ‘sleep mode’.
5. ElaadNL and Netbeheer Nederland (the joint grid operators) are already working with car manufacturers to promote the development of V2G-compatible vehicles and improve interoperability between systems. They will have to keep an increased focus on this topic.
6. In addition, ElaadNL will have to continue investing in research to optimize V2G charging. Stimulating innovation and informing the public and industry about the benefits of V2G charging can promote support for electric vehicles and grid-supporting technologies.
7. Finally, the grid operators and the ACM will have to ensure that investments are made in the necessary infrastructure for modern grid communications.