Battery Storage and Electric Vehicle Policy Announcements

Last week saw two major policy announcements with major impacts on the way we manage our electricity networks, generate and consume electricity, and use transport.

The Department of Business Energy and Industrial Strategy released its Smart Systems and Flexibility plan and announced £246m for battery storage innovation.  Meanwhile there was a high profile announcement banning the sale of petrol and diesel cars in the UK from 2040.

Battery Storage

BEIS Secretary Greg Clarke announced the Industrial Strategy Challenge Fund which will put £246 million into research, innovation and scale-up of battery technology. Aside from core research, the new initiatives will also make it possible for companies to aggregate the solar power from householders’ rooftops and sell it to local power grids when needed.

Ofgem’s Andrew Burgess stated: “The changes should also make it easier for companies to aggregate and trade services from people who have fitted solar panels or batteries at home – selling households’ electricity to power grids at times of need.  For individual consumers, I think the opportunities are for businesses coming in, for the Amazons and Netflixes of the world coming into a traditional sector and offering different ways for consumers to engage”

Electric Vehicle policy

Britain is to ban all new petrol and diesel cars and vans from 2040.  It should be noted that this is primarily an air quality driven piece of policy, with concern high regarding particulate and nitrogen oxide emissions from diesel vehicles, and their associated health risk.  It does however, have the energy systems implication of the electrification of transport, and that this electricity will need to be generated from renewable sources to comply with our overall climate change commitments.

Joju Solar’s Opinion

There’s quite a lot to take in here, so here’s some of our thoughts on the announcements.  Broadly, we’re very positive, and they align with much of what we have been working on for the last few years.

• The two policies seem to point a clear direction for our future energy system – towards a heavily electrified future, where both buildings and transport are powered electrically.
• The ‘all-electric’ future has been the approach adopted in energy circles for some years now, but it is worth noting that energy seems to go through fashionable cycles. In the early 2000s, the big idea was the solar/hydrogen economy, and we have seen waves of support for micro-wind turbines (remember them?), combined heat and power, and carbon capture and storage come and go.  Will the all-electric future take off?  It stands a good chance now, as the solid policy backing seems to be there, and all the key components (wind, solar, batteries, electric vehicles) already exist and are reducing their costs massively.
• The missing aspect in the all-electric future is what to do about heating of buildings. Will this too be electrified?  It would need a combination of heat pump technology and dramatically improved insulation to do so.  Or could there still be a role for ‘green gas’ – that is to say methane derived from biomass sources as opposed to fossil methane?
• One of the worries of electrifying transport is that we will need an increase in electricity generation capacity to meet this demand. However, it turns out we are only likely to need 20% more electricity to power all cars, and Chris Goodall provides some excellent analysis on the subject.  The key issue is to ensure that all cars aren’t charging at the same time (g. when people get home from work at 6-7pm.  However, the typical car is only used for 3% of the time, so the 97% of time it sits idle should provide plenty of scope for flexible charging.
• Technical issues from EV charging are more likely to arise locally where multiple vehicles want to charge at the same time on the same section of grid, or at one property. However, the technology already exists to schedule charging smartly between different vehicles, so they don’t all charge at once and over load the local network.  Indeed, this ‘dynamic load-balancing’ is one of the technical EV offerings that we already provide.
• The decision to ban petrol and diesel vehicles from 2040 is a slightly odd one. The announcement has been criticised in some quarters for not doing enough to tackle poor air quality in the short term, and we agree on this point.  What it does do, however, is provide a clear direction for future policy, and we can now be in no doubt that the future of transport is electric, and emission-less at point of use.
• Policy usually first looks at ways of promoting new technologies (grants, incentives, information) and only legislating old technology out of the market at a later date. So it seems slightly backwards introducing a ban on fossil powered vehicles when EV’s are only just beginning to take off. As with the air quality arguments above, we’d welcome more proactive policy support in the short-term to promote this transition.
• Of course by 2040, it’s entirely possible that the transition to electric vehicles will already have happened. With the average age of cars on the UK roads at 7.7 years, we should have rolled through the entire stock of vehicles 3 times by 2040 – that is to say the average person will buy 3 new cars between now and 2040. That’s plenty of opportunities to go electric, especially if you look at the rates at which other technologies like wind, PV and LED lighting have taken off.  Our Twitter follower Andrew Harmsworth satirised:

• The 2040 target is also miles behind the efforts of other countries. Norway and the Netherlands both intend phasing out fossil powered vehicles by 2025.

• The drive towards using storage to store surplus renewables and then provide it back to the grid in times of need is something we have been promoting for many years, and may finally get the support that it requires, in the form of novel electricity tariffs.
• Any tariffs to promote sale of surplus electricity to your neighbours will have to be generous enough to overcome the desire for self-storage. Currently, storing electricity to use yourself will save you 15p/kWh off your bills, so the price needed to release electricity stored in domestic batteries back to the grid for others to use will need to be greater than this.  Otherwise it will still be beneficial for the householder to hold on to this electricity and use it themselves, even in the middle of the night (which is not helpful from the grid operator’s perspective).
• Overall, we’ve had a feeling for a while that there were seismic technology shifts underway – including the growth of solar, electric vehicles, battery technology, and indeed driverless cars at unprecedented rates – and that government was behind the curve and going to be taken by surprise as the world changed rapidly around them. The recent announcements suggest that they might be both catching up and embracing the possibilities offered by a smart electric future.

 

Further Reading

• See how we are incorporating battery storage and electric vehicles into our home energy systems in Chris’s Complete Set and Robert’s Home of the Future.
• Battery storage systems are reducing in cost and becoming increasingly attractive for households and businesses
• The switch to electric vehicles will require a complete change in infrastructure.  See how our smart EV charging products can help you.