BLOG 3: 2030 Ban of New Petrol and Diesel Cars

Why is this significant for the Energy Sector?

… … … 15 minute read … … …

In a month where England was held in national lockdown, in which a dramatic US election took place and multiple Covid vaccines passed their final stages of testing, it feels like another big news story was dwarfed into relative insignificance. A few weeks ago, on Tuesday the 18th of November, the UK government imposed a ban on the sale of all new petrol and diesel cars by 2030 – no small announcement!

In accordance with the UK’s commitment to net-zero emissions by 2050, set by Theresa May in 2018, a ban on the sale of combustion engine vehicles was originally set for 2040. However, with advancements in electric vehicle (EV) technology constantly exceeding expectations, this ban was brought forward to 2035 in February this year. Persistent external pressure from groups such as Greenpeace, expressing that a 2035 ban would be insufficient for the UK to meet its net-zero by 2050 pledge, helped to force the decision to further advance this ban to 2030. This was news which I had been keenly awaiting because I viewed the decision as an obvious one, with major positive implications for air pollution and climate change mitigation whilst costing very little to support and implement.

Inevitably, this news has kicked up a lot of fuss from several car manufacturers and journalists. The most prevalent argument I’ve come across is that EVs are too expensive, and so the ban is unfair on lower-income people wishing to buy a car. I want to take a second explaining why this argument holds little value. First of all – this is a ban on NEW internal combustion engine vehicles (ICEVs), not affecting the cheaper second hand market, so affordable cars will still be available. And what about the (privileged) people who would prefer to purchase from the first hand market? Will EVs still be more expensive than conventional petrol and diesel cars in 2030? The answer is – no they won’t! Price parity between EVs and ICEVs is expected to occur in 2023. Beyond this date, EVs will continue to become cheaper and cheaper whilst ICEVs, whose technological advancements plateaued decades ago, will show no significant cost reductions. This is before even considering the far lower running costs of EVs. So if you hear arguments explaining how electric cars are nothing but “good fun for the wealthy virtue signallers”, which is how one reactionary Telegraph article phrased it, on the contrary, they will soon become far more affordable than their petrol and diesel predecessors ever were.

This new 2030 ban will no doubt push forward the number of expected EVs on UK roads in the coming years. One genuine concern is that there is currently not enough investment in charging infrastructure to support this increase in numbers. So far £4 billion has been allocated to facilitate this transition (as part of the government’s total £12 billion investment for the ‘Green Industrial Revolution’ ten point plan). But is this a real fundamental hindrance to the adoption of EVs or does the government just need to spend a bit more than they are currently planning to? Well, £4 billion may sound like a lot already but it is 25 times less than the £100 billion cost of high-speed rail – HS2, for some context. Furthermore, one study estimates that air-pollution may cost the NHS £18.6 billion by 2035 – an estimate that is substantially lower with the rapid reduction of ICE vehicles. So it becomes easy to see that the cost of charging infrastructure is really not all that significant when compared with the benefits gained from having fewer engines on the road.

Finally, moving on to the argument about the National Grid not being able to cope with the increased electricity demand. It is amazing how frequently this argument is proliferated by journalists, internet commentators and most likely by one of the guys down in your local pub. But why don’t we instead find out what the National Grid say themselves? Turns out they say that, not only can they cope, but they could benefit from the transition to a fleet of EVs. (Here’s a video of them saying this). And this is what prompted me to write a quick blog on the topic.

In my last blog I went into detail about how energy storage is essential for supporting the transition to renewable energy. I talked about batteries as one key example of an energy storage technology that will likely play a role in supporting energy flexibility and I specifically detailed how a large fleet of EVs will collectively hold a high amount of energy storage capacity. So in light of the news of the imminent ban on ICEVs – I thought I could go into a bit more detail about how this battery storage potential could be utilised.

Image Source: IEA

So the way in which EV batteries can support the grid is through a process known as ‘vehicle to grid’ charging, or ‘V2G’ for short. In this process, the car owner is selling some of their leftover battery charge from their EV to the grid. Obviously this is only in the car owner’s interest if they’re selling this electricity for more than what they paid for it in the first place. In the UK the electricity prices do vary a lot in accordance with levels of supply and demand, so it is possible to make money by buying electricity when it’s cheap and selling it back to the grid when demand is high and costs are expensive. Throughout 2020 we have even experienced negative electricity prices multiple times, where the National Grid has paid consumers to use electricity (because this is cheaper than turning generating stations off and on). In other countries such as France, who generate their electricity from more stable energy sources like nuclear, the electricity prices fluctuate less, so it’s harder to profit from this process of buying and selling energy. Mainland Europe in general also has superior interconnectors (transporting electricity across borders) meaning it’s easier for neighbouring countries to buy and sell electricity to each other, stabilising the price for consumers. With the UK being an island with less substantial interconnections, it makes more sense to vary the electricity prices for the consumers. And this is one reason why V2G has so much potential – allowing EV owners to exploit this price volatility.

In addition to V2G there is also V2H, standing for vehicle to home. As well as selling the electricity to the grid the EV battery could also be used to power the home directly, reducing energy bills whilst still also reducing strain on the grid. V2X is another abbreviation used standing for vehicle to ‘everything’, i.e. the charger can be used to power the car as well as going the other way and using the car to power either the house, or sell back to the grid. The ultimate goal would be for ‘smart charging’ to automatically optimise when it’s best to charge the car, supply the house with electricity or sell electricity to the grid, maximising its value for the EV owner.

Just to recap why V2G is also in the National Grid’s interest. Estimates made by the National Grid in July this year predict that by 2050, (in their words): “45% of homes will actively help to balance the grid, offering up to 38GW of flexible electricity to help manage peaks and fill troughs in demand.” To put that 38GW value into context, the UK average demand over the past year has been about 30GW. So in theory, Britain’s EV fleet would have the potential to power the entire country for a certain (admittedly short) period. And of course the bringing forward of the ICEV ban to 2030, since this report was written, will only speed up the transition and advance these estimates to before 2050.

This graph below is the biggest single thing which tells me that V2G will definitely be a thing. Comparing the large differences between the predicted demand, with and without smart charging and V2G, shows how critical a feature this technology is for the National Grid managing an increase in EV ownership and electricity demand. Bear in mind this graph was made in 2019 (whilst a 2040 ban was still in place) so we can expect these curves to be a fair bit sharper in light of the advancement of the ban. The lower, solid pink curve shows that if we are sensible with managing smart charging and V2G technologies, electrifying the entire privately owned domestic vehicle fleet will add no more than a few GWs of energy demand – which is easily manageable.

Not only does the collective EV fleet present a massive amount of energy storage capacity but the nature of batteries also means that this power can be discharged to the grid on millisecond timescales. This high sensitivity is beneficial as it allows the sharp and regular fluctuations in energy demand to be met by this battery energy reserve. With the rise in renewable energy sources, which are inherently intermittent, these fluctuations in demand are becoming increasingly sensitive. For example, a passing cloud may cast a large solar farm suddenly into shade for five minutes requiring a fast response time of an alternative supply, to ensure that overall the total supply is still meeting the demand. Multiple domestic sized batteries, acting in unison, controlled via sophisticated software, are capable of providing these levels of sensitivity and helping to maintain a constant balance.

So the potential benefits offered by millions of large batteries existing in millions of EVs across the country can’t really be overstated. At this point you may be wondering, does V2G charging already exist, and if so, to what extent? To answer in short, yes it is already a thing, but the vast majority of EV owners do not yet possess the means to utilise this process, with most EV chargers capable of only one-way charging. To quickly cover the science of why this is the case; electricity from the grid exists as an ‘alternating current’ (AC), but charge in batteries exists as ‘direct current’ (DC), so normal, one-way chargers require the ability to convert from AC to DC, whilst two-way, ‘bidirectional’ charging requires a more sophisticated converter, capable of transforming the DC current back into AC. And this is, without going into the real technicalities, more expensive. However, bidirectional chargers are becoming cheaper and for certain EV owners, the benefits of using their batteries to profit from the buying and selling of electricity justifies the investment.

At present, V2G charging is being pioneered by large companies and public sector bodies which own large fleets of EVs (for example taxi/bus/delivery companies). The benefits of moving from combustion engine to electric for such organisations are already greater than for individual consumers, who only use their vehicles on average about 5% of the time. For companies whose vehicles are being used more like 30 to 50% of the time, the savings made through lower fuelling costs are much more significant, making the transition from an ICEV fleet to an EV fleet an already intelligent business decision. Now with V2G these profits can be increased further, utilising the potential of these batteries not only 30 to 50% of the time but 100% of the time, charging and discharging, to and from the grid when they are not in use on the roads.

Take for example a bus company with each bus having a large 500kWh battery and a 200 mile range. Each day one bus may travel 150 miles leaving 50 miles worth of charge left over. If the bus finishes its route before a period of high energy demand, it can sell this remaining charge back to the grid at a high price per kWh, before it begins to recharge later at night when prices are low. By the time you have 100 busses all doing the same thing, such a company can be supplying many megawatt hours’ worth of energy to the grid each day during times when it’s most needed. (One megawatt hour is enough energy to power approximately 2000 homes for one hour).

By the time you integrate delivery companies such as UPS and Amazon into the mix, along with large taxi companies and wider public transport infrastructure, bidirectional charging is quickly becoming a key aspect of energy flexibility and grid balancing. But what is really exciting is envisaging when V2G will become accessible to all UK EV owners, who are predicted to collectively own 30 million EVs by 2040. A single fully charged EV has enough energy to power a house for up to ten days, so collectively this number of EVs could act as a truly massive energy reserve.

One last potential technological limitation facing V2G charging worth mentioning is battery degradation. A battery’s total life-time is limited by its number of charge cycles. Every time a battery is charged and discharged it experiences a slight level of degradation, limiting its total storage capacity. Modern EVs have battery charge cycles numbering roughly around 2000 cycles, equating to about 500 thousand km or 312 thousand miles of driving, so have lifetimes of the same order as combustion engines. (Over this period they may gradually fall to about 80% total original capacity, it’s not as if they suddenly become entirely redundant.) So the question is – does V2G charging increase the amount of charging back and forth and therefore reduce overall battery lifespan? Well battery degradation is a complex topic which I’ll avoid the details of, but one study I came across talked about how if V2G is coupled with smart charging, the battery can be charged in such a way that minimises degradation and can potentially even increase battery lifespan overall.

Furthermore, the number of charge cycles are increasing all of the time; companies such as Tesla are now talking about a ‘one million battery’ and even, in the not too distant future, a two million mile battery! At this point the battery lifetime will not be the limiting factor of the overall vehicle lifespan and this brings me onto one last point that should be made – that is the ‘second life’ of batteries. After their capacity has experienced a substantial reduction in capacity they may no longer be appropriate for the EV but this does not mean they are now dysfunctional as batteries. These batteries can then be collected and combined to create large energy stores, used exclusively for supporting the grid and providing yet more energy flexibility. Ideas such as filling large shipping containers with second hand batteries and placing these units near large energy intensive buildings such as a factory and then using this energy store to avoid peak energy periods and help to balance energy demand, making life a lot easier for the National Grid. At present, companies with ideas of exploiting second hand batteries, are to some degree, sitting around twiddling their thumbs, waiting for the second hand battery market to emerge. But with EV sales skyrocketing it is only a matter of time before the second hand battery market follows suit. (Here’s a good podcast discussing this second hand market in detail for those who are interested).

To conclude by asking – when can we expect bidirectional charging to become common place in the private EV market? A company called ‘Electric Nation’, specialising in V2G charging regularly quote 2025 as the year by which bidirectional chargers will become more mainstream, with a few remaining technological and legislative hurdles still to pass. But ultimately the graph from the National Grid I showed earlier illustrates to me that V2G is an essential component of the transition to electric which we cannot do without. If costs are not attractive enough for consumers, it seems likely that government subsidies will come in to support their adoption. However, like with all technologies surrounding EVs, the cost of bidirectional chargers are quickly reducing and I am hopeful that in the near future, the additional cost of having a charger capable of charging both ways will be minimal enough to justify the financial rewards of V2G charging.

Reading the news that followed the announcement of the 2030 ban of new ICE vehicles, I felt like this very important topic of EVs’ role in supporting the grid, has been largely left in the dark. So I hope this blog has helped shine some light on the neglected details!

With the cost of both renewable energy and EV technology reducing all the time it seems to me brilliant that EVs can support the grid in such a way and certainly provides me with hope that a rapid decarbonisation of all sectors is achievable.

The UK’s first ‘all-electric’ service station opened this week, constructed by a company called ‘Gridserve‘. The facility is capable of ‘rapid charging’ 36 EVs simultaneously and is powered exclusively by sustainable energy.
Image source

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