What's driving tomorrow's
electricity grid

EFS Position Paper 2015

What’s driving tomorrow’s electricity grid

Electric Vehicles as a game changer for the utility business?

Although yet to gain significant traction, the widespread adoption of electric vehicles (EVs) holds the potential for a more sustainable future for both the automotive and electric power industry. In this position paper we investigate how close collaboration between two historically distinct industries could reduce the total cost of ownership of an EV, improving the value proposition for original equipment manufacturers (OEMs), utilities, and most importantly, their (shared) end customer.

Increasing EV sales could provide OEMs* with a means of complying with ever-stricter CO2 fleet targets. However, despite EVs being sold by OEMs at lower margins than internal combustion engine (ICE) vehicles, range anxiety deters potential customers, as does the higher total cost of ownership (TCO) of an EV compared with conventional ICE vehicles.

Meanwhile, for electric utilities, traditional revenue streams from conventional generation plants are becoming increasingly unprofitable. There are many reasons for this, most notably the rising penetration of renewable generation, at both transmission-grid as well as local level (e.g. rooftop solar panels). EVs have the potential to open up new revenue streams for those utilities that are willing to adapt their business models and transition from their traditional role as commodity providers to being service providers also.

In this paper, we investigate such a case for the German market (as is reflected in our parameters and calculations). However our findings can be considered as generally applicable to most other European countries.

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