Electric vehicles (EVs) are set to change everything about how energy is consumed and supplied. As a report from the World Economic Forum, Electric Vehicles for Smarter Cities: The Future of Energy and Mobility makes clear, we’re at the start of a mobility revolution. By 2040, more than half of new cars sold in the world will be EVs, with 70% of market share in Europe, and over 50% in China.
You may or may not already drive an EV. But sooner or later, you will. Certainly your kids will. Our grandchildren will look back at the gas-guzzler the way we associate horse-drawn carriages with something we see in movies.
We’re at a crossroads. While the momentum of electric vehicles may be unstoppable, the road forks. One way — with plenty of EVs and minimal co-ordination and planning — limits the possible benefits and creates challenges for the grid. The other way, taking a more intelligent approach to EV management, could meet population and economic growth without congesting and polluting our cities. Ride-sharing, car-sharing and self-driving cars all need to be part of the plan for modern cities, and together with the electrification of transport offer arguably the best opportunity to transform our future.
As with any disruption, this shift from “molecules to electrons” to fuel our transportation needs will produce winners and losers. Major industries will be affected, including oil and gas, but far sooner, the automotive and power sectors. These threats can also be opportunities for the oil majors and automotive companies to adopt new business models in electric transportation, electric supply and energy flexibility management services.
One word from the World Economic Forum’s report is key to understanding where the EV revolution can take us: convergence. Namely, the convergence of power and mobility.
In the future, we’ll refuel not at filling stations but at charging stations, and more often, in the convenience of our homes and workplaces without the need to drive to a fuelling station.
Electrifying the transportation system offers numerous benefits, including greater diversity in the fuel portfolio, reduced dependence on fossil-based sources, lowered total cost of ownership and increased price stability. And in addition it will foster national security, energy independence and a healthier environment.
The potential benefits to the electricity sector are tremendous. By 2035, one in nine cars sold worldwide will be electric. China, India and European countries are all planning to phase out fossil-fuelled vehicles. With new mobility models and technologies emerging, EV growth will be exponential. EVs will need electricity to recharge, and utilities will be eager to supply that power.
For an industry with stagnating revenues and legitimate concerns about disruption, the added income from selling electrons to charge these vehicles’ batteries is exciting. Bloomberg New Energy Finance (BNEF) calculates the revenue stream from replacing all 236-million gas-powered cars in the United States with EVs at about $115-billion.
Turning electric vehicles into grid assets
We’re only scratching the surface of the promise of electrifying transportation.
Integrating solar and wind is challenging. Due to their intermittent nature, these resources require fast-responding backup generators, which are currently fuelled by natural gas — a fossil fuel. This is not only expensive, but defeats the original purpose of achieving sustainability. Through a Vehicle-to-Grid (V2G) approach, EVs represent a significant opportunity to bring more renewable energy onto the grid by managing and levelling those periods of intermittency.
This is an extract of a feature which was originally published on www.weforum.org
Amit Narayan is founder and chief executive of AutoGrid Systems