Charging for the Future

With the growing number of electric vehicles hitting the road, and more charging stations popping up across the country, there is no denying we are powering towards a hybrid future.

Tesla Motors recently announced construction has commenced on three new supercharger stations linking major Australian cities.

Two of the stations connect Brisbane and Sydney, while the other connects Melbourne and Adelaide.

The six-bay Supercharger stations will be located in Motto Farm in Heatherbrae, NSW; Macadamia Castle in Knockrow, south of Brisbane; and Wendouree shopping centre, near Ballarat.

After just 30 minutes of charging, the Superchargers can add up to 270 kilometres of charging, allowing owners to travel for three hours at a time.

At the moment, the charging stations are free. However, vehicles delivered after April 1, 2017 will be charged to use the network, but will have 400kWh of credit (about 1600km of driving) per year.

With major car manufacturers doing their best to keep up with the trend, there are more electric vehicles on the market, and on the road, than ever before.

Energy Source and Distribution chats to Advisian’s Phil O’Neil about the future of electric cars in Australia.

Firstly, can you tell us a bit about your career and background in the industry?

I have a Bachelor of Engineering (mechanical) degree and more than 20 years’ experience in design, manufacturing and consulting, working across a wide range of industries including hydrocarbons, electricity generation and networks, minerals, metals and chemicals, food manufacturing, water and waste water treatment and timber processing.

For much of my career I have focused on reducing waste and developing efficient solutions. My recent work integrating renewables into sites and the electricity network have stimulated a passion to help clients achieve a rapid but ordered to more sustainable energy sources. These engagements have involved technology assessments as well as consideration of the impacts on the electricity network from New Energy technologies.

Why will Australians take up electric vehicles?

While Australia is a country of vast distances – which seems to imply it is unsuited to widespread uptake of electric vehicles (EVs) – the reality is that Australia is the most urbanised large country in the world. The average Australian car travels just 38 kilometres each day. This makes Australia an ideal environment for electric vehicles.

Advisian foresees that the benefits that electric vehicles offer to consumers will be the main reason for their uptake and we can expect more than four million electric vehicles on Australian roads by 2035.

Early adopters have already shown great enthusiasm for electric vehicles, as demonstrated by the more than 300,000 reservations made for the Tesla Model 3, one of the first EVs sold with a price and driving range comparable to petrol cars.

Benefits, such as cost savings, will be another driver of demand for the uptake of electric vehicles. Using off-peak residential electricity to charge EVs costs less than filling similar vehicles at the petrol pump, offering a saving of more than $30 for 500km of driving. They also need less maintenance than petrol or diesel cars, making them cheaper to own in the long term.

EVs also have large batteries that have the potential to become an energy storage medium and power source for households when the sun isn’t shining on home solar systems.

Will recharging stay affordable?

Tesla itself is already playing a role in this, offering owners of most vehicles in its range free recharging using its Supercharger network. Electricity retailer AGL has announced EV charging for $1 per day. Just as new manufacturers like Tesla are stepping into the automotive market, new players in the production and distribution of transport energy will push down recharging prices for EVs.

What sort of infrastructure will we need to cater for them?

Poor recharging infrastructure in Australia has led to doubts about whether EVs are suitable for this country, but Australians were early adopters of petrol vehicles before the installation of widespread refuelling infrastructure. Drivers simply carried extra fuel on long trips. Similarly, early EV adopters will take home-charger cords with them to recharge en route.

In addition, we will likely see EV charging stations appear at workplaces and shopping centres as employers and retailers take the opportunity to provide a perk for employees or attract shoppers.

Will the average home be able to support one or two electric vehicles?

Current average domestic customer peak demand in Australia is around 5kW. A significant number of EV-owning households drawing 10kW or more for nine hours every night will represent a very considerable increase.

This will have an impact on power infrastructure, requiring potentially significant electricity storage implementation in parallel with widespread EV uptake, either on the network or behind the meter within the consumer’s premises. Smart charging systems that respond to peak demand and pricing signals could also address this problem.

Home charging is one factor when it comes to the number of EVs a home will be able to support. Workplace or car park charging using renewable energy could distribute demand more evenly throughout the day, home battery storage could shift PV output to match EV-charging demand.

Storing solar-generated power to “time-shift” it to the evening, when EVs are parked at home, could contribute to the financial return on a home energy storage investment, especially where feed-in tariffs are low.

The highest-value uses for electricity will always be those for which the alternative is most expensive. Displacing transport-fuel consumption by providing energy to an EV is one such use, with current fuels likely to be two to three times more expensive than off-peak electricity per kilometre travelled.

Workplace and destination charging from local solar PV or other renewables will also confront the time-shifting issue to some extent, with variability in solar output on a daily and annual basis reducing the certainty of obtaining sufficient charge while a vehicle is parked.

What impact does electric vehicle battery development have on storage batteries?

Almost all trips by car currently involve a return-to-base each evening. This provides a generous period when EVs can be recharged at home using the traditional off-peak electricity supplied from the grid, or with stored electricity from a solar PV and battery combination.

The key technical issue is likely to be in keeping recharging times acceptably short. As EV battery capacity increases, chargers and battery technology will have to develop further to achieve fast charge times of 15 to 30 minutes, which is a reasonable duration for a break during a long driving trip.

The home-charging model will have an important effect on the electricity grid once penetration levels become significant. EVs with extended driving ranges are likely to have higher-capacity batteries that will draw more power or need longer charge times.

For example, to fully charge a Tesla Model S 90D with a purpose-wired home charger could require up to 10kW of electrical capacity on a 50A circuit, taking at least nine hours. But as previously noted, vehicles are used for less than 40 kilometres per day on average so charging times will be proportionately shorter.

What is the future for transport markets given the predicted uptake for EVs?

Many stakeholders in transport markets could be affected by a shift towards EVs. Current producers, importers and retailers of liquid transport fuels are the most prominent examples, but existing vehicle manufacturers and servicing companies will also be affected if they are not agile enough to respond quickly.

Light passenger vehicles are the most likely to be replaced by EVs in the foreseeable future. In Australia, this category of vehicle consumed 15.2 billion litres of petrol and 2.4 billion litres of diesel in the 12 months to October 2014, accounting for around 54 per cent of the total motor vehicle fuel market. At an average pump price of $1.10 per litre, the market for light passenger vehicle fuels is worth more than $19 billion per year.

If we ignore the effect of efficiency increases, the impact of EV take-up on liquid fuels producers, importers and retailers will come through a reduction in the number of liquid-fuel vehicles being operated. In Australia, our analysis shows that under the most conservative AEMO estimate, revenue from this market will only decline by four per cent by 2035, deepening to seven per cent by 2040.

However, under the most aggressive scenario, proposed by Tony Seba of Stanford University, we estimate that petrol revenue would fall 60 per cent by 2035 and 97 per cent by 2040. Even so, the impact in all scenarios is unlikely to be significant until the mid-2020s, which suggests that investment in assets related to liquid-fuel refining, importation, storage, distribution and retail is unlikely to become stranded before the end of the 2020s.

If EV uptake mainly involves replacement of petrol-consuming vehicles, this could have ramifications for the refining industry. A steeper reduction in the demand for lighter-fraction petrol, relative to the reduction in demand or heavier fractions such as diesel, could require significant investment in reconfiguring refineries to bias output towards heavier fractions. This effect could also be accelerated by a wider uptake of diesel and hybrid vehicles over the next five to 10 years.

It is also likely that new entrants, or changes to the historical hierarchy of brands in particular markets, will challenge now-dominant automotive manufacturers.

For consumers, increased choice not only of makes and models but also of fuel types, in conjunction with reduced operating costs, can only be a welcome development.

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