EV-to-grid could supply three times peak electricity demand: BNEF

Electric vehicles could supply three times Germany’s peak power demand by 2040 if every one was fitted with vehicle-to-grid technology, providing reliable back-up to a renewables-dominated electricity network, according to a new report by BloombergNEF.

The report says near total electrification of transport by the middle of the century would see demand for electricity surge by 25 per cent. That would mean by 2050, the world’s EVs would be using almost as much electricity per year as all the OECD countries put together use today.

That will put major new stresses on the grid, and require more than $US1.5 trillion of investment in charging infrastructure by 2050.

But done right, there would be a massive upside: in the evenings, when solar power drops off and household demand rockets, the EVs sitting in our driveways, in car parks, or at charge points in the street could provide a “major tool for grid operators in managing peak energy demand”.

“By 2040 in Germany, if all electric vehicles in the fleet in our Economic Transition Scenario were vehicle-to-grid-capable and available to the grid, they could provide triple the amount of power than our projected peak energy demand,” the report says.

“If only 25 per cent of the fleet were V2G [vehicle to grid] capable and 50 per cent of those vehicles were available to provide services, the power available could still equal 40 per cent of total peak demand.”

The “Economic Transition Scenario” refers to a market-led take-up of EVs. Under BNEF’s much more ambitious policy-led proposal, which would see total decarbonisation of transport by 2050, the capacity of EVs to back up the grid would be even greater – and would include countries that are currently on a less positive trajectory than Germany.

In that more ambitious “net zero scenario”, by the middle of the century BNEF predicts EVs will be using 8,524 terawatt hours of electricity a year. That will add 25 per cent on top of the more 30,000 TWh of electricity BNEF predicts the world will be using per year by 2050.

By comparison, in 2018, the world’s total final electricity consumption was 22,315 TWh, and the OECD nations’ consumption was 9,728 TWh.

Even if the rollout of EVs is slower than is needed to prevent catastrophic climate change, EV’s will be using well over 5,000 TWh of electricity a year.

The report argues that, along with aggressive policies to decarbonise global transport, governments must prepare their electricity grids for the necessary shift. That means upgrading transmission and building out large charging networks.

“To reach the Net Zero Scenario, the required number of chargers increases to 504 million connectors by 2040 and 722 million connectors by 2050,” the report says. “This requires a cumulative $US939 billion in investment by 2040 and $US1.6 trillion by 2050.”

As demand for electricity goes up, demand for oil will drop. In the slower scenario, BNEF sees oil demand from transport peaking in 2027, and falling to about half its current level by 2050. In the net zero scenario, oil demand from the transport sector will disappear altogether by 2050.

It’s a much more ominous outlook for oil demand than the oil industry itself has predicted. British oil major BP predicts that, under a net zero scenario, oil will still make up more than 20 per cent of transport energy demand by 2050.

Exactly how that would be compatible with net zero isn’t clear – presumably BP has a hopeful picture of how much CO2 can be drawn out of the atmosphere.

As well as putting new demands on electricity networks, BNEF warns EV uptake consistent with net zero will make huge demands on the minerals required in lithium batteries, warning known reserves of lithium will be completely exhausted by 2050. But it says recycling can solve this problem.

“With universal battery recycling, however, not only does primary lithium demand remain below known reserves, but there is also the prospect of a fully circular battery industry, with supply of recycled lithium exceeding total annual demand by mid-century,” the report says.