Factors to consider when charging your EV?

Factors to consider when charging your EV?

If you're an EV owner it's worth giving some thought to where the power comes from for your EV and what you can do to help maximise the benefits of your switch from a petrol or diesel vehicle.

In some electricity grids such as Australia, most of our electricity is still being generated from fossil fuels such as coal and gas.

With careful consideration of when you charge your EV you can help reduce the carbon emissions from the electricity generation, support the continued build of more renewable generation, and reduce the cost of running the electricity network. Best of all, you can do all of these things and also reduce the cost of charging your EV at the same time!

In this article we'll consider some of the high level factors involved in how your EV charging interacts with the electricity system.

Generation: fossil vs renewables

Electricity systems globally are operated in a constant state of balance: the amount of energy generated must match the amount of electricity consumed. This balancing occurs right down to the millisecond level.

The energy market operator (AEMO in Australia) constantly evaluates all of the different sources of energy generation available and the level of demand from end users. Taking into consideration the capacity of the transmission network, and the cost of the different sources, the market operator is constantly deciding how much power each generator (ie power station) should deliver.

As solar and wind farms don't incur costs for generating each unit of electricity, they generally bid into the wholesale markets at low prices and are chosen to dispatch most of the time. Coal and gas generators on the other hand have to pay for the coal and gas they use and typically set higher costs which reflect this.

Shifting demand for electricity to times when supply from renewable generation is high reduces the amount of fossil fuels used to make electricity. Creating demand during periods that renewable generation occurs (e.g. when the sun is out) helps ensure that solar farm owners get paid. The more solar farm owners get paid for the energy they generate, the more price support there is for continued building of more solar farms.

Generation: price

Wholesale energy in Australia is priced via a public market, when demand is high relative to available supply, prices rise to encourage more generators to enter the market. When demand is low relative to available supply, prices fall (even into the negative zone) to encourage generators to exit the market. There's a myriad of commercial agreements and contracts in place which make it more complex but very simplistically, that's how it works.

There are periods when lots of different users all want energy at the same time without much flexibility - for example, hot summer afternoons when business is still operating, and home air conditioners are coming online. At these times wholesale prices rise. The cost of this expensive energy eventually makes its way through to individuals and businesses via their energy bills.

Demand for energy from EVs normally has a lot of flexibility or choice as to when it happens. It can be moved to when demand is not peaking and when prices are lower. For a car doing an average amount of driving per year (say 15,000 kms), on an average day, on an average home wall charger (say 7kW), it only needs to charge for 1-2 hours per day. Overnight that average car might be home for 10-12 hours. Even allowing for some higher-than-average driving patterns, there's a fair bit of flexibility that allows for charging to be timed to coincide with periods of lower wholesale price.

Transmission & distribution

Unlike generation, there's no live or dynamic pricing for the cost of operating the electricity networks. Similar to generation though, the role of the networks is to allow the exact amount of energy that is demanded by homes and business to be supplied to them as is created by the generators. This means there must be sufficient capacity along the way - at all times.

The amount of network capacity needed is largely dictated by the peak demand periods each year. The more these peaks grow the more capacity we need to build into the energy network. The cost of operating the networks is paid by your energy bills, so the more capacity that is needed and is built, the higher your bills.

Increasingly, the part of your energy bill that covers the cost of the energy networks is shifting to a time-of-use (ToU) model: network charges during periods of higher demand (e.g. early evening) are higher than during periods of low demand (e.g. early hours of the morning).

As with generation, there's a fair amount of flexibility for when most EV charging occurs, so shifting charging times to avoid peak network loads will reduce your own bill as well as costs to all other energy users.

Your energy bill

At the residential level, energy is commonly priced in three different ways in Australia:

  • Flat rate: You pay largely the same price for every unit of energy you consume
  • Time of Use (ToU): Mostly made up of three different price periods each day: peak, shoulder and off-peak. Power in the later afternoon and evening being more expensive than earlier in the day.
  • Variable rate: In combination with Flat Rate or Time of Use network tariffs, variable rate tariffs change constantly based on live wholesale energy prices.

In the average Australian home, EV charging will be one of the largest consumers of power in the home.

If you're on a flat rate tariff, the times that you charge will not alter your energy bill in the short to medium term. However, In the longer term if all EV owners charge during periods of peak demand and peak prices then everyone's energy bills will rise because the overall cost of the grid will rise, and this cost is spread across all consumers.

With an EV and control over when you charge it, being able to move one of your major loads to off-peak periods might provide the opportunity to reduce your bill by switching to a time of use tariff. In addition, on a large scale, ensuring that EV charging occurs at the right times can help reduce everyone's bills.

You might also find our article on when is the best time to charge your EV of interest.