EFS and DNV GL call for close collaboration between automotive and electric power industries to capitalize on game-changing electric vehicle opportunity
EFS and DNV GL have launched the position paper: “What’s driving tomorrow’s electricity grid”. The paper investigates how close collaboration between the automotive and electric power industry could create exciting new opportunities as game-changing EVs evolve into a mass-market proposition over the next decade.
The automotive and energy industry are set to experience disruptive trends over the next decade that will necessitate a change in their business models. For electric utilities, traditional revenue streams from conventional generation plants are becoming increasingly unprofitable due in most part to rising penetration of renewable generation, at both transmission-grid as well as local level. For the automotive industry, electrification of their vehicle fleet (in the form of EVs and plug-in hybrids) helps them to comply with ever stricter CO2 fleet targets.
The position paper shows how cooperation between utilities and OEMs can be beneficial for both in order to manage the transition smoothly and use the core competences of both partners in the most effective and efficient way. Several aspects concerning alternative and second use for EV batteries are explored. Using EV batteries to provide flexibility to the power system (alternative use) is shown 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. The second use concept proposed in the paper, allows OEMs to offload the recycling obligation for used EV batteries and provides utilities with a viable business case for PV energy storage.
Hans de Heer, Principal Consultant Smart Energy, DNV GL comments: “The new business model we see on the horizon requires OEMs and utilities to determine how exactly they will earn their revenue, incur their costs and manage the associated risks. They should evaluate the depicted trends thoroughly with regards to their effect on the individual business models. OEMs and utilities must act proactively and investigate how cross-industrial partnerships could improve the individual position in a changing environment.”
Effective collaboration between industries today will be vital in order to reap maximum benefits in the future. It will be essential to be able to offer customers a comprehensive service, which can only be achieved through an alliance between OEMs and utilities. Instead of selling EVs and energy contracts separately to individuals, partnerships between OEMs and utilities could better serve customer demands by offering a service that neither of them could provide alone.
Peter Allan, Engagement Manager at EFS, comments: “The question for future successes is not whether there will be a market for storage services based on charging and discharging capabilities of EV’s, but rather who will be in a position to capitalize on the new opportunities that will arise with a large number of EVs in the power system.”