The EU has an opportunity to take forward-looking action and shape exactly what kind of market we want when it comes to flexible electricity consumption offers, argues Angeliki Malizou.
Angeliki Malizou is an energy project officer at BEUC, the European Consumer Organisation.
The age of the electric vehicle is upon us. In the coming years, we can expect them to become common on our roads as they become more affordable, and as charging points and the choice of models increase. A report BEUC issued last year estimates that electric cars will become as cheap as conventional cars as soon as 2024.
Another big change, which has been underway for a while, is the rolling out of renewable energy facilities. Technology like solar panels or wind turbines allows us to obtain our electricity more and more from clean and endless sources like the sun or wind.
Knocking these two developments together naturally raises questions about our grid’s capacity to handle these new (in the case of electric vehicles) and variable (in the case of renewable energy) loads. Some changes to the way we do things are therefore needed. The good news is that part of the answer is already available, and it comes in the form of more flexible electricity consumption.
Charge later, pay less
Making demand for electricity more flexible according to the time of day would reduce pressure on the grid at peak times. It would also allow electricity consumption to match more closely the time of day when the sun is shining most, or when the wind is blowing hardest.
Practically, it would mean the consumer who owns an electric car and needs to recharge its battery while at home or in the office would give an app permission to charge it when electricity is more plentiful, and therefore cheaper.
There are examples of how this works already. In the Netherlands, drivers can charge their car from over 1,000 charging points with renewable energy when the prices are lowest. The savings obtained are calculated on the basis of electricity market prices at that specific time, how much demand and supply of renewable energy there is on the grid and the car owner’s personal settings.
In the UK, a bundled offer from one energy supplier and car manufacturer installs a special charger in the consumer’s home, with car owners able to set a minimum amount of charge they need for driving the next day. The supplier then automatically trades electricity from the car’s battery, topping it up during off-peak periods when power costs are lower, and selling it at peak times for about four times more.
Planning for the mass market of the future
While these developments are still niche, they are set to move forward as the share of renewables grows and more electric car models hit the market. This gives the EU the advantage of choosing the kind of ‘disruption’ it wishes to see in the energy market. That would allow companies to grow and innovate within a determined space, while respecting consumer interests.
There are some golden rules EU legislators should enshrine in the law now to avoid pitfalls tomorrow. The Clean Energy Package currently being discussed at EU level gives them a perfect opportunity to do so. The key elements to take into account are the following:
Consuming electricity in a flexible way will throw up lots of data about the consumer and his or her habits. It’s important that, as owners of the data, consumers have clarity and can then decide with whom they share their data, when, for what purpose and for how long.
Choosing the most advantageous flexible charging offer will require some effort from the consumer. They will need to pick up an electricity offer for their car, just as they do for their home. To make sense of how much they can save by charging when prices are low, they will need to factor in their transport habits and needs. So it’s absolutely essential that this information is presented in a simple and comparable way.
Finally, all the consumer protections in place today, like what happens when you change energy suppliers, should apply to new types of electricity companies too. We should not deliberately create energy markets where there are varying degrees of protection.
Energy regulators need to closely watch these new offers and be able and ready to introduce new protections so that consumers are protected against lower comfort or bill shocks.
Some argue that setting consumer protection rules before the market takes off will inhibit innovation. But I would argue that’s just having too little faith in innovation. A well-designed piece of regulation can provide the setting for the right kind of innovation to take place.