Smart charging solutions could reduce UK Electric Vehicle costs and boost grid capacity, report finds

• Smart vehicle charging solutions could save UK Electric Vehicle (EV) owners thousands of pounds, according to a new study by EY and Eurelectric
• Owners of compact EVs could save more than £700 per year through smart charging solutions, while large EV owners could save up to £1,475 annually
• EVs in the UK could have up to 24 terawatt hours (TWh) of energy stored by 2030, ready to supply back to the grid, equivalent to 7.5% of the UK’s total electricity demand in 2023
• UK’s double taxation on energy storage and lack of vehicle-to-grid (V2G) infrastructure remain hurdles to potential bidirectional charging and EV transition progress

Smart vehicle charging solutions, such as Time of Use (ToU) tariffs and selling surplus energy back to the grid, could save EV owners in the UK more than £10,000 over seven years of ownership based on a large EV, according to a new study by EY and Eurelectric.

The study found that owners of compact EVs could save more than £700 annually by charging their vehicles at off-peak times through ToU tariffs agreed by electricity suppliers, and selling energy back to the grid through bidirectional vehicle-to-grid (V2G) and vehicle-to-home (V2H) charging. Meanwhile, owners of family EVs, including medium-sized cars such as saloons, could save more than £1,000 per year, while the owners of large EVs such as SUVs could save as much as £1,475 annually by utilising optimised flexible charging solutions. 

EY and Eurelectric’s findings underscore how emerging smart and flexible charging solutions have the potential to create a mutually beneficial relationship between consumers and electricity suppliers, with potentially significant cost savings for EV owners. They can also support an optimal balance of grid capacity across different times of the day to cope with growing demand as EV uptake increases.

Maria Bengtsson, UK Head of Mobility at EY, said: “This study provides a compelling case around how V2G and smart charging solutions could enable consumers and electricity transmission and distribution grids to collaborate, helping to reduce EV running costs and optimise grid capacity.

“One of the key hurdles facing the EV transition in the UK is a lack of adequate infrastructure to accommodate more rapid uptake, so ensuring grid capacity is less stretched through smart charging solutions is a step in the right direction. However, V2G solutions are still in their infancy, so it will take time for their impact to be seen on a significant scale.

“As highlighted in EY’s latest UK Mobility Consumer Index, the costs associated with purchasing an EV are stunting the UK’s EV uptake, which is unlikely to be helped by the introduction of the Expensive Car Supplement, which will add a further tax burden for those who purchase vehicles priced over £40,000. This could further de-incentivise consumers from purchasing an EV given many models remain expensive. Potential cost savings associated with flexible charging solutions could be crucial in offsetting this challenge.”

Significant potential for energy storage

According to the latest EY and Eurelectric study, based on projections around EV uptake and battery size, EVs in the UK could supply the equivalent of up to 24 terawatt hours (TWh) of the nation's battery capacity by 2030 back to the grid. This is equal to 7.5% of the UK's overall electricity demand in 2023, according to government figures, which could mitigate energy usage at peak charging times. However, this is contingent on all EVs having the capability to send energy back to the grid, and consumers having the knowhow to optimally utilise V2G technologies.

Lee Downham, Energy and Resources Lead at EY in the UK, added: “With the UK’s EV market share still not quite keeping pace with regulatory requirements, this study highlights the critical role that smart charging could play in helping more households make the switch to an EV. Furthermore, with storage of clean energy increasingly a limiting factor in the UK achieving its net zero ambitions, technologies like this could provide essential access to the significant capacity that EVs provide to the grid.” 

UK has hurdles to overcome to unlock full potential of bidirectional charging

Despite the clear potential benefits of bidirectional charging through methods such as V2G, stumbling blocks remain in place in the UK according to the study. Similar to the wider UK trend for EV charging, V2G infrastructure remains relatively sparse and expensive, and will need to be ramped up if a smooth and successful EV transition is to materialise. 

Furthermore, the UK is still navigating challenges associated with the double taxation of energy storage, which currently remains a significant barrier for the progress and deployment of V2G and bidirectional charging. Other European countries, including Spain and Sweden, have already eliminated this tax, but it currently remains a hurdle for the UK.  

The study also highlights the need for the value proposition of EVs to be carefully considered, beyond just financial costs. For example, robust business models that demonstrate the financial viability of V2G are essential, and for consumers, solutions need to be simple to use, with clear and accessible benefits.