Could EVs be the answer when the wind stops blowing?

Meridian Energy is trialling a vehicle-to-grid EV charger at its Christchurch office.

As New Zealand aims to decarbonise by 2050, the increasingly renewables-driven power supply will need to be flexible when the wind isn’t blowing and the sun isn’t shining.

Could electric vehicles (EVs) be part of the answer, rather than being a drain on the system?

The popularity of EVs continues to surge. Latest data from the Ministry of Transport showed 26.5 per cent of light vehicles registered in September 2023 were EVs.

“EVs sometimes get talked about as being the problem but, for me, EVs can quite clearly be the solution,” Meridian Energy’s head of energy innovation, Ryan Kuggeleijn, says.

Most EVs are now equipped with batteries that can cater for home consumption for many days over a week, he says.

And Kuggeleijn says the power network will need EVs, plus other solutions, if the country is to reach its decarbonising goals.

About 80 per cent of New Zealand’s power comes from renewable sources, but the talk in the industry tends to be around how the country can function without the backup of fossil fuels for those times when generation is constrained by the weather.

Meridian is running a “smart charging” trial, allowing 50 Tesla and BMW EV owners to test new technology that optimises the charging of the EV in response to market demand and pricing, while making sure the vehicle is charged and ready when the driver needs it.

It is also trialling a bi-directional charger – which can export power back to the grid – at its Christchurch office.

Kuggeleijn says the trial could pave the way for widespread use of this technology across all models in the growing EV fleet.

Combining the power of this new technology with EV batteries and flexible demand would enable the creation of a “virtual power plant” big enough to play a key role in national decarbonisation goals, save customers money and help the electricity system manage periods of peak demand, he says.

Meridian has teamed up with British energy software platform Kaluza, which is managing the charging of Meridian customers’ EVs in response to their needs, as well as market signals and pricing data.

A Transpower report published in 2020 estimated that, by 2035, smart EV charging and “time-of-use” pricing mechanisms could reduce peak energy demand from 10.8 gigawatts (GW) to 8.9 GW, with this difference representing more than twice the capacity of the largest hydroelectric power station at Manapōuri and 60 per cent greater than the Huntly power station operating at peak capacity.

Meridian's Te Apiti wind farm, near Woodville. About 80 per cent of New Zealand’s power comes from renewable sources, but at present we still need the backup of fossil fuels for those times when generation is constrained by the weather.

Further estimates are that, for every gigawatt of peak demand saved, $1.5 billion in generation, transmission and distribution investment costs could be avoided.

As a result, EV smart charging could save the economy close to $3b by 2035, the report said.

As it stands, a “smart” charger – a device that can be programmed to take advantage of power when it is at its cheapest – can be installed for $2000 to $3000.

A step up from that would be a bi-directional device, which Kuggeleijn says would need to be available for under $5000 to be attractive.

Widespread uptake of bi-directional chargers is probably about three to five years away, he says.

EV car batteries typically have more charge than is needed for most days. They generally have a range of 400 to 500 kilometres but EV motorists typically drive for only 30km a day on average.

“So typically, on any day, you have a lot of spare capacity in your battery and that battery runs a car that wants 150 kilowatts compared with 4 or 5kW for a house.

“You are asking your battery to do something that is pretty light compared to what it does when it’s pushing a car around, so letting it run your home is making that asset work a little harder for you.

“It means that you don’t have to pay peak power prices and cause things like the [coal and gas-fired] Huntly to come on stream during the peaks.”

Meridian’s trials suggest most of the benefit to consumers would be in using EVs to offset demand in the household.

“As the uptake of EVs increases and the technology and the chargers get cheaper, you can see a clear line to a really good benefit for homes and businesses.

“The concept and the technology is proven and understood, but it’s now a matter of getting it to a scale where it can become really useful.

“Right now, the real tipping point for it will be around the bi-directional charger becoming cheaper.

“You need that device to be able to feed power back into the home.

“Smart charging is a right here, right now thing that we can go after.”

The collective potential of virtual power plants set up by Meridian and other companies could quickly add up.

New Zealand is forecast to have close to 80,000 light fleet EVs by the end of this year.

That is enough to store 5480MWh of electricity, enough to power about 270,000 homes for one day.

In terms of decarbonising, Kuggeleijn says New Zealand is not going to get where it wants to “by relying on big assets at the end of a wire”.

As it stands, power delivery tends to be one-way.

“These things let you be dynamic and actually interact with the system,” he says. “That’s where we are trying to get to.”

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.