Australia’s EV infrastructure dilemma: the downfall of the wait and see approach

29 November 2018 Authored by Consultancy.com.au

Electric vehicle adoption in Australia is far behind that of Western Europe, Developed Asia or North America. As the country’s leaders continue the discussion in Canberra about whether or not coal is the future of energy, Australia’s electricity grid continues suffers from a policy vacuum. With a lack of leadership in the future of energy, Australia is likely to face issues as electric vehicle adoption ramps up.

They say that the only constant factor in life is change, death and taxes. But for some reason, Australia is afraid of change. Perhaps due to the lack of inheritance taxes, Australians often claim that they cannot afford to change their behaviour. However the world is changing and with it Australia must adapt or face an uphill battle later. After all, a dollar today will be worth more tomorrow and fixing anything isn’t getting any cheaper.

This warning shined through in the latest report by global management consulting firm L.E.K. Consulting in conjunction with Australian EV charging infrastructure company Tritium. The report, titled “Preparing the Grid for the Uptake of Electric Vehicles”, states the importance of planning in energy network management for the increased power usage due to EVs.

A lack of direct government initiatives has left Australia directionless when it comes to adoption of EVs. As more electric vehicles become available and expand their presence in the market, the more stress will be put on the already complicated – to put it lightly – energy grid. According to the consulting firm, there could be a surge of up to 30% during peak demand in an unmanaged local grid scenario with 50% adoption.

Australia’s EV infrastructure dilemma; the downfall of the wait and see approach

Such a scenario – 50% adoption – admits the report will take time to eventuate. However, and as is the case with most new technologies, adoption happens in clusters. The majority of electric vehicle drivers in Australia are centralised in inner city pockets of capital cities, with waterside Sydneysiders the main culprits. Coupled with a lack of public charging stations, it is likely that most EV owners will charge at home.

“If utilities are not proactive in managing or incentivising residential charging in lower-demand times, localised peak demand will increase. Owning an EV will increase a household’s electricity consumption by about 50%.5 If multiple houses on a single street decide to charge simultaneously, there may be insufficient capacity in the feeder lines to deliver the required level of power,” states the report.

“The real challenge for utilities is managing the peak demand increase and greater unpredictability that comes with greater EV adoption,” says Natasha Santha, principal at L.E.K. Consulting. “EV charging has an element of randomness that needs to be managed; this can stress local infrastructure and heighten the need for increased network investment.”

“Utilities have a tremendous opportunity to drive growth in their businesses – but they have to be prepared for it and that means putting the right infrastructure in place to manage an increase in energy demand.” 
– David Finn, CEO and co-founder, Tritium

Whilst adoption will continue to be slow in Australia, it must be noted that by 2030, a fifth of all vehicle sales around the globe will be electric. Just like the roll-out of renewable energy, political backlash won’t prevent EVs from being commercially competitive in Australia. To be proactive in planning for the future, EVs must be taken into account by utility operators if the government fails to take initiative.

“There are significant opportunities for network owners, operators and energy retailers as EVs are one of the few growth drivers for many developed energy markets, and also enable the opportunity for utilities to build closer customer relationships,” she says. “But utilities need to be proactive in planning for a future scenario of significant EV adoption, especially in a world where spending capex on additional infrastructure at the cost of the consumer is no longer a palatable response.

Laying the foundations for EVs will take time, investment and leadership. “The good news is that we have time to prepare in Australia. Given the expected pace of adoption, and time it will take to turn over the car parc, grid owners have sufficient time to prepare for the change,” said Santha. The downfall will be that if no party takes responsibility, development will likely be ad hoc and sporadic, almost akin to ailments of the the national energy grid.

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