The transition to renewable energies requires smarter and more flexible management of the grid. Commercial electric vehicle fleets have a big role to play in stabilizing the electricity system through the adoption of smart charging solutions. This way, vehicles will charge faster when there's a surplus of energy and pause charging when there's a shortage.
We spoke to Friso Schuring, who heads our business development for a virtual power plant (VPP) unit , about imbalance smart charging and how it is revolutionising EV fleet management.
What is a VPP?
The term “VPP” has a history that goes back 20 years to when the first wind turbines were introduced. Individually, they were too small to play a significant role in the energy market, so they were combined ‘virtually’ to make power plants. Hence, VPP.
More recently, the VPP definition has been widened to also encompass controllable load (like electric vehicles) and storage. Simultaneously charging a thousand buses can help stabilize the grid when there is an excess of energy, pausing them will help when there's a shortage, and discharging them will help when there's a very large shortage of energy. In doing so, fleet operators will receive compensation from the transmission grid operator, which will help lower charging costs.
What role can these types of VPPs play in supporting renewable energy?
VPPs and smart charging help to both stabilize the electricity grid and lower the cost of operating electric vehicles, both of which are important as we rely more on renewable energy sources such as wind and solar.
How does the VPP concept work for EV operators?
Take the example of an electric bus operator. The most important thing is that their operations are not affected, so the buses get back to the depot in the evening and must be charged back to (or close to) 100% by the morning. We need to make sure that happens, but how it happens is entirely up to us.
So, when the bus is connected to the charger, we might not immediately start charging. We’ll wait for a few hours until the price is low in the imbalance market and then we’ll start charging much faster. This significantly reduces charging costs.
What are the typical savings that operators can achieve with this approach?
When we looked at this in 2021, we showed an annual cost saving potential of up to 60%, based on 20 vehicles charging a 200kWh battery with a 50kW charger on a 1MW grid connection. So, that is the kind of difference you can get from using our smart charging algorithms and buying electricity in the imbalance market compared to day-ahead wholesale costs.
Electricity prices have obviously risen significantly since 2021. Has that affected the proposition?
Yes and no. With much higher electricity prices, the percentage saving is lower, but the total cost savings are much higher — as much as 100 euros per MWh.
Of course, if you’re on a fixed long-term contract based on cheaper electricity prices, the savings may be lower as you need to switch to a different type of contract to be able to buy electricity in the imbalance market.
Can you explain a bit more about how the imbalance market works?
Adding more renewables into the energy mix can make it more difficult to match supply and demand, and this can lead to imbalances. When the energy market cannot match supply and demand anymore, the transmission grid operator will communicate imbalance figures and compensation fees. Our algorithm forecasts when such imbalances are likely to happen and uses this to determine the best times to charge your vehicles.
Is this model applicable in all markets with a large renewables sector?
There are different energy markets in every country, so we cannot yet offer this kind of imbalance smart charging outside of the Netherlands and Belgium yet, but we’re preparing the service for Germany and the Nordics and are also looking at France and the UK.
Do operators need to upgrade their charging hardware to take advantage?
No, whether they’re using Heliox chargers or another system makes no difference. We don’t need any additional hardware to do this, which means that it’s very easy to set up a three-month pilot scheme. From there, we see how big the potential savings are — without any effect on operations.
All our customers have access to a dashboard that breaks down the charging rates and costs per vehicle, as well as a comparison to the cost of charging the vehicles without our smart algorithm. Of course, those savings are just on paper during the pilot. We need to open their energy contract to generate the savings. Until then, all the savings stay with the energy supplier, which is great for them, but what we really want is for our customers to enjoy those savings.