Looking ahead to lower cost ways to support electric vehicles

11 December 2012

The AEMC today released its final advice on implications for energy market arrangements from the introduction of electric and natural gas powered vehicles.

The Commission has taken a long term view in relation to the introduction of market reforms designed to support the economically efficient uptake of electric and natural gas vehicles. Electric vehicles in particular are another new “appliance” which is set to place new demands on Australia’s power system. This review has found that each electric vehicle could impose additional network and generation costs from $7500 up to $10,000 per vehicle over the 5 years from 2015 to 2020 in the absence of appropriate pricing signals and efficient charging decisions.

AEMC Chairman, John Pierce, said today that each electric vehicle could result in additional generation and network costs that, under current market arrangements would be shared by all consumers.

“Promotion of efficient investment by both consumers and service providers in electric vehicles requires some changes to electricity market arrangements,” Mr Pierce said.

 “To facilitate efficient market outcomes in relation to electric vehicles we recommend that pricing signals (particularly network pricing signals) should reflect the underlying cost of supplying electricity.

The final advice confirms the review’s findings that efficient electric vehicle charging and consumer choice would be promoted by development of new metering arrangements in the market.

AEMC recommendations include:

  • As stated in our Power of choice review, we propose that cost reflective network pricing be phased in through a banding approach, with medium to large consumers transitioned to efficient and flexible network prices. This should be set to capture a high proportion of EV consumers.
  • Introducing new metering arrangements that enable consumers to separate their electric vehicle power consumption from their household consumption. This would enable them to source the most appropriate mixture of retail deals to best reflect their preferences;
  • Adoption of metering with interval reading capability for all electric vehicles;
  • Devising new metering arrangements that enable third parties to install electric vehicle charging infrastructure in commercial properties (eg. shopping centres and business parks); and
  • Specifying principles for load management where an electric vehicle owner delegates charging rights to another party.

The final advice concludes that no significant changes need to be made to market arrangements to cater for the uptake of natural gas vehicles.

 

 

For information contact:

AEMC Chairman, John Pierce (02) 8296 7800

Media: Communication Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817

 

11 December 2012