Smarter electricity pricing needed to capture full benefit of electric vehicles

8 March 2018

A report released today gives further weight to the view that New Zealand will need to develop smarter electricity pricing options for consumers charging electric vehicles (EVs) as mass-uptake of the technology occurs.

The research, by Concept Consulting, was sponsored by three of New Zealand’s largest electricity distributors - Orion, Unison, and Powerco. It looks at the long-term implications of charging EVs, and explores the need to develop smarter, more cost-reflective electricity prices specific to EV charging.

Concept director, Simon Coates, says, “Mass uptake of EVs has the potential to slash New Zealand’s CO2 emissions, and cut transport costs for New Zealanders.

“However, under the existing approach to electricity pricing, EV uptake will be held back and electricity supply costs will be higher than they need to be.

“Without electricity pricing reform, our research shows costs to consumers could be higher by approximately $4 billion over the next 30 years, and vehicle emissions more than one-third greater in 2050.”

Coates says the benefits of EVs could be better realised under a new approach to pricing that rewards consumers for charging their vehicles in a smarter fashion.

“The existing pricing does not encourage smart charging of EV batteries.

“Smarter charging can be achieved by rewarding consumers for charging in off-peak periods - such as 10pm to 6am - and using ‘managed charging’ options to stagger charging among households. This will deliver the ‘win-win’ of making it cheaper for consumers to charge their EVs, and help avoid significant network investment upgrades – which are potentially costly – as the number of EVs in New Zealand grows and battery sizes increase.

“If the industry and Government continue to work together to progress pricing reform the financial and environmental benefits from smarter EV charging can be achieved.”

A copy of the report: “Driving change” – Issues and options to maximise the opportunities from large-scale electric vehicle uptake in New Zealand