Europe’s e-mobility market: Flexibility monetisation and a regulatory action plan

In this week’s Power Playbook: The week saw the publication of new research on EV flexibility monetisation and the European Commission’s Industrial Action Plan for its automotive sector, signalling a hopeful speed up for the continent’s e-mobility market.

This has been a big week for the European e-mobility sector, illustrated by new research from Eurelectric and EY, coupled with an Action Plan from the new European Commission.

Let’s dive in.

Flexibility, EVs and monetising e-mobility

On Wednesday, I covered Eurelectric and EY’s study on smart and bidirectional charging, Plugging into potential: unleashing the flexibility of EVs.

Within the study, the continent’s electricity sector association and consultancy dive into the potential offered by using EVs as flexibility assets.

On the side of grid operators, the numbers are a nice incentive to spur them into action.

The study states that DSOs could benefit from a projected €4 billion ($4.3 billion) in savings annually, as higher flexibility reduces the need for infrastructure expansion.

For consumers, the figures are also encouraging and key to driving uptake. A result of a variety of smart charging and V2G mechanisms, the study estimates that European EV owners who use smart and bidirectional charging could save between €450 ($478) to €2,900 ($3,080) every year.

Having covered e-mobility quite extensively already, I wasn’t necessarily surprised to see the numbers, but it is refreshing to see them become a key argument for the transition, especially the savings potential for consumers, which hasn’t always been a focus.

It solidifies the bidirectional value case for those who may still be in denial.

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Monetising flexibility

To gain more insights on the topic, I spoke to EY’s Serge Colle, EY Global Power & Utilities Leader, ahead of the study’s release.

Colle emphasizes that monetisation is key for bringing about the benefits of V2G and smart charging. Namely, flexibility markets and better pricing must reward providers and support trade in the commodity.

Of course, many barriers still abound, such as data interoperability, price signalling, establishing local flexibility markets, and appropriate investment and regulation to effectively manage flexibility output from weather-dependent renewable resources.

But for Colle, all of this “ultimately translates back to the customer who trusts…that they can make money by keeping the car connected to the grid.”

The business proposition to incentivise V2G uptake will be critical, says Colle. “Gotta be the money – which is very appealing.”

Auto Action Plan

Indeed, without customers, there will not be much of a case for e-mobility.

But, one other point mentioned – that of investment and regulation – is still crucial and has been a talking and action point this week in Brussels.

Eurelectric and EY’s report was released a few days before the European Commission’s Industrial Action Plan for the continent’s Automotive Industry.

With the Action Plan, the Commission said they will make €1.8 billion ($2 billion) available to create a secure and competitive supply chain for battery raw materials, which will help support the growth of the industry.

The Action Plan has different elements to it – confirmation of an upcoming legislative proposal on decarbonising corporate fleets, action to shorten waiting times for charging point grid connections, action to better coordinate Member State EV incentives – but the battery financing is what stands out.

It takes me back to Eurelectric and EY’s study, which details how, should EVs be tapped as flexibility assets, their batteries could open up 114TWh capacity by 2030; not a small number.

Discussing with me from the floor of EVision was Torben Fog, co-founder and CIO of smart charging company Spirii and former Head of Network & Platform, eMobility Solutions at E.ON Nordics:

“It’s super expensive to reinforce the grid and if you had all the money, it would still take a long time to do it. You need spare parts, you need the workforce and…there are so many things.

“It’s not that easy to just reinforce and therefore we need to build in smart ways…and maybe we can even avoid some investments if we can agree to do things in a smarter way and still allow value extraction supporting the grid space and battery to grid.”

With their announcement of the action plan, the Commission said they will also support the EU battery industry with financing under the Innovation Fund, looking into direct production support to companies producing batteries and non-price criteria for components such as resilience requirements.

Forben welcomed incentives from the plan that will go to setting up public chargepoints as well as vehicle mounted chargers (VMC):

“I’ve been part of that tendering before, back in time in my E.ON days, and it was actually quite helpful in order to overcome the fairly large investments that needs to be done in order to fix things in the ground fast.

“So, a lot of those incentives are very good. They will help us speed up.”

Now, while the Action Plan from the Commission certainly has good provisions, it is also being criticised by some as it sets more flexible compliance for automakers with the CO2 fleet limits to a period of three years, rather than one, until the end of 2027.

Indeed, the flexibility has sent a confusing market signal about the urgency of decarbonising transport.

BDEW calls it a “shift down” in gears for electromobility.

E-Mobility Europe (formerly AVERE) says the Commission needs to “send a strong business signal and compensate for today’s weakening of the 2025 car and van CO2 limits”

ACEA, although they recognise the pragmatism behind the move due to global market turmoil, warns that there are yet elements missing.

I for one, am hopeful. We’ve known for some time the potential offered up by smarter ways of managing power consumption, both in terms of power balancing and monetary savings.

And with the Commission looking to speed up charging infrastructure – a long-time barrier – and battery manufacturing, which will be key for competitiveness, the next few years may yet see a turnaround for the continent’s e-mobility success.

What do you think?

Reach out and let me know your thoughts so that I can feature them on the Power Playbook.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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