Britain Faces Huge Costs To Avoid Power Shortages With Electric Car Plan

Britain must plough billions of pounds into new power plants, grid networks and electric vehicle charging points if it is to avoid local power shortages when a planned ban on new diesel and petrol cars begins. Supporting millions more battery-powered vehicles over the next two decades is technically feasible, and if drivers can be persuaded to recharge them overnight - when spare power capacity is abundant - the huge infrastructure cost could be kept down.

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Local networks particularly face problems, so the country will need a range of technologies for managing consumption to meet an estimated rise of up to 15 percent in overall demand and prevent spikes of up to 40 percent at peak times.

"It will be a challenge and a lot of investment is required - in generation capacity, strengthening the distribution grid and charging infrastructure," said Johannes Wetzel, energy markets analyst at Wood Mackenzie.

In July, the government said it would ban the sale of new petrol and diesel cars and vans from 2040. The aim is to reduce air pollution, a source of growing public health concerns, and help Britain to cut carbon emissions by 80 percent by 2050 from 1990 levels - the target it has set itself.

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Although some conventional cars will remain on the road, numbers of electric vehicles (EVs) could balloon to 20 million by 2040 from around 90,000 today, experts estimate. Charging them all will require additional electricity.

Britain already faces a power supply crunch in the early 2020s as old nuclear reactors come to the end of their lives and remaining coal-fired plants are phased out by 2025.

Four years ago, well before the conventional car ban was raised, the government said over 100 billion pounds ($130 billion) in investment would be needed to ensure clean, secure electricity supplies and to reduce demand.

That looks optimistic. The cost of Hinkley Point C alone, the only nuclear power station now under construction in Britain, is estimated at 19.6 billion pounds.

Gas plants are cheaper and faster to build but investment in new ones is flat, and they still produce carbon emissions. Renewable energy presents problems of matching supply and demand; solar panels for instance produce no power in the night when drivers would ideally recharge their electric cars.

OFF-PEAK INCENTIVES

Estimates vary on future numbers of electric vehicles, as well as hybrids and those powered by hydrogen fuel cells which do not require mains electricity. However, several analysts surveyed by Reuters said anything up to an extra 50 terrawatt hours (TWh) would be needed for them by 2040.

Bernstein analysts say overall demand could increase by 41-49 TWh, or 13-15 percent of current levels. However, a 15 percent rise would translate into a 40 percent jump in peak demand if drivers charged their cars between 6 and 9 pm, when electricity consumption is at its highest.

This problem can be eased by encouraging charging at night, when demand is currently only about a third of during peak periods. "We do not see the transition to EVs as posing a significant stress on peak demand if charging were incentivized to happen at off-peak times," they said.

Britain has made progress in energy efficiency. Overall and peak power demand fell by around 14 percent between 2005 and 2016, even though the economy grew by the same amount.

"There is definitely some slack in the transmission and distribution system to tolerate an increase in the peak demand," according to Bernstein.

Its "extreme scenario" projection of a 40 percent rise in peak demand equates to 24 gigawatts (GW). But National Grid, which operates the transmission system, has said the rise in peak demand can be kept to 5 GW if there is smart charging and time-of-use electricity tariffs.

Such encouragement of off-peak EV charging by making power cheaper than at peak times of the day will be essential.

"A very large peak demand could be the outcome if other things don't happen, such as smart grids, smart charging and energy storage, although we expect these technology solutions to be developed to support increasing power demand within sensible peak levels," said Richard Sarsfield-Hall, director at Poyry Management Consulting.

(Additional reporting by Susanna Twidale and Oleg Vukmanovic; Editing by Veronica Brown and David Stamp)

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