The outsized influence electric vehicles will have on electricity markets

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Many in the electricity supply sector regard the deployment of electricity storage technologies as too expensive and therefore not a significant competitor to fossil generation. But developments in the electric vehicle (EV) industry may directly result in the deployment of large amounts of battery electricity storage, regardless of the investment preference of electricity generators.

In Europe many countries are resorting to or are considering the use of capacity payments to keep unprofitable fossil power plants alive. This is seen as necessary to guarantee electricity supply when the wind or sun are not delivering enough power. But it raises the question of why consumers should pay for little used fossil plants when energy storage could provide a more attractive solution.

This brief outlines how and why these changes are likely to pan out.

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