Built throughout the 20th century, and as early as 1935 in the UK, European power grids were not developed to support the ongoing electrification of everything from heating to transport, explains Francesco Nobili of Charles River Associate.
For context, in 2021 electric fleet vehicles made up 25% of total vehicles on European roads, but the shift to electric by 2030 is expected to double their electricity consumption compared to private vehicles. Internal combustion engine (ICE) fleets are responsible for 50% of road transport emissions, making their electrification vital for climate targets, especially when powered by renewables. Driven by competitive Total Cost of Ownership (TCO), policies, ESG awareness, and technology advancements, commercial EV fleets are projected to reach 18% market penetration by 2030, up from the current 1.4%.
The transition to electric fleets could have disruptive effects, increasing grid capacity and generation needs while creating potential bottlenecks at the distribution level. If well optimized, fleet electrification could boost system flexibility while offering new revenue sources for both existing and new players. We explore the challenges at each level.