Project Summary
Park & Flex aims to unlock the potential of V2X-enabled EVs in public carparks. This untapped resource will harness new technology and infrastructure to transform how flexibility services are provided. By collaborating with key stakeholders, we are actively developing and testing real-world flexibility products and customer offerings.
Initial findings indicate these innovative propositions hold commercial promise in theory. Uncertainty exists with how much customers will embrace these, so we are developing a trial-ready customer proposition(s) for demonstration.
Park & Flex is changing the future of mobility and empowering customers to redefine the way they interact with EVs and public carparks.
Innovation Justification
Park & Flex aims to unlock the potential of flexibility services from EVs in car parks, facilitating quicker and efficient connection of low carbon demand and generation, while deferring or avoiding costly network upgrades. This project addresses two SIF challenges – Challenge 4: Accelerating the decarbonisation of major energy demands and Challenge 2: Preparing for a Net Zero power system.
In the Discovery Phase, we examined perspectives of consumers, car park stakeholders, and the DNO, by engaging with stakeholders including the British Parking Association, Gatwick Airport, and QPark, and reviewed published research. This confirmed a large untapped resource of potential flexibility exists in public car parks, provided attractive propositions can be developed. They must engage/encourage V2X drivers, and provide investable business models for car parks. This work also suggested that further research should examine propositions in long, mid, and short-stay car parks as a material source of flexibility can exist in all settings.
V2X propositions are innovative for car park owners for several reasons:
· Current business models rely on fees for the use of charge points for charging but V2X propositions will differ in that drivers earn revenue from flexibility service provision or energy sales. This allows for alternative models where these benefits could be shared (e.g. free parking).
· Current charge point offerings are in areas where drivers will need to charge and encourage short stays, but V2X offerings will enable charge points in new locations and may encourage longer stays.
Car park operators are hesitant to invest in these propositions because V2X technology is still in its early stages and V2X capable vehicles are scarce. If viable propositions can be demonstrated and the investment case validated, this could build further interest from car park operators, encouraging further investment.
V2X offerings will also enable new services for electricity networks and system operators, requiring investigation of the commercial arrangements needed to facilitate them. While V2X charge points may pose connectivity challenges for DNOs, innovative commercial arrangements could potentially overcome or mitigate network limitations. This would enable faster connections and facilitate integration of wider load or generation. Additionally, V2X charge points have the potential to address wider system challenges, such as absorbing excess renewable energy or providing ancillary services. They also present an attractive storage opportunity as the battery cost itself does not need to be recovered in the investment case.
The technology for Park & Flex exists – i.e. IRL7 and TRL9 have been achieved for V2X charge points and the supporting market access platforms. The focus of Park & Flex is on demonstrating a new commercial application, propositions, and consumer engagement. As such the CRL level of a V2X proposition in public car parks could be assigned following Discovery to be CRL2-3, with the intent in Alpha to progress to CRL4-5, and in Beta to CRL6-7.
However, whilst the technology exists, given low uptake of V2X enabled vehicles it is too risky for car park stakeholders to invest in unproven V2X propositions. In addition, it would be challenging for DSOs to invest from within price control allowances as many of the benefits will accrue to other parties. A full demonstration is necessary to test consumer behaviour and engagement with V2X propositions in public car parks, to move beyond theoretical value. The SIF Beta fund sizing matches the size and scale compared to other innovation funding sources.
The counterfactual approach is assumed to be a continuation of existing charging-only business models with limited exploration of V2X and flexibility propositions in public car parks. This is supported by evidence from stakeholders and Fermata Energy.
Impacts and Benefits
At present, the prevailing business model for charge points in public car parks is charging-only. We assume based on stakeholder engagement that this will continue as the status quo whilst take-up of V2X cars is low. The results of our cost/benefit assessment are set out in our Discovery report and summarised under the benefits headings below.
Financial - future reductions in the cost of operating the network
Our Discovery Phase analysis estimated that over 500,000 V2G enabled charge points could be installed in UKPN’s areas by 2050 – leading to an aggregate capacity of 4.2 GW of flexibility. This flexibility could reduce network operating costs for the DNO by:
· Reducing the price of flexibility through increased competition, and
· Potentially assist in mitigating connection challenges for car parks and associated customer sites – for example through on-site self-consumption (where power is consumed by e.g. the airport / shopping centre rather than being exported to the grid);
· Additional storage connected to the network will also potentially reduce renewable curtailment related costs. These benefits were not assessed in Discovery but will be examined further in Alpha.
Environmental – carbon reduction – indirect CO2 savings per annum
Increasing the level of energy storage available on the grid through V2X services will enable an increased ability to store energy at times of high renewables output when the carbon intensity of the generation mix is low. The stored energy can then be used to reduce the need for carbon peaking generation at times of high demand, contributing to indirect CO2 savings per annum.
We did not forecast the impact of this in the Discovery Phase because layered assumptions need to be made on when vehicles will charge and discharge and the carbon intensity of the grid at those times. We will reassess methods to quantify carbon emissions in the Alpha Phase.
Revenues - improved access to revenues for users of network services:
The revenue streams envisioned for Park & Flex exist today – i.e. wholesale market arbitrage, the capacity mechanism, ancillary services provision for the ESO, and DSO services. However, the customer propositions and business models do not exist and need to be demonstrated.
Our cost/benefit assessment modelled these opportunities for various car park settings, and suggests potential benefits on a per-bay basis, considering charger CAPEX, as running costs, and energy costs, providing opportunity for car park operators and drivers.
Scaling these benefits across UKPN’s patch could yield revenues by 2050 of £1.3bn in long-stay settings, £2.1bn in mid-stay, and up to £3.2bn in short-stay.
For EV drivers the benefits of individual sessions can be small (as with many customer incentives) but accrue over a year. For short stay, a customer can make c. £4.50 a day (c. £1,600 per year) on wholesale arbitrage if exporting for four hours. Our surcharge proposal (from Discovery) would entail a £1.60 fee on days where that export happens in a car park. For mid and long-stay, assuming a required IRR of 8% to investors with the remaining going to customers, a customer in a train station every week could earn c. £200 per year off their parking charge, or in long-stay £25 for a week (£1,300 per year). It is unclear which scenarios may appeal to customers, hence the need for a trial.
New to market – products and services:
The propositions proposed through Park & Flex will be new to market, providing additional sources of revenue for car park operators and EV customers. The success of the project could be judged based on the number of car park operators that engage with the insight generated in dissemination stages, and subsequently launch V2X offerings.
