FRANKFURT (Reuters) - An anticipated shift to 40 percent electric cars on German roads by 2035 could be absorbed by the power system and generate additional income for utility companies, an independent study by Aurora Energy Research said on Monday.
It calculated this will result in 31 terawatt hours (TWh) of additional power demand by 2035 - at five percent of the current annual consumption a manageable number, given that renewable generation units are expanding.
“E-mobility will be the more economic choice by then and its impact on the German power market will tend to be moderate,” said Benjamin Merle, one of the authors.
“We don’t see any threat of significant price increases for households or industry,” he said.
Europe’s biggest economy had roughly 46 million small passenger cars on the road on Jan. 1, 2017 when only 0.1 percent of them were powered by electricity, official figures showed.
However, around 10 percent of cars get replaced each year and Aurora’s Berlin office, the German arm of an Oxford-based parent company, assumes that falling battery costs and a far better climate record of electric cars versus the combustion engine will start supporting mass adoption in the next decade.
Battery-powered cars should emit 40 percent less carbon dioxide in 2035 than those with traditional engines, it said.
This assumes that the carbon efficiency of the latter will not be improved from today as less research goes into the old technology.
Higher battery density will ensure that driving ranges expand due to more powerful batteries while charging infrastructures are built up to meet demand, it also assumed.
It estimated that exchange-quoted power prices for the day-ahead will nearly double to an average around the mid-60 euros a megawatt hour by 2035, as Germany is to phase out cheap nuclear and much coal-fired capacity by then.
Within that price, the additional costs required to meet the 31 TWh were estimated at 2.7 euros/MWh, Merle said.
German utility companies stand to gain between 500 and 700 million euros a year in additional earnings before interest and taxes (EBIT), if they exploit cross-selling opportunities with start-ups in the chargepoint sector that are springing up fast, the researchers estimated.
These could include offering consumers time-of-use tariffs to charge cheaply at night-time or using electric vehicles as interim storage for inexpensive power, to release it at high-price times, they said.
Reporting by Vera Eckert, editing by David Evans