Europe is undergoing major change. More and more energy is produced from renewable sources such as wind and solar. At the same time, more and more electric cars are being sold and homes and industries are electrifying. This is an essential step to reduce emissions and become energy independent, says Mihai Drăghici, Partner, Advisory, EY Romania
But the transformation comes with a significant challenge: how do we keep the electricity grid stable in a world where both production and consumption vary much more than in the past?
A report conducted by EY in partnership with Eurelectric shows that an important part of the solution already exists and is „parked” in front of our homes: the Electric Vehicle (EV).
Electric cars the new pillar of energy flexibility in Europe
The report starts from a simple reality: Europe is producing more and more renewable energy while consuming more and more electricity. This combination is creating unprecedented pressure on electricity grids.
In the next 25 years, electricity consumption in Europe is expected to grow four times faster than in the last four decades, to exceed 4,500 TWh by 2050. In parallel, renewables have already reached 451 TWh of electricity production and solar and wind capacity has grown at an accelerated pace in recent years.
The problem is that energy from wind and solar is variable. There are periods with surpluses, including 7,841 hours of negative electricity prices in the first 8 months of 2024, and periods with shortages. In this context, flexibility becomes essential: the ability of the system to quickly balance supply and demand.
The report shows that electric vehicles can become an important part of the solution. The first level is smart charging (V1G). Instead of all drivers charging their cars as soon as they get home - at rush hour, systems can automatically shift charging to intervals with cheaper or surplus energy on the grid. It is a solution that already exists and does not require major infrastructure transformation.
The second level is bi-directional technology (V2G), which allows the car to send energy back to the grid when needed. The vehicle thus becomes a battery on wheels.
In the short term, unidirectional smart charging (V1G) is the realistic priority for integrating flexibility into the energy system, while V2G depends on the maturing of the regulatory framework, interoperability and technological infrastructure.
By 2030, Europe's electric car batteries could reach 114 TWh available for V2X uses, equivalent to about 4% of Europe's annual electricity consumption. This capacity could power 30 million homes for a year.
The economic impact is equally relevant. Using flexibility from existing assets could generate savings of around €4 billion annually for network operators. In addition, the estimated annual bill for network upgrades between 2025 and 2050, €67 billion, could be gradually reduced to €55 billion.
For consumers, the benefits are significant. For example, in the UK, the total annual savings for EV owners can reach around 19% for the compact segment and up to 26% for the large segment or SUV, depending on the use of flexibility mechanisms.
The message is clear: electric vehicles are not just energy consumers. They can become strategic assets of the European energy system, if there are clear rules, access to data and business models that reward participation.
Implications for Romania: strategic opportunity or risk of additional pressure?
Romania has an energy mix with a significant share of renewable sources including hydro, and in recent years photovoltaic and wind capacity has increased. In parallel, the electric car market is growing, supported by national programs and the European trend. This combination reproduces, on a national scale, the dynamics described in the report: more variable energy and more electrification.
For Romania, there are three major directions:
1. Peak load management
In the absence of a system to distribute charging throughout the night, the increase in the number of electric cars can amplify the pressure on the grid during the evening peak. The report shows that flexibility is cheaper and more efficient than investing exclusively in infrastructure development. For Romania, where grid investment is already a challenge, smart charging can reduce pressure on electricity distribution operators.
2. Harnessing renewable energy surplus
Romania has already experienced high renewable generation at certain times. The model described in the report, in which EVs absorb energy when there is a surplus and can re-inject it later, could become a practical tool for stabilizing the national grid.
As solar capacities increase, the risk of temporary imbalances will also increase. Batteries deployed in thousands or tens of thousands of electric cars can operate in a decentralized way to balance the electric grid.
3. Economic opportunity for consumers and businesses
The report shows that in some markets, savings for drivers can be significant when participating in flexibility schemes. For Romania, where price sensitivity is high, clear financial incentives could accelerate the uptake of both EVs and smart charging.
In addition, fleet operators, public transport, logistics, fleet companies, could become active players in the flexibility market, reducing their costs and generating additional revenues, following the model analyzed in the report.
In order to stimulate these investments, it is essential to implement actions dedicated to the rapid development of the charging infrastructure. In this context, the E-Move and E-Mobility programs are key instruments, providing non-reimbursable funding for the development of electric vehicle charging infrastructure for both the public and companies' own fleet. In parallel, the scheme to finance the purchase of zero-emission transport vehicles will stimulate the renewal of the national fleet.
What is needed at national level?
The report emphasizes the importance of interoperability, data access and the regulatory framework to enable energy trading and monetize flexibility. For Romania, this means: developing attractive and clear time-of-use tariffs; stimulating infrastructure compatible with smart and bi-directional charging; tax clarifications to avoid double taxation of stored energy; and integrating EVs into national strategies on flexibility and storage.
Romania has the advantage of being able to learn from the experiences of other European countries. The increase in the number of electric cars can also be approached as an opportunity for balancing the electricity grid, concludes the EY official.