Assessing potential of Electric Vehicles in the energy flexibility markets
This e-mobility player, a charging point operator (CPO) specializing in charging solutions for residential customers in Belgium, aimed to investigate the potential of Electric Vehicles (EV) in the energy flexibility markets as part of their future growth strategy. They aimed to understand the mechanisms and value of EV flexibility, how to package it into customer propositions, and what capabilities are needed to operate and deliver it.
We conducted a strategic analysis to provide insights into the electricity market, qualify and quantify the different flexibility services and benchmark a specific range of product offerings.
Objective
- Provide necessary insights into the energy and flexibility market, as well as the working principles of energy supply.
- Deliver a concise overview of current standard market practices and benchmarks for EV Flexibility offers across major EU-adapted markets.
- Define the value of EV flexibility in Belgium and identify the key drivers impacting this value from both the EV drivers’ and suppliers’ perspectives.
- Identify the main operating models offering energy and home charging flexibility, including the required capabilities for each model.
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Methodology
Thorough Flexibility Market Analysis and Product Shaping
- Provide a qualitative description of the different flexibility services and corresponding valorisation mechanisms technically feasible for a pool of EVs.
- Identify potential risks and main barriers.
- Customer target segmentation based on parameters that drive the value of each flexibility service, such as customer plug-in time and mileage.
- Evaluate different product offering options and target segments. Assess the feasibility of products that offer a simple and appealing value proposition to customers.
Flexibility Valorisation Model
We developed an EV flexibility valorisation model that allows to define multiple simulation scenarios, calculate the yearly value and analyse the impact of separate parameters. Key components include:
- Residential electricity prices and wholesale market sourcing cost
- Plug and charging behaviour of the client portfolio
- Projected consumption profile
- Forecasted PV production based on historical data extrapolation and installation size
- Average energy market prices, including flexibility markets
Operating Model Strategies
We provided an overview of the different possible operating models with varying levels of ownership within the value chain, starting from the client’s current state as a CPO. The operating models were presented and evaluated based on the following aspects:
- Level of ownership over the customer, including charger, residential energy contract, and its BSP/BRP1 relationship with the client
- Revenue streams related to each model
- Core capabilities and distribution of those capabilities among the different parties involved in the operating model
- Barriers to achieving the desired state of the operating model
1 BSP = Balance Service Provider, BRP = Balance Responsible Party
Results
Our analysis provided the client with valuable insights to inform future developments in their business strategy. By identifying and quantifying the value of flexibility, we clarified the potential value proposition for both customers and the business. Through a detailed sensitivity analysis, we uncovered the key drivers behind such an offering and guided the client in possible products that encourage positive customer behaviour to maximize value and customer satisfaction. Finally, we outlined the essential steps and capabilities required to successfully launch and operate the service.
