The transition to e-mobility is a major technical challenge for power systems, especially in emerging and developing markets. Its unique type of electricity load may amplify existing demand peaks and put additional stress on power systems and the utilities that operate them. However, it can also create opportunities for new business models.

In this new Insights series, ECA experts will discuss how e-mobility will impact power systems in emerging and developing markets, focusing on demand forecasting, generation planning, network planning, tariffs, and the potential for vehicle-to-grid integration.

E-mobility is growing

The past decade has seen a rapid acceleration of e-mobility. Supported by concerns on air pollution, sustainability, and affordability, one in five cars sold in 2023 was electric: electric car sales neared 14 million in 2023, 95% of which were concentrated in China, Europe, and the United States[1].

Growth has lagged in emerging markets, which rely on second-hand vehicles and lack the resources to replicate the significant subsidies and tax breaks that stimulated the initial rise in EVs in Europe, the US, and the Far East.

Notwithstanding this, in the coming decades, EV uptake will be fostered thanks to decreased EV prices and the rise of second-hand markets. Goldman Sachs research expects EV prices to be driven down by declining prices for raw materials used to manufacture batteries. By 2025 battery prices will fall to $99 per kilowatt hour (kWh) of storage capacity — a 40% decrease from 2022[2]. Furthermore, as major electric car markets mature, more used electric cars will become available for resale. While used car markets already provide more affordable electric options in China, Europe, and the USA, trade of used electric vehicles to emerging and developing markets is expected to increase[3].

EV charging can significantly impact the electricity grid

EV charging is expected to increase electricity demand, which is already driven by economic growth, electrification, and other factors. Demand forecasting will require thorough analyses of future transport patterns and projected trends of EV uptake. Not only does this concern the favoured types of EVs in emerging and developing markets, eg, motorbikes, taxis, and buses, that may differ from those in developed markets, but also EV charging models and the impact of third-party charging businesses.

The impact, in turn, of EVs on the electricity system will be greatly influenced by the timing, location, and speed of charging behaviour:

• Daytime charging – Taxis and other public transport may charge their vehicles during the day in central urban areas. This could result in the extensive use of public and third-party charging stations, reaping excess generation from rooftop solar installations, and alternative models such as battery swapping.
• Evening charging – Without smart technology and automated chargers, most private EV charging will occur when drivers return home from work in the evening.
• Overnight charging – Consumers may see to benefit from lower overnight time-of-use tariffs by charging their EVs at night when electricity demand is lowest.

Illustrative demand curves for EV charging. Source: ECA

Increased EV demand will require enhanced generation and network planning

As EV charging demand grows, countries must enhance their generation planning. New and rapidly growing loads can alter the shape and peaks of system demand. The challenge is more acute if peak EV charging coincides with system peaks. At the same time, greater penetration of variable renewable energy increases the power supply volatility, making matching demand and supply more challenging. These trends also create opportunities. For instance, in systems with a high proportion of solar generation, lower daytime tariffs can significantly lower the cost of EV charging.

Distribution network planning must consider EV charging load profiles’ temporal and spatial variability while also incorporating more flexible and distributed generation, and how any ensuing network capacity constraints can be addressed. Countries should assess public and private charging business models and their infrastructure reinforcements to match future EV charging developments. Furthermore, EV uptake needs to occur in tandem with network decarbonisation and consider the role of renewable energy in achieving this.

Emerging market utilities have an important role in EV development

Emerging market utilities are key in making the e-mobility transition successful and can turn the risks of unmanaged charging into an opportunity for growth. Gathering charging behavior data based on time and local network location would improve the accuracy of demand forecasts.

More dynamic time-of-use pricing can incentivise charging at times of lower demand or lower-cost supply. When combined with locational pricing, local network constraints can be alleviated, and surplus capacity can be utilised[4].

Successful e-mobility implementation requires utility financial and technical resilience. A well-operated local network and coordinated charging practices ensure local grid stability, manageable maintenance costs, and operator cost recovery.

Our future Insight series

In this ECA Insights series, we will address key considerations for emerging market power utilities:

• EV demand forecasting in power system planning – EV charging will increase electricity demand’s temporal and spatial distribution.
• The generation planning required to meet EV uptake – ensuring sufficient supply to meet variable demand while supply variability grows through increased renewable and decentralised energy penetration.
• The readiness of electricity networks – spatial variability in charging will increase the need for decentralised energy, flexible network capacity, and associated system operator management mechanisms.
• The incentives of efficient tariff setting – increasingly dynamic tariffs can encourage managed charging by time and location and reduce potential utility financial losses.
• The potential of vehicle-to-grid (V2G) integration – V2G facilitates enables “batteries on wheels” to provide flexibility to the electricity grid.

[1] IEA. 2024. Global EV Outlook 2024.

[2] Goldman Sachs Research. 2023. Electric vehicle battery prices are falling faster than expected.

[3] IEA. 2024. Global EV Outlook 2024. 

[4] Greenflux. 2021. The opportunities of e-mobility for the energy industry