Electric Vehicles in Australia's National Electricity Market: Energy Market and Policy Implications

Over the long run, the electric vehicle market seems poised to proliferate, driven by pressures to decarbonise the transport fleet, rising fossil fuel prices, improving operating efficiencies and falling costs of batteries. These pressures will impact vehicle manufacturers, battery producers, governments, regulators, utility companies, fleet owners and individual drivers. In this article, we assess the implications of passenger electric vehicle development on the National Electricity Market (NEM). Our analysis shows that the medium term aggregate impact on the electricity grid is likely to be relatively minor, although there may be specific challenges at a neighbourhood level. The correct mix of pricing, policy and regulatory settings should ensure a smooth transition to the decarbonisation of the transport fleet.