The Impact of EV Charging Infrastructure on the Global Energy Grid

Growing scale

As EVs become more accessible, convenient and cost-effective, the corresponding build-out of EV charging infrastructure is creating challenges for the global power grid. 

While home charging remains the most popular way for EV owners to charge their vehicles, the number of public chargers has doubled globally since 2022, now standing at over 5 million, with 1.3 million public charge points being installed in 2024 alone. Around 65% of these public charge points are in China, which is by far and away the largest EV charging market. 

In the EU, the number of charge points has steadily increased to over 1 million as the Alternative Fuels Infrastructure Regulation (AFIR) drives access to EV charge points across the continent. AFIR, for example, mandates the installation of fast-charging stations for cars and vans of at least 150 kW every 60 km along the TEN-T core road network. Simultaneously, the EU Energy Performance in Buildings Directive (EPBD) has revised the requirements for pre-cabling for EV charging in new and majorly renovated residential and non-residential buildings, setting the tone for future infrastructure implementation. This guarantees the continued growth of EV charging infrastructure across Europe. 

The UK's EV charging infrastructure is also rapidly expanding, with over 82,000 public charge points currently operational and government targets to reach 300,000 by 2030, supported in part by the UK government's recently announced £63m investment (see our article on this package here). The Automated and Electric Vehicles Act 2018 (AEVA) enables the government to mandate on reliability interoperability standards while the 2021 Part S of the Building Regulations 2010 creates requirements for EV charging infrastructure installation and specification in new and majorly renovated buildings (see Bird & Bird's guide to UK EV charging legislation here).

Meanwhile, the US has seen federal funding for EV charging drop as disbursements under the National EV Infrastructure Program have been paused. However, US passenger EV sales are still predicted to rise to 4.1 million in 2030 and EV infrastructure will be required to cater for this, whether funded privately or by state/federal government.   

This continued growth of global EV infrastructure is impacting the power grid and has knock-on effects for charge point operators (CPOs) and consumers.

Potential Issues

Firstly, the growing scale of EV charging infrastructure requires a corresponding increase in generation, particularly renewable energy generation which supports the role of EVs in the wider energy transition. For example, in the UK, estimates suggest that electrifying the vehicle fleet could result in road transport making up 15% to 20% of total electricity demand in 2050. Whilst a small amount of electricity will be diverted from industrial refining of petrol and diesel for vehicles, this will be nowhere near enough to meet EV charging requirements. We will therefore require an increase in generation to meet demand or else risk rising electricity prices for CPOs and consumers. 

Secondly, an uptick in EV charging infrastructure places additional, and sometimes unpredictable, demands on the energy grid. Unlike traditional electricity loads, EV charging can require substantial bursts of power, especially if numerous vehicles charge simultaneously in a single area. This strain can lead to grid instability, prompting the need for upgrades to transformers, power lines, and substations. Moreover, without effective management - such as load-shifting or real-time grid monitoring - utilities can be forced to generate or procure more electricity during peak hours, driving up operational costs and potentially raising prices further.

Solutions

In response to these challenges, there are a number of solutions which provide better outcomes not only for grid operators, but CPOs and consumers. 

Smart Charging 

Smart charging refers to methods which can control when and how EV charge points draw power from the grid. This includes data-driven scheduling and communication between chargers, vehicles, and energy providers. By shifting charging to off-peak hours or adjusting the rate of charging when the grid is under high demand, smart charging minimises stress on power infrastructure, stabilises electricity supply, and can reduce overall costs for consumers.

In the UK, smart charging is mandated by the Electric Vehicles (Smart Charge Points) Regulations 2021. This requires new home and workplace charge points to include smart functionality by default, such as the ability to schedule charging during off-peak times. This is intended to alleviate pressure on the grid and promote efficiency of electricity use. Additional regulations mandate secure data communication and safeguards that help protect user information while enabling remote management of charge rates. Smart charging is also incentivised on the consumer side as off-peak charging will typically be cheaper for consumers on flexible electricity tariffs. In the EU, AFIR and EPBD also work to provide technical requirements for EV chargers in public spaces and necessitate smart capabilities. 

Smart charging therefore aligns EV charging demands with grid capacity. This allows continued rollout of EV charging infrastructure without compromising energy security or affordability.

Vehicle-to-Grid (V2G) Technology

V2G technology is a form of smart charging which allows EVs to send electricity back to the grid via charging infrastructure when demand is high or when the grid requires support. 

In essence, EV batteries function as distributed energy storage units, capable of discharging stored power for broader network benefit. This two-way interaction not only enhances grid stability but also presents financial opportunities for vehicle owners, who can sell surplus energy during peak pricing periods and recharge during off-peak times. CPOs can also benefit from schemes such as the UK’s capacity market where they may receive payments for providing a demand side response solution during potential capacity market events in which the supply of electricity may potentially miss demand. CPOs can do this by stopping charging during certain times and instead sending electricity back to the grid, thereby assisting grid operators in balancing supply and demand. 

In the UK, while no standalone legislation exclusively governs V2G, smart charging legislation has laid the groundwork for bi-directional charging capabilities. Similarly, the European Union is exploring measures under AFIR to anticipate how V2G could integrate with Member States’ networks. Other jurisdictions such as California have introduced incentive schemes and pilot programmes that reward EV owners for participating in grid-support initiatives. These schemes often operate under time-of-use tariffs and can evolve into more comprehensive V2G regulations as the market matures. We are therefore seeing legislative frameworks emerging to capitalise on V2G’s potential to enhance the resilience and efficiency of the modern power system.

Private Wire PPAs

A simple way to negate the impact of EV charging on national grid infrastructure is to bypass the grid entirely via a private wire PPA. Sometimes referred to as a ‘behind the meter PPA’, this is used where the source of power generation is either co-located or close to the electricity consumer (or ‘offtaker’). This allows electricity to move from generator to offtaker without national grid intervention. 

This is well suited to EV charging projects, particularly highway services charging hubs, where solar projects can be built out in relatively low-cost land surrounding the services to provide electricity direct to EV charging infrastructure. Such infrastructure is becoming increasingly common in the UK where CPOs may become involved early in the development process, guaranteeing an income stream for the project, which provides bankability, whilst tailoring the project to the demands of the charging hub. Another use case is in commercial car parks, where new legislation such as the French APER Law (see our article on what the APER Law means here) mandates that outdoor carpark managers cover 50% of their car park surface area with solar panels and will apply to all car parks larger than 1,500 m² by Q3 2028. This same law also requires non-residential buildings with a car park of more than twenty parking spaces to have EV charging stations. These requirements therefore create a perfect opportunity for private wire PPAs and we are likely to see this becoming increasingly popular as other jurisdictions, including the UK, look at similar requirements for commercial car parks (see our article on proposed UK legislation here).

This PPA structure provides several additional benefits alongside alleviating pressure on national grid infrastructure. Firstly, by bypassing the grid, generators and offtakers can avoid grid charges which allows lower prices for generation. Secondly, generators and offtakers can easily obtain exclusivity in such an arrangement, thereby guaranteeing supply for offtakers and income stream for the project. Thirdly, the global issue of grid connection delays in an increasingly electrified society and decentralised generation environment are negated as the project does not need grid connection.  For more information on corporate PPAs, please see the Bird & Bird Corporate PPA Hub or get in contact with us.

Summary

Whilst the continued growth of EV charging presents potential issues for the grid as a result of increased and complex electricity demands, there are a number of potential solutions which can provide benefits for grid operators, CPOs and consumer alike. 

Bird & Bird has significant experience advising clients in the EV charging infrastructure sector.  As a full-service international law firm, this includes advising on issues ranging from corporate finance, compliance with EV charging regulatory regimes, commercial contracting, public procurement and much more. For further information, please visit our EV charging page and our EV charging infrastructure regulations comparative guide.