Going green with electric vehicles and smart grids

A report from the International Energy Agency (IEA) revealed that global EV sales reached around 14 million in 2023, marking a significant increase from 4% of total car sales in 2020. By the end of the year, the agency predicts that more than one in five new cars sold worldwide will be electric. 

The journey towards a greener world is a collaborative one and spans multiple sectors. In the world of transportation, electric vehicles (EVs) are leading the charge, playing a vital role in decarbonising the automotive sector — which accounts for over 15% of global energy-related emissions. 

A report from the International Energy Agency (IEA) revealed that global EV sales reached around 14 million in 2023, marking a significant increase from 4% of total car sales in 2020. By the end of the year, the agency predicts that more than one in five new cars sold worldwide will be electric. This highlights the rapid adoption of this technology.

EV revolution in the Middle East

The Middle East has long been known as an oil-dependent region. As Middle Eastern countries accelerate their clean energy goals, they are also beginning to embrace this shift toward EVs. The regional EV market is expected to grow significantly, with an estimated market size of $3.33 billion in 2024. The figure is projected to reach $9.42 billion by 2029, growing at a compound annual growth rate (CAGR) of 23.20%. 

This growth is driven by government initiatives (e.g., the UAE’s National Electric Vehicles Policy), increased consumer awareness, and investments in EV infrastructure. It’s also a welcome development, as EVs have a strong potential to minimise the world’s overall reliance on oil. 

According to the IEA, the global EV fleet consumed about 130 terawatt hours (TWh) of electricity in 2023, displacing around 0.9 million barrels of oil daily. To align with the Net Zero Emissions by 2050 Scenario, EVs must displace around 8.2 million barrels of oil per day by 2030.

Despite the growing momentum, the Middle East faces several challenges in fast-tracking EV adoption. Range anxiety remains a significant barrier — exacerbated by the region’s vast desert landscapes and extreme temperatures. According to a PwC analysis, such an environment can reduce battery performance by up to 23% when temperatures exceed 40°C.

Infrastructure is another critical challenge in the Middle East. 

As of last year, there were 3.9 million public charging points worldwide. And it was China that led the way, housing 70% of the global stock of public chargers. In contrast, the Middle East is still developing its EV charging infrastructure. While ambitious plans are underway — for instance, Saudi Arabia’s Electric Vehicle Infrastructure Company (EVIQ) aims to install 5,000 EV chargers by 2030 — they are not yet fully realised. 

The role of smart grids and the way forward

Challenges are expected for any game-changing, tradition-shattering movement, such as the switch to EVs. In the Middle East and beyond, the emergence of EVs points towards one truth: the critical need for supporting technologies like smart grids.

Smart grids are modern electricity networks that use digital communication technology to respond in real time to changes in energy use, enhancing the efficiency and reliability of electricity distribution. 

For EVs, smart grids act as a backbone. These modern grids enable bidirectional energy flow between the grid and EVs. Known as vehicle-to-grid (V2G) technology, this concept allows EVs to draw power from the grid and supply excess power back. In a nutshell, it turns EVs into mobile energy storage units. This capability can help stabilise the grid, especially during peak demand periods, and reduce overall energy costs.

Smart grids also support dynamic pricing models, which can encourage EV owners to charge their vehicles during off-peak hours when electricity is cheaper and more abundant. 

With all these advantages, it’s no surprise that entities like IEA are adamant about prioritising EV infrastructure and smart grid expansion. According to the agency, governments should support the deployment of public charging infrastructure and provide incentives for installing home chargers.

Additionally, PwC emphasises the importance of investing in smart and bidirectional charging capabilities, which can transform EVs into valuable assets for the grid rather than potential challenges.