Utilities Must Plan Now for Growing Popularity of EVs
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- Mar 2, 2019 4:29 am GMT
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The number of electric vehicles in operation is rapidly increasing. Electric utilities should think carefully about how they want to support this trend, and move quickly to roll out a forward-looking plan.
Fast Growth Ahead
According to the International Energy Agency (IEA), over one million electric cars were sold in 2017, representing a new record, and contributing to the over three million electric cars now on the road. The organization projects that between 125 million and 220 million electric cars will be in use by 2030. Bloomberg New Energy Finance predicts sales alone during the same timeframe will rise to 30 million “as they become cheaper to make than internal combustion engine (ICE) cars.”
This fast growth will present significant challenges to electric utilities as noted by the Smart Electric Power Alliance (SEPA) in a paper titled Utilities and Electric Vehicles: Evolving to Unlock Grid Value. However, “Utilities have proven their ability to adapt and innovate to handle new challenges. For example, many utilities today have demand response programs that minimize system peaks caused by air conditioning on hot summer days or heating on cold winter nights. Similarly, we would anticipate utilities will respond to a large concentration of [electric vehicles (EVs)] that may be simultaneously charging on-peak.”
The SEPA report further observes that “utilities do not want to just serve this new load – they want to take advantage of EVs as a distributed energy resource (DER) with the ability to modulate charge (i.e., managed charging), or even dispatch energy back into the grid (i.e., vehicle-to-grid).”
SEPA considers vehicle-to-grid (V2G) programs a “late-stage” activity performed by utilities that are “actively engaged with their EV customers and are considered leaders by their peers.” To set up a functioning V2G program, these utilities will need to overcome challenges including vehicle-grid communication protocols, cooperation with vehicle manufacturers to avoid invalidating vehicle warranties, hardware for AC/DC conversion, and permits and requirements for local grid operators, according to the report. While these factors remain unresolved, “V2G is still more conceptual than commercial.” Still, utilities should be looking ahead and considering V2G even as they engage in early planning.
Support for the proliferation of EVs requires new infrastructure. A report by the Center for American Progress (CAP) states, “As with any major technological transformation, transitioning to an electrified transportation system will not be easy nor cheap.” It points to the example of ICE vehicles, which required tens of thousands of gas stations, federally funded roads, and a network of maintenance providers. Similarly, the ubiquitous use of EVs will require ubiquitous charging stations.
The report notes a CAP finding that, “overall, the United States needs to deploy at least 330,000 new public charging outlets by 2025 to meet [plug-in electric vehicle (PEV)] demand.” While many states are “well on their way” to developing the needed infrastructure, current funding levels “can provide only about 50 percent of the funding needed to deploy adequate public charging infrastructure through 2025. Additional public resources and private investment are necessary to close the remaining $2.3 billion gap.”
The new infrastructure may also include home and workplace charging stations. Yet, SEPA points out that there is a debate in the DER community “over the right of regulated electric utilities to own and/or operate assets behind a customer meter, such as a ‘make-ready’ site (i.e., all of the materials required up to the point of the charger) or charging station.” Individual states have been engaged in resolving this issue. For example, regulators in California, an EV infrastructure leader, “decided that utilities could play a greater role to accelerate EV adoption and improve the business case of charging-station providers with behind-the-meter investments.”
To best prepare to meet customer and community needs in the coming years and decades, utilities should consider load management, V2G deployment, charging stations, and the many other factors involved with supporting more widespread use of EVs.