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Utilities Must Plan Now for Growing Popularity of EVs

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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.”

Vehicle-to-Grid

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.

Infrastructure

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.

Karen Marcus's picture

Thank Karen for the Post!

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Bob Meinetz's picture
Bob Meinetz on March 3, 2019

Karen, some observations from my own experience:

1) EVs, like ICE vehicles, need the same federally funded roads and network of maintenance providers. It becomes an issue for states which rely on gasoline taxes to pay for road maintenance - where will the money come from? A few years ago hackles were raised in the environmental community when Oklahoma proposed an "EV tax"  - not sure what the status of that is now.

2) Whether the ubiquitous use of EVs will require ubiquitous charging stations is debatable. Even with 300,000+ EVs now driving California roads there are suprisingly few public charging stations. I seldom use public stations to charge my EV - it gets charged each night at home, and I think as battery capacity improves there will be even less need for them.

3) Years ago I made a rough calculation of how much current would be required to charge them all if everyone in California was driving an EV instead of an ICE vehicle. I was surprised to find average power consumption would only be 5-10% higher, and would likely peak overnight when consumption is low. So added costs for transmission will be lower than many estimate.

4) In the 1990s analysts recognized the threat of EVs to the oil industry's bottom line, and have invented various strategies to preserve it. One way was to promote natural gas for electricity generation; another was to promote liquid hydrogen as an automotive fuel (95% of hydrogen is made from natural gas). So anyone purchasing an EV for environmental purposes should find out where their electricity is coming from. They might be surprised to learn their "emissions-free" EV is dirtier than the car they're driving now.

Karen Marcus's picture
Karen Marcus on March 5, 2019

Thanks for your insightful comments, Bob.

Bryan Leyland's picture
Bryan Leyland on March 7, 2019

Electric cars have huge disadvantages compared to conventional cars. They are more expensive, they have a much shorter range and they take a long time to refuel.  In most cases, the electricity to charge the batteries comes from fossil fuel power stations.  The carbon dioxide that they save costs more than $100 per tonne. On the carbon market, the price is $10 per tonne.

In almost every country they are heavily subsidised directly and also indirectly because they don't have to pay road tax. So they are subsidised by other road users and by taxpayers. This cannot go on for ever and when it stops, the fuel cost advantage will largely disappear

 My prediction is that as the subsidies are withdrawn they will soon run out of people who are prepared to spend a lot of money to show off their green credentials.

In the US at least, there are indications that the growth rate is declining.

 

Karen Marcus's picture
Karen Marcus on March 13, 2019

Thanks for your expertise and observations, Bryan.

Bob Meinetz's picture
Bob Meinetz on March 14, 2019

 

"Electric cars have huge disadvantages compared to conventional cars."

That depends on what you're using them for, Bryan. If it's for day-to-day errands or short commutes, there are a number of qualities to recommend them:

1) Virtually zero maintenance - no oil changes, no filter changes, no belts/radiators/spark plugs (you do have to check tire pressure occasionally).

2) Like your cellphone, you charge them at night and use them during the day. Say goodbye to visits to the gas station.

3) Electric fuel costs 5¢/mile - you can't find gas for less.

4) Quiet as a mouse. Buy that really good sound system you've always wanted for your music - you'll hear every note.

5) The electric motors which power them have no power band like internal combustion engines - you get full torque from a full stop. Translation: the cheapest electric vehicles have pickup equaling that of sports cars selling for three times the price. An experience which must be felt, to be believed.

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