Let’s count all the ways EVs can support the grid and utilities. Then let’s count all the reasons they don’t.
That’s what a new report from Deloitte does. Called Powering the Future of Mobility, the report says that EVs can help stabilize the grid, absorb extra renewable energy, and help engage utility customers. To do this, however, utilities need to invest in EV charging infrastructure and offer better incentives for smart charging. And policymakers and regulators need to give the utilities a big push to realize all these benefits.
“We have to quickly move beyond pilot programs and toward a full-scale build out of EV charging infrastructure. It’s not just about charging the vehicles, but integrating them with the grid,”
says Scott Smith, Deloitte’s US power & utilities leader.
The report notes that electricity consumption from EVs is expected to increase 300-fold globally, from 6 TWH in 2016 to about 1,800 TWH in 2040. Electricity consumption from EVs is expected to make up about five percent of total 2040 global consumption, according to a summary of the report.
To meet that boost in kilowatt-hour consumption, utilities need to cope with increased peak demand. “Without incentives, growing EV adoption could exacerbate this challenge. Many utilities have deployed or are developing time-of-use and EV rate plans that sharply reduce electricity prices during off-peak periods, such as late evening, to help shift EV load to off-peak hours,” says the report summary.
Smith, who owns an EV, says that he suffers from range anxiety. Others are less likely to invest in EVs if, like him, they don’t feel confident about the infrastructure.
“We believe the regulators need to recognize that the utilities have to own and operate a lot of the electric infrastructure for charging,” Smith says.
Regulators are hesitant to include EV infrastructure in the rate base because some argue that people without EVs shouldn’t pay for it. “But we do it with other assets,” he says. “We believe it’s important for environmental reasons and public policy to spread the cost to ratepayers.”
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Just as important, regulators and utilities need to get serious about integrating EVs into the grid so they can absorb excess renewable energy.
Smith offers Hawaii as an example. EV owners could charge their cars when there’s too much solar on the grid, absorbing excess solar and helping balance the grid. He suggests that absorbing excess renewable energy with EVs might be more cost-effective than using storage.
“There’s a lot of focus right now on using battery storage to soak up excess renewable energy. But that’s expensive — while EVs are already on the ground and able to be used,” he says.
Smart charging programs needed
Needed to make this happen are smart charging programs and smart policies, he adds.
In windy areas of eastern Oregon, for example, if there is a big increase in wind generation, and grid operators face more renewable energy on the system than expected, a smart charging system could start charging cars that were already plugged in.
“It’s pretty easy to do,” Smith says. Smart charging involves charging communications and control technologies that are now becoming more available, says the report. They help monitor EV battery usage and charging patterns, for example. And some options are now available that can provide value to EV owners and the grid.
“These may include enabling individual EV or fleet owners to set charging preferences, adjust or override them, receive price signals and grid support requests from utilities and respond to them — automatically or manually — and receive notifications of their vehicles’ state of charge,” says the report.
In addition to absorbing excess renewable energy, EVs can provide ancillary and regulating services that help maintain power quality and balance the grid. These could include voltage regulation and support, frequency regulation and ramp rate regulation, the report says.
Utilities have a lot to gain from investing in EV infrastructure, boosting the use of EVs, and inviting EV owners to help balance the grid, Smith says. By doing this, utilities can engage more with customers, creating more give-and-take — a goal of many utilities.
“Widespread EV adoption may compel (customers) to become more active participants in the energy ecosystem once they begin amassing utility bill credits in payment for EV services provided to the grid,” says the report summary.
EVs as killer app
“EVs might be the killer app to get customers more involved in their own energy use and energy production,” Smith says.
In addition to incentives for off-peak charging, utilities could offer green charging plans, the report says. For example, Great River Energy provides 100 percent wind energy for EV customers, at costs no higher than off-peak rates.
And demand response via EVs is another option–but few utilities now take advantage of it, the report says. “More than 44 percent said they are planning to incorporate EV charging into their demand response programs; only 6 percent have already done so,” says the report summary.
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