Oct. 18, 2019 | InBrief

The rise of electric vehicles (EVs) presents opportunities for drivers and electric utilities

The rise of electric vehicles (EVs) presents opportunities for drivers and electric utilities

Electric utilities are undergoing many transformational changes that affect how they operate and engage with customers. The latest trend – gaining quite a bit of traction – is electric vehicles (EVs). Why is this a big deal? EVs are a unicorn trifecta of a win-win-win scenario: benefiting customers, electric utilities, and society.

EVs can now create true pocketbook savings

Auto manufacturers are quickly ramping up their production and development of EVs, suggesting a dramatic shift in the transportation industry in the next decade. By 2025, EVs are predicted to capture between 30-50% of new vehicle sales.

Why is this happening? EVs are coming onto the market at competitive price points with significant improvements in electric range making the decision to go electric more appealing each year, with 81% growth from 2017 to 2018.

Several utilities now provide total cost of ownership calculators for light duty vehicles on their websites – Con Edison and Southern California Edison to name a few. This allows people to easily compare and evaluate the decision to buy an EV by making it easier for customers to learn about the incentives available and make comparisons across a quickly expanding inventory of EVs. These tools may be helping convince consumers of the benefits of EVs. In a recent survey done by West Monroe of northeast and California consumers, 59% of respondents say they plan to purchase an EV as their next car.

In addition to light duty vehicles, we see a lot of promise for medium- and heavy-duty EVs. While the variety of EVs for these vehicle classes is limited, there are certain applications that are already viable today. We’ve developed a Fleet Total Cost of Ownership calculator that considers all the costs and benefits of fleet conversion, including fuel and maintenance costs, electric vehicle supply equipment (EVSE), and Low Carbon Fuel Standard Credits. Our tool makes it easy to understand EV viability by providing recommendations on when to charge and which EVSE to purchase to meet charging requirements while maximizing savings.

EVs can improve grid utilization and sustain electricity rates

With growing renewables, utilities are learning how to balance a more volatile supply and demand. The combination of behind-the-meter renewables and increasing energy efficiency has led to flat (and sometimes even negative) load growth, creating a challenge for utilities to sustainably operate the grid. EVs are a flexible load that can help mitigate grid issues including absorbing excess energy to avoid curtailment or exports and providing opportunity for more low-cost baseload generation.

What does this mean? If EVs can be charged in times where it helps the grid, the cost of energy for all customers can be sustained or even become lower, providing benefits to all customers, even if they do not have EVs.

There is, of course, a risk to the tremendous load growth EVs can add. If EV charging happens during times when the grid is already at or near maximum capacity, it can trigger the need for distribution and transmission upgrades as well as increase energy and capacity procurement costs. This is one of the reasons why the utility plays an important role in achieving and promoting sustainable EV load growth.

While some studies have estimated the potential impacts of EV adoption at the system level, we believe it is important to examine the impacts on the circuit level. Our tools can model EV adoption on any feeder under various adoption rates as well as show the impacts of unmanaged versus managed charging. This can help utilities better quantify and plan for transmission and distribution upgrades, especially as EV adoption often occurs in clusters versus being evenly distributed across the grid.

The utility role in reducing EV adoption barriers

Two of the biggest barriers to EV adoption are lack of widespread public charging stations and limited customer education on EVs. Electric utilities across the country are stepping up to help bridge those barriers, supporting a wide variety of EV programs for the workplace, multi-unit dwellings, ridesharing, public transit, and residential managed charging. Many of these programs include incentives to charge during off-peak periods while providing additional monetary support to offset EVSE procurement costs.

These programs also provide educational opportunities to customers, from the basics of how EVs and home charging works to working with customers to plan and evaluate EVSE infrastructure installation. In some cases, the utility can play a critical role in the expansion of EVSE infrastructure. For example, in areas where EV adoption has not yet taken off, the utility can make the investments that are not yet attractive to private entities. As a result, the availability of the public infrastructure can spur and support EV adoption. Further, the utility can incorporate additional considerations such as locating charging stations in areas where there is ample grid capacity and/or in areas that support low-carbon mobility for disadvantaged customer groups.

The future of EVs is promising and exciting. We have been thrilled to support this transformation through both our utility EV program expertise and EV customer engagement tools. Transportation Electrification is a rare opportunity for bringing a diverse group of stakeholders together to support a common goal: an affordable and clean energy future. What’s not to love about that?

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