September 2, 2022

How utilities can capitalize on the rise of electric vehicles

Woman plugging in her Nissan LEAF

The clean economy has really begun to rev its engines nationwide.

 

Electric vehicle sales rose by more than 10% in the last year, and are now over 10% of the new car market. Experts estimate that over half of auto sales will be electric by 2030. Similarly, electrical power from renewables nearly doubled in the last decade, and the federal government is aiming for a carbon-neutral power sector by 2035. Almost 90% of consumers have gotten greener in the last few years, almost two-thirds of companies now have a sustainability strategy, and almost 200 localities across the country have committed to 100% clean and renewable energy.

 

And utilities are right in the middle of it: no wonder more than 360 electric utilities have set environmental policies to take aim at greenhouse gas emissions. They must smoothly replace fossil fuel based electricity generation with renewable energy resources, and they must provide enough additional electric power to fuel EVs on the grid. Additionally, these clean energy technologies may suffer from intermittency problems—wind turbines and solar panels don’t always supply electricity to the grid when it’s most useful—whereas EV drivers often plug in their car batteries in the evening, during peak demand hours.

 

But this challenge can also be a huge opportunity for power utilities. Overall electricity demand in the US has not risen much recently—from 3.8 trillion kWh in 2007 to 3.9 trillion in 2021— due to regulatory restrictions, efficiency standards, technological improvements, and the rise of the service economy. This has caused utilities to steer toward investments in clean energy. So the projected 300-fold rise in EV-based electricity consumption by 2040 should come as very welcome news!

 

Such huge opportunities don’t come around very often, and there are many things that power companies can do to make the most of this windfall. So here are some of the best ways for utilities to capitalize on the rise of electric vehicles:

 

Build out electric vehicle infrastructure

Public charging infrastructure in the US has lagged far behind that in other countries. For instance, though our population is seven times the size of South Korea’s, they have nearly the same number of public EV chargers that we do. Likewise, the Netherlands has more than 20 times the EV charging stations per mile of paved road than we do. To keep up with projected EV sales growth, by 2030 we need ten times more charging infrastructure than we have now.

 

In Europe and Asia, a large proportion of public Electric Vehicle Supply Equipment has been installed by electric utilities. However, in the US, power companies have typically been less involved, so many other sectors—including real estate companies, automakers, EV equipment suppliers, retailers, and various government institutions—have gotten involved in building out and funding our EVSE. Regulations have generally limited the ability of US electric companies to recover the costs of providing public charging infrastructure, because raising rates on general consumers might have been controversial back when very few people had the plug-in electric vehicles that would benefit. But state utility commissions have recently started changing their minds, because of the clear need for many more charging stations.

 

Now, utilities can take many steps towards expanding EV adoption. Of course, they can purchase Level Two and Level Three charging stations (like our award-winning JuiceBoxes) for public installation. But they can also provide discounts and rebates on leased or purchased electric cars or charging equipment, or help with financing. They can also request cost recovery for campaigns to educate customers about the benefits of electric vehicle ownership. These programs can also be offered for auto dealers, ride-hailing services, and heavy-duty vehicles like trucks or buses.

 

This could prove crucial, because utility companies would make the best fit for investing in public chargers: they have access to cheap credit, experience with infrastructure projects, and strong balance sheets. Furthermore, electric companies have a clear interest in driving up electric vehicle ownership, because this grows their electricity consumer base, reduces transportation emissions, and could expand “smart charging” services that enhance grid reliability by flexibly balancing the supply of energy with its demand.

 

Develop “smart charging” programs to modernise grid use

In the US, the electrification of transportation probably won’t require more generation and transmission resources. For example, our grid’s excess capacity could already supply nearly 200 million electric vehicles with regular charge. But utilities will face difficulties distributing all this extra power when and where it’s needed without grid modernization programs. Fortunately, EV adoption helps tremendously with electricity distribution upgrades!

 

Because overall electricity demand has remained flat as electric companies have had to invest in cleaning up our energy sources, they’ve been looking for a way to offer more products to customers. These include operator upgrades like automation systems, analytic services, and smart meters, which would allow utilities to better manage network load and further incentivize electric vehicle use. Indeed, this ability to use electric vehicle batteries as distributed energy storage systems—to “give back” charge to the grid when it’s needed, in exchange for rewards—should expand overall electrical capacity, rather than straining or draining it.

 

For example, in one of the first projects of this kind, Enel partnered with Denmark and Nissan to help EV fleet owners automatically “smart charge” and receive roughly $1,500 per vehicle per year for the help this provided to the grid. Because EVs are so new, and are still a small share of many car markets, and because regulatory authorities and grid operators are still determining how they would like to pursue such programs, these services are still not widely available. But because electric vehicle batteries are such a good source for grid-balancing benefits through voltage control, frequency regulation, and ramp rate reduction, they should ramp up fast!

 

One of the best ways to improve grid economics and achieve higher utilization rates through EVs would be with a service like JuiceNet, which can shift when and how much electricity utilities draw from connected stations. This allows grid operators to reduce costs, ease congestion, maximize the use of renewable energy sources, and provide incentives to EV owners. And JuiceNet Utility Edition enables utility managers to access charging behavior data, execute demand response events, offer “green charging” plans, and manage utility load requirements, while prioritizing driver mobility needs.

 

Conclusion

As electric vehicle ownership rates continue to rise, the utility sector could really begin to enter the transportation industry. EVs will undoubtedly increase demand for electric power, and their distributed energy storage capacity can assist with many other necessary grid improvements. This might even allow electricity companies to start widely offering new products and services like smart meters!

 

The best step that grid operators can take now is any bold step forwards into our clean driving future, such as investing in EVSE and developing smart charging programs.

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