Not long ago, executives at utilities and within the energy industry looked at the potential electric vehicle (EV) future with wide eyes. But these wide eyes were not of excitement and anticipation, they were the wide eyes of fear. From the perspective of these energy leaders, this perspective isn’t tough to understand. After all, studies have found that vehicle electrification will lead to the largest opportunity to increase energy demand since the introduction of air conditioning into buildings in the 1950s. Depending on the rate of EV purchases, though, this energy load growth could actually end up being larger and even more consequential in terms of how much energy will need to be generated and transported on a macro scale.
On a more micro scale, the picture can be just as daunting as well: individual commercial buildings and residential neighborhoods were outfitted with the size and type of transformers and substations intended to suit an expected load profile with some moderate growth built in. This equipment was not, however, historically erected with the additional load that a street full of Teslas may bring—especially given that one EV on a grid can hit the utility provider the same as an additional house being connected.
These seemingly inevitable challenges served to intimidate the energy industry for quite some time, but in recent years new outlooks from innovators and forward thinkers have highlighted how shortsighted such a perspective was. Are EVs—including commercial fleets, electric trucks, and electric buses, and more—going to transform how utilities must operate? Yes, that part is still quite true. The difference, though, is advances in technologies and utilities strategic approaches have progressed to the point that utilities can and should look at the transportation revolution not as a reason to stress but rather as a golden opportunity to solve other utility challenges. From the clean energy transition to smartly addressing peak load demand and more, utility planners have no shortage of hurdles coming at them, but EVs can be a part of the solution to these problems.
EVs as a solution rather than a liability has been an idea growing in theory in recent years, and today the industry is now lucky enough to see use cases, pilots, and other real world examples for how EVs are opening new doors for power providers.
This first and most talked about area of opportunity to the grid from EVs comes via vehicle-to-grid (V2G) charging. Traditionally, EV charging operates in a single direction: the driver plugs the car into the charger, electricity is sent from the charging to the EV battery, and then the car stops charging when the battery is full and the driver is juiced up with their full range. In the early days of EV charging, some utility operators identified opportunities to play with the timing of when EVs would charge by giving EV drivers a discount if they programmed their cars to charge in the middle of the night when overall demand dropped. This type of load management has already been used in practice for a few years and represents the baseline of how EVs can be less of a stressor to the grid.
For EVs to go from ‘less of a burden’ and into being a real asset, though, EV stakeholders have been developing bidirectional charging programs. In such an arrangement, energy can flow not just to the EV battery but also from the battery and back into the grid, serving as a tangible source of energy storage. Energy storage is often considered a lynchpin to the greater clean energy transition as batteries storing large quantities of energy allow renewable operators to generate at full capacity when available (e.g., when the sun is shining on a solar panel) without worrying about curtailment, storing the clean energy to be sent back into the grid at the point when it’s most needed. For example, typical peak demand periods for utilities occur in the early evening when the sun is setting but people are largely returning home from work or school and engaging in energy intensive activities like cooking and running the laundry. This peak demand timing runs counter to when solar energy is available, creating what’s known as the duck curve. Energy storage can be an elegant solution to these issues.
One of the great struggles with getting energy storage built out in a way that can address this problem is the large footprint, capital costs, and complexity that is required. But what if the batteries already existed, say in the garage of people across the city? With rapid electrification of transportation, that’s indeed the situation. EVs would be well suited to be a mobile, agile, flexible source of aggregate energy storage. Even better, the typical demand pattern means they can slide in nicely for addressing peak demand: if users plug them in when they return home at night (during peak demand), cars can be programmed to send their extra energy back into the grid and not start recharging until the nighttime when demand drops and energy is more readily available. By combining these opportunities with personalized settings like a driver dictating when they want to next drive the car and how much charge they’ll need, it creates an intelligent opportunity.
White papers and thought pieces have extolled this V2G opportunity for years, but recently Utrecht, the fourth largest city in the Netherlands, has sought to become the first city in the world to put such a bidirectional charging ecosystem in practice. Utrecht has partnered with We Drive Solar and Hyundai to put a fleet of 100 solar electric vehicles on the road with a carsharing program, providing a collective 1.1 megawatts of peak power to the city (a quantity of capacity that would otherwise require a large solar plant the size of two football fields.).
End of Life EV Battery Storage
EVs and their batteries can even step in to start and solve the energy storage issues across the grid after the end of the useful life of the EV. The reason for this opportunity comes from the fact that EV batteries must be rated very highly in their ability to reach and hold a given level of charge to be road legal. Once the EV batteries degrade to a certain level (though that takes a decade or more of driving for most EVs), the battery needs to be replaced or the car scrapped. However, just because the battery has dipped below the safety regulations for a vehicle doesn’t mean they have become useless. In fact, these ‘end of life’ batteries no longer suited for a car are still capable of holding a notable amount of charge quite reliably and affordably.
Given that one of the major points that EVs get criticized for are the resource intensive nature of creating the batteries in the first place and the trouble with safe recycling and/or disposal of the component battery materials, using the EV batteries until their very last moment of usefulness is a critical strategy. If they cannot be used in the vehicle anymore, then they can still be used as components for grid-tied storage.
By collecting end of life EV batteries and connecting them together, larger scale energy storage projects can be cost effectively built. Rather than try to recycle the materials making up the batteries, numerous companies are looking at batching used EV batteries together to create large-scale grid storage. This practice once again lowers the price of creating energy storage because the materials have already been mined and the battery manufacturing has been completed, and once they are wired together and connected to an intelligent process, the result is the type of larger scale energy storage implementation that will be popping up across the grid to empower greater renewable energy penetration.
A great example of this theory being put into practice has come via collaboration with the utility CPS Energy, the automaker Hyundai, and the solar company OCI Solar. The agreement among these three stakeholders has called for end of live EV batteries to be combined with solar installations and be implemented across the San Antonio jurisdiction of CPS Energy. The data and results will be shared among these stakeholders as the starting point to greater circular uses for EV batteries, more forward-looking planning to get storage on the grid, and more favorable environment for solar installations across the city.
Strengthen Power Provider Relationship with Customer
A final area where EVs are transforming the utilities for the better comes from the less tangible but just as important area of customer engagement. The utility business model is changing rapidly, which is arguably overdue as the typical operations have remained relatively unchanged for decades. Utility customers would typically only interact with their providers once per month to pay their bill, an interaction that rarely left the customer excited or encouraged by the relationship. The advent of solar panels on residential rooftops started to slowly change that process, as net metering meant that customers who had installed solar could get credit back (or even profit) for all the excess power they generated and sent back into the grid. However, utilities have largely been opposed to this model of the customers elbowing into their business, seeking to fight it via policies and regulations.
As time has progressed, though, the changing relationship between utility and customer seems to be inevitably going through revolution. No longer will the interaction just be a once monthly, uni-directional interaction, but utilities are starting to embrace customers as partners in the wider energy system rather than an end node. The role for utilities in this new paradigm would be trusted ally and energy advisor for a new energy ecosystem, but to do so successfully requires buy-in and engagement from the customer which is not always easy to acquire.
The rapid growth of customers who purchase EVs, though, is giving utilities embracing this change a new opportunity to reconfigure the utility-customer relationship. The starting point can simply be utilities serving to aid customers who are interested in EVs to find tax credits, available rebates, and even advice on models. Taking it a step further, when customers install chargers at their home the utility can assist in choosing, paying for, and installing this equipment.
This collaboration helps the utility because they really do want to see more EVs in their service area, and of course the customer will accept all the assistance they can get. As these relationships are built, that’s when utilities can really lean into opportunities. Trends being seen in practice include knowing which customers are now more likely to engage the power providers in green programs, participate in demand response programs or time of use rates, or even just receiving messaging on a more regular basis from the utility via email, text, app, or otherwise. Early signs have shown great success, with both PG&E and Southern California Edison succeeding in getting a majority of their EV drivers to charge during off peak hours.
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