Plugged in blog

The Electric Vehicle Revolution is Approaching, but the Grid is Unprepared

When electric vehicles, or EVs, first popped into the public consciousness, they were an exciting oddity. A Tesla may have been spotted here or there along a road trip, and the idea of seeing an EV charger in a parking lot felt like a novelty, but with their high price tags, they seemed unattainable and more of a plaything of the wealthy than a vehicle the typical American could consider. In decade and a half since the first road-ready EVs rolled off of the production line, though, that landscape has evolved drastically: nearly every major automaker has an EV model currently for sale or soon to be available, buying one doesn’t cost the same as a down payment on a house, and EV chargers on the highway or parking garages have become common.

While this progress towards the electrified transportation future is no doubt a positive one when it comes to reducing carbon emissions and moving away from oil dependency, the rapid progress in the EV industry has brought about new challenges. Notably, taking cars out of gas stations and instead plugging them into the grid means the unification of the electric power industry and the transportation sector like never before, and this shift is on a scale with which utilities have never had to contend. While this transition has become a focus of all stakeholders and leaders driving the change, the power grid as it exists today is unprepared for where the EV market is going to shortly be.

But it’s not too late to play catchup, and stakeholders on the grid have the benefit of advancing technology ready to help with the revolution.

Current and Future Trend of EVs in the U.S.

When it comes to the rate at which the transportation sector is transitioning to electricity, the United States is somewhat behind the curve, though it’s looking to play catch up quickly. As of the end of 2021, EVs accounted for less than 3% of all vehicles on U.S. roads and were accounting for about 4.5% of total new car sales. Globally, though, EVs represent 8.6% of vehicle sales (and up to 16% in Europe and 14% in China).

That said, the U.S. markets do appear to be reaching a pivot point and are ready to ramp up, with forecasts of 32% of U.S. car sales being electric by 2030 and 45% by 2035. This trend is only going to accelerate as more automakers put out EV models to reduce price points, to overcome consumer concerns about vehicle range and charge times, and even to bring EVs to new potential audiences (such as the appeal of the Ford F150 Lightning to the traditional pickup truck consumer).

In anticipation of these future trends, automakers are committing to providing the necessary supply chain. For example, Nissan is building two new EV models at a plant in Mississippi, traditional automakers adding new EV models while new EV-only companies rise, Volkswagen commits millions of dollars to support EV infrastructure and transform its dealers to prepare for EVs, and so much more.

So, while the U.S. lags behind Europe and Asia in EV progress, perhaps that delay could be beneficial in the end, as the American power grid is not currently poised to meet the demand of the exploding EV needs. But grid investors and stakeholders can’t waste the time they have left.

Poking Holes in the EV Mission & What’s Expected of the Grid

The progress on EVs to date should absolutely be considered a notable accomplishment.  Starting back when EVs were only attainable for only extremely high earners to today where EV sales may outpace gasoline-fueled car sales in a decade and a half, the results speak for themselves. Public and private commitment to decarbonizing transportation for a climate-ready future, utilizing EVs specifically, is coming to fruition. However, while all these results are a noteworthy success, they do not signal that the mission is accomplished and over.

The journey from tailpipe carbon emissions to EVs was not always a direct one. In fact, an early criticism of EVs was that they simply traded direct tailpipe emissions from burning gasoline with equal or greater greenhouse gas emissions at the power plant level to generate that electricity. And while in certain situations this comparison was true, in the years since the increased efficiency in EV batteries and clean energy progress taking place on the grid has moved the needle to the point where EVs are cleaner than gasoline cars no matter where in America they may be plugged in (a calculation that only tilts more in favor of electricity as time goes on and more renewable generation comes online). Similarly, doubters expressed concern that maybe EVs were simply virtue signaling and not actually environmentally beneficial because of the critical materials required to build them. And while ethical sourcing of source minerals and proper recycling practices and related policies are a continued focus for the sector, these are issues largely being resolved, enabling a truly clean EV future.

But while the accounting of how many emissions and what level of environmental impact comes with EVs seems largely settled, a singular major problem persists: ensuring the grid is ready for what’s needed to charge the massive quantity of those electric cars expected to come.  

A common notion is that the EV revolution will be the single greatest load increase for the power sector since air conditioning became ubiquitous. Add that fact to an already growing population where everything is digital that has pushed the total U.S. electric demand to grow even without significant volume of EVs, and that’s the basis for the U.S. Energy Information Administration’s (EIA’s) forecast that U.S. electricity use will grow nearly 30% from 2021 to 2050. That growth spells trouble for a power generation and transmission sector that may struggle to keep pace with demand.

These concerns have bled outside of the energy wonk circles and into mainstream think pieces. See the following criticisms and worries levied in major publications:

Rapidly Increased Demand, as reported by the Washington Post

“By 2050, the state projects, electric cars, trucks and buses will use 14 percent of New York’s total output. That’s equivalent to half of all the electricity used in New York City in 2019 — so it’s like powering a new city of four million people. Overall demand could grow by as much as 50 percent.”

New Peak Levels of Electricity Use Will Outpace Capacity, as reported by the New York Times

Take California. The state has a surplus of solar power during the day, but that ramps down in the evening as the sun sets. If millions of Californians with electric cars came home in the evening and immediately started charging all at once, it would put a major strain on the grid — and this in a state that has recently been suffering from blackouts.”

Insufficient Grid Infrastructure to Carry All the Electricity Needed for EVs, as reported by Reuters

“A model utility with two to three million customers would need to invest between $1,700 and $5,800 in grid upgrades per EV through 2030, according to Boston Consulting Group. Assuming 40 million EVs on the road, that investment could reach $200 billion. So far, investor-owned companies have plans approved for just $2.6 billion in charging programs and projects, according to trade group Edison Electric Institute.”

The problems that EVs will pose for the grid vary across topics, areas where investment is needed, and require systematic and wide-ranging solutions to be considered. These issues aren’t just the talking points of naysayers clutching to their gas cans, but rather they are real hurdles with which EV drivers, grid stakeholders, and public policy leaders must contend.

That said, the technologies that can help plug in these gaps do exist.

How to Play Catchup

When it comes to making sure the U.S. power grid is where it needs to be for EVs to reach their full potential, a couple of key areas of focus take center stage:

Build Out Critical Clean Energy and T&D Infrastructure

The approach that would be the most direct to ensure the grid can prepare for the EV future is direct investment in new capacity. The stressors that millions of EVs are poised to bring to the utility sector include 1) how to generate enough electricity to reliably charge the cars if the bulk of them get plugged in at the same time, and 2) the congestion on the finite transmission and distribution (T&D) wires that carries that electricity to where it’s needed. As such, the brute force strategy to solve these issues is simple: build more generation (ideally, more clean power generation like solar and wind) and install more grid infrastructure to carry it.

This strategy is going to happen to a degree, EVs or not, because of the needs for the clean energy transition. The goal of decarbonizing the power grid already requires building massive amounts of new renewable generation, and then because wind and solar are intermittent in nature, this strategy actually requires more transmission capacity to address the ebb and flow of their availability. Further, a notable issue with the grid is how much of it is aging and needs modernization, so many grid operators are seeing the value of building new infrastructure assets rather than strictly upgrading the existing grid. However, this solution is not particularly elegant and is already running into natural roadblocks: it’s expensive, it requires lots of new land, and it takes a long time to push through the red tape required for all these new builds. The funds required can come from federal, state, and even local governments, but that alone may not be enough. Even the Build Back Better proposal coming out of the Biden Administration was touted as being key to modernize and make more resilient the grid, but even its $27 billion in funds would only be a drop in the bucket of the $360 billion in transmission investments that World Resources Institute estimates would be required to meet grid requirements for mass electrification by 2030.

Engage in Demand Response and Load Management Strategies

If directly building out more capacity for generation and transmission isn’t feasible, then a supplementary approach that will be necessary is demand response and load management programs. Because the main challenges to EVs on the grid isn’t just the quantity of electricity required, but also the expected timing of those charging needs, proper planning can help to stagger when EVs get charged in bulk in a way that actually helps to stabilize the grid. EVs come with battery technology, so them being charged and discharged during (often in different locations) can be thought of as a natural mobile energy storage technology.

For utilities seeking to tap into these energy storage opportunities, they can do so with demand response and/or load management. By offering differing rates for EV charging based on time of day, utilities can encourage EV users to plug in when demand is lower than supply (e.g., in the middle of the day when solar generation is peaking or middle of the night when energy-intensive applications aren’t being used), avoiding drawing from the grid during peak power demand times (e.g., traditional peak load times in the early evening as families return home from the day). This opportunity is great for individual EV drivers, but the power of doing so multiplies even further when fleet operators with multiple EVs can pool their charging needs in aggregate to really shift where and when power is consumed in a way that best benefits the grid.

Of note, smart EV chargers are already enabling this practice in pilots across the country (such as pilots by PG&E and Baltimore Gas & Electric), where drivers can plug in when they get home but have an automatic sensor to ensure the power isn’t being drawn at the wrong time. These technologies balance the dynamic pricing from the utility with the user-set input on what level of charge they want and by when to ensure they can use the car as intended the next day.

Further, advancing vehicle-to-grid (V2G) technology can take this process to the next level. Using V2G, not only does smart charging allow for charging at opportune times, but EVs can truly become energy storage and send power back into the grid when it’s most needed (and most valuable), thus earning the owners money for these services. Engaging in this manner requires a rethinking of how customers interact with energy and their utilities, but this shift in mindset is already happening with EV drivers and the solar power, residential energy storage, and similar technologies creating the prosumer mindset.

Enable Greater Contributions from Distributed Generation

Lastly, speaking of prosumers, utilities that feel stressed about the EV future have even more incentive to foster an environment where residential and commercial customers are encouraged to bring their own site-level generation and energy storage. Building new transmission infrastructure and additional generation capacity is extremely cost intensive, requiring a long lead time from beginning to end of the projects, and is a massive bureaucratic headache. However, fostering an environment and designing programs where customers are compelled to install their own distributed assets—whether that means rooftop solar systems, battery technologies in their garage or even condos thanks to technologies like Joule Case that bring energy storage in a modular and mobile manner, or otherwise-- is cost effective for the grid operator, not to mention it is a quick and efficient undertaking. Utilities benefit as distributed generation brings efficiency in transmission and reduces their responsible operation and management (O&M) costs. Meanwhile customers will feel empowered to be partners in the energy journey and can even foster a greater relationship with their power provider as they get empowered via their own distributed generation. The long-term plan mustn’t be restricted to just building out more centralized assets on the grid as has been done for over 100 years. In this new paradigm, distributed energy is the future and can bring mutual benefits to the utility, the customer, and the entire grid.

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