The growth in popularity of Electric Vehicles (EVs) is coming at an interesting time for the electric utility industry. After many years of steady growth in demand for electrical power, government data shows that the demand has remained flat since 2010 despite steady growth in the economy. Another telltale sign is that for the first time in its history, the Tennessee Valley Authority is projecting that it will sell 13 percent less power 20 years from now. There are a number of factors contributing to these trends including:
The key point in all this is that utility companies are eager to find new markets—and maybe even new business models. And, that’s why they are so interested in encouraging the adoption of EVs. Some of the measures that utility companies are taking to promote the adoption of EVs include:
• Partnering with states to help build charging infrastructure • Offering financial incentives to commercial charging stations
But, what are utility companies doing to support Electric Vehicle Service Equipment (EVSE) and supply the power needed for charging all those EVs? After all, adding one Level 2 EV charger essentially doubles the electrical load of an average house, which has implications for residential transformers and possibly other upstream power infrastructure. Analysts estimate that if every car and light truck on the road in the US today were an EV, the amount of power they would consume would equal the US’s entire power generation capacity. Are the utilities ready to support EV charging needs?
Fortunately, they don’t have to be ready for that yet because we’re many years from having that many EVs on the road. A lot needs to happen to build a power infrastructure that supports wide EV adoption, but there is time, and timing is everything.
In the near term, with stagnant growth in demand for power, it’s not necessary to build new power generation capacity. Instead, utility companies are focusing on strategies that encourage more even distribution of power consumption throughout the day. Christoper Michelbacker, EV Charging & Infrastructure Manager for Audi, explains. “Utility companies are becoming smarter about how they generate electricity, how they distribute it, and how they acquire new sources. With technologies that allow them to communicate with smart thermostats, for example, they are able to manage power consumption in a more efficient manner. Utilities are looking at ways to de-incentivize people from charging the electric cars during peak power consumption times—for instance, during that peak period between 4:00PM and 6:00PM when business electricity consumption is still high and people are also coming home and powering up their appliances and turning on their lights. Utilities can look at it from a demand response standpoint, from a 5-15 minute increment, saying, hey, if you can throttle down your charging rate, that would be great. They can even pay the customer something, because it's cheaper for them to pay you to stop charging than it is for them to buy electricity from somewhere else or to turn on those peak plant generation sources. Or, they can incentivize you with cheaper electricity rates to defer that charging until after the peak demand has fallen off. Some vehicle Original Equipment Manufacturers (OEMs) are coming to utilities for various partnerships to help manage when a vehicle charges and when it doesn't.”
In addition to being smarter about how they manage power consumption, utilities are also working at a number of levels to build capacity when and where it is needed. This includes upgrading residential transformers when demand requires it and working with new construction to ensure there is enough nameplate capacity available to the building to support whatever the designers have in mind. Additionally, there are technology strategies that can help offset high-demand charges for the kinds of peak electrical demand situations created by EVSE. For instance, it’s possible to install batteries that accumulate power during low-consumption periods, and then feed power to the system during high-demand periods so that peak demand does not increase the load on the power grid.
The utility companies themselves are considering what role they should play in EV charging. In many jurisdictions, power utilities are regulated monopolies, which means they are the only ones allowed to sell electricity. In those cases, commercial charging stations are prohibited from selling actual electricity. They get around this restriction in a number of ways, such as through subscription access to charging networks or selling parking time at a charging station. Utility companies need to consider if it makes sense for them to become direct participants in the EV charging business. All these are incremental changes that are continuously happening over time and will evolve as more EVs take to the roads.
Even with consistent growth in the economy, government data reported that the demand for electrical power has remained flat since 2010. As a result, electric utilities are eager to enter new markets. This is why they are particularly interested in encouraging the adoption of EVs.
At the present time, it is not necessary for utilities to build new power generation capacity on a wide scale due to almost stagnant growth in the demand for power. Instead, utilities are encouraging more even distribution of power consumption throughout the day. Utility companies are also upgrading residential transformers as needed, and working with new construction projects to ensure enough nameplate power capacity is available to support the building requirements.
David Talbott is an IT and Technology Analyst with Mighty Guides who focuses on emerging technologies including deep learning, cloud and edge computing, and ubiquitous connectivity, and how these technologies converge to create powerful self-learning systems.