(This is the first of a two-part series. You can read the second part here: How electric vehicles will drive over the electric monopolies.)
I recently had the honor of facilitating a panel on the impact of electric vehicles on the grid. It was part of an event hosted by the Center for Distributed Energy at Georgia Tech and the center’s leader, Dr. Deepak Divan. The panel included several execs from the companies shaping the EV revolution: Patrick Bean from Tesla, Mike Whitlash of UPS (huge fleet owner) and Jonathan Colbert from Mercedes Benz.
We discussed a wide range of topics from the rate of EV adoption across cars, fleets, and heavy-duty trucks; lessons learned from working with utilities as each of these companies built out charging networks; and observations on what is happening outside the US, especially in China.
Some of my biggest take-aways were just how beneficial EVs will be to the grid and the utility industry. But I also learned that EVs may be even more disruptive than they are helpful, so be sure to check out my second article, How electric vehicles will drive over the electric monopolies, part 2.
Just how big will the EV marketplace become?
To get a sense for just how quickly the EV market is growing, I reached out Loren McDonald of EVAdoption, one of my favorite strategy and data firms in the EV space. Loren told me:
The growth in EVs is building toward an inflection point beginning in about 2022 and will then see new EV sales nearly double by 2025. Sales of EVs in the US are forecast to reach 1.5 million in 2025 and 3 million by 2028, accounting for an estimated 18% of new vehicle sales. More significantly, California should reach 30% EV share of new vehicle sales in 2025 and 50% by 2029. The number of US EVs will grow from a cumulative 1.5 million in 2019 to more than 14 million in 2028.
Loren also shared some other statistics that drove home the point:
- The average BEV range will increase to an estimated 302 miles in 2023, from 220 in 2019 and 114 in 2015,
- From 41 EV (both BEV and PHEV) models available in the US in 2019, we’ll see 60 additional new models introduced by 2022.
- As of September 15, 2019 there are more than 67,000 public EV charging outlets (connections) available at nearly 23,000 locations. In 2011 there were only 3,400 outlets, and we expect the number to reach 100,000 in 2023.
Electric vehicles are one of the best things to happen to the grid in decades
Growth – EVs will recharge a stagnant utility industry
After a century of consistent growth, electricity consumption in the US stagnated about 10 years ago, with usage stuck around 3.7 billion megawatt hours. The culprit is energy efficiency. Despite continued population growth, efficiency technologies like LED bulbs have been so effective that demand for electricity has plateaued and is even shrinking in some places. But EVs will recharge the growth of the power industry. Not since air conditioning took off in the early 1900s has the utility business had a catalyst like EVs to drive its growth. According to the National Renewable Energy Laboratory (NREL), EVs and other new forms of electrification will increase electricity consumption by 20%-38% by 2050. As consumers and businesses shift their vehicles from fossil fuels to electricity, their spending will shift from gasoline to cleaner, cheaper energy from their electric utility.
V1G – Controlling when EVs are charged can ease grid congestion
One of the most complex and expensive parts of managing the grid is “peak load.” This often occurs on weekdays after 5pm when families return from school and work. All at once, millions of stoves, clothes washers, and air conditioners turn on, spiking demand, and pushing power lines and power plants to their maximum capacity.
Many experts are concerned that EVs will make peak load even worse. But, as it turns out, EVs may also be the ideal solution. Unlike your stove or clothes washer, which needs to work the moment you turn them on, EVs can be charged at any point throughout the night (or during the day when there is excess solar). Imagine if your utility actually controlled when you car charged so they could optimize it for when they have the most capacity. I call this V1G — a simplified derivative of a more complex idea called V2G, which I will talk about next.
A 2019 study from Lawrence Berkley National Labs looked at this idea for the state of California. They found that scheduling the electric vehicles to charge in the middle of the day would be like adding 1 gigawatt of storage, and would save the state $1.45 billion to $1.75 billion in stationary battery costs.
V2G – Vehicle to Grid
As EV growth continues, the collective battery capacity across all those cars is predicted to far exceed the batteries deployed purely for the grid. This enormous collection of EV batteries will likely be the single best solution for balancing the intermittency of clean energy from the sun and wind. Imagine a hot summer afternoon with millions of air conditioners all turned on full. Rather than having to spin up expensive peaker plants, utilities can call on these two-way charging EVs and have them dump some of their extra charge back into the grid to help power the air conditioners. The utility spends less money. The car owners get a small stipend. And fewer fossil fuel power plants are needed, reducing greenhouse gases and pollution.
Lawrence Berkley National Labs also analyzed the opportunities for V2G in California. They found that if just 30%of workplace chargers and 60% of home chargers allowed EVs to provide power to the grid, it could offset up to $15.4 billion in stationary storage.
While V2G is incredibly exciting, it faces some challenges. At the moment, only Nissan’s Leaf EV offers two-way charging. When I asked the executives on my panel from Tesla and Mercedes about their plans, they both said there were no immediate plans to offer two-way charging because it wasn’t something their customers were asking for yet.
The Freeing Energy Perspective
Renewable energy and electric vehicles are largely separate industries. For the most part today, they only overlap when EV fast charging requirements require changes to the local grid. But, the truth is they are deeply intertwined and they will each have a profound impact on the other. EVs and the huge collective battery storage they represent will prove to be the single best solution for the intermittency of solar and wind. The sooner grid planners begin to embrace the opportunities, the sooner they can capitalize on them and the faster we can adopt clean energy.