Will EV charging overload the electric power grid?

As several countries look to ban the sale of fossil-fuel vehicles by 2030, car buyers will have alternate options to choose from, such as plug-in hybrids (PHEVs), battery-electric vehicles (BEVs), or hydrogen fuel-cell vehicles.

Currently, Electric Vehicles account for 2.6% of global car sales and about 1% of the global car stock in 2019. More than four million BEVs and PHEVs have been sold globally, and it is predicted to increase to 125 million by 2030. As electric vehicles’ (EVs) adoption grows, utilities and other power generators will grapple with challenges in estimating the power load needed to charge those vehicles and how to forecast when—and where—that electricity will be required.

The adoption rate is vital because it gives utilities time to upgrade and grow with the EVs’ adoption curve. If companies can incentivize charging patterns, giving discounted-rates to charge overnight instead of during the daytime, it can help distribute charging to off-peak times. With such an approach and similar others, utilities will reduce the amount of grid upgrades required by redistributing demand.

Worldwide, analysts have been studying the impact of EV adoption on power grids. There’s disagreement about needed upgrades. However, there’s a consensus that the effect will depend entirely on the region and the time of day when vehicles are charged.

How will EVs play a role in managing increased power needs from the grids in the future?

Electric vehicles act as batteries-on-wheels. EVs make it possible for energy to be stored and used at a later time. By 2040s, EVs will add up to over 30 TWh of installed battery storage capacity. Now to put that into perspective, Finland consumed 86 TWh of electricity in 2019.

Smart charging can solve most local and residential areas when managing the peak electricity demand and low-voltage grid. When production is typically high during the daytime, an EV battery can store renewable energy. During evenings, when consumption peaks, the energy can be discharged to relieve pressure on the market.

Exhibit 1 below presents a visual depiction of the plans from some OEMs like Nissan and Mitsubishi, who are the leaders in manufacturing EVs to support vehicle-to-grid (V2G).

For utilities, this very well means that EVs offer cheap energy storage options, with relatively low operating costs and no capital cost. This way, EV batteries can help stabilize the grid, and EV owners can earn money to facilitate this opportunity to utilities.

In addition to controlling charging power, V2G (vehicle-to-grid) enables the charged power to be pushed back from the vehicle batteries to the grid to balance energy production and consumption variations.

Utilities can use (vehicle-to-grid technology (V2G) to their benefit. V2G can help stabilize the grid and reduce operating costs while supporting renewable-energy goals. V2G technology at a massive scale may cut-down the need to build additional physical power plants instead of utilizing distributed sources of energy. Moreover, it could help make an energy grid resilient by supplying electricity during peak use times. It accommodates the scenario of renewable energy resources being unavailable, such as at night-time when solar panels are not working, but plenty of vehicles are sitting idle.

How can Utilities play a significant role by focusing on critical areas?

Customers’ charging behavior – Utilities can leverage new technologies and tools to encourage charging of EVs during off-peak periods and help discourage charging in parts of the grid that are already capacity-constrained or over-loaded.

Utilities should design charging-rates in a way that can dissuade customers from charging at times of high demand for grid capacity. Based on techniques that include hourly pricing, time-of-use rates, and demand charges are just a few examples. As the technology matures that enable differential-pricing-by-location, utilities should also introduce rates that help direct where EVs charge to optimize the load on the grid.

Deploy new technology – Utilities also need to adopt new technologies to limit the strain that EVs put on the grid. It may include investing in infrastructure improvements such as advanced electricity metering technology, which allows them to charge different electricity rates depending upon the time of charging. Utilities need to also invest in improvements to that technology that would enable differential pricing based on location to incentivize charging in some areas and discourage it in others.

Utilities can deploy Controlled Demand Response Systems (CDRS) that automatically shift EV charging to the right times and places, based on pricing-signals from the grid. These systems can offer, for example, actively manage when specific chargers are allowed to charge EVs. CDRS can make charging related decisions by leveraging information from devices (either directly from a vehicle or from a mobile) that can update the Utility on a vehicle’s battery status in real-time.

Simultaneously, utilities also need to actively manage traditional power demand sources, such as the HVAC (heating, ventilation, and air-conditioning) needs. With such efforts, Utilities can help ensure that overall demand—including that from EV charging—can be met with existing grid capacity, without putting extra power-load.

In addition to the above, Utilities can also help deploy battery storage at charging stations. Such systems can allow customers to use batteries instead of the grid to charge EVs during peak periods and allow batteries to be charged during off-peak hours.

Innovative solutions from non-Utility companies are creating exciting use-cases

A lot of companies are introducing products to help manage the load as well. Enel X recently announced a new line of chargers that all integrate behind the scenes. Whether it’s home wall plugs or public chargers, they communicate on a network called JuiceNet, which can dynamically optimize the state of charge, energy consumption, and needs of the grid in real-time.

Blink has introduced wall plugs that also have load management built-in. These wall plugs are designed with multi-family buildings in mind because users can install up to 20 of them off a single-phase AC circuit. These wall plugs share available power between all of the plugged-in EVs. The proposed solution reduces overload and installation costs.

There are also systems like Quasar bi-directional charger from Wallbox. It not only allows a user to charge their vehicle, but they can use their vehicle to power their home when required. V2G systems can benefit utilities since they can siphon-off small amounts of power from their vehicle during peak-load times and then replenish that energy along with paying a user for what they’ve consumed.

Fast chargers that require incredible energy throughput also have some exciting solutions in the works. Envision Solar and Fastned are rolling-out charging stations that can be powered by wind power and solar power.

Combining battery storage with EV charging stations can also have a significant impact. The stations can store renewable energy generation from those solar panels, or the batteries trickle charge from the grid at a lower rate and off-peak times. The batteries provide high power bursts needed while charging cars instead of the grid. Volkswagen introduced its first charging station with a built-in battery in January. And EVgo has installed battery storage systems so far to help balance demand.

Are there challenges and costs of upgrading the grid to handle EV adoption? Of course, there are. However, they’re not insurmountable. Utilities and other companies are introducing innovative solutions to balance the load as well as keep costs down. Also important is to remember that it’s going to take time for EVs to reach a level that would cause significant grid problems. As EV adoption goes up, so will the changes to our grid as well as charging infrastructure.

The market for EVs is beginning to grow, and it can create a win for both, utilities who aim for profitable growth, and the regulators, who are looking to push for cleaner energy sources. The task for utilities will be to develop a strategy that supports EVs and, at the same time, minimizes the costs to customers.

References

1. Pew Trusts
2. Powermag
3. NREL
4. S&P Global Platts
5. Virta Global
6. Inc42
7. BCG
8. Undecided with Matt Farrell