Prepping power grids for the electric vehicle revolution
As the world continues to face up to the urgent need to act decisively against climate change, the consensus among policymakers – and even senior executives in the auto industry – is increasingly coming to accept that electric vehicles (EVs) are the wave of the future. And evidence continues to mount that although it will be some years before the EV revolution begins in earnest, the momentum of this paradigm shift is now building towards critical mass.
Counting both fully electric cars and plug-in hybrids, there were more than a million EVs on the world’s roads in 2015, according to data from the International Energy Agency (IEA). Highlighting EVs’ role in global decarbonisation efforts, the agency noted that to limit global warming to 2°C, 150 million EVs would need to be on the road by 2030 and a billion by 2050, which would require a compound annual growth rate of more than 20%.
EV integration: a challenge and an opportunity
In one sense, the rise of EVs represents a growing challenge for electric utilities that are trying to balance power supply and demand and operating within some pretty slim margins during peak hours. If hundreds of thousands of vehicles are all plugged in to charge at the same time in the evening, the strain on grid infrastructure could reach breaking point.
Back in 2013, when the EV market was significantly smaller than it is now, UK transmission network National Grid’s power demand manager Lauren Moody warned of the implications of not properly managing EVs’ added demand on power grids.
“The stakes are huge,” Moody wrote in a National Grid editorial. “If price incentives can’t influence how people charge their EVs, then by 2035 we could be looking at a peak demand increase by 30% from 67GW to 86GW [in the UK].”
In a June blog, Chris Nelder of US-based energy-efficiency research group the Rocky Mountain Institute further outlined the risks for grids caught unawares by the EV switch. “If utilities and their regulators are not prepared for such a rapid expansion of the EV fleet, it could have negative effects on the grid,” he wrote.
“The life of grid infrastructure components could be shortened and greater investment in peak capacity could be required, making the grid less efficient, increasing the unit costs of electricity for all consumers, inhibiting the integration of renewables, increasing grid power emissions, and making the grid less stable.”
On the other hand, the electrification of personal transport represents a huge opportunity for utilities and power generators – in the simplest terms, more electricity demand translates to a greater opportunity to sell it. As the public becomes more energy-efficient to the extent that sales are taking a hit – US retail electricity sales fell by 2% between 2007 and 2013 – and distributed renewables continue to reduce reliance on the grid, EVs represent a new frontier of demand that could become the lifeblood of the future utility industry.
“The bottom line is that the electric utility industry needs the electrification of the transportation sector to remain viable and sustainable in the long-term,” concluded US utility association the Edison Electric Institute in a June 2014 report.
What’s more, evidence suggests that by preparing in advance with the right technologies and incentive schemes, utilities should be able to take advantage of this projected demand growth without threatening the health and stability of grid infrastructure.
Big in Japan: are electric vehicles really a concern for the grid?
Japan has emerged as a leader in EV technology and deployment. Japanese car manufacturers such as Mitsubishi, Toyota and Nissan – manufacturer of the Nissan Leaf, the world’s best-selling highway-capable fully electric car – have invested heavily in EVs. So much so that the country has become the first in the world to have more EV charging points than petrol stations, with less than 35,000 petrol stations overtaken by more than 40,000 charge points.
This number admittedly includes private chargers installed in home garages, but it still demonstrates Japan’s commitment to overcoming the key issue with EVs – namely, insufficient charging infrastructure leaving drivers feeling tethered to their home charge points – and makes it a good case study for EV grid integration.
Japanese power companies have reported few problems managing the extra demand of the country’s growing plug-in electric fleet, which numbered around 150,000 vehicles as of March. Although the number of EVs currently deployed doesn’t amount to a true test of any nation’s grid infrastructure, Japan has made the right investments to help manage future growth.
The origin of these investments is rooted in tragedy. The Great East Japan Earthquake and subsequent tsunami in March 2011 caused a meltdown at the Fukushima Daiichi nuclear plant, souring public sentiment on nuclear power and leading to the total shutdown of the country’s extensive nuclear fleet, only a fraction of which has come back online.
The subsequent electricity supply shortages and reliance on expensive fossil fuel imports has forced resource-poor Japan to remould its energy system, investing heavily in smart grid technology and policies supporting a much higher level of demand-side management (DSM) to balance energy supply and carry out targeted blackouts when shortages occur.
Lessons in demand-side management
Investing heavily in battery storage and smart meters, providing subsidies for home and building energy management systems and full deregulation of the energy market has amounted to “a remarkable investment in demand-side management in a short period” in Japan, according to an October 2014 report by Bloomberg New Energy Finance.
These sorts of DSM measures are exactly what grids need to cope with the coming influx of EVs, and the lesson is being applied elsewhere in the developed world.
Forward-thinking utilities are beginning to offer financial incentives for EV users to charge their vehicles during off-peak overnight hours, and advanced EV charging hubs are integrating local solar power, energy storage and dynamic pricing to manage EV demand on the grid.