Utilities must adapt before electric cars drive off with their business
Recent advancements in energy technology should come as a wake-up call to Canadian utility companies.
The rise of electric vehicles (EVs) in particular is already an indicator of change as batteries become more affordable, ubiquitous and desirable. According to the World Energy Markets Observatory report, new registration of battery and plug-in hybrid electric vehicles recently reached a record high with more than 750,000 sales worldwide. The prevailing rise of gas prices, the cost of EVs dropping and the convenience of battery and charging technology are all important factors.
This disruption within the energy industry will affect Canadian business leaders and consumers alike. If Canadian utilities are not studying what is happening around the world regarding new energy business models resulting from major advancements from batteries and electric vehicles, they risk getting left behind.
For example, in countries with a higher adoption of EVs, we are now seeing the evolution of new business models around residential communities and vehicle fleets. The Nordics are leading the way with a fleet of plug-in cars that is the largest per capita in the world. Car owners are beginning to have easy access to charging stations through housing co-ops. Using an app, co-ops can bill drivers for individual usage of charging stations and consumers to keep track of their electricity usage while providing visibility into the distribution of energy across the grid.
But what about the rest of the world? The Cars Online report that studies behaviours in the automotive sector asked 8,000 consumers from eight countries what would drive them to buy an electric car – 43 per cent of respondents said that charging or exchanging the battery would have to be as quick and easy as filling up their tank with gasoline. Assuming the average Canadian automobile commuter travels about 50 kilometres a day, companies such as Tesla are already capable of supercharging an EV battery quickly enough to meet the average commuter’s needs.
And while battery technology is already disrupting transportation, it will have its biggest impact on the energy and utilities industry. Those who own the batteries and the charging infrastructure will play a significant role in the future of energy management.
Consider this energy management scenario in the not-so-distant future. Imagine an EV with an 85 kilowatt hour (kWh) battery. The average home in Canada consumes between 25 kWh and 30 kWh a day, depending on where they live. As a result, a fully charged 85 kWh EV battery represents almost three times more power than one needs to run a home daily. The typical commuter’s electric vehicle only uses a small amount of its battery every day – to go to work, run a few errands and go home. Most people with electric vehicles would have energy capacity to spare at the end of an average day’s commute.
Consumers would be able to drive EVs to work the next day, plug in and have the building or parking lot buy the excess energy at lower time-of-use rates from their battery, to a limit they approve. The building could then use that energy to feed their facility’s own energy needs. Better still, consumers could use excess battery capacity to power their homes.
As EVs grow in numbers and magnitude, they will have greater impact on how we view sources of energy and transform the model for how energy is supplied and who supplies it.