Electric Cars: Can They Cause An Energy Crisis?

Shelly Dutton

electric car at a charging stationLet’s face it electric vehicles (EVs) are cool. Arguments over who should fill the gas tank will cease. No longer will owners need to worry about gas prices. And no glaring looks at the pump from your teenager who recently adopted “environmentalism” as her social case this year.

Yes, they are cool – but are they worry-free? Not for the utility industry.

What happens when everyone charges their electric cars at the same time?

Imagine a handful of vehicles draining a gas station of all its fuel at once. This gives you an idea of how EVs can impact the electric grid at the local level. While EVs have the potential to help the air and the planet, they also push the limits of the current smart grid system. To cope with the demands of plugging a car into the grid – which can draw as much power needed to power the house its owners live in – utilities need to strengthen their smart-grid systems so that service to homes and businesses will not be disrupted, especially during peak hours.

However, that’s just the beginning of the challenges facing smart grids. Renewable energy sources and greater use of EVs will force utilities to partner and collaborate with each other to smooth out supply-and-demand curves. For example, if the wind is blowing strongly in one region, but not at all in another, it makes sense to share or sell the excess energy generated from the windy place to the area starved for power.

Similarly, if utilities are to manage consumption of free-ranging EVs without driving customers crazy with bills from every utility along their route, they will need to partner with other utilities and auto companies like never before. These new partners will need to cooperate on everything, from billing standards to the size and shape of the plugs used to charge the cars. With so many partners and so much data sharing required, security becomes an issue – forcing utilities to ensure that only authorized partners get to read only the data and the information needed to complete the transaction.

3 best practices for preparing the utility infrastructure

1. Use EVs as a power source

With all that energy stored inside their batteries, electric vehicles could potentially give some of it back when utilities need it most. Researchers and automakers are experimenting with batteries that give as well as receive. This approach helps everyone involved: consumers save on energy costs, automakers gain another selling point for their vehicles, and electric vehicles become a kind of tranquilizer for the utilities’ grid by smoothing the demand.

However, a single car battery is inconsequential to an electric grid that serves thousands or millions of homes and businesses. To have a meaningful impact on the grid, utilities must be able to govern energy flow at a more aggregated level in order to speed up or slow down charging for many vehicles at once. Experts predict that electric vehicle owners could be bundled together into trading entities. Utilities could do this, or aggregators could emerge to take on the role and bid multiple vehicles as if they were a single resource.

Such trading entities, known as non-generating resources (NGRs), already exist in California, such as the California Independent System Operator. They aggregate demand response for office buildings and other load generators, ramping down loads in response to requests from utilities. However, there’s nothing to stop utilities from getting into the selling game themselves.

2. Encourage owners to charge during off-peak hours

The programmable end- or start-time charging feature of EVs helps customers charge their cars when it’s best for them and the grid. Setting an end time creates a more random start-time pattern because batteries have different “states of discharge” and charge at different levels. When customers set an “end charge” time for charging to be complete, they randomize the start time of their charging, which prevents a large number of vehicles from coming online at the same time – avoiding power-load spikes that potentially could affect the local distribution system. At the same time, utilities can reward customers who charge during off-peak times by developing a tiered rate system, where this is higher pricing for high-demand times and lower pricing during low-energy demand.

For example, Southern California Edison (SCE) has already put different rate options in place. Owners can add an electric vehicle to their existing tiered rate structure, or they can take advantage of SCE’s whole-house time-of-use rate or even a separately metered electric vehicle time-of-use rate. Customers that are able to shift most of their energy consumption to off-peak hours (for example, a family where two parents work outside the home and the children are in school during the day) can sometimes actually lower their energy bills below their pre-electric vehicle levels by picking the whole-house time-of-use rate.

3. Engage customers and partner with them.

Customer engagement drives customer satisfaction – and utilities know this. For example, SCE created a Web site to educate consumers on EVs and help them make informed decisions based on cost implications, including metering arrangements, rates, charging equipment, and installation. The site includes a Plug-In Car Rate Assistant app to help owners estimate the cost of charging their EV. Through these resources and others, SCE prompts EV adopters to speak with a utility rep to assist with integrating the customer and utility.

What do you think? Does the demand for charging electric cars create any other challenges for utilities? Is there anything else they can do to help overcome them? Check out the this white paper to learn more about the challenges – and opportunities – utilities will face when servicing customers with electric vehicles.