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The future of regulated electric utilities is tied to EV charging

Jonathan Jacobs and Alex Pischalnikov | Utility Dive | 10 october 2017

This article first appeared in Utility Dive.

In a world that is becoming empowered by individual end-users, the evolution of the product considered the vehicle of individual empowerment, the automobile, has created a significant opportunity for utilities to become a catalyst of socially beneficial technology.

Utilities – particularly those operating in clean energy-focused territories – can spur electric vehicle (EV) adoption by developing the power delivery infrastructure, and fostering business models, to provide charging for those without access to home charging and to encourage the development of a network of rapid battery filling stations.  

EVs offer an avenue for growth at a time when the traditional utility business model is being challenged to evolve due to the entrance of non-utility power plants; retail deregulation, community choice aggregation (California, New York, Michigan, Massachusetts, etc.); and distributed energy resources such as rooftop solar.

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Societal benefits of EVs

The replacement of automobiles powered by internal combustion with electric vehicles will indeed have significant benefits to society.  Electric vehicles emit no NOx, volatile organics or small particulates, so they will not contribute to ground-level ozone, and they do not produce excess carbon dioxide.  Public health data show that respiratory ailments such as asthma are associated with proximity to heavily trafficked highways, and that effect is attributed to vehicle emissions.  Experience has shown that it will be much easier to control and reduce emissions from stationary power plants used to generate the electricity used by those vehicles than from individual internal combustion engines.

A surge in faster charging stations to spur EV uptick

Electric vehicles are still a small fraction of the automotive fleet, even in California, a leader in EVs. There have been two key barriers to EV adoption:  cost and convenience. With the introduction of the Chevy Bolt and the start of Tesla Model 3 production, electric vehicles are becoming more affordable.  Convenience has yet to be addressed. To be convenient for use, the electric vehicle must be already charged or quickly chargeable. Convenience covers the unexpected need to charge, the ability to charge on a regular basis and the amount of time it takes to charge.

  • Range anxiety, the uncertainty that many current or potential EV owners face relative to being able to complete a trip before needing a charge, has long been described as a key impediment to broader proliferation of EVs. The larger batteries available in the Tesla, Bolt and other new models can alleviate the anxiety around completing a single trip, but still require extended periods to recharge for the next trip (let along to recharge in the midst of a longer trip). A National Renewable Energy Laboratory conference paper concluded that “a lack of retail stations may pose a market barrier as significant as the incremental costs of the advanced vehicles.”
  • Accessible charging infrastructure is particularly important to renters, who cannot invest in Tier 2 chargers for their dwellings, and others who live in multifamily structures without control of the common space. According to the US Census Bureau’s 2015 American Housing Survey, 40% of US households either rented their homes or owned units in multi-unit structures.  These Americans will probably not be able to put Tier 2 chargers in their home and will have to rely on public infrastructure if they want to use EVs for anything more than short trips.  Futhermore, 8 million Americans commute at least 70 miles daily, and a million of those face round-trip commutes of 100 miles or more. Both public and workplace charging will be desirable for them.
  • For electric vehicles to make more than a dent in the usage of conventional automobiles they will have to be usable as primary vehicles, not second cars. Car owners are used to quick refueling, without having to worry about the infrastructure, wastes or needed investments themselves. Rapidcharging requires more than a household circuit – it will take 2-1/2 days to charge a Chevy Bolt from a standard 120V home wall outlet, and around 9 hours from a home Level 2 charger.  Currently available DC Fast Chargers, should be able to charge the Bolt in an hour and a half, but by contrast, it takes only five to ten minutes to fill a typical automobile’s gas tank. (New charger technology has been announced with three times the power of a Tesla Supercharger.)
Types of chargers
Tier 1 chargers using the 110V home outlet at a charging rate of about 1.5kW or less. Tier 2 chargers can run at about 220-240V like large appliances and can deliver up to 19kW (usually around 6.6kW) but require a trained installer. Tier 3 chargers use high-voltage DC not available in the home—generally 480V—and are more suitable to community installations or electric "filling stations." Tesla's high-voltage supercharger delivers 120kW and ChargePoint says its Express Station can deliver 312 to 400kW—enough to almost fully charge an 80kWh in 15 minutes.

Central, area or hub fast-charging will have to be developed to serve the growing EV population. A recent study showed the importance of fast charging to electric vehicles on days when they have to be driven further and concluded that the future of the EV market “could be predicated on the availability of a fast charge network.”

The natural role of the electric utility in charger development

The development of public charging infrastructure is in the public interest.  This includes “community Tier 2 charging” – common chargers to provide charging services to consumers who cannot install chargers at their homes, just as community solar can provide solar power to those who cannot install rooftop PV – and privately developed Tier 3 charging businesses. While private investors will probably build most of the necessary electric filling stations, just as they built most of the 120,000 gas stations in the USA, those chargers – especially the Tier 3 chargers – will require extensive new utility infrastructure to deliver and bill for the power they supply. Utilities have the positioning to facilitate the wider proliferation of charging infrastructure by adapting and strengthening the grid for the benefit of EV owners.

Neighborhood area and hub charging stations will require a significant amount of wires infrastructure, which utilities will have to integrate with their system and in which they should be investing.  Charging stations will create new and different load patterns; for example, high-power burst-capable connections and local storage will facilitate flash charging, and must be harmonized with the grid. Until charging time can be brought into the five minute range they will require priority sequencing of charging requests and vehicle retention – a level of trust provided by public utility regulation.  

Utilities can install this infrastructure without waiting for connection requests from new charging stations.  Equipment that serves the specific operational needs of charging should still be considered part of the grid and rate based.  This extends the approach that forward-looking utilities and regulators took to encourage renewable by reinforcing the grid in anticipation of renewable development rather than in response; California has already started down this road.

The embrace of new technology by empowered consumers has been viewed as “hollowing out” the utility grid, reducing the traditional usage of infrastructure and challenging the investment-based utility business model. New technology can also require increasing amounts of new and different infrastructure.  Public charging services will require a long term commitment, but they will also complement clean energy growth, represent a reliable long-term demand and create additional utility investment and services.

Jonathan Jacobs and Alex Pischalnikov are energy and utilities experts at PA Consulting Group

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