The Electric Vehicle Revolution
At the 2016 North American Leaders Summit on June 29, President Obama, Prime Minister Justin Trudeau of Canada and President Enrique Peña Nieto of Mexico met in Ottawa, Canada to discuss initiatives to enhance North America’s economic competitiveness, environmental goals, and global cooperation. That evening they agreed to a new clean energy goal: the North American leaders set a target of 50 percent renewable energy by 2025 to slow climate change, foster clean energy industries, and support new jobs.
Though national Corporate Average Fuel Economy (CAFE) provisions have been in place since 1975, President Obama increased the average fuel economy standards for all vehicles to 54.5 miles per gallon by 2025. These standards are calculated based on a vehicle’s carbon footprint (size, oil usage, and carbon emission) and expressed in miles per gallon. CAFE standards not only improve the average fuel economy of cars and trucks, but they also reduce our consumption of petroleum, increase the availability of alternative fuel and innovative technologies such as electric vehicles, and lower greenhouse gas emissions.
Moving Away from Fossil Fuels and Towards Cleaner Air - Enter EVs
Responding to increasing pressure to reduce carbon emissions, politicians, business leaders and the general public are looking to electric vehicles. Many states offer tax credits and other incentives to encourage people to purchase cleaner vehicles. After all, for most individuals, the single most effective action that they can take to reduce carbon emissions is to buy a more fuel-efficient car.
Currently, EVs represent less than one percent of total vehicles on the road worldwide. Reasons for this slow deployment include lack of knowledge of EV options, limited battery range, and high upfront vehicle costs. However, advances in technology are driving continuous reductions in battery prices. A recent Bloomberg New Energy Finance press release projected EV sales will reach 41 million by 2040, representing 35 percent of new car sales globally. Purchasing an EV is expected to cost no more than $22,000 on average, making EV ownership an economically viable and efficient option.
Grid Benefits from EVs
The growing EV industry holds tremendous potential to help to meet national and statewide energy and environmental goals. According to Michael Shepard’s Utility Dive opinion article, we are perfectly set up for rapid EV development and growth – we have all the right regulatory drivers (policies and government incentives), advanced and updated technology, and EV vehicle options.
EVs can serve as a stepping stone towards helping achieve global, national and state renewable energy goals by acting as a key distributed energy resource (DER). They can provide a multitude of services that contribute to a cleaner, more efficient, and more reliable grid. These services include:
- Absorb and store excess renewable energy
- Defer transmission and pipeline system costs
- Respond to real-time fluctuations in supply and demand load (load shifting)
- Provide frequency regulation and ancillary services
- Improve overall energy security
How Utilities Can Benefit From EV Growth
Utilities have huge potential to gain by integrating EV charging infrastructure into their economic models and energy services. By some estimates, utilities could add up to $100 billion in electric utility revenue by capturing the entire fueling market for vehicles.
Data have shown that most EV charging takes place during off peak hours – typically after midnight. This charging pattern helps utilities avoid increased demand on the grid during peak times of day. Late-night EV charging stabilizes electricity demand, spreading revenue out over the entire day for utilities. Furthermore, this charging schedule allows consumers to save money on time of use rates, so both utilities and their customers benefit.
With the help of new technology and software, EVs can be taught to adjust to changes in electricity load to keep supply and demand fluctuations low, store excess generation for later use to maximize renewable energy, and provide frequency regulation and ancillary services to boost grid flexibility. Utilities have the chance to capitalize on the growing EV market to capture all of these benefits at a low cost for consumers. However, they must act fast before the window of opportunity closes and they are left behind.
Energy Storage North America 2016 will feature a keynote panel on the opportunities, benefits and future of electric vehicles, titled, “Electric Vehicles: The Opportunity of the Century” on October 5th from 9:45am to 10:30am. Panelists, including Frank Spennemann, Senior Manager at Daimler-Benz AG, and Noel Crisostomo, Energy Policy and Program Analyst at California Public Utilities Commission, will discuss how EVs can impact the grid and how utilities can take advantage of EV services and boost revenue. Don’t miss out on this conversation! Register before July 31st for early bird rates.