Hottest Issues in Smart Grid, Part 3: Electric Vehicles

by Adam James

This is the third article in a series exploring various issues within the evolution Smart Grid and provide some insight into the conditions shaping the debate. This article will discuss the impact of electric vehicles — particularly the chicken-or-egg problem of whether the infrastructure needs to be in place to support EVs before they can impact the market or whether significant market penetration should precede investment in structural changes.

Issue 3: “Infrastructure Build out vs. Market Penetration”

Consumer choice: or “why am I not charging my electric car right now?”

The consumer wants to know they can readily and easily use the product. If the hassle is too great (i.e. the charging infrastructure is not in place) they won’t bother. In fact, there are plenty of people who will pay more for a product to avoid any extra work.

The question of infrastructure vs. markets will be gauged by the cost and convenience to consumers. A lower total cost of the car combined with incentives and rising gas prices will encourage sales. Likewise, if consumers can just plug the car in at home or pull into the charging station on the way to work they may be willing to pay more.

So what’s the problem?

One side argues that it would be irresponsible to pour significant investment in infrastructure for a product that may not gain market velocity. On the other hand, some have pointed to the lack of infrastructure preventing EVs to penetrate the marketplace. Of course, it’s both. These forces need to work in tandem.

However, the scale does tip to the infrastructure issue when we consider that even in a very low market penetration scenario, our grid system may not be able to handle a massive increase in load.

Currently, the reliability of our grid is dictated by the tension between generation capacity, storage, and demand. Energy demand functions in peaks and troughs, with the peaks during midday and the troughs (generally) in the evening. EV charging, if done during peak hours, would add strain onto an already overloaded system and decrease reliability.

For example, if you pull into your garage after work and start charging your EV, this would correspond to neighborhood load peaks (as everyone arrives home and turns on the lights etc.) which would wear our transformer systems and pass along increased cost through the rate base to the community. Since reducing peak demand through demand response is already an issue, it may serve utilities well to update existing infrastructure in a way which can accommodate and encourage increased EV use.

Wait, if EVs are an additional burden, why encourage them?

The exciting part of EVs is the potential for bidirectional flow on the grid. Simply, the ability for EVs to act as storage units for offloading excess energy from the grid and sell their unused energy back onto the grid at needed times. Rather than being part of the problem, EV could be a revolutionary part of the solution. The trick is a combination of competitive rate structures, real time pricing, and enabling technology.

Competitive rate structures would function as a demand response mechanism by incentivizing use at off-peak hours and, by providing better rates at times when the grid is under less duress, utilities could encourage consumers to charge at different times. Also rate structures could provide consumers with good reason to sell energy back at peak hours and take some weight off generators. Real time pricing would enforce rate structures with pay-as-you-play energy purchases; tracking when you use and sell energy, and giving you the corresponding rate.

Enabling technology to do vehicle to grid operations needs to become commonplace and changes to batteries and transmission would have to be made. Additionally, mechanisms would need to be in place to ensure that when you agree to have your car float some energy back to the grid, utilities can access your EV. This requires automation across the system, which will be required of the Smart Grid moving forward with or without EV.

The endgame

While studies vary as to the potential for EVs in the market, infrastructure changes must go full steam ahead. Hopefully, EVs will empower consumers and increase their energy independence. But in the medium-term it is much more likely — as a report published by MIT’s Energy Initiative concludes — that their impact will be highly localized and community specific. Because utilities, too, are community specific, there are likely to be some that need to take certain parts (rate structure, technology) more seriously. Other components like real time pricing are important not just for EVs, but also for efficiency and renewables — so this is a piece that could form the fastest.

Adam James is a special assistant for energy policy at the Center for American Progress

This post has been updated.

See also:

Hottest Issues in Smart Grid, Part 1: Data Access Versus Security

Hottest Issues in Smart Grid, Part 2: Interoperability Standards “Doing it Fast” Versus “Doing it Right”


6 Responses to Hottest Issues in Smart Grid, Part 3: Electric Vehicles

  1. Raul M. says:

    a compromise between elec. supply and demand might be a use timer for the demand side.
    If the car charges for 6 hours and won’t be used for 10 hours, then the time of charging might be moved to the hours just before the use of the car. That could take the charging time to off peak load hours.

  2. B Waterhouse says:

    My Leaf has a simple system that allows delayed charging. Plug it in whenever I get home, but it starts charging at 8 pm.

  3. Sasparilla says:

    Just to point out a couple of obvious errors with the Author’s assertions:

    “First, battery prices play the biggest role in the overall cost of electric vehicles, and those are dictated by the markets for rare earth and necessary technology. ”

    Actually rare earths are not used in the production of Lithium batteries (which are the batteries used for EV and plug in vehicles).

    For EV’s rare earths are used in the magnets of the electric motors, where they do not have a huge price impact of the vehicle (like they would if used in the battery pack).

    Rare earths are used in the battery technology for most hybrids (not plug in vehicles), called Nickel Metal Hydride (NiMH), but are not used for EV’s because the capacity isn’t sufficient.

    This is pretty basic stuff and calls into question whether the author knows what he’s talking about.

    The original erroneous assertion leads to the author’s 2nd major erroneous assertion:

    “This means that (barring a significant market disruption) battery prices are likely to stay relatively constant.”

    2nd generation EV and plug in EV’s are expected to have double the capacity (per battery cell) of the battery packs in the 1st generation plug in vehicles (these 2nd generation batts were being tested and talked about by both Nissan and GM prior to the launch of their 1st generation plug ins).

    For vehicles like the Volt, this would lead to a huge reduction in battery costs since it won’t need an increase in EV range (just reduced battery cell count and pack size). For pure EV’s like the Leaf it would lead to increased range and possibly a decrease in price (if Nissan reduces cell count).

    This is the result of the initial significant investment into lithium battery technology for plug in vehicles (which wasn’t happening prior to 2007 or so as the Bush Admin kept money away from Lithium battery research and in Fuel Cells) – increases in Lithium cell capacity, durability along with associated decreases in prices (per capacity) are expected to continue for the foreseeable future (this process is just beginning and large advances can be expected over the next decade).

    Most EV charging occurs at night when rates are low and the existing grid has huge amounts of spare capacity to handle more cars than will be produced this decade (the cars have timers that charge at times when the rates are lowest as set by their drivers – can be over-ridden of course if an early charge is needed, but as is being seen in the real world that is a rare thing).

    One thing often not appreciated is how cheap putting a plug in charging infrastructure is (compared to something like Hydrogen or Natural gas). The basic infrastructure (nightly charging) is in place, for the most part, in most homes as is. For public charging an example is that Chicago decided in 2010 they’d put a complete basic public plug in charging infrastructure into the city and surrounding suburbs. So by the end of 2011 they’ll have 70+ quick chargers in place and more than 270+ level 2 chargers. While it might be delayed a little – the point is that you couldn’t even do that with any other technology.

  4. Adam James says:

    You are right, the part on batteries only applies to HEVs and not to BEVs and PHEVs; I will amend.

    Also, will be sure to do some infrastructure comparisons in the future- that is a good point.

  5. Bill Bugbee says:

    GE stated a year ago that one of the companies green energy goals was “the electrification of the transportation grid”. With or without GE, this transformation of transportation fuel sources is now underway.

    I recently traded 10 years gas-electric hybrid driving experience for a PHEV, the 2012 Chevy Volt. Both the former 2nd, and then 3rd generation Prius vehicles I previously owned, at the time were the most advanced mass produced vehicle technology available. In comparison to the Volt, cars that don’t plug-in seem as antiquated as the Model A Ford. Although these fine examples hybrid powertrain technology and low emissions Japanese engineering doubled the gas mileage performance over the average non-hybrid sedan, and did not produce the noxious tailpipe emissions of so-called “green-friendly” diesel vehicles, there are and remain gasoline fuel-dependent cars.

    Driving an emissions-free vehicle like the Volt, and in EV mode up and including highway speeds, one quickly develops a new outlook on the driving experience. Instant, quite, and smooth acceleration of an electric vehicle make everything you’ve driven in the past seem obsolete by comparison. Like the Prius, the Volt carries with it a gas engine, eliminating range and plug-in infrastructure anxiety, but that is where the similarities stop. As a daily driver of the Volt, and not yet exceeding the EV driving range of 35+ miles per day, so far it’s been an all EV driving experience. Recharging a PHEV during off-peak grid hours (overnight) and through a standard 110 outlet for about a $1.25 in electricity has not produced any problems for the local utility, and bypassing the weekly trip to the gas station is a real delight.

    From the perspective of the national grid, naturally, this situation will change overtime for utilities as they see the demand side of peak and non-peak power loads becoming more balanced with the addition of thousands of vehicles charging at night. This change to overnight grid power demands comes at a most convenient time for T&D operators of the grid, especially as they struggle to balance and manage power flow with the addition of grid-distributed renewable energy generation sources. The problem of what to do with all that wind power being generated at night during non-peak periods becomes less an issue as demand at night increases with the addition of PHEV / EVs plugged into grid.

    The role of PHEV and pure Electric Vehicles in transitioning America’s 20th century electricity grid into a 21st century-ready infrastructure will prove in time, even to skeptics struck in yesterday, to be more of an enabler than an obstacle in achieving a truly national smart grid.

  6. I agree with what Bill Bugbee said.

    We traded in my wife’s 2000 Honda Accord with 209,000 miles on the odometer (30 mpg highway, 27 mpg city near end of life) and I passed my 2003 Toyota Echo with 190,000 miles (37 mpg near end of life) to my son. I had been waiting for years to replace these cars with electric or PHEV cars. We bought two 2012 Chevy Volts about 45 days apart. The pure acceleration and smooth handling are joys.

    Unlike Bill Bugbee, we have both used our Volts in a variety of settings. Even at highway speeds, we get 37 mpg in charge sustaining (generator) mode after the batteries are depleted. We each have gotten more than 100 mpg lifetime with about 75% of use in electric mode. This is not the ultimate for this technology, but the beginning. Batteries will get lighter and more powerful. The 4 hours it takes us to recharge using a level 2 charging system from fully depleted (the 16 kWH battery uses about 10.4 kWH in normal use) will be 10 minutes within a couple of years for new cars when using a Level 3 charging system.

    The cost to run the vehicles using electricity is about 1/5 the cost of gasoline , due to the greater efficiency of electric motors vs gasoline engines and drive trains. There is never a shift, because the motor doesn’t need a transmission. As to fossil fuel electricity generation, we do need to buy more solar panels, as the system we had before was generating what our house consumes, but now we use more kWH per day. However, even with coal-fired electricity the efficiency of the drive system is so much greater that the CO2 emitted on our behalf to power the batteries is a fraction of what it takes to run an efficient gas engine. Plus coal-fired plants are point sources with the potential to be scrubbed and even carbon sequestered in a couple of decades (I know that is a pipe dream, but the efficiency part of the story is true). Also, this source of fossil fuel is not subject to embargo by foreign governments and wind and solar are increasing parts of the national generation story. Wind has surpassed 3% of generation on average nationally (20% in Iowa, 7 to 8% in nearby Texas). Coal has gone below 44% of electric generation as a national average in 2011.

    Mass-produced electric vehicles are here. They were sold in every state of the U.S. in 2011. They are expensive, but have fewer externalized social costs like the 1,400 excess deaths per month from toxic emissions. Electric vehicles contribute much less to the causes of asthma than any gasoline vehicle, even a hybrid. Cheaper electric cars are in the product pipeline for Ford and Mitsubishi. The Nissan Leaf is on sale on both coasts (not yet in the middle of the country).