Electric vehicles, or EVs, are gaining in popularity. According to the International Energy Agency, global sales of EVs doubled from 2011 to 2012, while here in the U.S., the Electric Drive Transportation Association reported that sales of plug-in cars nearly doubled from 2012 to 2013, and are on track to grow by 30% in 2014. From 2011 to 2013, the percentage of cars sold that featured electric drive -- this includes hybrids and plug-ins of all types -- increased from 2.3% to 3.8%, a whopping 50% jump.
What's the potential impact of adding all these new vehicles to America's power grid -- a power grid that has been described as old enough that Nikola Tesla and Thomas Edison would recognize many of its components?
After all, it only takes two EVs to equal the power demand of one average American home.
The impact of a single electric vehicle
The most popular fully electric vehicle in the U.S. is the Tesla Motors. Model S sedan, with the company expecting to deliver 35,000 in 2014. Furthermore, Tesla management expects to be building cars at a rate of 100,000 per year by the end of 2015, enormous growth from today's levels.
According to Tesla, the average driver would need about 4,800 kilowatt hours, or kWh, of electricity per year to travel 15,000 miles. The average American home pays $0.12 per kWh, so you're looking at about $576 per year in additional electricity cost. Compared to a gas-powered car that gets 25 mpg and paying $3.85 per gallon, that's a cost savings of $1,700 per year. That's pretty awesome, if you don't mind paying more than $70 grand for a Model S.
But what's the impact of that 4,800 kWh on power usage? According to the U.S. Energy Information Administration, the average residential customer consumed just over 10,800 kWh in 2012, so we are talking about increasing power use by a whopping 44% per home, per electric vehicle. There are more than 115 million households in the country. Here's what power consumption -- just for residential customers -- would look like based on an EV in every driveway:
Adding to the load at the worst possible time
Adding 44% to the demand load isn't the big risk with EVs, because our grid has capacity to meet additional demand. The problem is when so much of that new demand is concentrated into a narrow window of time. Residential power consumption tends to peak in the late afternoon and early evening, when people arrive home from work and school en masse.
The concern with EVs, then, is that the power demand they add to the grid isn't distributed evenly over the day. Going back to information supplied by Tesla, the average daily commuter would pack that new demand into about 90 minutes, potentially every afternoon when he or shre returned home from work, right when residential power demand is peaking.
Technology and time to the rescue
While plug-in vehicle sales are rapidly escalating, the raw numbers are still relatively small. Sales did double from 2012-2013, but the actual increase was from about 55,000 units to just under 100,000. Through July 2014, EDTA reported just over 66,000 plug-ins sold in the U.S. This would put total plug-ins sold since 2010 at just below 235,000 cars, adding a more manageable level of demand to the grid.
The IEA's EV Initiative has set a goal of having 20 million electric vehicles on the road globally by 2020. That's an enormous increase from today's levels, but not enough to even remotely put the grid at risk in the U.S.
Power companies such as CenterPoint Energy are beginning to take a closer look at the impact now, before it becomes a threat. As the Houston Chronicle recently profiled, CenterPoint is working with makers of EVs today in order to be prepared to manage demand later.
Just as technology is allowing plug-in vehicles of all kinds to grow market share, technology will also be the answer for the ability of the grid and utilities to meet future demand. One of the simplest ways to manage demand already exists, via charging only during set times of the day. The best -- and cheapest -- time to charge an EV is very late at night when energy demand is lowest.
This corresponds to utilities still operating baseload power plants, which are largely underutilized at these hours, because not only is household demand at its lowest, but commercial and industrial needs are also lower. This increased demand would actually be a boon for utilities, which frankly are losing money at these hours due to the incredibly high fixed costs associated with operating a power plant.
Technology that can actively control when a car is charging is a major possibility. Utilities can offer incentives to EV owners to allow the utility to actively manage charging, and reduce or alter a charging cycle in real time based on grid use.
Distributed utilities, in-home power storage part of the solutionSome estimates put sales of plug-ins at a half-million units per year by 2023, and there will be demand on the grid. However, the same technology that is putting EVs on the road in growing numbers -- cheaper, better batteries -- could offset some of the demand on the grid.
Earlier this year, SolarCity -- another company backed by Tesla CEO Elon Musk -- announced that it was partnering with Tesla to offer battery storage for residential and commercial customers. While it will be years before this technology becomes established and affordable, and before utilities and regulators allow it in many markets, the potential for EV owners to store power from solar systems, to use later for things like charging an electric vehicle, could be a reality when EV sales reach levels that could threaten grid operators.
Final thoughts: It's a long road
It's going to be a decade before enough EVs are in enough driveways to make this a serious threat, and you can be sure that technology will keep advancing at the same time. These advances will largely address the potential threats that EVs present.
Warren Buffett's worst auto-nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of the most important businesses he's ever invested in. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to ride this megatrend.
Source : The Motley Fool, by Jason Hall, August 24, 2014
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of the most important businesses he's ever invested in. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to ride this megatrend.
Source : The Motley Fool, by Jason Hall, August 24, 2014