Can the power grid handle a wave of new electric vehicles? – EQ Mag

A wave of electric cars, SUVs and pickups is headed toward America’s highways, driven by the auto industry’s aggressive rollout, the vehicles’ growing driving range, environmental regulations and government incentives.

Experts believe EVs will make up a third or even half of all light vehicles sold annually in the U.S. by 2030, up from about 7% in 2022.

If those predictions are correct, that leaves a big question: Will the power grid be capable of charging the batteries in those tens of millions of vehicles?

Some grid operators already are struggling to keep up with demand in certain areas and at certain times—California power authorities, for example, asked residents to avoid charging electric cars in the evening during a heat wave last September to help avoid overloading the grid, while utility officials in other areas have warned at times of possible rolling blackouts to prevent system collapses.

First, the good news: Many experts think the utility industry will be ready to generate enough power for the coming EV wave, thanks to planned capacity increases costing hundreds of billions of dollars.

But that isn’t the whole story. The potential for much more serious bottlenecks looms in the local legs of the grid that transmit electricity to individual homes and businesses. Expensive upgrades could be needed for these neighborhood power-distribution systems. Additional spending will be needed to bolster the wires and transformers serving commercial sites as electric trucks and delivery vans become common.

Combined, all these investments likely would result in higher electric rates, many industry analysts say.

“The more they invest in the grid, the more those costs go back to consumers,” says Brad Stansberry, U.S. energy advisory leader at audit and consulting firm KPMG.

Something that could help all parts of the grid deal with higher demand is controlling when EVs are charged, such as curbing charging in late afternoon and evening, when electricity use peaks. There are several ways to accomplish this, such as varying the cost of electricity by time of day and offering incentives to car owners to charge overnight.

Here’s a look at how mass EV adoption could affect the three major components of the electrical system—power generation, long-distance electric transmission and local distribution—and what needs to be done to prepare.

Power generation

The nation’s approximately 12,000 utility-scale power plants generate electricity by burning natural gas, coal or oil, splitting atoms or tapping the energy in sunshine, wind or water. So far, EV charging uses a minute fraction of this power production.

A recent study by the Argonne National Laboratory found that the 2.1 million EVs on U.S. roads in 2021 used less than 0.2% of the 3,930 trillion watt hours of power consumed overall that year.

Projections of how much electricity EVs will consume in coming years vary widely. The Electric Power Research Institute, a nonprofit that gives guidance to the power industry, estimates that EVs of all sorts, including buses and commercial trucks, will boost the nation’s overall use of electricity between 8% and 13% by 2030 from 2021. These vehicles will consume 7% to 11% of all U.S. electricity generation by that year, the group estimates.

New power demand also will result from mandates by some governments to curb installation of gas stoves in favor of electric ones and gas furnaces in favor of electric heat pumps.

Power companies have dealt with big increases in demand before, such as from the widespread installation of air conditioning 50 or so years ago and, more recently, the construction of massive data centers for cloud storage.

But EVs present a different challenge. The rate of EV adoption can’t be reliably predicted. It involves many variables, including gasoline prices, the price and availability of EVs, the build-out of public charging stations and the continuation of government incentives.

In contrast, power companies generally know years in advance about the arrival of other new energy-hungry customers, such as big housing developments, shopping centers and factories, giving them time to upgrade, says Kellen Schefter, senior director of electric transportation at the Edison Electric Institute, a trade group for investor-owned electric companies.

The electric industry also is facing pressure from regulators, environmental groups and some investors to shut coal- and gas-fired plants. That means new generating capacity and utility-scale battery storage for renewable power will be needed to make up for closed fossil-fuel plants, as well as the rising demand from EVs.

Still, most experts are confident that the industry can keep up.

EPRI projects utility companies overall will spend $1.5 trillion to $1.8 trillion on infrastructure and operations by 2030. Of that, about 22% to 30% will go toward adding generating and electrical-storage capacity, the group says.

A 2019 study overseen by the Energy Department concluded that “based on historical [electric generation] growth rates, sufficient energy generation and generation capacity is expected to be available to support a growing EV fleet as it evolves over time.”

Moreover, the power system already has excess capacity during certain periods of the day. An analysis by KPMG says the U.S. currently has enough generating capability to charge 80 million EVs during overnight hours—hence the need to control when cars are charged. The Edison Electric Institute estimates there could be 26 million EVs on the road by 2030, up from about 3.2 million today.

Long-distance transmission

Once electricity leaves its generating site, it is stepped up in voltage to enable it to travel along the long-distance, high-power transmission lines that crisscross the country on tall towers.

EPRI projects the need for a 10% expansion in high-voltage transmission capacity by 2030, in part to connect new solar and wind-power installations to the grid but to a lesser extent contend with the power needs of EV charging. The research group estimates these upgrades will cost $30 billion to $40 billion, though it says such forecasts are subject to variables such as inflation and labor costs.

Government money could help. The 2022 federal Inflation Reduction Act offers nearly $3 billion for transmission networks, while the 2021 infrastructure act provides $10.5 billion to upgrade the power grid overall.

Yet these enhancements face challenges. One is obtaining the rights of way and government permits—new or expanded power lines often prompt not-in-my-backyard pushback from people and communities. Sourcing the required materials also could be a challenge. Currently there are supply-chain backlogs for power poles, transmission lines and other components, says Jeff Smith, EPRI’s director of grid operations and planning research.

Local power distribution

When electricity reaches the local level, its voltage must be reduced at substations to be safely sent through the local grid. From there, wires take it to neighborhoods, stores and office parks, where transformers further reduce it to the voltage used by homes and businesses, generally 120 or 240 volts.

This part of the grid is where the biggest concerns lurk.

Charging an EV can require a major boost to the electricity-transmitting capacity of the wires and transformers serving an EV-owning household—a 70% to 130% increase, depending on the power of the charger—according to an analysis by Boston Consulting Group.

The consulting firm projects that utility companies may need to invest between $1,700 and $5,800 in grid improvements for each light-duty electric vehicle sold through 2030.

For the power industry overall, this work could cost $10 billion nationwide through 2030, says Thomas Baker, a Boston Consulting Group managing director and partner.

Utilities will get new revenue from EV customers, but not enough to cover the needed upgrades, Mr. Baker says. The upshot, he says, is that utilities will seek rate increases, possibly up to 12%, assuming regulators approve.

Charging commercial vehicles at industrial parks, package depots and warehouses will pose another challenge. Such vehicles can use substantially more electricity than a car.

Local grids also will have to supply public charging stations. Their number and power need is another wild card.

As with transmission-network upgrades, bulking up the local distribution grid could face backlogs in equipment and shortages of workers to install it.

“Unfortunately, this new infrastructure could take months to years to put in place,” says EPRI’s Mr. Smith.

Some utilities are looking at novel solutions in the interim, such as mobile battery power storage or mobile power generation setups that they could deploy temporarily at local sites to contend with the new demand, Mr. Smith says.

Managing EV charging

To make it easier for all parts of the grid to deal with higher demand, some utility companies are working with car makers and technology providers on so-called deferrable, managed or smart charging.

In California, a pilot project involving Sacramento Municipal Utility District, General Motors Co., Ford Motor Co. and BMW AG asks vehicle owners the best time to charge based on their travel schedules. The technology coordinates that with off-peak power periods to determine the optimum charging time.

The customers receive $150 to sign up and quarterly payments of $20, and may change their charging schedule as needed.

In Michigan, DTE Energy is testing a program with GM, Ford and BMW that allows the power company to pause EV charging during periods of peak electricity demand. Participating customers, who will receive up to $100 in gift cards, will be texted before a pause and can opt out of it.

“A little bit of deferrable charging can go a long way [toward easing peak demand strains]. You don’t need everyone participating,” says John Bistline, program manager in EPRI’S Energy Systems and Climate Analysis Group.

Some utilities, including Duke Energy and Pacific Gas & Electric Co., are experimenting with a more advanced setup called bidirectional charging, which lets EVs aid the grid during peak demand by sending power back to it from their batteries—making them part of the solution to the problem. The batteries are refilled by the utility when demand eases.

Most of these setups will require upgrades to power networks and wiring inside of homes, and specific charging technology inside EVs.

Source: livemint