What Are the Implications of Mass Utilization of EVs?

Speaking of thought-provoking, I found that Jenna Hermann’s post at UtilityDive about the potential implications of the Tesla 3 might be for electrical utilities:

Coupled with flat or declining load growth, changing regulations, increasing customer demand, and new technology penetration, these challenges have given the electric utility industry good reason to describe its future as “threatened.” These trends, each exacerbating the others, mean essentially that utilities can no longer rely on traditional ways of doing business.

EVs have significant potential to help relieve the industry’s pessimistic outlook. This article will explore what EV growth could mean for utilities and how they can begin establishing critical foundations today to help ensure their ability to exploit this opportunity.

At the Bloomberg New Energy Finance (BNEF) Global Summit 2017, BNEF Advisory Board Chairman Michael Liebreich announced the group’s prediction that electric vehicles will comprise 35-47 percent of new vehicle sales globally by 2040.

U.S. utilities have good reason to be optimistic about this potential new revenue source. If all 236 million gas-powered cars in the U.S. — average miles driven per year: 12,000 — were replaced with electric vehicles, which travel an average of 100 miles on 34 kWh, they would require 956 billion kWh each year. At a national average cost of $0.12 / kWh, the incremental energy sold by utilities in the U.S. would bring in around $115 billion per year in new revenues. A variety of factors could increase or decrease this number, but it still represents an attractive opportunity for the utility sector.

Frankly, I’m suspicious of the claim, examined here, that the present electrical grid is capable of supporting the mass adoption of electrical vehicles. The problem that I see isn’t a capacity problem; it’s peak load.

Courtesy of the U. S. Energy Information Agency, here’s a graph of electricity utilization during the week of July 13-July 19, 2013:

Adding one EV per neighborhood grid is roughly the equivalent of adding an additional house to it. In other words it increases the load on its grid from between 10% and 20%. Replacing half of the present internal combustion vehicles with EVs would be about the equivalent of increasing the load on neighborhood grids between 50% and 100%.

Consider that in the context of the graph. The entire curve would be raised between 50% and 100%. Peak load would be even worse because utilization isn’t distributed evenly through the day. I would expect surges in use between 9:00am and 1:00pm Central Time and between 5:00pm and 9:00pm Central as millions of people arrived at work and recharged their EVs or returned home and ditto.

Failure of power substations is dependent on a variety of factors including age, utilization, load, and environmental conditions. Under the most favorable possible circumstances one would expect more failures with increased utilization. However, the increased peak load would make the situation that much worse. Expect more substation problems.

Additionally, such problems tend to be preceded by surges. That would increase the likelihood of a cascading failure.

Consequently, the implications of EVs for the electrical utilities include not just a bonanza of increased utilization but greater risks as well in the form of increased maintenance costs and reduced reliability.

There are implications for government, too. Use of EVs cut into gas tax revenues. There have already been calls for new fees for EV users to make up the difference. As utilities’ revenues increase and the reliability of their service decreases, expect calls for additional scrutiny on them.