Last week I focused on electric vehicles and the drivers, environmental and regulatory, which are impacting the way the transportation industry operates and adopts the use of electric vehicles (EVs).
With over 250 million light duty vehicles on the road in the U.S., how will the energy be supplied?
There are multiple charging infrastructure options to consider: private charging at residential homes and fleet vehicle storage centers, public street charging, workplace charging and private parking charging.
Much of the success of electric powered vehicles lies within the modernization of the Smart Grid; the current electric grid is not interconnected and may not be able to adapt to the increased usage. As documented in the National Broadband Plan, the Department of Energy has found that the U.S. currently has the capability to charge 73 percent of light duty fleet vehicles – if they are charged during off peak hours. By instituting a grid that reflects the cost of supplying power at different parts of the day, consumers are incented to better manage their energy use. While success of EVs is highly dependent on the ease and availability of recharging options, large scale infrastructure build-out – whether for public streets or private workplaces and parking lots – will require a mass of users to be economical. Building a network of charging stations around the country on a scale similar to gas stations will require massive investment. There are also concerns over the ability of electricity distribution networks to handle this demand without a smarter, interconnected grid.
With Nissan, Chevy and Ford coming out with EVs by the end of 2010, charging infrastructure is something that will become increasingly of interest to regulators, organizations involved in Smart Grid projects, consumers, and businesses with operations tied to the transportation industry.
EV Impact on Restructured Electricity Markets
In the absence of mandated or incented off peak charging, EV owners may choose to charge their vehicles during peak hours leading to increased peak demand and subsequently increased peak prices. Few utilities have created rate plans aimed towards EV owners to date; however, as early adopters begin to make the switch to EVs to reduce their carbon footprint and take advantage of cost savings derived from the high efficiency of electric motors, regulators and utilities will need to consider the impact of mass EV charging on electricity pricing.