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Utilities And Their EV Opportunity

The rapid growth now taking place in the EV sector is viewed by some as an extraordinary entrepreneurial opportunity for electric utilities, which are not traditionally regarded as belonging to the entrepreneurial or innovative classes.

According to Michael Shepard, chairman of energy advisory firm E Source, “Revenue growth is not the only benefit EVs offer to utilities.” How much revenue growth? Possibly up to $100 billion.

Electric transportation is one of the biggest strategic opportunities utilities have had in nearly a century, contends Shepard.

“How big? America spends roughly equal amounts on gasoline and electricity—about $400 billion a year for each. If electricity could capture the entire fueling market for light duty vehicles, power sales would rise by about 25%, adding roughly $100 billion per year to electric utility revenues and saving car drivers about $300 billion a year. [1] That’s a great deal for consumers and a big, hairy, audacious goal that should capture the attention of utility executives struggling with flat loads and profits.”

EV motor shutterstock_323562035

In his article on UtilityDIVE, Shepard rightly points to the benefits EVs offer utilities in the grid services they can deliver to users.

“Utilities will increasingly need flexible, dispatchable loads and storage that can smooth out fluctuations from intermittent renewables and keep the grid stable. Electric cars can be taught to respond instantly to calls from grid operators to shed or increase load, store excess generation for later use, send stored energy into the grid, and provide frequency regulation and other ancillary services.”

According to Greentech Media, analysts at the Rocky Mountain Institute project that half of America’s vehicle fleet in 2050 could be electric, adding an additional 2,900 gigawatt-hours of storage and generation capacity to the grid. The opportunity is obviously huge.

Many critics state utilities have been remarkably slow in adapting to disruptive renewable innovations like wind and rooftop solar. And now utilities have an opportunity to “capture a large chunk of a $400 billion US gasoline market from the oil companies,” writes Shepard.

e_source_ev_pic_1

Not all utilities have their feet stuck in the mud. Recently, the California Public Utilities Commission approved a proposal by Southern California Edison (SCE) to invest $22 million in its “Charge Ready and Market Education Program,” under which the utility provides incentives to deploy 1,500 EVs.

In this case, SCE has a vision on the future. Having a utility participate in paying for the infrastructure to support EV charging is a new model for providing the infrastructure, Jordan Ramer, EV Connect CEO told Energy Efficiency Markets.

This charging program is designed to provide infrastructure in locations where EVs are parked for long periods of time, such as work places, shopping malls, or multi-family communities.

Not only will the SCE infrastructure allow California to bring more renewable energy to the grid, charging can be timed to occur when the most renewable power is being produced. In addition, the charging stations will meet the requirements of demand response programs, meaning the utility can send a signal telling the operator of the charging station to schedule charging to meet the needs of the grid.

According to Shepard, a variety of factors make the next several years a particularly critical time for utilities to push hard on electric transportation. 

We will watch with keen interest as this EV charging tapestry unfolds.

Images via E Source and Shutterstock

 
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Written By

is a writer, producer, and director. Meyers was editor and site director of Green Building Elements, a contributing writer for CleanTechnica, and is founder of Green Streets MediaTrain, a communications connection and eLearning hub. As an independent producer, he's been involved in the development, production and distribution of television and distance learning programs for both the education industry and corporate sector. He also is an avid gardener and loves sustainable innovation.

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