Published on July 6th, 2020 | by Tina Casey0
Why Plan For Fleet Electrification In The Middle Of A Pandemic?
July 6th, 2020 by Tina Casey
Oil prices have been wobbling all the way through the COVID-19 crisis, which is good news for fleet owners on the prowl for cheap gas, and bad news for fans of fleet electrification. However, the electrification trend is still carrying on, with the latest example being the leading US utility Exelon. The big question is, why?
Huge (-ish) Fleet Electrification Plans Afoot For Exelon
Exelon has had its hands full of late, between decommissioning the Three Mile Island nuclear plant in Pennsylvania and shutting down the fish lift at the Conowingo Dam hydropower generating station in Maryland, all as the COVID-19 crisis continues to unspool across the US.
Nevertheless, the company found time to formulate a fleet electrification plan that potentially involves thousands of new electric vehicles hitting the road in the coming years. The company’s current fleet totals more than 7,200 rolling units. It set the goal posts at 30% fleet electrification by 2025, with 50% electrification by 2030.
That is roughly consistent with the marker laid out in a recent BNEF analysis, which forecasts that electric vehicles would total 58% of all new car sales by 2040.
Fleet Electrification, Not 100% Electrification (Yet)
The devil is in the details, though. Exelon is counting on gas-electric hybrids and auxiliary equipment to carry some of the load.
Under Exelon’s road map, only light duty vehicles that reach the end of their useful lifespan by 2025 will be replaced with hybrids or full electric vehicles. The company expects to complete the rollover of all light duty vehicles by 2030.
Heavy duty vehicles are a whole ‘nother kettle of fish. Garbage trucks, excavators, and other heavy duty vehicles are becoming electrified, but bucket trucks and other utility vehicles are in a class of their own.
In addition to local usage, utilities also have to think about emergency mutual aid situations that would require long distance travel on short notice. That element complicates life for fleet managers looking at battery range and charging times.
So, instead of pursuing electrification for mobility in the heavy-duty category, Exelon plans to deploy plug-in batteries that will enable bucket trucks to shut off their diesel engines and use electricity to run their bucket lifts, lighting, air conditioning, and heating.
That may sound like a second-best solution, but it should still have a significant impact on diesel use. Exelon cites the figure of 65% for the amount of time that utility vehicles spend in idle.
It looks like Exelon won’t have to wait around for the technology to develop in that area. Versalift and Altec are two utility truck specialists that already offer a diesel-electric hybrid option. If you can spot more, drop us a note in the comment thread.
Moving The Fleet Electrification Movement Forward
Exelon is one of the few utilities to make a fleetwide commitment to electric vehicles, which puts it in a position to influence the entire utility sector. Its electrification announcement comes at a crucial time when many businesses are reeling under the impact of COVID-19 and vehicle sales are down across the board.
As for why now, consider that utility fleets have a direct relationship with demand-response strategies, virtual power plants, energy storage, and other elements of the renewable energy transition that impact utilities. These factors are becoming all the more powerful during the COVID-19 crisis, as lockdowns have shifted patterns of electricity use in many parts of the country.
Exelon can use its own fleet to model best practices and sell its rate payers — including other fleet managers — on EV charging behaviors that help improve grid reliability and resilience while lowering costs. It could help accelerate the learning curve for other utilities as well.
Charlotte Argue, the Senior Manager of Fleet Electrification at the fleet management firm Geotab, made the case for electrification in a June 11 article posted by the global decarbonization non-profit SEPA.
Although utilities must plan ahead for increased load as more fleets go electric, she argued that the predictability of fleet usage provides for strategic opportunities.
“Established routes and charging schedules allow both the fleet operator and the utility to accurately predict and meet charging demand,” she explained. “They also know where charging will occur, as most fleets will use consistent charging locations (such as their fleet yards), which is critical for infrastructural planning.”
Fleet Owners Not Waiting Around For The Paint To Dry
Meanwhile, some fleet owners are already making some big moves into the EV field.
One interesting example is UPS. Back in February, just before the COVID-19 outbreak, the company announced an investment in the EV startup Arrival. The deal will enable UPS to tailor its own electric delivery vans, and also enable the company to call dibs on the first vehicles to roll off the delivery line. Meanwhile, last month Arrival surprised and delighted everyone by rolling out a sleek new electric bus.
Meanwhile, according to a scoop from Reuters, GM is also hopping into the electric van pool. Last month Reuters reported that the company’s yet-to-be-formally-announced electric delivery van is code-named BV1. That evokes unfortunate memories of the similarly named EV1, but it is unlikely that BV1 will meet the same fate considering GM’s commitment to an all-electric future.
Public policy could also help push the fleet electrification envelope. One significant development on that score is California’s new electric truck mandate. Despite a few (or more than a few) weak spots, the new mandate should provide fleet owners with more options when they go out shopping for new heavy duty vehicles.
More Renewable Energy For More Electric Fleets
Circling back around to Exelon and its potential influence on fleet electrification, back in 2016 the company became the largest utility in the US when it merged with Pepco.
“We are a FORTUNE 100 company that works in every stage of the energy business: power generation, competitive energy sales, transmission and delivery. As the nation’s leading competitive energy provider, Exelon does business in 48 states, D.C., and Canada and had 2019 revenues of $34 billion,” explains the company’s website.
Peeling back another layer, Exelon notes that its Constellation branch covers more than 2/3 of the other Fortune 100 companies as a provider of renewable energy certificates, energy efficiency plans, and solar development up to utility scale. Constellation also works with non-business entities as well.
That Fortune 100 relationship could become a high-impact element in the renewable energy transition.
To see how, dial back a bit and consider that fans of renewable energy are all excited about community choice aggregation regulations. Those are state-based platforms that enable local jurisdictions to pool the weight of their ratepayer clout, in order to get local utilities to provide more renewables.
That’s the stick side of the aggregation equation. There is also a newly emerging carrot side, in which businesses and/or government agencies can pool their ratepaying power to provide financial support for new wind or solar developments.
The aggregation model enables smaller-sized businesses — you know, the ones that are not Amazon or Facebook — to jumpstart their renewable energy goals with offsite energy, either by direct purchase or through renewable energy certificates.
The aggregation model could have a significant impact on the pace of renewable energy development. The initial participants serve as anchor tenants, which lowers risk and enables developers to round up financing more efficiently.
Last fall, Constellation engineered a 175-megawatt aggregation deal for Johns Hopkins University, McCormick & Company, and the TJX Companies, Inc., to nail down clean kilowatts from the yet-to-be-built Skipjack Solar Center in Virginia. For those of you keeping score at home, Skpjack’s builder is sPower, an AES and AIMCO Company.
Where were we? Oh right, Exelon and fleet electrification. Now that Exelon has nailed down the pole position for utility fleet electrification, perhaps it can focus more attention on transitioning its fossil gas business into a more sustainable model.
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