How will the Proliferation of Electric Vehicles Impact Utilities?
We are currently experiencing rampant growth and adoption in the Electric Vehicle market, and there’s no better indicator than Tesla, which sold 14,000 Model 3s in July 2018. This was the highest month of EV sales to date, ever.
Momentum for responsible, environmentally centered choices paired with the buzz behind electric vehicles (EV) and the buying power for targeted consumers, presents a unique problem for the utility supply chain. Everyone needs more power, but is it available? If a family’s electricity consumption (MWh) doubles after they start charging their two new electric cars, and everyone in their neighborhood eventually follows suit, can the current power grid infrastructure support the multiplied need? Unfortunately, it cannot.
An electric vehicle driven 12,000 miles per year will consume about 4.8MWh/year of power, and the current average US household uses about 10-11MWh/year. If a household has 2 EVs, they are almost doubling the average electricity consumption. If all households get two EVs, utilities will be selling *a lot* more power. How will all these future EVs be charged?
Current Primary Charging Solutions:
- Consumer Funded and Managed: Consumers charging their own cars on their own, e.g. through a plug in their home garage. If everyone in a neighborhood starts charging EVs, we will need to upgrade our distribution network, and possibly even our substations. But residential EV charging is highly deferrable so some/most of the residential upgrades can be avoided if it is handled strategically.
- Community-Based: EV charging stations made available for multi-unit dwelling, retail environments, workplaces & parking garages. For community-based EV charging, utilities are often responsible to develop, install, maintain and coordinate construction of infrastructure from the transformer to the parking space (often 60-80% of the total project cost).
- Fleet Ready: Charging infrastructure for medium/heavy duty electric vehicles. These programs will support the conversion of commercial/public vehicle fleets to electric, especially in disenfranchised communities. Utilities are typically responsible for upgrading the distribution infrastructure to enable commercial development.
- Fast Charge: Roadside and highway fast charging, intended to reduce EV driver range anxiety and increase access to EV charging for customers who lack ready access to home charging or need charging stations for longer trips. Plans are in progress for large networks of EV roadside chargers, e.g. Electrify America plans to spend $2 billion over the next 10 years in Zero Emission Vehicle (ZEV) infrastructure as part of VW’s settlement from the recent diesel emissions scandal. These chargers can draw 100+kW per charger, or potentially MWs per charging site; these new power needs could quickly overrun remote rural distribution networks. As with Fleet Ready programs, utilities are typically responsible for upgrading the distribution infrastructure to enable commercial development.
Utility Supply Chain organizations have the opportunity today, to be part of their utility’s strategic conversations around new EV developments, and to examine required infrastructure upgrades. Only by participating in these conversations can supply chain organizations ensure that they are well positioned to help their utility meet future EV charging needs.
This blog is based on a topic found in our recent UPMG Conference presentation on Utility Supply Chain Disruptors. Click here to check out the complete presentation.