Ready for a Fifty Percent Demand Spike?

By Curtis Underwood
This article appeared in the October 2017 edition of Public Utilities Fortnightly magazine.

Vehicle electrification is a monumental change for the transportation sector, but the impact on utilities may be equally profound. Based on our calculations, the conversion of all transportation fuels, gasoline and diesel, to electric vehicles would add fortyfive percent to national electricity demand in the U.S. and as much as sixty percent in countries like France.

While this book-end scenario represents an opportunity, it also poses a threat to our aging and often stressed power grids. The crucial challenge for policymakers, regulators and utilities across the world is how best to prepare their national grids for this massive hike in demand.

The push to replace internal combustion engines with electric vehicles is gaining momentum across the world. Governments and car companies have begun announcing plans to phase out the internal combustion engine in favor of electric alternatives.

Volvo, for instance, has said that it will stop producing pure internal combustion engines by 2019.  The U.K. and France intend to ban sales of gas and diesel cars by 2040. Norway and India have declared faster paths away from internal combustion by 2025 and 2030 respectively.

In the U.S., eight states, including California and New York, have joined a Zero Emission Vehicle initiative to make all passenger vehicles emission free by 2050. The announcements foreshadow a potentially huge electricity demand increase in the coming years and decades. While the transition won’t happen overnight and won’t replace all transportation fuel, we should be thinking about the likely impact on electric generation, transmission and distribution.

Utility control over electric vehicle chargers, special charger tariffs and time of use rates could help avoid localized problems

Clearly, some additional demand can be absorbed by existing off-peak capacity. This can be further enhanced by implementation of time of use rates, which have been shown in various pilots to promote demand shifting toward underutilized periods.

In addition, advances in storage promise to improve overall network utilization, including potential use of electric vehicle batteries connected to the grid themselves. The challenge for generation and transmission therefore is one of relatively uniform capacity growth. New sources of generation will help, but the industry should also proceed cautiously with central generation capacity reductions.

With distribution systems, new demand will be unevenly spread and especially imbalanced in some local areas. Residential circuits will bear the brunt of new vehicle charging demand, which will pick up first in high- and medium-density residential parts of the distribution grid.

It will take time for utilities to react, while the shift toward electrification is accelerating. Distribution system operators and regulators must ramp-up efforts for proactive planning, investment and expansion in areas that will see the largest increases. Utility control over electric vehicle chargers, special charger tariffs and time of use rates could also help to avoid localized problems.

These recent pronouncements by governments and car manufacturers are clear indications that change is indeed heading our way. Utilities and policymakers need to monitor development and prepare by maintaining available generation capacity, integrat-ing new sources of generation, building out and maintaining infrastructure (including charging infrastructure), and enhancing the reliability and capacity of the grid ahead of forthcoming demand.

You don’t need a crystal ball to realize that electric vehicles represent a massive disruption and change to the global economy. Preparing for this change represents an extraordinary amount of work that needs cross-industry and political support. The question facing the utility industry is equally clear: Will we be ready in time?