Electric vehicles represent a big strategic opportunity for utilities in an era of flat to declining load growth. But plug-in cars can do more than simply consume electrons; they have the potential to be valuable load-managing resources -- and they may need to be to avoid wreaking havoc on the grid.

“While most industry analysts see EVs as a boon for utilities, risks do exist,” according to a new report by the Smart Electric Power Alliance (SEPA). The report is designed to help utilities insert themselves into the conversation on electrifying America’s vehicle fleet, with an eye to serving the grid at the same time.

The downside of EVs is mostly associated with poor load management, such as peak load increases, transformer and substation impacts and "timer peaks" caused by time-of-use rates, the report states. TOU rates successfully help shift charging hours to utilities’ preferred times of the day, but customers often schedule their vehicles to begin charging the moment off-peak rates begin, which results in sharp load ramps.

“Poor load management and suboptimal rate schedules could, in turn, require costly solutions,” according to SEPA. One study for the Sacramento Municipal Utility District estimated 17 percent (12,000) of the utility’s transformers might need to be replaced due to EV-related overloads, at an average estimated cost of $7,400 each.

While it may not seem like there are enough EVs on the road to stress the grid just yet, some utilities are already starting to see effects, and projections show EV adoption growing exponentially. As of February 2017, U.S. EV sales totaled more than 580,000 units, representing approximately 1 terawatt-hour of annual consumption. Bloomberg New Energy Finance projects that EV electricity consumption will increase to roughly 33 terawatt-hours per year by 2025 and 551 terawatt-hours by 2040.

In SEPA’s 2017 Utility Demand Response Survey, 69 percent of utility respondents said they are planning, researching or considering demand-response programs that integrate EV managed charging, and 3 percent said they have already implemented such programs. That compares to 20 percent of respondents who said they have no interest in managed charging at this time.

Managed charging is what turns EVs into a grid resource. Communications signals sent via charging infrastructure allow a utility or third party to reduce or curtail the rate of charge if the grid is overburdened. These controls can also be leveraged to provide grid services, such as capacity and emergency load reduction, or to absorb excess generation from renewable energy resources.

The report notes that these services can provide real economic benefits. For example, in a 40 percent renewable energy penetration scenario, consulting firms ICF and Energy+Environmental Economics calculated that managed charging could reduce the costs of delivering electricity to an EV in California from $1,400 to less than $600, for a benefit of $850 per vehicle.

FIGURE: Opportunities for EV Managed Charging to Meet Grid Needs

Managed charging also mitigates utility system costs. If multiple EV owners are clustered together on the same distribution transformer, they may cause damage or outages from overloading the equipment. However, the Sacramento Municipal Utility District (SMUD) report referenced above found that managed charging can address virtually all of the cost impacts of higher residential charging levels.

In SMUD’s forward-looking scenario with 240,000 EVs on the system in 2030, the cost of transformer upgrades was calculated at $100 per vehicle. This scenario represents 30 percent to 60 percent more EVs than SMUD is actually expecting by that year, so in reality, costs could be lower. Whatever those costs are, though, managed charging needs to be cheaper in order to make economic sense.

Pepco, for instance, conducted a pilot program that reduced EV infrastructure from a Level 2 to a Level 1 rate of charge for an hour during a demand response event, with the option for customers to opt out of the program. When evaluating the pilot results, Pepco found the ongoing costs of the communications equipment was too expensive to justify.

FIGURE: EV Impact on Transformers in SMUD Territory Through 2030

Multiple stakeholders and layers of technology all need to work together in order for managed charging to live up to its expectations, at a lower cost than upgrading the grid. One of the key challenges is network communication and equipment interoperability.

Communications between a utility and EVs and EV-charging infrastructure consist of a combination of messaging or application protocols (OpenADR 2.0/OCPP) and transport layer protocols (Wi-Fi, cellular). The protocols for messaging and transport are distinct: The former sends a specific instruction (e.g., “begin charging after midnight”), while the latter ensures the message is delivered.

The report notes that most leading vehicle and electric-vehicle supply equipment (EVSE) manufacturers have incorporated common industry-developed messaging protocols in their products or developed their own proprietary protocols that require use of a proprietary platform software. Examples of proprietary platforms include the eMotorWerks JuiceNet, Itron/ClipperCreek’s OpenWay network, and Siemens' VersiCharge platform. Vehicles can also be managed via a direct telematics link or an on-board diagnostic interface (OBD-II). Microsoft’s Azure Connected Vehicle proprietary cloud platform represents a sophisticated type of vehicle telematics capability that allows a utility or aggregator to send complex messages to a vehicle; it will be deployed in Renault and Nissan cars.

Now that EVs are becoming more widespread, many industry stakeholders are calling for uniform and non-proprietary communications messaging protocols between EVs and charging station equipment so that utilities have an easier time managing charging functionality and for a more seamless customer experience.

To that end, the Electric Power Research Institute is coordinating work on an Open Vehicle-Grid Integration Platform (OVGIP), “a software application that connects EVSE and EVs to various nodes to allow utilities to more proactively manage charging activity that could help with a variety of grid services,” according to the SEPA report. The goal of the OVGIP is to give automakers the flexibility to use existing on-vehicle communications technologies with utility standard interface protocols and EV charger application program interfaces through a common platform. The platform will ultimately allow utilities to provide TOU pricing, peak load reduction, load balancing for intermittent solar and wind production, demand-charge mitigation and other grid services to EVs.

Like many other distributed energy technologies, “the growth of the managed charging industry depends heavily on the actual value of the grid services that EVs can provide,” the report states.

Getting beyond the growing pains

Going forward, EVSE manufacturers, automakers and utilities will need to develop and test new managed-charging solutions in order for the technology to become widespread. Several pilots are currently underway. For instance, Pacific Gas & Electric and BMW are conducting a project that allows BMW to delay vehicle charging for up to an hour based on signals from the utility. Furthermore, San Diego Gas & Electric has tested an innovative day-ahead price-varying rate, and Southern California Edison has created a workplace-charging pilot project to test pricing signals. Pilots aren’t limited to California utilities, but it’s no surprise they’re leading the charge given that California is by far the largest EV market in the U.S.

On the technology provider side of the equation, SEPA found that approximately one-third of all EVSE manufacturers currently have a managed charger offering, and half of all EV manufacturers have been involved in managed charging pilots in some way, or have managed charging capabilities.

The report recommends that utilities get more involved in developing communication standards and best practices with industry players. They also have an important role to play in providing a test bed for pilot projects and sharing results, as well as overall EV education for consumers, among other things.

“Despite some initial growing pains, managed charging could prove to be a gateway for consumer adoption of other utility-managed [distributed energy resources],” the report concludes. “It could also provide an innovative, highly replicable solution as our nation’s fleet transitions from conventional fuels to electricity.”


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