by Jayesh Goyal: The buzz around Tesla’s rollout of its more-affordable Model 3 has triggered a surge of press (and opinions) about the impact to the energy business and power grid…
when the U.S. electric vehicle (EV) fleet gets to critical mass. One group that will be affected are energy managers at commercial and industrial (C&I) organizations, who often buy significant amounts of electricity. C&I energy managers will want to keep an eye on EV growth, because five accelerating trends could put EV impacts right on the driveway of the way they operate.
1. Explosive growth means changes are a-coming
The U.S. EV market has grown at a 32 percent compound annual growth rate since 2012, according to Forbes. Analysts estimate that the U.S. will have more than 11 million EVs on the road by 2025 — compared to just about half a million as of the end of 2016.
The global market is even more bullish. The International Energy Agency’s 2016 report on the global EV market noted that electric cars numbered in the hundreds in 2005. The same study showed that by 2015, more than 1 million electric cars were on the road, with an Electric Vehicles Initiative (EVI) goal of 20 million EVs by 2020.
We’re already seeing the power grid evolve to accommodate more renewable energy and other distributed energy resources (DERs) — and successfully so. EVs will introduce further changes as they move the driving public from oil to electrons, bringing a massive new level of electrification. In fact, EVs have already created an estimated demand of 1.4 TWh in the U.S. in 2015. Also, because EVs are often charged at night, while people are home sleeping, their rapid adoption will create a new residential load profile that can’t be directly met with solar generation.
2. We are just beginning to understand how this will affect the electricity grid.
Just a few years ago, there was already discussion that power demand growth due to EV adoption would result in new strains on grid infrastructure, with utilities in California and elsewhere expressing concerns.
More recently, however, energy experts have begun to look at EVs as a potential net benefit to the grid, acting as distributed energy storage units capable of easing peak loads and reducing the need for additional generation capacity.
The key is getting each of the players to work together to actualize the vision. Analysts say that, under any growth scenario, EV integration with other technologies is critical to accommodate a changing grid.
In short, no one knows how big the impact of EVs will be — just that it will be big.
3. Increased EV penetration will mean that commercial and industrial locations will want to provide EV charging as a service to customers and employees.
Savvy C&I energy managers will find ways to build EV charging stations to accommodate employees and customers, while enhancing their core business. Retail stores in particular might want to install charging infrastructure to take advantage of some of their observed benefits, such as attracting desired demographics and increasing customer time spent in the store.
But how will this new infrastructure affect their energy bills?
If integrated properly, EVs can provide a net benefit to the power grid, allowing participating utilities to provide incentives to C&I customers. That will create a new revenue stream for them as demand response providers.
4. C&I energy users with mission-critical loads can use EVs as a resource.
With advances in energy storage technology over the past five years and continual cost declines, multi-use battery energy storage systems are poised to address some of the thorniest C&I problems, such as ensuring the stability of increasingly complex power systems.
That’s because energy storage systems are increasingly providing resilient power to facilities that manage mission-critical loads, such as hospitals, pharmaceutical manufacturing centers, data centers, financial services firms and military complexes. These are businesses and institutions that can’t afford to have an outage — ever. Resilient storage systems therefore can provide the backup services needed. That’s a big potential benefit, but one that could require a change in the way C&I managers operate.
5. From disruption to resilient backup power at a moment’s notice
EVs have the potential to become powerful energy storage resources when connected to the grid and controlled by intelligent software, serving as a “Swiss army knife” of the power grid. That’s due to the flexibility and adaptability of smart storage, which provides grid resiliency to a wide range of stakeholders, including C&I users.
To overcome the challenges presented by the growth of EVs, battery-based energy storage (BESS) technologies can not only help maintain grid resiliency and stability, they can also offer ways to meet C&I customers’ unique energy needs.
Those needs include guaranteeing a company’s critical loads, reducing peak charges associated with intermittent EV charging, and responding quickly to rapid increases and decreases in load, among others.
Intelligent energy management, in harmony with intelligently controlled batteries, can minimize power supply and demand fluctuations with speed and precision, allowing a higher percentage of intermittent clean energy sources to be successfully integrated. With millions of EVs expected to be plugging in to the grid on a daily basis over the next few years, the opportunity is huge to tap into their vast storage capacity, creating value for utilities and providing valuable service to C&I energy managers.
This innovative technology has been successfully implemented in a couple of pilot programs in California. In collaborative partnerships with utilities, C&I customers, and smart battery technologies and software, this could be the answer to the many challenges brought about by the massive growth of EVs.
EVs will be bringing major changes to transportation and power infrastructure, as well as to the ways that C&I energy managers do their jobs. Wise C&I energy managers will keep an eye on how that change is driving towards them and take a leadership role in addressing it.