Electric Vehicles

Electric vehicles are here: are utilities ready to charge forward?

Sponsored Advertising Feature

Whether it is due to growing customer demand, government incentives, or competitive pressures, every major automaker has invested billions into electrification with plans to bring at least one plug-in electric vehicle (EV) model to market in the next few years, many with plans to electrify every model in their portfolio.

Audi, Ford, General Motors, Honda, Hyundai, Jaguar, Jeep, Kia, Nissan, Tesla, Toyota, Volkswagen, Volvo and others all have committed to introduce new or additional EV models by 2025, according to Greentech Media. Worldwide, manufacturers will produce 127 battery-electric models in the next five years.

Navigant Research said in a report, prepared for the American Public Power Association, that by 2021 it conservatively projects new EV (battery electric vehicles and plug-in hybrid electric vehicles) sales of more than 700,000 units in the U.S. annually. Markets saw a 37 percent increase in sales of plug-in electric vehicles in 2016 and Navigant Research expects 50 percent growth in market sales in 2017 and 2018, largely due to Tesla’s Model 3 and other longer-range, low cost battery electric vehicles coming to the market, as well as more vehicle options becoming available for plug-in hybrid electric vehicles.

What does this EV growth mean to public power utilities and how should they prepare?

“Utilities that are ‘plug-in ready’ are best positioned to maintain visibility into unplanned load growth and be community champions for electricity as a transportation fuel,” according to James Ellis, Senior Director, Utility Solutions at ChargePoint, the industry leader in providing smart charging infrastructure for EVs. Ellis and the ChargePoint team work with utilities to help prepare for the electrification of transportation and take advantage of the new load growth. “Setting an example by installing charging infrastructure at their facilities for their employees and their own fleet vehicles, utilities become natural leaders, and their hands on experience can help others in the community deploy infrastructure and help accelerate EV adoption.”

Utilities that help bring EV charging to their communities stand to gain in several ways. “Staying ahead of the EV curve will enable utilities to provide new programs and cleaner transportation options for customers, and EV charging creates an opportunity to increase electricity sales in a period when load is flat or declining,” he said.

Utility involvement

EV drivers are already engaging with their employers, local retail stores and other businesses about their charging needs, but may not be talking to their electric utility. EVs provide a unique opportunity for utilities to create grid benefits through smart charging, and as the new fuel provider, utilities are vital to the successful deployment of a comprehensive charging network to support anticipated EV growth. Those that start now will ensure they have a place in the conversation as the shift to electrification heats up, Ellis said.

He pointed to several actions utilities can take now to get out front:

  • Investigate and understand customers’ — residential and business —  EV plans
  • Incorporate EV adoption forecasts into their own load planning
  • Create a website to help educate customers on electricity as a transportation fuel
  • Install workplace charging for their own employees and fleet vehicles
  • Institute other pilot EV charging stations and programs including smart charging (ability to manage the EV load to create grid benefits)
  • Develop time-based rates and incentive programs for customers to purchase and install charging stations in their homes and businesses
  • Educate customers about EV charging options in easy-to-understand terms

First and foremost, when designing an EV readiness strategy, utilities need to keep in mind what the EV driver values.

“EV drivers want autonomy, freedom and choice,” Ellis said. “Utilities can create advocates for their brand by serving these needs.”

Ellis recommended that utilities start by learning the ins-and-outs of EV ownership by getting their own vehicle and learning firsthand about using electricity as a fuel. “This allows you to become a trusted advisor — a community information and referral resource on EV ownership. Get your EV message out — create digital information strategies, bill inserts, and educate the press on workplace charging opportunities.”

Convey the message that you understand electricity as a transportation fuel, as an environmentally sound, cost effective way to power vehicles, he said.

Next, Ellis advised that utilities consider developing an EV time-of-use rate program. “Keep it simple, provide clear and easy to understand messages for consumers that electricity is a better value,” he said. “At the same time, utilities should educate their teams about the virtues of driving electric by installing a charging station in their parking lot so that employees can gain insights through hands-on experience that can be shared with all of their customers.”

If practical, utilities can incentivize employees to purchase their own EV and allow them to charge at work at a discount or free in exchange for charging data and participating in load management pilot programs.

Utilities can expand and develop customer charging incentive programs from there. But remember, EV drivers prefer that charging stations are open and accessible all the time, not just when advantageous to the utility, he said. If someone needs to charge – they need to be able to charge. After all, people are on the road 24 hours per day, whether they are going to the grocery store, hospital, or picking up their kids.

“Charging services can always be priced accordingly, but the goal of any utility incentive program should always be to encourage the customers that install charging stations to provide the most seamless, positive charging experience for EV drivers,” Ellis said.

Finally, educate potential commercial sites about the benefits of hosting EV stations. The stations serve as a way for businesses to attract and retain customers while supporting organizational sustainability goals.

Utilities can make a strong business case to their commercial customers about hosting EV stations. Studies have found that EV drivers feel a stronger allegiance to EV charging station site hosts, Ellis said. By adding EV charging, retailers can increase the time customers spend in their stores, and as a result, increase their average spending. As EV drivers tend to have higher loyalty to businesses that have charging infrastructure, they can become a brand’s most valuable customer.

Gathering data

Since the utility is not part of the vehicle purchase, it’s not always easy to determine how popular EVs are in its territory, but there are some tricks to ferret out the numbers. For example, utilities might offer gift cards to customers who alert them of their EV purchases. Some utilities even sponsor EV clubs that provide electric fuel cards or other incentives to join, Ellis said, which is a great way to have a direct connection to a customer.

Some utility programs offset customer costs of installing a smart charging station. Once the smart chargers are installed, the customer provides the utility with data that can shed light on driver behavior, usage patterns, and other valuable information. The more utilities understand about how drivers charge EVs, the better they can plan for infrastructure additions, load management, and use of EV storage to serve the grid.

Eventually utilities might use data to institute residential smart charging programs that can help shift EV charging to off-peak hours and help manage peak demand. This is an alternative if a separate EV rate is not an option.

“Smart charging systems allow utilities to remotely manage and aggregate EV charging loads over time,” Ellis said. “This allows them to optimize their renewable energy resources and reduce the need for new fossil fuel-based power plants.”

For many utilities, getting hands on experience with EV charging infrastructure is a natural first step. They can do this by installing smart charging stations at customer service locations. Giving an incentive to go electric provides the utility valuable data on charging station utilization. This living lab environment can scale up as more employees choose to drive an EV, helping the utility develop load management programs, test smart charging to mitigate any grid impacts, and integrate more renewables. Many also consider the sustainability benefits to their community and brand.

Examples of utility EV charging programs

There are more than 800,000 EVs on the road today. A potential total market of 2.9 million EVs on the road by 2022 could add more than 11,000 GWh of electricity demand to the world’s grids, according to Rocky Mountain Institute.

Charging station deployment continues to expand rapidly, largely in line with the increase of EVs that hit the market. It is estimated that the U.S. has more than 75,000 charging stations, about half of which have been deployed in the last few years by businesses, manufacturers, automakers, utilities, and through government programs. According to its website, ChargePoint alone has more than 48,000 publicly available places to charge and sees more than 1,000,000 charging sessions per month.

Smart utilities are getting ready. Utilities in bellwether states like California are leading the way, upgrading their EV capabilities, albeit from two different angles. For example, the Los Angeles Department of Water & Power (LADWP), a public power utility, has a robust workplace-charging program and for customers, eschewed direct ownership but incentivizes private charging station installation.

In contrast, public power utility Austin Energy in Texas provides commercial incentives for customers who purchase and install charging stations but also provides rebates on smart 240-volt chargers to customers who install them at home.

Austin Energy instituted Plug-In Everywhere, which offers drivers access to more than 250 public charging stations throughout its territory, powered through the utility’s wind energy program for a low annual fee. The utility is also experimenting with a charging pilot program to shift EV electric demand to off-peak hours. Called the EV360 program, it allows EV drivers to pay a low, fixed time-of-use rate that includes unlimited charging at Plug-In Everywhere stations and unlimited off-peak charging at home. Austin Energy is also assisting the city with electrifying its fleet.

In Florida, the city-owned Orlando Utilities Commission (OUC) has installed 140 public charging stations since 2010 as part of Project Get Ready, a public/private partnership to promote EV use. OUC says that the program has seen more than 17,000 charging sessions and reduced significant emissions.

OUC uses its own fleet of EVs for service calls and public education. The utility has eight EV charging stations to support its own fleet, three of which are solar powered.

What to do next?

ChargePoint, as part of its utility EV readiness strategies, recommends that utilities take the time to answer the following questions:

  • How many electric vehicles are on the road in my territory?
  • How many can I expect in the next 5-10 years?  
  • How do I maintain visibility as a provider of electric fuel?
  • How many charging stations do my customers own today?
  • What is the impact of charging on my distribution grid?
  • What exactly is a smart charging station and what are the tools I can use for load management?
  • How do drivers use the charging network; when and how much do they charge?
  • How does the competitive EV market work?
  • What is each new vehicle that plugs in to my grid worth in terms of contribution to margin?

EV charging may seem like a new world to utilities, and in some ways it is. But ultimately, “providing electricity as a transportation fuel has major benefits for the utility. Getting plug-in ready helps accelerate adoption of EVs and increases the value to the utility and its customers. By driving new grid efficiencies and asset utilization from EV charging, utilities can ultimately reduce electric rates for all customers,” Ellis said.

Learn more about EV charging:

https://www.chargepoint.com/blog/category/the-business-of-charging/

Tags