A new report from McKinsey & Co. finds that the growth of electric vehicles will not lead to substantial increases in demand for electric power through 2030.
The spread of electric vehicles will add only about 1% to total demand on the grid, requiring about 5 GW of new generation capacity, and by 2050 EV penetration could grow to about 4%, requiring about 20 GW of new generation, the report found. Almost all of the new capacity will likely involve renewables with some gas-fired generation, the authors said.
In McKinsey’s analysis, for a typical residential feeder circuit of 150 homes with a 25% EV penetration rate, local peak would increase by about 30%. While significant, the increase is not as dramatic as it might appear. McKinsey notes that while EV charging can easily double peak consumption for an individual household, when that load is aggregated across many households – some of which do not have EVs – it reduces the relative increase.
McKinsey’s analysis drew on data on electric car penetration rates and usage in Germany.
While McKinsey does not see a significant increase in total demand, the consulting firm says the growth of EVs will likely reshape the load curve with the most noticeable effect being an increase in evening peak loads as people charge their cars at the end of their work day. However, that reshaping will not occur evenly. Electric vehicle ownership is likely to be concentrated in suburban areas where many of the early adopters of electric vehicles are likely to reside.
The report put forward several potential solutions to potential demand spikes caused by evening charging. One solution would be the use of time-of-use rates to provide incentives to charge car batteries after midnight instead of in the early evening. McKinsey’s analysis shows that strategy could halve the increase in peak load. One potential problem with that approach, however, is that it could result in a “timer peak,” if many people set their charging time for the same hour in the night.
Some of those problems could be avoided if an energy storage unit is co-located with a transformer that charges the storage device during times of low demand. The storage device could then discharge during peak use times, reducing demand. Another alternative would be to tie the charging station to a combined heat and power plant that could both provide power for the charging station and heat or steam for nearby businesses.
Fast charging stations present a different kind of challenge. Their load profiles are volatile and spiky and can quickly overwhelm the capacity of a feeder-circuit transformer. That could prompt the upgrade of some transformers, says McKinsey. At low penetration levels, the needed upgrades would not likely be extensive, but the need would rise rapidly as EV penetration rises and then begin to level off, McKinsey’s analysis found.
While the spread of electric vehicles will require some grid upgrades, McKinsey says they can reduce them by addressing their root causes, for example, by shifting EV-charging loads.
The data McKinsey collected on the charging behavior and driving and parking patterns of EV owners suggests that much of the time that EVs are connected to the grid they are not actively charging. That creates the potential to shift the charging load and thereby optimize charging times and speeds from a system perspective.
Looking beyond the immediate challenges that electric vehicle penetration poses, McKinsey says that smart charging systems could actually make EVs an asset to the grid. For instance, charging could be maximized during times when there is an abundance of solar and wind generation or throttled down to help integrate renewable power production into the grid.
Smart charging could also offer demand response services and system balancing services such as frequency response. Such vehicle-to-grid plans would not only shift the power demand from EVs but also make it possible for EVs to feed energy back into the grid under certain conditions. McKinsey says pilot studies have shown a substantial willingness of EV owners to participate in coordinated smart charging.
Smart charging would require some up-front investments, but the payoff could mean that electric vehicles would no longer be a cause for concern from a grid perspective, but could benefit the grid by making it more cost-effective, resilient, and green.