A new study commissioned by the Environmental Defense Fund and written by Black & Veatch finds that when utilities prepare for new electricity demand from electric trucks and buses, it’s good for ratepayers.
The report models grid buildout scenarios using asset planning, capacity and cost data provided by CenterPoint Energy Houston and Con Edison, a New York-based utility.
The study suggests that proactive building yields about $20 million of savings compared to the status quo for the assets modeled in Con Edison’s territory; and about $10-13 million of savings for the assets modeled in CenterPoint’s territory.
Though the electrification of trucks and buses is expected to make up only a small share of overall national energy consumption, it could require new or upgraded grid infrastructure locally.
"This has posed a chicken or egg dilemma for state energy regulators and utilities: build the infrastructure they anticipate will be needed or wait until the demand is imminent, as they have done traditionally," a news release related to the report said,
To address this issue, the report set out to answer the questions, “Does making grid investments in anticipation of electric truck loads end up costing less than reactive investments?” and “What is the risk of overestimating future loads, versus underestimating them?”
The study "is the first of its kind to illustrate a way of engaging in these questions through a replicable and scalable process," EDF said.
The study suggests that utilities and their ratepayers may tend to save money where the utility invests proactively. This becomes increasingly true over longer time frames associated with transitioning to electric vehicles. The study also identifies how local variables can impact costs and benefits in the short term.
Another key finding is that failing to build in anticipation of potential future loads probably presents a greater risk, from a total cost perspective, than overestimating EV loads.
The growth of other new sources of electric loads, such as building electrification and data centers, are likely to amplify this finding. While building proactively may not yield lower costs in every instance, an all-proactive approach to ready the grid for electric vehicles is cost-effective overall, even under scenarios of slower EV adoption.
The study builds on EDF’s “Building The Grid to Need” report issued in January 2024, which identifies key actions regulators can take now to enable utilities to get ahead of electricity demand growth from electric trucks and buses. The report’s 10 recommendations focus on how policymakers can maximize the benefits of proactive grid investments while minimizing the risk and total cost to ratepayers.
You can read the full report here: Pro-Active Grid Investment Assessment Medium- and Heavy-Duty Vehicle Transportation Electrification
