Q&A with Mark Duvall, director, energy utilization, Electric Power Research Institute
Q. Your National Electrification Assessment laid out a picture of sweeping changes to the U.S. energy system, including updates to the grid infrastructure, shifts in generating fuels, substantial increase in load, new data management tools, policy reform, and more. Are we ready to handle all this change, or are there players ready to step in if utilities can’t keep up with any aspects of the changes?
A. Many changes in the energy system — the generation mix, digitization, active customers and changing customer preferences, and policy and market reform — are happening with or without efficient electrification. Companies — both traditional utilities and new entrants — will step forward to help provide customers with what they want: low cost, comfort, convenience, and clean and reliable power.
In our National Electrification Assessment, we examined a range of technology and policy futures, but the overriding assumption was that customers will have a wide array of technology choices and will choose those technologies that best meet their needs. While electrification in our scenarios certainly creates challenges, it also creates opportunities. New flexible loads, such as electric vehicle charging, can allow the grid to operate more efficiently. Load growth also spreads the costs of grid modernization and other investments driven by customer and societal demands.
Q. What should utilities be doing now to prepare for a scenario where load grows 20% or 50% in the next 30 years, as the assessment suggested?
A. Dealing with load growth has for the last century been central to being a utility. Although 50% load growth over the next 30 years sounds large, it represents 1.2% growth annually, which is modest compared to the pace of growth in the 1990s and earlier. Much of the initial growth is projected to come from electrified transportation. Over the next decade, significant distribution and transmission upgrades will be needed to support public and private EV charging as these technologies increasingly move from early adopters in a few states to people of all economic positions across the country.
Q. What gaps remain in being able to bring more electrified end uses to market? Are there initiatives addressing these gaps?
A. While EPRI’s role is not to advocate for any technology over another, we do focus on what is in the public interest. And certainly, where there are opportunities to economically replace higher emitting sources of end use energy with cleaner electric options, we would be supportive. In every scenario of our assessment, we identified opportunities where economy-wide electrification and technology advances led to reductions in energy consumption and emissions driven by electrification and efficiency gains.
For instance, transportation is one of the highest sources of greenhouse gas emissions in the U.S. More electric transportation would support public goals. However, the major gaps today are lack of EV models available, their higher purchase price, and the lack of standard charging infrastructure. These gaps are closing quickly, with 130 EV models (including about 45 SUV or crossover models) announced by auto manufacturers by 2023, and with the cost of EVs declining rapidly as production volumes and competition increase. The key areas of focus for EPRI regarding on-road transportation are: 1) to support development of customer-facing tools, educational material, and standards, including interoperability, that make owning and operating an EV as easy as possible; 2) to work on the grid side to turn EVs into an asset for the grid; and 3) to focus on the special needs and opportunities of vehicle fleets as well as medium- and heavy-duty transportation.
Other opportunities for electrification are highly dependent on local conditions, such as temperate zones, energy prices, policies, and regulation. However, building space heat and water heat are other areas where electrification can play a key role, along with new efficient natural gas options. Given our assumption of continued low natural gas prices, we projected significant growth in the use of natural gas in electricity generation and industry. In colder regions of the country, many residences continue to use gas for heat unless there is very stringent climate policy. We also project that many customers could choose dual-fuel technologies for heating — an electric heat pump when temperatures were moderate, supplemented by gas heat in colder periods. This dual-fuel option avoids the cost and siting difficulties associated with building out the electric grid to meet all needs on the coldest day while still getting the environmental advantages of heat pumps for most hours. A dual-fuel approach also offers potential resiliency and flexibility across the energy system.
Q. Have any specific themes or priority areas for the industry to address emerged from your various conferences on electrification?
A. We are seeing dramatic differences in the local drivers for electrification. Eleven states have implemented zero-emission vehicle standards. That is where most EVs are being supplied and where most growth is expected. Seven states have committed to very low or no carbon emissions within the next 30 years. Our analysis suggests that building, industrial, and transportation electrification will be much more rapid in those states to enable them to achieve their environmental goals
While different states and regions have much in common when it comes to electrification, e.g., choosing from the same basic electric technologies, there also are fundamental differences. For example, providing home EV charging or heating a high-rise in New York City presents different challenges than providing the same options in rural, single-family home communities in California. Electric rates, gas availability, and price vary widely across the country, as do heating, cooling, and transportation needs.
Q. Discussions usually focus on the benefits of electrification, but are there potential drawbacks?
A. The essential point here is that electrification is not a societal goal, but rather a means to achieve many possible ends, e.g., lower cost, lower emissions, higher productivity/product quality, and greater safety. The goal is to maximize customer value rather than kilowatt-hours sold. Substantial electrification will create questions and challenges — certainly lifecycle costs and environmental impacts are essential to understand and control.
Also critical are reliability and resiliency in the face of natural events such as storms and deliberate physical or cyber attacks. We have become increasingly dependent on electricity over the last century — from 3% of energy use in 1950 to 20% today and projections of up to 50% by 2050. A continued focus on reliability and resiliency is an essential part of electrification; without it, the transition will reach its limits.
Q. How critical is the customer (or individual user) to increased electrification, and what role do utilities and other industry players have in promoting electric end-use technology to customers?
A. The pace of electrification will be driven by the decisions of 110 million households and tens of thousands of businesses, and most don’t have planning departments guiding their decisions. Utilities and other industry players have several key roles: information and education, investment in grid technologies that enable choice, and incentive programs to overcome hurdles — where supported by local regulators or boards.