Perhaps a silly question about electricity companies

Electricity has been a little different than oil since the marginal cost of the next kWh is pretty high if it requires building new plants, especially if they have extremely high initial capital costs. Therefore in some jurisdictions electricity producers are actually more interested in reducing demand - like subsidizing you to replace incandescent lights with LEDs or CFLs. This is call negawatt power. You don't really see Shell or Exxon encouraging people to cut back on the use of their product.

What electricity companies should be trying to do is balance the load more. That is why I think workplace charging of vehicles should be discouraged rather than free as you are just increasing peak demand. You really only want people to charge during off-peak periods and maybe you want to actually have power flow from your car's battery to the grid during peak demand times. Maybe that is the strategy that EV manufacturers and electrical utilities should be working on.

 

I can offer a little insight as I am a senior executive at an electric utility, and have been active in the so-called "smart grid" and EV areas, including with other utilities and regulatory/government entities.

The bottom line is that electricity is usually locally produced and delivered by members of the community, and the economic benefits of using the electricity stay in the community/state/province more so than with fossil fuels. As such, electric utilities are very interested in supporting the adoption of electric vehicles. Utilities in my jurisdiction have been compelled to support energy conservation and demand management for about 10 years now, but that was to initially address a shortfall of generation capacity (and not for environmental reasons as many had assumed). A combination of the economic downturn in 2008 (loss of manufacturing companies) and the refurbishment / installation of new generation assets has largely removed that impediment. The biggest driver of conservation now is the rising cost of power. In my jurisdiction, some of that rising cost is associated with a move to more renewables, but the majority of the blame goes to dealing with policies of the past that buried costs and artificially kept costs low... largely for political reasons.

There have been a number of impact studies done, and for the most part there is plenty of capacity for electric vehicles. If/when demand grows, the increased sales will support the addition of infrastructure just like it did when air conditioning became more prevalent in the '60s and '70s. The biggest bottleneck is at the local distribution level, in particular the distribution transformer feeding (typically) 6-10 houses on a street. The primary system feeding the transformer will typically have capacity as will the conductors in to the home/business which are sized to the main disconnect's capacity. Transformers, on the other hand, are sized to the typical load they supply. With diversification, a group of homes may only be using a small fraction of their capacity at any given time. Plug in an EV (a Tesla may consume the equivalent of 4 homes) which consumes power continuously and the transformer may become overloaded. Nighttime charging doesn't always help as utilities often count on lower loads and cooler temperatures at night to reduce the transformer's operating temperature.

Multiple EVs on the same local system could present problems in larger numbers. This is where creative "demand response" systems could help by scheduling when cars charge so that all are not trying to draw power at the same time.

 

You didn't address charging of EVs during peak demand times. Shouldn't we be discouraging this? Yet many office buildings provide free charging for EVs which means that it makes more financial sense for people who park at those buildings to take advantage of free charging from their office building rather than pay for their own off-peak energy overnight?

In Ontario we have been peaking around 22,000 MWs (Ontario Demand from the IESO web page) which seems to peak out between noon and 9pm and we bottom out around 15,000 around 4 am. Don't we want to push EV charging from the afternoon until midnight - 6 am? Especially since we can supply about 17,000 MWs from Nuclear, Hydro and Wind during the night which have very little variable cost? Won't that balance the grid better and minimize GHG emissions and pollution since it minimizes the use of Gas generation? And this would be even more the case in jurisdictions where they still burn coal.

 

With the proliferation of distributed solar (and the growth of the duck curve), wouldn't mid-day become the new "off-peak" rate? Since power would be generated locally and delivered locally, thereby reducing the strain on the grid (or at least the major transmission lines)?

 

Ontario really doesn't have a peak problem from a generation standpoint any longer. But you are right in that overnight a greater percentage of the power is coming from cleaner sources like nuclear, hydro and wind. Nuclear and Hydro are "baseload" generation and so are there in the day as well, but depending on renewables output, gas can be a greater component during the peak of the day. As more grid-connected solar comes on line, EV charging in the daytime will be even less of a concern. For someone with net metered solar, it may actually be preferable to charge an EV mid-day. (Not so with microFIT solar due to the difference in rates between what you purchase and what you sell).

As I say, the biggest current concern with EVs is at the local distribution level. If we have communities of EVs all charging from, say, midnight to 6:00 am it could be a big problem from a local capacity point of view. We would need some sort of scheduling/demand response then as well unless there is an economic way of increasing local capacity.

 

No; Yes; Should/Could be a lot; Sort of...

I work in the utility industry. This has certainly been a point of frustration to me but I know some people have a different experience... The nuclear industry is largely populated by luddites... somewhat ironically. Most nuclear plants still use a lot of analog controls. Even where I work our management has done their best to keep things as manual as possible even though in most situations it's better just to let the computer do its thing.

You generally won't find a lot of support for EVs in the utility sector, there are exceptions but that's generally true. The primary reason is the kind of person that is attracted to that line of work... they're the laggards on the tech adoption graph. I know that NuclearPowered a TMC member who I believe works at PaloVerde nuclear generating station has had a similar EV apathy experience.

In terms of conflict of interest... there is one but I doubt it has much of an effect on policy. Mass Market EVs will make grid storage cheaper due to economies of scale. Cheap batteries are a threat to some utility business models and a dire threat to nuclear power.

 

While I agree that there is a certain amount of apathy, in general I think utilities are in favor of EVs if for no other reason than increased electricity sales. It would be kind of crazy not to. I think the apathy is more of the "it will never happen" kind as opposed to any unwillingness to be supportive.

 

It's cultural... if there's one thing utilities ARE NOT known for... it's being innovative. I really think some of my bosses view my car as some kind of witchcraft...

But... there are always exceptions... NRG and PSE seem to understand the opportunity. No doubt there are also others.