DER-Grid Edge, Electric Vehicles, Executive Insight, Smart Grid

Can EVs shock utilities back to life?

The automotive industry is undergoing a significant revolution, driven by the most innovative technological advancements. This is affecting the way we commute on a daily basis. At the center of these significant innovations is the development of autonomous technology and the deployment of electric vehicles – and the latter phenomenon comes with significant implications for the consumption, supply, and management of global energy resources.

After years of consumers gradually shifting away from the grid and toward alternative solutions, the electric vehicle era presents an interesting opportunity, one that can shock utilities back to life. However, to capitalize on this opportunity and prepare for a world where electric vehicles represent a growing share of electricity demand, utilities must transform their operations. According to International Energy Agency projections, the number of electric vehicles on the road worldwide is slated to reach 125 million by 2030, compared to 3.1 million in 2017. During that time span, electric vehicles will have gone from accounting for 0.3 percent of global electricity demand to 6.3 percent of demand.

Even as fuel consumption plunges, the energy industry will enjoy new opportunities to develop innovative business models and cultivate new revenue streams as the electric vehicle ecosystem is developed.

How significant is the electric vehicle opportunity for utilities? The market to power these cars has the potential to reach upwards of $2 trillion a year. While this represents a major new source of revenue for utilities – and signifies a newfound dependency on the traditional grid following years of consumers manufacturing their own energy – the rollout of millions of new electric vehicles threatens to strain the grid and disrupt electricity supply, absent proactive measures and visibility.

The bottom line: Unless utilities embrace digitalization and smart grid technologies, they risk squandering this unique opportunity and missing the benefits of the Fourth Industrial Revolution – which could greatly affect their current operations and lead to heightened operational and maintenance costs.

What should utilities do to foster a vibrant electric vehicle ecosystem and claim their rightful place in this revolution? They must harness solutions that provide complete visibility and optimal management capabilities for the entire grid, leveraging the promise of IoT, advanced software, and other smart grid technologies.

If grid edge devices are not visible to utilities and optimally managed, the theoretical opportunity presented by the introduction of millions of new devices to the grid will turn into a practical bust.

As Texas Instruments notes in a recent white paper, smart meter adoption in the U.S. is currently only about 50 percent, meaning that across much of the country, the grid is not being fed adequate data about supply and demand, and is effectively “blind.”   In other parts of the world, the situation is even worse. Traditional utilities must therefore find ways to integrate and monitor new distributed energy resources (DERs) that are connecting to the grid – be they wind power, solar farms, or electric vehicles. The twentyfold increase in electric vehicles’ share of electricity demand between 2017 and 2030 will mean the proliferation of new batteries and charging stations being added to the grid, in addition to other DERs.

To envision the costs of not integrating technologies that offer full visibility of the grid’s supply and demand, consider the tale of the massive bathroom break in Tokyo during the 2018 World Cup soccer tournament. During halftime of the match between the Japanese and Colombian teams, viewers took advantage of the lull in activity and flocked en masse to their restrooms, sending water consumption in the Japanese capital soaring. Fortunately, government officials anticipated the bathroom break and adjusted Tokyo’s water supply – but had they not done so, the consequences for the city’s water supply could have been dire.

Now imagine a similar scenario playing out on a daily basis, but with drivers of electric vehicles all coming home at the end of a hard day’s work and then, in unison, plugging their cars in to recharge them. Luckily, we can foresee the surge in electricity demand that electric vehicles will generate. And while charging vehicles during off-peak hours will be a key part of the solution, building smart grid infrastructure to automatically adjust supply levels, conserve energy when appropriate, and optimize energy costs, is no less important.

For utilities, grid modernization can also mean grid monetization. The multi-directional flow of energy is a potential gold mine, offering the opportunity to buy unused energy from consumers, including the energy stored in parked electric vehicles – if you have the ability to optimize the grid, in real time.

Grid modernization – through greater visibility and sound data management – will be crucial to enabling the electric vehicle era and the revival of traditional operators. Utilities must take a systematic approach and upgrade the grid where necessary so that it is well-prepared for the emergence of electric vehicles and can support the multi-directional flow of energy – allowing for energy storage, the integration of DERs, and support for the high electricity loads that electric vehicles will demand.

By incorporating sensors and smart systems that communicate with one another and “talk” to the grid, utilities will be able to gather and analyze vital data to make informed decisions in real time about their power infrastructure. With utilities set to play a critical part in the evolution of the electric vehicle ecosystem, they are on the cusp of a vibrant new era of opportunity – as long as they lay the groundwork.

Natan Barak is CEO and founder of mPrest.

We’re accepting abstracts for the 2020 DISTRIBUTECH International event, set to hit San Antonio, Texas January 28-30, 2020. If your company has worked with an electric utility to implement a solution, submit an abstract to talk about it. Click here to learn more.