Electric vehicles are becoming big business. So why are utility providers terrified?

Three converted Prius Plug-In Hybrids charging at San Francisco City Hall. By Felix Kramer (CalCars). Image retouched with Photoshop and uploaded by User:Mariordo - Flickr: https://www.flickr.com/photos/56727147@N00/3292024112/in/set-72157614049251389/, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=10055455
Three converted Prius Plug-In Hybrids charging at San Francisco City Hall. By Felix Kramer (CalCars). Image retouched with Photoshop and uploaded by User:Mariordo - Flickr: https://www.flickr.com/photos/56727147@N00/3292024112/in/set-72157614049251389/, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=10055455

The business of electric vehicles is really buzzing these days, and essentially that’s a good thing. Theoretically, the increasing proliferation of electric cars can only spell good news for the survival of our planet. However, unless the underlying power grid infrastructure is flexible and interoperable enough to meet new energy demands, the potential financial impact on both commercial facilities and energy providers could be just shy of cataclysmic.

It’s no laughing matter: The evolving complexity of the U.S. power grid currently presents the biggest challenge of the 21st century, due in part to the rise of distributed energy resources (DERs) such as solar, energy storage and other new devices that are being connected to it. And I’m not alone in this thinking: The Smart Electrical Power Association (SEPA), U.S. Department of Energy (DoE) Grid Modernization Laboratory Consortium (GMLC) and numerous other organizations have time and resources devoted to this issue.

In fact, you may remember hearing that back in August 2018, the GMLC launched the “Plug & Play DER Challenge,” which called upon leading technology providers to propose new concepts and interoperability solutions to address the challenge of grid modernization. Numerous companies stepped up and got involved by sharing their innovative ideas for advancing interoperability and solving these challenges.

So now we’re turning our attention to what we think is a growing opportunity – and challenge. The issue of electric vehicles alone has caused quite a few ripples out there. For a start, could new power demands rapidly outstrip supply? Are we engaged in a race that can’t be won?

The challenge of charging electric vehicles

First let’s back up a step: Many of you reading this are familiar with new retail applications for electric vehicles, such as major online retailers that are now investing heavily in electric delivery vans. Or perhaps you drove into a Target store parking lot the other day looking for a parking space but were thwarted by the fact that several of those prime spaces right near the entrance were reserved instead for electric vehicle charging only. And if you were driving a gasoline-powered car, you might have even been momentarily angry, wondering about all the empty spots not in use. 

Now, take that frustrated feeling and multiply it times a thousand: Because this is how our nation’s energy providers feel every day. Why? Because they want to know when all of those thousands of charging stations will be used, and exactly how it will impact their grid.  And not just when, but for how long?  You see where I’m going with this.

This challenge in forecasting demand is what keeps grid operators up at night. And this really matters, because it’s no secret that our nation’s power grid is already being challenged by the new DERs mentioned earlier. Now, when you add electric vehicle charging to the mix at a facilities level of energy consumption, it could rapidly turn into the perfect storm, or a blackout or a brownout. In other words, a whole lot of no fun for everybody.

Is forecasting demand even possible?

At the moment, sort of. The trouble is that most utility companies can’t accurately forecast demand. Sure, they can use historical data by city and region to figure out what energy consumption was then, and what it’s likely to be.  And of course in the summer, more people are probably going to be using their air conditioners. Beyond that, it can get hazy.  

Sometimes it’s because utility providers lack the analytics – a lot of vital data out there could be used, but instead lives in isolation. What’s missing is a connectivity software that would allow all their devices to interoperate and share this useful data. Building new power grids to keep up with new spikes in demand from EV charging stations and other unpredictable surges is prohibitively expensive, so this places greater emphasis on finding solutions for interoperability that make the most of existing energy grid resources.

Best case for energy providers who want to sleep at night: A solution that would be plug-and-play enough to finally provide actual visibility into real-time energy demand. And that means truly anticipating demand by gaining actionable intelligence, rather than just scrambling to accommodate spikes, avoid outages and fix the equipment that breaks down in the process.

Penalty round: The wonderful world of “demand charges”

Now, when it comes to all these exponential increases in energy demand, utility providers have a tough choice to make.  Because energy provision is a business, that choice often involves assessing additional “demand charges” to large facilities when energy use becomes unpredictable or excessive.

Demand charges can really present a significant challenge for large facilities, especially universities, hospitals and institutional buildings with electric vehicle charging stations. And some facilities are already suffering. That’s because they’ve already started to exceed their energy allotment and are now increasingly having to atone financially for surprise energy use surges during peak demand hours.

It’s fair to say that facilities managers are going to have to start watching those electrical costs like a hawk, because unplanned charges can really affect the bottom line, especially if it’s a campus with dozens of large buildings. But what can a large facility do to avoid paying a lot of penalties?

Plenty. Because fortunately, there is a solution. And ironically, it’s the same one that could greatly benefit utility providers too. As companies demonstrated in GMLC’s “Plug & Play DER Challenge,” the answer is connectivity software that provides an intelligent middleware layer, thus uniting disparate devices and enabling the rapid sharing of all operational data across an entire facility’s infrastructure to make all systems work together as one.

What’s next?

In an ideal world, large facilities and utility providers wouldn’t have to size each other up nervously, like cowboys squaring off in the street for a quick-draw showdown. Gaining visibility into the grid to model demand numbers, incorporate real-time weather data and accurately predict demand could change the entire economic landscape of power grid management. And facilities could realize huge savings by gaining the agility to fly under the radar of restrictive rules on energy usage.

The Object Management Group’s Data Distribution ServiceTM (DDS) framework will be a big part of facilities and power grid infrastructure moving forward, because the system-wide interoperability benefits are simply too persuasive. Especially if you consider smarter energy management is to be our brightest hope and most powerful resource for global progress.

Grid edge technology and grid-edge intelligence are both topics that will be discussed at DISTRIBUTECH International in San Antonio, January 28-30. Register today!

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Erik Felt is the Market Development Director for Future Grid at Real-Time Innovations (RTI) where he is focused on bringing the benefits of IIoT standards and systems into the utility market. Throughout his career, Erik has worked with utilities, generation companies and ISO/RTOs worldwide where the rapid changes in technology and the market's diverse needs required implementation across the utility spectrum.

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