What Are the Impacts of Renewables and Electric Vehicles on the Grid?

November 27, 2017

Despite a challenging political climate in the US, the renewables energy sector is growing. So too is the market for electric vehicles, but while both of these advances will help to mitigate our effects on the environment, what impact will they have on the stability of the grid and what should utilities firms be doing now to prepare themselves for these impacts?

In 2016, renewable energy accounted for almost 15% of US electricity generation at utility-scale facilities. This energy is currently derived from five sources, as detailed in the table below.

Renewable Energy Source	Percentage of total electricity generation 2016
Hydropower	6.5%
Wind	5.6%
Biomass	1.5%
Solar	0.9%
Geothermal	0.4%

Source: US Energy Information Administration

Of these renewable energies, it is solar and wind capacities that are expected to increase the most dramatically over the coming years. These technologies offer a scalable and affordable low carbon alternative to fossil fuels. However, they also present a significant challenge to grid resilience, due to the variable nature of the energy resources that they are harnessing.

Growth in Renewables Capacity

Forbes Energy Innovation cites a ‘breakneck’ growth in renewable energy in the US, with solar and wind responsible for the greatest increase in capacity for the past three years including 2016. These two sources represent almost two-thirds of all new renewable capacity. And as more solar and wind farms come online, installation costs are driven down, to the point that for several regions in the US, an increase in solar or wind capacity is now cheaper than increasing capacity in coal or natural gas.

 Energy Innovation’s Energy Policy Simulator forecasts multiple wind and solar capacity scenarios for the years up to 2050. In their ‘business as usual’ outcome, which assumes no new federal policies other than those already approved, the simulator forecasts wind capacity increasing 158% by 2050, and solar PV capacity increasing 858% within the same timeframe. This includes distributed (rooftop) solar, representing 47% of the additional capacity.

These increases would result in wind representing 14% of total electricity capacity, and solar reaching 21% of total installed capacity by 2050. As the percentage of electricity derived from solar and wind increases, this will assert greater pressure on the grid to increase its flexibility.

Managing Greater Grid Complexity

The US grid must develop new mechanisms to dynamically balance supply and demand-side resources against one another, in order to deal with the fluctuations resulting from an increased proportion of electricity generation from solar and wind farms.

Until recently, grids have not required a great deal of operational flexibility. Historically there has been little need to dynamically match demand to available supply, or to select supply with adequate capabilities to create grid flexibility, but this situation is changing. States such as Hawaii and California, where renewable sources provide 20% or more of utility-scale electricity generation, are already starting to foresee such operational flexibility issues.

The mechanisms required include operational changes, such as improved weather forecasting, and the use of physical assets, such as fast-ramping natural gas plants. Operational changes generally offer the most cost-effective manner of managing fluctuations as they can utilize existing infrastructure. In comparison, physical assets generally require a greater investment, but will become more necessary as the need for grid flexibility increases. Below, we consider two operational changes that grids can make to improve resilience, and one physical adaptation.

Improved Accuracy Weather Forecasting

More accurate forecasts that can predict output to short time intervals and update commitment schedules more regularly will improve system reliability, therefore lessening the need for operating reserves. Additionally, as more solar and wind farms come online in geographically diverse locations across the country, variation in supply will flatten out, as most output affecting weather patterns are local in scale.

Demand Response

This powerful strategy for managing electricity demand consists of a variety of demand-side mechanisms, including using less energy when it is scarce, and more when there is a surplus. Dynamic electric vehicle (EV) charging is one such mechanism, whereby vehicles charge when prices are low and there is an oversupply of electricity, and then cease charging when prices are high and there is a scarcity of supply. At these times, it is even possible for the EVs to operate as ‘batteries’, returning electricity to the grid.

The payoff of allowing demand response to participate in wholesale markets can be significant. When the regional transmission organization, PJM Interconnection, allowed demand response to participate in its capacity market, their price of capacity dropped 85% in one year.  

Natural Gas Plants

The grid can also manage increased variability by bringing online fast-ramping natural gas plants as it retires uneconomical coal plants. These gas plants can provide a significant amount of grid flexibility, allowing more renewables to be incorporated into the system. However, operators would need to be financially compensated in order for their plants to act as load balancers, rather than baseload providers, since this would otherwise decrease their revenue and increase their costs.  

Market Predictions for the Growth of EVs

Having seen the benefit that EVs can bring to the stability of the grid when demand response is allowed to participate in energy markets in the same way that supply-side generators do, what are the predictions for growth in the EV market, and what effect will the increase in EV charging demand have on the grid?

Bloomberg New Energy Finance’s 2017 forecast predicts that electric vehicle sales will surpass internal combustion engine (ICE) sales by 2038, and that by 2040, plug-in vehicles will represent a third of the global auto fleet. This will significantly increase demand on electricity grids, and make power demand-side solutions mandatory.

Effect of EV Growth on Grid Security

It is commonly understood that the growth in the EV market won’t cause utilities companies concerns regarding the total nationwide electricity demand. Instead, the challenges are centered at a local level where there is a risk of overloading residential transformers.    

Since a single plug-in electric vehicle (PEV) with a 240V, Level 2 charging system consumes about 7kVA, and most residential transformers are only built to manage between 10 and 50 kVA, the concern is that several EVs charging simultaneously may damage or overload the transformer, or take it offline.

Residential transformers are particularly at risk of overloading during peak hours, especially if there are multiple electric vehicles in a neighborhood.

How Can Utilities Manage Increased EV Demand?

As when an EV owner charges their vehicle, they are storing up electricity rather than using it in real-time, a conscious decision can be made about when to store that power. This has lead many utilities to trial the use of submeters, in order to offer time-of-use (TOU) rates to their customers.

The submeters separate the PEV charging from the rest of the household’s power demands, enabling the utilities to influence PEV charging times, utilizing (TOU) rates to incentivize off-peak charging, and in turn, manage demand. However, in many trials this has resulted in a second peak when all EVs start charging at the beginning of the off-peak period, causing a sudden rise in local power consumption.

Utilities have also found the rate of customer uptake in submeter trials to be underwhelming due to the lead-time and cost of installation.

Smart Charging for Demand Response

Utilities providers need a more dynamic strategy, which allows for the distributed charging of EVs across the entire off-peak period, without the substantial costs of installing submeters.

This strategy can also be used to incentivize drivers to charge EVs during periods when supply from renewable energies is at its highest, reducing the demand for fossil fuel powered plants.

‘Smart charging’ uses a combination of infrastructure and communication signals sent directly to a vehicle, or via a charger, to influence the driver’s decision on when to charge their car.

FleetCarma has developed two smart charging solutions for utilities to enable the efficient deployment of demand response programs. These technologies enable utilities to shift and shape load from electric cars, in the same way that successful energy saving programs operate through smart-thermostats.  

SmartCharge Rewards

FleetCarma’s SmartCharge Rewards is a plug-and-play incentive program for utilities to help create manageable load growth by shifting EV charging to off-peak hours, without the hassle and cost of installing a submeter. EV owners benefit from reduced costs of charging, and utilities benefit from enhanced electric grid efficiency and resilience, making service more reliable for everyone.

The program uses our C2 device, which is simply plugged into an electric vehicle’s OBD-II port, under the dash. This install takes the EV owner 10 seconds, making it a much more scalable EV load management program than submetering, which can be quickly and easily rolled out across thousands of vehicles.

Unlike submetering, SmartCharge Rewards can monitor and incentivize charging behavior that occurs outside of the home. It also eliminates the barriers of cost and long installation times that have resulted in low customer enrollment rates for submeter-based TOU programs.

By offering participants SmartCharge Rewards, utilities benefit from built-in flexibility to adjust the financial rewards structure without the lengthy process of seeking regulator approval that would be required with tariff adjustments.

SmartCharge Manager

This simple solution allows utilities to efficiently deploy demand response programs. A logger is plugged into the customer’s vehicle, obtaining real-time vehicle-side data such as battery state-of-charge. This provides utilities with a comprehensive overview of their smart charging program, enabling them to gain a better understanding of the charging behavior in their service territory.

With real-time access to vehicle-side-data, administrators can instantly see the impact of allowing or curtailing vehicle charging at any given time. This real-time information enables better decisions and efficient deployment of demand response programs, while ensuring vehicles always receive the charge they require.

And by presenting little-to-no impact on the EV owner’s current lifestyle, it is easier and cheaper to achieve high user engagement.

Conclusion

The continued growth in consumer demand for EVs brings with it both opportunities and potential risks for utilities. Utilizing demand response, these EVs could help to manage the fluctuations in supply resulting from an increased proportion of electricity generation from renewable energies. But utilities must plan for this growth in EV use and ensure that at a local level, demand is dynamically managed to prevent the risk of transformer outages.

Scalable smart-charging solutions such as FleetCarma’s SmartCharge RewardsTM and SmartCharge ManagerTM balance the needs of utilities and their users, in order to manage localized grid load, at a fraction of the cost of previous options.