Why Electric Vehicle-Grid Integration Matters Today

Governments across the world are issuing ambitious plans to decarbonize electric and transportation systems. This dual decarbonization effort to increase plug-in electric vehicles (EVs) and renewable generation will create challenges for electricity grids, but also presents an immense opportunity for electric vehicles, i.e. “energy storage on wheels,” to enable a more cost-effective, cleaner electricity grid, at a fraction of the cost than if supported solely by stationary energy storage. The convergence of these two market trends will transform the management of the electricity system, as renewable electricity is inflexible and intermittent, and the proliferation of electric cars will grow, alter and challenge historical patterns of electricity demand. However, smart EV charging, or V1G, can provide a range of grid services through intelligent modulation of unidirectional energy flows from the grid to the vehicle, such as real-time grid balancing, reducing energy costs, integrating intermittent renewable energy, reducing air pollutants and deferring expensive infrastructure upgrades.

The rise in everything electric & renewable

From electric scooters to cars, trucks, and buses, there is a growing appetite for electric vehicles from governments, businesses and consumers. According to Bloomberg, there will be more than 100 battery-powered electric car models available by next year, and BNEF forecasts that by 2022 EVs will cost the same as their internal combustion counterparts. This is anticipated to drive record sales growth and lead to an inevitable decline of internal combustion engine (ICE) vehicles.

In conjunction with ZEV mandates, many regions are setting ambitious renewable energy goals. China, which accounts for nearly half of the world’s electric car sales, has created a quota for automakers with annual vehicle sales of more than 30,000 to comply with a 10 percent plug-in vehicle sales quota in 2019, 12 percent in 2020, and at least 20 percent by 2025. China’s aggressive New Energy Vehicle (NEV) mandate attempts to curb local air pollution and clean up its streets, while simultaneously reducing its dependence on coal with a Renewable Portfolio Standard of at least 35 percent by 2030. Similarly, California, which represents the world’s fifth largest economy, has taken a three-pronged strategy by mandating a carbon-free electric grid by 2045 and setting goals of a decarbonized economy by 2045 and five million ZEVs by 2030, matched with 260,000 public charging ports by 2025. Already, California has over 490,000 registered electric vehicles and North America has over 1 million. Vehicle-grid integration in 2019 will serve as a key factor for California to achieve its longer-term decarbonization goals efficiently.

EV Smart Charging, A Large and Highly Flexible Load

In 2013, California mandated the procurement of 1.3GW of stationary storage by 2025, in part, to address the resulting grid challenges from increasing intermittent solar and wind generation -- before the State increased its carbon-free electricity goals two-fold. It is even more critical for California’s electric grid to secure all low-cost sources of flexible demand to help balance supply and demand at every time scale needed. The growing fleet of EVs across the state, if dynamically managed, can supply this much-needed flexibility at a much lower cost than stationary energy storage. Good utility and regulatory practices call for first developing and utilizing lower cost resources on the supply curve of flexibility and reliability services before proceeding to higher cost sources.

The authors of a recent Lawrence Berkeley National Laboratory (LBNL) study found that with only one-way electric vehicle charging control, or V1G, “California can achieve much of the same benefit of its Storage Mandate, but at a small fraction of the cost. By displacing the need for construction of new stationary grid storage, EVs can provide a dual benefit of decarbonizing transportation while lowering the capital costs for widespread renewables integration.”

Solar and wind generation are intermittent, so maintaining a cost-effective balanced grid by matching electricity supply and demand is essential to “keeping the lights on” as an affordable and expected customer service. By increasing solar generation to meet California’s SB 100 commitment, the belly of the duck curve is expected to become more dramatic as more renewables are deployed. Mid-day over-generation and sharp evening ramps once the sun sets are considered to be the most severe challenges, and LBNL demonstrates how productive vehicle-grid integration could be for California. For example, a daytime solar glut leads to substantial problems with over-generation, but could be mitigated by shifting and managing electric vehicle charging to align with daytime solar generation.

LBNL examined how delaying and ramping charging could help with peak shaving, valley filling, and reducing steep changes in supply and demand. The authors found that in a V1G-only case, there are substantial benefits for ramping mitigation and day-time valley filling, while V1G residential charging can avoid exacerbating the evening peak of the duck curve. Specifically, a 1-gigawatt virtual battery consisting of 1.5 million smart charged electric vehicles could replace most of the grid-scale stationary storage and save $1.3 - 1.6B in renewables integration costs, while providing the same flexible capabilities as stationary storage.

Residential Smart Charging

The most common places to charge for EV owners are at home and at work, with most charging volumes taking place over extended periods of time, making residential and workplace charging ideal use cases for managing the time and speed of charging in response to grid needs. Also, by deferring charging to a time of day or night that is more affordable based on rates or programs that reflect the time-varying cost of providing electricity, flexible EV charging can provide benefits to all ratepayers by spreading out the fixed costs of utility infrastructure over more kWh sales and avoiding costly grid upgrades that can result from unmanaged charging. This mutually-beneficial outcome stands to lower electricity costs for EV drivers and non-adopters alike and is critical to scaling the EV industry sustainably; to ignore it will thwart our ZEV and renewable energy goals. It is the essence of why paving the way for vehicle-grid integration at scale matters, and why the need for, and value of, smart EV charging will increase as the penetration of renewable energy grows.

Today, the average electric vehicle stays plugged into a charging station for far longer - up to 90 percent longer- than the time needed to fully charge the vehicle. By enabling smart EV charging, electric vehicles can be transformed into our most powerful Distributed Energy Resource.

JuiceNet can provide wholesale market services

Enel X has proven its fleet of JuiceNet-enabled charging stations can operate as a grid resource to wholesale energy markets. Enel X recently announced it has deployed a 30 megawatt / 70 megawatt-hour virtual energy storage battery within California. The JuiceNet cloud software platform serves as the Battery Management System (BMS) for this virtual battery, a portion of which is active in California Independent System Operator (CAISO) wholesale markets providing day-ahead and real-time energy commodities, dynamically managing charging loads to respond to grid operator instructions, reducing wholesale energy costs, and mitigating the intermittency of renewables.

Over 6,000 units of Enel X’s residential EV charger, the JuiceBox, and other JuiceNet-enabled chargers installed in California since the start of 2017 make up the 30MW virtual battery. Spread across the state and concentrated in the major population centers, these distributed energy resources (DERs) are controlled by the company’s cloud-connected JuiceNet software. The initial capital outlay for these DERs are borne by EV drivers instead of utility ratepayers or energy storage developers. EV drivers that enroll in Enel X’s Rewards programs are dispatched to deliver energy services, primarily demand response in the form of V1G charging curtailment, on a daily basis across the state. In turn, JuiceNet-enabled charging stations, such as the JuiceBox, provide invaluable data that utilities can utilize to analyze and model how smart EV charging can participate in retail and wholesale markets, as well as maximize the use of wind and solar energy in their service territories.

By shifting when and how much electricity JuiceNet-enabled loads draw from the grid, Enel X helps utilities and grid operators reduce electricity costs, ease grid congestion, absorb excess solar and wind power, and provide rapid response to unforeseen grid events. Through low-latency cloud-based dispatch, JuiceNet-enabled charging stations can provide several services to the grid, including:

Energy

• • Day-ahead market
• • Real-time market
• • Load shift / building

Capacity

• • Forward markets, such as resource adequacy
• • Day-Ahead markets
• • Avoided capacity charges 
• • Distribution upgrade deferral

Ancillary services

• • Spinning reserve
• • Non-spinning reserve
• • Frequency Regulation

Why Smart Charging Policy Matters

Time of Use (TOU) rates with a significant differential between on- and off-peak periods incentivize charging when electricity costs are relatively low and allow EVs to be fueled considerably cheaper per mile than the equivalent amount of gasoline. For example, PG&E’s EV Residential Rate offers two non-tiered, time-of-use plans for residential EV customers. EV-A combines your vehicle's electricity costs with those of your residence. EV-B involves the installation of another utility meter, which separates your vehicle's electricity costs from those of your home. For a full breakdown, we recommend reading our guide on the cost of gas cars vs the cost of electric cars. Smart EV chargers are commonly equipped with embedded metering that can achieve the load-shifting benefits of TOU rates without forcing EV adopters to subject their traditional household uses to very expensive peak period rates. Smart charging should also be used in tandem with time of use energy rates to optimize wholesale energy procurement costs and manage the local distribution grid as EV adoption scales in neighborhoods.

Addressing EV obstacles by lowering infrastructure costs & barriers

The primary obstacles facing the transition to transportation electrification are infrastructure availability, electric system modernization, vehicle-grid integration, and the price differential between EVs and ICE vehicles. States can address these obstacles by incentivizing electric transportation technology through a combination of ratepayer- and taxpayer-funded investments as well as market mechanisms. Electric utilities can make foundational investments in distribution infrastructure needed to support electrified transportation, provide customer rebates for charging equipment and installation, and adopt rates for charging electricity that best gasoline prices. States can establish carbon markets, similar to California’s Low Carbon Fuel Standard (LCFS), that require fuel providers to reduce the carbon intensity of their fuel. The LCFS program allows clean fuel providers to generate carbon credits and can earn market revenues through selling these credits. These proceeds can be used in a variety of ways to incentivize clean transportation adoption, by funding point-of-sale EV rebates or utility EV supply equipment (EVSE) rebates, or by supporting the business activities of EV service providers (EVSPs), EVSE manufacturers, or automotive original equipment manufacturers (OEMs). LCFS-funded incentives can augment state taxpayer funds to assist in the electrification of public transit, ride sharing, and state-owned and operated fleets. Finally, state-level EV purchase rebates and auto OEM discounts can work alongside federal EV tax incentives to reduce the premium of EVs over ICE vehicles and encourage early adopters to make the switch. Here’s a breakdown of electric car incentives by state.

Utility investment programs that facilitate “make-ready” infrastructure build-out and provide EVSE purchase and EV charger installation rebates for single- and multi-family residential, commercial, workplace, and fleet customers lowers the upfront cost of charging infrastructure and provides a number of charging options that reduce range anxiety. Utilities can orchestrate this EV infrastructure buildout and invest in back-end IT and communications systems that can oversee smart charging dispatches for grid integration purposes. Utilities should ensure that new EV loads are integrated into the grid in the most seamless and cost-effective manner possible, through a variety of different methods:

1. The utility can adopt EV time-of-use rates with significant differences between on-peak and off-peak periods. This will ensure that electricity is considerably cheaper than gasoline, charging does not exacerbate peak load, and non-participating customers benefit from spreading fixed infrastructure costs across more kWh sales.
   
   
2. A key ratemaking component of enabling widespread transportation electrification should be to transition away from traditional non-coincident demand charges (NCDCs) that can constitute significant cost hurdles for customers wishing to install commercial, workplace, fleet, or DC Fast Charging. Alternatives include: Coincident demand charges that reflect the contribution to peak load or distribution capacity costs; NCDCs that are based on a load factor or utilization factor of the customers maximum potential instantaneous peak demand; or Demand-charge holidays with energy-only rates, or a dynamic rate that reflects time-dependent contribution to peak load or distribution capacity.
   
   
3. Require that any EVSE deployed with the assistance of ratepayer dollars is “smart” -- i.e., can connect to a network, communicate with the utility or third- party aggregator, and respond to signals or commands that modulate charging rates and times in a way that benefits the grid. This will prevent the stranding of ratepayer-funded assets, and ensure that EV charging can be fully integrated into the grid in a cost- effective manner.
   
   
4. Initiate dedicated efforts to understand, maximize, and procure vehicle-grid integration services by coordinating with regulators and the EV charging industry in the expectation of exponential EV growth.

Overall, smart charging can ensure that EVs are used to cost-effectively integrate clean energy. As demand for intermittent renewable electricity grows significantly to power the proliferation of EVs, valuing and procuring EV flexibility services in the form of smart EV charging is critically important to decarbonizing the electricity and transportation sectors economically. Utilizing smart EV charging as a flexible and efficient distributed energy resource to meet the ambitious renewable energy targets that have been established by many political entities around the world will be essential.

Note: A version of this article was first published February 11, 2019 in Natural Gas & Electricity Journal here.