In my previous post I posited that the electric utilities would be the ones to actually make electric cars go. And that they'll profit from the change, long term, while making the world a bit greener in the process.
The oil companies will lose out, but that's okay. The oil companies' loss is the electric utilities' gain.
There have been some news items in the past week that indicate that more and more utilities are figuring this out.
San Diego Gas and Electric is establishing milestones that will enable them to deliver electricity to electric car drivers. It will take a while, but it appears that SDG&E is in it for the long haul.
Fifteen Michigan utilities are participating in a pilot program with Ford. The utilities get plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs) to use in their daily operations. But in order best to use them the utilities need to create charging infrastructure for the vehicles. The utilities and Ford will share information resulting from the project.
The last article I'm going to reference in this post has a spokesperson from Southern California Edison stating that they expect electric cars to account for over 10% of their demand by 2020. Considering that our overall demand for electricity has been steadily increasing over time, this is significant.
Thursday, May 28, 2009
Tuesday, May 5, 2009
Utilities Can Make Electric Cars Move
Utilities stand to benefit - more than any other companies or entities - from the advent of electric cars.
Most obviously, all those electric cars will be using electricity. It’s one more appliance for the consumer to plug in, and the more appliances consumers plug in then the more money the electric utilities stand to gain. For this reason alone the electric utilities should be actively encouraging adoption of electric cars.
There’s another reason, though, but it’s more complicated. And it requires the electric cars in question to have V2G technology.
V2G or Vehicle-To-Grid technology allows electric cars plugged into the electrical grid to be used by the utility for load-levelling.
Load-levelling is something the utilities currently do every week, every day, every hour, every minute. They track electricity demand and they make sure that they are able – at all times – to meet and exceed that demand. Because of the demand for more electricity during peak hours, electric utilities have plants that spin up before peak hours begin. These load-levelling plants then go out of service after peak hours are over. Other, baseload plants are running all the time. During the night when electricity use is low these baseload plants are producing more electricity than is being used.
And really, that’s what power companies do all the time – produce more electricity than is being used. Currently there is always always always extra electricity that goes to waste.
V2G cars will usually charge at night, making use of the additional electricity produced by the baseload plants at that time.
During the day, then, any V2G cars still plugged in at home – or plugged in at a V2G parking / charging station – can be used by the utility for load-levelling. The utility can delay or avoid spinning up the load-levelling plants. Instead they can just draw unneeded power from the V2G cars. Current projections are that an owner of a V2G car would make perhaps $2000 a year from the utility for allowing said utility to use his/her car for V2G load-levelling.
In this manner the V2G cars would serve as Grid Energy Storage. That is, a place to store excess electricity which, remember, the utility is currently producing all the time.
Many utilities are looking into building Grid Energy Storage systems for the same purpose discussed above, but if V2G cars can serve this purpose then that’s a project the utilities can scratch, avoiding that capital expenditure.
Instead, that cap ex can be spent working with car and battery manufacturers to create V2G standards that will work for the purposes outlined above, and possibly subsidizing the cost of the car or the battery for the consumer.
Basically, the utilities need to adopt the Better Place model, perhaps even to the extent of retaining ownership of the electric car batteries. The cost of the battery is what makes an electric car expensive, after all. Utilities will need to run a cost-benefit analysis, but it seems to me that there is enough benefit to the utilities (in the form of additional revenue and reduction of load-levelling costs) to offset the cost of the batteries.
This seems like a real win-win, and the beginnings of a smart grid, to boot. It's all very exciting.
Here are links to additional reading on the topic of V2G electric cars.
CBS Interactive's BNET article from 4 May
Christian Science Monitor article from 24 April
Hartford Courant article from 8 April
Discovery Channel article, undated
Additional Discovery article from 2 February
Most obviously, all those electric cars will be using electricity. It’s one more appliance for the consumer to plug in, and the more appliances consumers plug in then the more money the electric utilities stand to gain. For this reason alone the electric utilities should be actively encouraging adoption of electric cars.
There’s another reason, though, but it’s more complicated. And it requires the electric cars in question to have V2G technology.
V2G or Vehicle-To-Grid technology allows electric cars plugged into the electrical grid to be used by the utility for load-levelling.
Load-levelling is something the utilities currently do every week, every day, every hour, every minute. They track electricity demand and they make sure that they are able – at all times – to meet and exceed that demand. Because of the demand for more electricity during peak hours, electric utilities have plants that spin up before peak hours begin. These load-levelling plants then go out of service after peak hours are over. Other, baseload plants are running all the time. During the night when electricity use is low these baseload plants are producing more electricity than is being used.
And really, that’s what power companies do all the time – produce more electricity than is being used. Currently there is always always always extra electricity that goes to waste.
V2G cars will usually charge at night, making use of the additional electricity produced by the baseload plants at that time.
During the day, then, any V2G cars still plugged in at home – or plugged in at a V2G parking / charging station – can be used by the utility for load-levelling. The utility can delay or avoid spinning up the load-levelling plants. Instead they can just draw unneeded power from the V2G cars. Current projections are that an owner of a V2G car would make perhaps $2000 a year from the utility for allowing said utility to use his/her car for V2G load-levelling.
In this manner the V2G cars would serve as Grid Energy Storage. That is, a place to store excess electricity which, remember, the utility is currently producing all the time.
Many utilities are looking into building Grid Energy Storage systems for the same purpose discussed above, but if V2G cars can serve this purpose then that’s a project the utilities can scratch, avoiding that capital expenditure.
Instead, that cap ex can be spent working with car and battery manufacturers to create V2G standards that will work for the purposes outlined above, and possibly subsidizing the cost of the car or the battery for the consumer.
Basically, the utilities need to adopt the Better Place model, perhaps even to the extent of retaining ownership of the electric car batteries. The cost of the battery is what makes an electric car expensive, after all. Utilities will need to run a cost-benefit analysis, but it seems to me that there is enough benefit to the utilities (in the form of additional revenue and reduction of load-levelling costs) to offset the cost of the batteries.
This seems like a real win-win, and the beginnings of a smart grid, to boot. It's all very exciting.
Here are links to additional reading on the topic of V2G electric cars.
CBS Interactive's BNET article from 4 May
Christian Science Monitor article from 24 April
Hartford Courant article from 8 April
Discovery Channel article, undated
Additional Discovery article from 2 February
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