Transportation electrification, once considered an uphill struggle against the convenience and affordability of gasoline-fueled vehicles, now appears ready to roll.
Forecasted growth of today's approximately 1.5 million U.S. electric vehicles to 20 million in 2030 requires at least $75 billion in investment, according to recent Brattle Group data. To achieve this, once-competing stakeholders must expand their still-tenuous collaboration.
"We are on the cusp of a new adoption phase," Robert Barrosa, director of utility strategy and operations at public charger advocate Electrify America, said in an email. But "significant progress" in deployment has been "fragmented" and "piecemeal," making it "confusing for drivers and businesses that want to invest in transportation electrification."
"There is always more we can do to go faster and further with electrification," agreed Katie Sloan, director of e-mobility and building electrification at Southern California Edison (SCE). That is "especially important now because it can create jobs for the economic recovery and help reduce all customers' rates by more efficiently using the grid," she said.
It seems transportation electrification has moved past early conflicts, in which utilities and charger providers fought over ownership, stakeholders told Utility Dive. Deployment is accelerating as utilities focus on the electrical infrastructure for chargers, called make-readies, and leave deployment and ownership of the chargers to private providers.
But questions like how to manage charging loads and how to assess costs and benefits of deployment remain unanswered and could, stakeholders agreed, impede EV growth.
Deployment has increased, but more is needed
Transforming U.S. transportation will do more than disrupt transportation, Brattle's study projected. The billions in investment is expected to increase power sector demand by 60-95 TWh per year and increase U.S. peak load by 10- GW to 20 GW.
Public charger deployment increased 40% per year from 2014 to 2019, Brattle calculated. In 2019, workplaces and other public locations had 66,000 Level 2 (L2) chargers, which can give a vehicle 124 miles of charge in roughly five hours. There were 12,000 Direct Current fast chargers (DCFCs), which can charge a vehicle the same amount in about 30 minutes.
But to satisfactorily serve 20 million EVs, the U.S. needs to deploy 1.25 million public chargers, according to Brattle — 1.2 million L2s and 60,000 DCFCs by 2030.
Growth is already supported by falling EV, battery and charger prices, growing market availability of cars and chargers, and greater consumer awareness, Brattle reported. And federal, state and local mandates, along with tax credits and rebates are expanding.
"Most utilities and third parties know a major barrier to EV adoption is lack of charging infrastructure and understand there is a lot of value in collaboration."
Transportation Electrification Principal, SEPA
Charger availability is accelerating in some jurisdictions through agreement among stakeholders that utilities should build the make-readies and private providers should install chargers, Brattle Principal and study co-author Sanem Sergici told Utility Dive. But less than $2 billion in utility investment for deployment has been approved to date, and at least $15 billion for transmission and distribution system upgrades and $30 billion for charger infrastructure to handle the expected increase in EVs will be needed.
Investment will come "across the supply chain but will likely be led by utilities and financed by ratepayers," Sergici said. Private providers, utilities and ratepayer advocates can develop joint solutions for leveraging each one's strength through a stakeholder planning framework, she said.
"There is no need to make it a competition, because utilities and charging companies can share the successes and opportunities," SCE's Sloan agreed.
Collaborating for growth
Many stakeholders see the growing collaboration between utilities and charger providers as a new phase in transportation electrification.
"In the first phase, nobody wanted to take any ownership opportunity off the table, but agreement on shared responsibility has a natural incentive" because it gives both utilities and private providers a share of the opportunity, said Charlotte Ancell, vice president of regulatory at AVANGRID, and former vice president of utility solutions at ChargePoint.
Make-readies put 60% or more of installation costs on utilities, but lead to "increased kWh sales and downward rate pressure," Ancell said. But the charger "has a higher technology risk," which makes it a better fit for the private sector, she said.
Partnerships also allow utilities to do formal interconnection review processes for charging stations to protect system reliability, she added. More broadly, charger providers will benefit from incentives utilities offer EVs and EV chargers, and utilities can use the providers' data to manage charging to the benefit of their system and customers.
"We definitely need managed charging to deal with grid impacts, but there is still a lot of work to be done on rate design, technology and policy."
Senior Director, Strategen and Policy Consultant, Vehicle Grid Integration Council
Utilities are starting to recognize the value of the shared responsibility model, said Jonathan Levy, senior vice president of business development with charging developer EVgo, agreed. EVgo's once-contentious interactions with transportation electrification leader Pacific Gas and Electric (PG&E) "have markedly improved since PG&E launched a dedicated EV team," he said.
Pepco, Eversource Energy and Georgia Power are using the shared responsibility model in major deployments, according to the companies. And PG&E, SCE and San Diego Gas and Electric (SDG&E) have used the model in California's charging pilots, said Ancell.
SDG&E's model initially emphasized utility ownership of chargers, but its latest proposal, submitted to regulators in October 2019, will trial the shared responsibility model in response to stakeholder feedback. Although the utility "continues to believe that utility-owned and maintained charging stations reduce barriers to EV adoption," according to 2019 testimony from Randy Schimka, SDG&E principal of clean transportation and technical solutions provider, the utility will compare results from the two models.
Regulatory filings in New Jersey and Massachusetts also endorse shared responsibility, and a New York program announced July 16 committed up to $701 million to it. Regulators are working "to balance the interests of utilities and private providers," Sergici said.
But utilities in Nevada, Colorado, Kentucky, Florida and Arizona have been allowed to own chargers to some extent, along with make-readies, according to the North Carolina Clean Energy Technology Center's EV policy quarterly.
Still, the shared responsibility model is a transportation electrification "best practice" recommended in a new Smart Electric Power Alliance (SEPA) paper.
"Most utilities and third parties know a major barrier to EV adoption is lack of charging infrastructure and understand there is a lot of value in collaboration," said SEPA Transportation Electrification Principal Erika Myers.
The next step in charger deployment may be networked chargers, either in partnerships between utilities and software platform providers or through independent vendor networks, according to SEPA. "Network service providers can quickly address malfunctions and do software updates," Myers said. They also add "a layer of security and standardization that increases reliability and the user experience."
Most stakeholders see networks as critical to meeting demand for charging, "and interoperability is moving the market that way," Levy agreed. But some charger owners are concerned about utilities intruding on their customer relationships, he added.
Deployment expansion has begun to reveal similar points of contention within the still-uncertain collaboration between utilities and charging companies, like defining the benefits of deployment and managing charging loads. Projected exponential growth could further those disagreements.
Two key questions
Two key issues could derail cooperation. If the benefits of transportation electrification fail to outweigh its costs or if charging loads overwhelm utility systems, contention between utilities and private providers could develop over which stakeholder should bear the cost burden or the responsibility for managing charging.
To further accelerate charger deployment, regulators need to be more certain the benefits justify the expenditures, stakeholders said. And in order to validate the use of ratepayer funds, "utilities will increasingly need to perform cost-effectiveness analysis as they transition from pilots to larger programs," Brattle concluded.
"Cost-effectiveness tests for EV programs are critical," Myers agreed. "Without data, regulators and others could fail to see how EV incentives benefit all customers and not just EV owners."
But "new, small programs may only provide limited cost-benefit data," Ancell said. "Utilities have done legitimate initial cost-benefit tests, but getting definitive data will take time."
"A utility can reject a charger provider’s proposal because it does not fit existing capacity, but it could also tell the provider what would work better. That would be tremendous."
Senior Vice President for Business Development, EVgo
A 2019 report from Brattle and the Electric Power Research Institute proposes a Total Value Test that addresses this question by recognizing near- and long-term costs and benefits of achieving policy goals and taking advantage of incentives.
Transportation electrification is one of the most cost-effective ways to meet California's greenhouse gas goals, SCE's Sloan said. The utility's 7 million EVs by 2030 target "was set based on the cost-effectiveness of achieving the state's GHG reductions."
That is a data-driven approach, Sergici acknowledged. But without a cost-benefit analysis of multiple factors like incentives and the availability of charging infrastructure, the target is "aspirational" and at the mercy of supply-side dynamics like model availability and EV production costs, she said.
Utilities' analyses of cost effectiveness will improve with the industry's growing experience, EV Connect Vice President of Business Development Ram Ambatipudi said in an email. "It is already possible to be more accurate about the impacts of siting and customer usage patterns."
On whether charging loads could overhwhelm the system, there was almost unanimous recognition from charging companies, utilities and researchers that EV-specific rates are needed to support effective management of varying charging loads.
Managed charging "is moving when charging is done to align with grid needs and EV-specific rates provide the price signals to do that," said Edward Burgess, senior director at Strategen and policy consultant for the Vehicle Grid Integration Council. "We definitely need managed charging to deal with grid impacts, but there is still a lot of work to be done on rate design, technology and policy."
Private sector providers are developing technologies to support EV-specific rates, but too many utilities "have not even begun to think about that," he added.
Managed charging could more than double the capability of U.S. power systems to meet the projected 2030 demand, according to July 2020 research from Pacific Northwest National Laboratory.
The unanswered questions of cost-benefit analysis and managed charging came together in the June final report from a California joint agencies working group on vehicle-grid integration.
Some of the 320 identified use cases for managed charging could deliver a "total statewide benefit" of "up to an estimated $200 million per year," the working group found. Examples of uses include "avoiding or deferring investment in upgrading the power distribution grid" and "balancing and storing renewable energy."
But due in part to data constraints, the precise cost-effectiveness of managed charging use cases could only be estimated, the report added. To implement rates that "improve cost-effectiveness or provide new incentives for managed charging" will require "an inclusive and collaborative approach," the working group said.
Utilities, developers need to communicate
Recommendations from SEPA and Brattle emphasized data-driven planning for charger deployments and recognizing the billions in potential benefits. Both stressed the need for communication and collaboration.
Utilities can streamline their charger interconnection processes by making them more transparent, Myers said.
The more utilities and private providers "work together and share best practices, the better, and the more we can make things standard, the faster we can scale."
Director of E-mobility and building electrification, SCE
They can also provide guidance, EVgo's Levy added. "A utility can reject a charger provider's proposal because it does not fit existing capacity, but it could also tell the provider what would work better. That would be tremendous."
The more utilities and private providers "work together and share best practices, the better and the more we can make things standard, the faster we can scale," SCE's Sloan said.
Partnerships should leverage strengths, Levy said. "We can work together, with utilities using their expertise to help us accelerate work that helps them sell more electricity."
Charger providers and utilities "understand that each has its own perspective and way of operating, but they may not understand the value each has to the other," Myers added. "If they continue to work collaboratively, they can unlock potential to benefit both."