Electrification and EVs

Transitioning transportation, the nation's biggest source of carbon emissions, to clean electricity is urgent, but will not be easy, according to charging companies, auto industry analysts and others.

President Joe Biden's Aug. 5 Executive Order calls for 50% of annual U.S. new car sales to be zero emission vehicles (ZEVs) by 2030. But of the estimated 14.5 million U.S. new car sales in 2020, only about 306,000, or 2.1%, were ZEVs, and only about 2 million of the nearly 290 million registered vehicles on U.S. roads are EVs.

Newer numbers, however, suggest "an exponential ZEV uptake" has started, said Garrett Fitzgerald, electrification principal at the Smart Electric Power Alliance (SEPA). "New ZEV sales increased from 1.5% in H1 2020 to 2.5% in H1 2021" and "were 3.6% of Q2 2021 new car sales."

Ford, General Motors and Stellantis are planning a total of over 50 new ZEV models "because they see they will lose market share if they don't," Commissioner Tremaine Phillips of the Michigan Public Service Commission said. "Those automakers have committed to a decades-long, billion-dollar transition, which tells me the vehicles are coming."

Private sector investments by automaker and charger providers and some state policies approving utility investments recovered from ratepayers have already seed-funded the transportation electrification transition, automakers, analysts, and charger providers said. They now have White House backing and are likely to soon get a boost from federal infrastructure legislation, they added.

But while those forces grow the numbers of EVs on the road, power system providers and their regulators need to face the challenge of unprecedented amounts and types of electricity demand, they said.

Policy to the rescue

The new Biden ZEV goal and other policies, like infrastructure bill provisions and stronger fuel efficiency standards, emphasize White House support for the transportation electrification transition.

Backed by major automakers and labor groups, the administration wants to build a national charging station network and provide incentives to drive zero emission vehicle and charger sales.

California's U.S.-leading 10.4% ZEV adoption is due to "strong fiscal and non-fiscal policies" like rebates, mandates, and a low carbon and other emissions standards, said SEPA's Fitzgerald. States with similar policies are building to higher adoptions, but "tremendous coordination and push at all levels of government and the market will be needed" to reach the Biden goals, he added.

That alignment is emerging, Ford Motor Company President and CEO James Farley, Jr., told a Sept. 23 Columbia University webinar, in describing his company's efforts to bring a battery electric version of its F-150 pickup truck to market in 2022.

Ford already has 150,000 orders, Farley said. There are supply chain and labor force issues and "this transition will be tough," but the F-150, the nation's top selling vehicle, could move transportation electrification "into the mainstream," he added.

Provisions in federal legislation will be one key.

The pending $1.2 trillion Infrastructure Investment and Jobs Act (HR 3684) offers $30.7 billion in EV-eligible funding, according to Atlas EV Hub. That includes $7.7 billion in ZEV funding, $12.7 billion for other "clean" vehicles, and $10.3 billion to support battery manufacturing and recycling and power system infrastructure, Atlas said.

There are also grants for charging and zero emissions fueling infrastructure, for deploying renewable energy generation and efficiency improvements at schools, and for advanced vehicle manufacturing innovations, Atlas reported.

Proposed programs in the bill would study electrification impacts on the power grid and impacts of critical minerals mining outside the U.S. Studies would also be funded to identify the best charging station standards for interoperability between providers and to identify strategies for moving medium- and heavy-duty vehicles to electrification, it added.

But the infrastructure bill is not the only piece of legislation currently under consideration on Capitol Hill with the potential to inject billions of dollars into the clean transportation sector.

The House's more ambitious Build Back Better Act has provisions similar to those in the infrastructure bill, but funded at higher levels, Atlas reported. Importantly, it also includes ​funding to continue the federal $7,500 tax credit for purchases of all-electric and plug-in hybrid vehicles and allows the buyer to receive the credit when buying the vehicle rather than waiting for it on their federal tax return. Depending on a vehicle's domestically- and union-made content, bonuses could increase the benefit to as much as $12,500.

Stakeholders are generally satisfied with HR 3684, though many would like to see the House bill's removal of the current tax credit cap, which limits each manufacturer's use of the credit to the first 200,000 vehicles it sells.

A September 2021 Edison International (EI) white paper called for similar policies as proposed in the federal bills, including higher national ZEV targets, bigger charging infrastructure investments, and expanded tax credits. 

Exelon, however, specifically supported the Senate infrastructure bill in a letter to House representatives in its territories asking them to vote for it "because its charging infrastructure funding is huge for utilities," Exelon Utilities Vice President of Utility Oversight Denise Galambos said.

Both bills' proposals "are ambitious but needed," Alliance for Transportation Electrification (ATE) Executive Director Phil Jones, a former Washington utilities commissioner, said. But the investments are only "a down payment" on the billions of dollars needed for the U.S. to compete in world markets.

Even before the new federal policy initiatives were under consideration, customer demand and private sector investment were driving transportation's transition to electrification.

Breaking barriers

The Michigan Public Service Commission's 2017 "Barriers Report" found 25 significant barriers to transportation electrification, but many are being resolved by utility pilots, Commissioner Phillips said.

Similar studies by other states leading in ZEV adoption show "barriers are being removed," agreed North Carolina Clean Energy Technology Center Senior Policy Program Director Autumn Proudlove. "Some states are lagging, but they are not actively trying to stop electric vehicles."

There are now eight ZEV models, from automakers Ford, Lucid, Rivian and Tesla, with single charge ranges of 300 miles or greater, according to a Green Car Reports Sept. 19 market assessment.

"Growth in the top eight states is doubling, and tripling, and private investment will follow to avoid missing the opportunities," Rocky Mountain Institute (RMI) Carbon Free Mobility Global Program Managing Director Britta Gross said.

The optimism in the private sector was reinforced by an April 2021 paper by the Alliance for Automotive Innovation reporting automakers "are planning $330 billion in electrification by 2025." The Alliance represents manufacturers that account for "nearly 99%" of cars and light trucks sold in the U.S., its website said.

Progress is good, but "it will take an ecosystem for this to succeed," Edison Electric Institute (EEI) Director of Electric Transportation Kellen Schefter cautioned.

Coalitions of automakers, charger providers, utilities and ratepayer advocates are growing that ecosystem,  Proudlove and other stakeholders responded. They are accelerating customer education work, reaching agreements on ZEV registration fees, and expanding pilots for medium and heavy-duty ZEV use, they said. 

Ratepayer funding has begun supporting charger infrastructure deployment and state commissions are becoming more aware of the opportunity it represents, they also agreed.

Time to charge up

There will be 26 million U.S. ZEVs by 2030, but 2030's projected 5.9 million new ZEV sales will be only 36% of all new vehicle sales, according to a July 2021 analysis from the International Council on Clean Transportation (ICCT).

To charge those ZEVs, the estimated 216,000 U.S. public and workplace chargers in 2020 will need to grow to 2.4 million by 2030, ICCT estimated.

For comparison, only 20 million ZEVs would impose power demand and peak load increases that would require power system investments of at least $75 billion, a June 2020 Brattle Group study estimated. The more ambitious Biden administration goal would significantly increase that cost, added Brattle study co-author and Group Principal Sanem Sergici.

But public charger deployment costs could be lower as people realize "it is more convenient to charge at home at night or when the car is parked than going to a gas station," Craig Lawrence, partner/co-founder of electrification start-up investor Energy Transition Ventures, said. That would increase the use of customer-owned home chargers and reduce the immediate need for utility expenditures for public charger deployments.

HR 3684 would boost public charger infrastructure deployment, but the overall costs for that component are likely to be $28 billion from 2021 to 2030, ICCT estimated. And that only meets charging needs when ZEVs represent 36% of new car sales in 2030, which is short of the Biden 50% goal, ICCT added.

"EV adoption is absolutely headed in the right direction," but "more charging station investment is of paramount importance," EV Connect Senior Vice President, Energy and Utilities, Ram Ambatipudi said.

Many are asking what the cost for transportation electrification to be shared by ratepayers, taxpayers and private sector automakers and charging providers will be, but some sector advocates said that is the wrong question.

It's not how much

The right question is whether the benefits of transitioning to zero emissions transportation would outweigh the costs, ZEV advocates said.

The transportation electrification transition can reduce drivers' costs over the long term because owning an electric vehicle and powering it with electricity is less expensive that owning a gasoline-powered vehicle, they said.

For drivers, fuel and maintenance cost savings over an average gasoline-powered vehicle can be as high as $1,600 per year, depending on electricity and gasoline prices, ATE's Jones and SEPA's Fitzgerald estimated.

That is only the beginning, according to Ford's Farley. If technologies allowed and compensation was available, ZEVs could provide grid services to reduce system and owner costs, he said. Ford is marketing the F-150 for its ability to provide home backup power during system outages.

Making the transition to a system that can accommodate transportation electrification comes with costs, stakeholders acknowledged. The options are distribution system upgrade costs, investments in distributed resources to reduce loads, or managed charging to shift loads, venture investor Lawrence said. "None are free, which means this transition could raise the price of electricity." ATE's Jones agreed.

But two features of ZEV charging will eventually allow its expected high loads to "put downward pressure on rates," according to Southern California Edison's 2018 application for the second and territory-wide phase of its charger deployment. First, a larger volume of kWh sales reduces each customer's share of the utility's fixed costs. Second, the ZEV load is flexible, which means price signals can move it away from high-cost peak demand periods.

"The more charging is moved away from peak demand, the less distribution system infrastructure and generation is needed to meet peak, which lowers the cost to serve," said SCE Director of Resource and Environmental Planning and Strategy Erica Bowman.

But building utilities' capability to manage charging has costs which could increase rates in the near term, she and others acknowledged.

Affordability is becoming a concern for utilities and regulators, Brattle's Sergici said. But "it would be shortsighted for regulators to press the brakes on investment." The Biden administration and automakers are giving "clear signals" that "should give charging companies confidence to invest," she said. But "if one player hesitates, the whole thing could collapse."

State utility commissions have approved $3 billion in utility charger deployments and utilities' role is "absolutely critical," EEI's Schefter said. But ratepayer investments "should be leveraged with other investments."

Though some utilities build and own chargers, utility-private sector partnerships are the "best practice" for deployment, a recent SEPA paper concluded. Exelon is "willing to work with either regulatory model, but it will take time to prove which works best," Exelon's Galambos said.

Beyond cost, effective managed charging will also require more work on rate design, technologies and policy, Strategen Senior Director and Vehicle Grid Integration Council policy consultant Edward Burgess told Utility Dive.

Time of use rates are a blunt tool, ATE's Jones said. "If everybody starts charging at the moment the rate changes, it could create an unexpected demand spike," he said. More advanced, software-based managed charging solutions can stagger charging, but that is more expensive, and "the best approach has not yet been determined," Jones added.

Rate design to manage larger fleet and medium- and heavy-duty ZEV loads is different because businesses already manage electricity costs through TOU rates, Jones said. But utilities are testing strategies for transitional Demand Charge relief "by increasing per-kWh charges and lowering demand charges" until the charging provider's usage reaches levels where demand charges are cost-effective.

Bet your life on ZEV

The many uncertainties are putting the transportation sector "through a transformation and there is anxiety about the new world," Audi of America Director, Government Affairs and Sustainability Spencer Reeder said. "But we will evolve."

Automakers' commitments have put the pressure on policymakers and regulators to prepare the power system "to handle the demand and load," Michigan Commissioner Phillips acknowledged.

General Motors "has bet its life on zero emissions, and if we guessed wrong, we are bankrupt and the government will not bail us out this time," GM Technical Fellow for Automated and Electric Vehicle Commercialization and Industrialization Rob Kleinbaum told a Sept. 21 Energy Thought Summit 2021 webinar. "It is a brand new world" and "we are learning as we go."

Article top image credit: Adeline Kon/Utility Dive

Electric vehicles (EVs) could finish 2021 as 5% of new car sales in the U.S., according to market observers, and are expected to make up a growing share in the years to come. Driven by city and state electrification goals, and now supported by federal infrastructure dollars, the years ahead will be a critical time for utilities working to drive beneficial electrification.

To get an idea of the challenges American cities will face with the rising numbers of EVs, Utility Dive is taking an in-depth look at how electric utilities in six cities are helping boost electric transportation adoption, through charging infrastructure and helping to support vehicle uptake.

Experts say EV adoption is poised to surge in the United States, potentially fueled by federal purchase credits now being debated on Capitol Hill. The proposal included in the Build Back Better legislation would knock up to $12,500  off the sticker price of a new electric car or truck, depending on where and how it is produced. Used EV buyers could get up to $4,000 back.

If lawmakers pass those credits, "you'll see an immediate leap forward in demand for EVs," Joel Levin, executive director of Plug in America, said.

President Joe Biden wants half of all new passenger vehicle sales in the United States to be EVs by 2030. That's achievable, transportation experts say, but will require development of new supply chains, along with public charging infrastructure to support an equitable transition.

Are cities ready for the transition? Not yet, say experts. But some are heading that way, while others will face difficulties.

"It is kind of a real estate problem, because basically wherever you put in charging you're taking a parking space," said Levin. "As cities get denser, that becomes more of a challenge — New York City being the extreme example, where real estate is really at a premium."

The Big Apple ranks 4th among U.S. cities in electric vehicle adoption, according to a Sept. 16 report from the New York Times, but lags on public charging infrastructure. The city's utility, Consolidated Edison, launched a program in 2020 that aims to help install thousands of charging ports by 2030.

Los Angeles has the most EVs on its roads and is widely considered a leader on EV infrastructure, though city leaders acknowledge there is much work to be done. EVs make up about 12% of new car sales in California, and "L.A. is probably above that," said Levin.

Other major cities of varying size are also looking to electrify transportation. In Denver, Xcel is helping the city with its goal to reach 30% EV adoption by 2030. Eversource is helping Boston put an EV charger in every neighborhood by 2023.

In Miami, where 40% of the state's EVs are registered, Florida Power & Light is looking beyond the city's urban center and is installing chargers along the turnpike. Seattle City Council has a plan to "electrify everything that moves people, goods, or services in and around our city."

"Utilities, obviously, are really a critical piece of this," said Levin.

Los Angeles

The city of Los Angeles has about 4 million people, and has developed a plan calling for 80% of all light-duty passenger vehicle sales to be EVs by 2028.

"We thought we were kind of ahead of the curve when it comes to EV infrastructure," said Yamen Nanne, who has been the electric transportation program supervisor at Los Angeles Department of Water and Power (LADWP) for the past two and a half years.

A state assessment indicated otherwise.

In the past three years, LADWP has helped to increase the number of commercial charging stations in the city by over seven-fold, said Nanne. Los Angeles went from about 2,000 commercial charging stations to over 14,000 commercial charging stations, with about 2,700 of those publicly accessible.

"We've really been happy about what we've been able to accomplish in the last three years," he said.

But in May 2021, the California Energy Commission completed an assessment at the direction of state lawmakers to determine how the state is going to meet EV adoption targets. New non-electric vehicles will stop being available for sale starting in 2035, and as a lead up to that, California wants to get to 7.5 million EVs in the state by 2030.

To accommodate those electric vehicles, the state will need about 1.2 million public and shared chargers, the CEC assessment found. Nanne said Los Angeles has about 10% of the state's vehicles, meaning the city needs about 120,000 commercial chargers by 2030.

"We have a long way to go over over the next eight to nine years to get there," he said.

The biggest challenge, said Nanne, is going to be finding the additional funding to help pay for some of the cost of installing the necessary infrastructure. So far, the city has installed about 15% of chargers available in Los Angeles by utilizing state funds through various market based programs like the Low Carbon Fuel Standard program, he said.

Ultimately, though, LADWP expects the private sector to play a major role. "Because we just simply don't have enough, you know, properties to accommodate 120,000 charging stations," Nanne said.

A second challenge, is scaling up LA's ability to interconnect the charging stations onto its distribution system, which Nanne said will require additional investment. Some of that could come from the federal infrastructure bill signed by President Joe Biden in November.

Another key issue is the utility's workforce, which may need to be expanded in order to complete the necessary grid upgrades. So far, said Nanne, 90-95% of EV-related work has not required power system upgrades. But the system was built in the 60s and 70s, and soon the additional load will become a challenge.

"As we start moving into a lot higher volumes and getting that infrastructure more spread out throughout the city, there are certain areas on our grid ... that are going to have to be upgraded in order to accommodate that additional load," he said.

LADWP is also one of a handful of utilities still using a lower-powered distribution system, Nanne said. While many utilities today run 12 kv or 18 kv systems, the Los Angeles municipal utility runs a 4.8 kv system.

"So that kind of limits us, in being able to host large loads, especially like when it comes to high powered charging stations, fast chargers that have a lot more draw onto the grid," he said. Los Angeles is building out a 34.5 kV system, but it is limited.

"We're going to have to find ways to extend those lines to reach where the EV charging stations are going to go," said Nanne. "So that requires design, buying equipment, and then our workforce installing those circuits either, you know, underground or overhead throughout the city of L.A."

If the task sounds daunting, Los Angeles has a key advantage in its municipally-owned utility. "We're dealing with one authority having jurisdiction," said Nanne.

"So when it comes to permitting ... we're essentially dealing with sister agencies, whether it's the Los Angeles Department of Buildings safety, or Public Works," said Nanne. "We have those relationships that help to make this process hopefully a lot shorter than it would be otherwise, when you have a private utility that has to deal with multiple authorities."

"Cities find it a little bit easier when they have their own municipal utility," said Levin. Los Angeles in particular has a strong commitment to EV adoption because it "has some of the worst air quality in the country," he added.

New York City

Permitting is often discussed as a challenge for EV charging infrastructure, but some utilities say the speed at which permits are processed reflects how committed a city is to electrification. New York City has real estate challenges when it comes to installing chargers, along with ambitious electrification goals, but officials at the city's utility, Consolidated Edison, say that — so far — permitting has been relatively simple.

"A lot of people in other service areas talk about specific permitting difficulties that they have experienced. We've actually seen New York City is really interested in bringing in as many chargers as possible, as is the Westchester municipality," said Raghu Sudhakara, Consolidated Edison's director of demonstration projects.

But he added that the largest city in the United States is only really getting started on electrification. It's "a little early to make vast generalizations yet," he said, regarding the ease of obtaining charging station permits.

New York City's Department of Transportation released a plan in September to install thousands of chargers across the city, and expects 400,000 EVs on its roads by 2030. The plan calls for leveraging government resources to spur private investment, to install 40,000 public Level 2 chargers and 6,000 DC Fast Chargers (DCFC) by 2030.

The city, however, is starting from almost zero.

Through ConEd's PowerReady program, Sudhakara said the utility will give incentives to customers to put in about 20,000 EV chargers by 2025. More than 19,000 will be Level 2 chargers, along with about 500 DCFC chargers. Until the program launched in July 2020, ConEd only had about 2,000 Level 2 chargers and 250 DCFCs on its system in New York City.

And "the vast majority of them are private, they're not publicly accessible," said Sudhakara.

With 8.5 million people living in a dense, urban environment, New York City faces a variety of challenges. "And so it's really complex, to do any sort of major infrastructure work," he said.

ChargePoint has been working with New York City to help electrify its fleet and the city "leads by example," said Anthony Harrison, head of North American utility partnerships at the EV charging company. "They've been on the forefront of electrifying their own fleet, and they've been working very closely with Con Edison."

As for New York's lack of public charging infrastructure, Harrison said the city simply started later than others. While LADWP has had a customer-facing EV program for more than five years, New York launched its own "in the middle of a pandemic," said Harrison.

"Not only was it much later to the game  ... you're trying to promote public charging when nobody's leaving their house. There's gonna be challenges with that," he said.

More than half of New York City and Westchester customers are tenants, as opposed to owning their own home, said Sudhakara. That means public charging will be key to EV adoption, because fewer residents are charging at home in their garage. The city must also provide charging to a large number of taxis and ride share vehicles.

There are signs of progress. In June, electric transportation company Revel opened a charging depot in Brooklyn's Bedford-Stuyvesant neighborhood with 25 publicly accessible DCFC chargers. ConEdison's PowerReady program provided incentives to help make it happen.

"The broader challenges that some of our customers face is the availability of land where there is already sufficient electric capacity to interconnect these chargers," said Sudhakara. 

Supplying electricity to a DCFC hub is similar to providing service to a 300 unit apartment building, he said.

The utility offers a hosting capacity map for electric vehicle charger customers, "so they could see areas of the system where ... we believe there's enough headroom" to power a charging station, Sudhakara said.

The PowerReady program also has "certain preferences built into it through pricing signals" meant to incentivize publicly accessible chargers, stations where the charger is universal, and for chargers "in the vicinity of a disadvantaged community."

"We think these are good price signals," said Sudhakara. "But then you do have a little more of a challenge in finding the right locations, where you're able to serve the public and the market can make a business case for the chargers."

While initial charging rollouts have been smooth so far, Sudhakara said the utility knows it "will likely run into the situation where we'll have more and more upgrades" as the city electrifies.

"The early projects have actually proceeded pretty smoothly on the permitting side, and also on the utility side," Sudhakara said. But as more projects come in, the utility is prepared to pursue larger grid upgrades that could include transformers.

"That's not a trivial undertaking. And that can be up to like 18 months," he said. "There will be cases like that."

The challenges faced by New York City and Los Angeles — the two most populous cities in the United States — will be similar to those in other metropolitan areas, though the scale may differ. Denver, Boston, Miami and Seattle all have ambitious goals (and unique challenges), with innovative utilities working to achieve them.

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Thousands of new electric delivery vehicles will be humming through city and suburban streets, according to announcements made at the Consumer Electronics Show (CES) in Las Vegas in January. FedEx said it reserved priority production for 2,000 BrightDrop vans, adding to the 500 the company ordered from the General Motors subsidiary last year. Walmart wants 5,000.

GM launched BrightDrop one year ago to provide zero-emission commercial vehicles, smart containers and software for fleet and mobile asset management. 

FedEx took delivery of its first five BrightDrop EV600 vans in December 2021 at its facility in Inglewood, California. To keep them running, FedEx installed 500 charging stations across the state. During a press conference at CES, FedEx Express Regional President of the Americas and Executive Vice President Richard Smith said the company is looking to add 20,000 more BrightDrop vehicles, subject to negotiations. FedEx will ultimately need 200,000 electric delivery vehicles, Smith added. 

The shipping giant is also testing the BrightDrop EP1, a motorized rolling cart that drivers can use to make multiple deliveries from one vehicle stop, such as at an office building or apartment house. Following pilot programs in Toronto and New York City, FedEx will expand EP1 testing to 10 markets this year.

Walmart plans to use BrightDrop electric vans for its InHome delivery service, which allows customers to have their goods, including food orders, delivered inside their house and put away or put in the refrigerator by the Walmart delivery person. Walmart CEO Doug McMillon said the retailer is expanding the service to reach 30 million U.S. households by the end of 2022.

In additional EV fleet-related news from CES, General Motors CEO Mary Barra debuted the battery-electric Chevrolet Silverado pickup truck, which will be available as both a consumer and work vehicle. Available to fleet operators in 2023, it will have a 400-mile range. 

Barra also announced that all GM heavy-duty trucks will be available as zero-emission vehicles by 2035. She added that the company is investing $35 billion in electric and autonomous vehicles.

Indigo Technologies, also exhibiting at CES, showed designs for two urban electric vehicles for the rideshare and delivery markets, one that's similar to a minivan and the other like a small SUV. The vehicles feature robotic wheels, active suspension and a low, flat floor. The company is marketing them to fleet operators and gig drivers.

Silicon Valley startup Udelv released a video debuting its autonomous delivery vehicle, which it said can carry up to 2,000 pounds and make 80 stops per delivery cycle. Intel subsidiary Mobileye provides self-driving technology to the vehicle. Udelv said it has amassed more than 1,000 reservations, including a contract with the U.S. Air Force for a pilot program at Edwards Air Force Base in California.

Swedish electric truck manufacturer Volta Trucks is taking pre-orders for its electric 16-ton Volta Zero, which it markets for city-center freight delivery. The company announced that its vehicles will integrate HERE Technologies' navigation services, which include route planning, precise geolocation and battery range prediction.

Stellantis, the company formed by the merger of Fiat Chrysler Automobiles and the PSA Groupe (Peugeot), announced Amazon as its first commercial customer for the battery-electric Ram ProMaster van, with deliveries beginning in 2023. Stellantis said the vehicle was designed with input from Amazon to include "unique last-mile delivery features." Amazon said it will put thousands of the zero-emission vehicles on the road in the U.S. every year. 

Article top image credit: Courtesy of General Motors/BrightDrop

Education, community engagement and adaptation will be key to bring cleaner mobility choices to low income neighborhoods and communities of color as the country makes the transition to electric vehicles (EV), experts said during an online webinar hosted by global consulting services company ICF. 

Low income neighborhoods and communities of color are more affected by transport-generated air pollution and have fewer resources to pay for new EVs, according to ICF Senior Director of Transportation Electrification and ICF Climate Center Stacy Noblet. Power utility companies, aided by cities, transportation providers, and non-governmental organizations, can assist in providing access to electric transportation in those underserved communities, panelists said. 

"It's important to think about how different segments are going to engage with electrification," said Garrett Fitzgerald, principal of electrification at the Smart Electric Power Alliance. 

Most car buyers do not purchase factory-new vehicles, Fitzgerald said, and low income buyers are the least likely to do so. That means that although auto manufacturers are producing more EVs, it will be some years before they reach a large majority of car owners.

"We really have to expand the purview of what electrification means, beyond just light-duty, personally owned vehicles, but to include public transportation, school buses, ride-hailing [transportation network companies], electric bicycles, [and] the second-hand market," Fitzgerald said. 

Lower income households rely on school buses, for instance, more than higher income families, and nearly 95% of school buses are diesel powered, according to Matt Stanberry, managing director of Highland Electric Transportation. Air quality within these vehicles can also be up to 12 times dirtier than ambient air quality, leading to asthma and other childhood health issues, said Stanberry. 

Just a few years ago, there was little interest in electric school buses, Stanberry said. But now, he said school districts are looking to electrify their fleets. "That’s a sea change," he said. 

While it’s important to replace older and more polluting vehicles, transportation equity legal counsel for the Greenlining Institute, Román Partida-López asked: “Are we actually deploying community-led solutions?” 

Partida-López urged setting equity goals as part of any electrification plan, which should include engagement with the community and a willingness on the part of cities and transit agencies to learn, adapt, and adjust their programs as needed.

Exelon joined with Lyft in Baltimore, for example, to provide 100 electric ride-share vehicles in a pilot program to serve low and middle income communities. "We believe that partnering with our customers and our communities is key to understanding what their needs are and how we can help in this transition," said Denise Galambos, vice president of utility oversight at utility company Exelon. 

"The benefits of any program cannot be fully realized if people within the communities aren't aware of them," said Noblet. 

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There are potentially more than $200 billion in electric transportation investments contained in President Joe Biden's jobs and infrastructure plans, including purchase incentives that could immediately accelerate the United States' electrification plans, according to electrification advocates watching negotiations in Congress.

The EV-related proposals include more than $100 billion in tax credits that could knock up to $12,500 off the sticker price of a new electric car or truck, depending on where and how it is produced. Used electric vehicle (EV) buyers could get up to $4,000 back.

If lawmakers pass those credits, "you'll see an immediate leap forward in demand for EVs," Joel Levin, executive director of Plug in America, said. But whether they pass remains an "open question," he said.

The level of investment in EVs and charging infrastructure now being debated on Capitol Hill is sufficient to create a tipping point for EV adoption and a major leap forward in reducing emissions from the transportation sector, experts say.

The big question now is whether politics — and potentially labor disputes — get in the way. Provisions to provide additional benefits to domestic and unionized automakers have drawn criticism both domestically and internationally.

The infrastructure bill also includes $13.6 billion for school bus funding and other electrification, according to Ben Prochazka, executive director of the Electrification Coalition. The bulk of the purchase incentives and other EV-related provisions are in the Build Back Better (BBB) budget package.

According to Atlas Public Policy, a policy and data firm, BBB includes more than $106 billion for tax credits, and another $122 billion for dedicated and potential funding including to help replace fleets, install charging equipment and make investments to reduce emissions in disadvantaged communities.

Prochazka called it "a good first step."

Credits can help US catch up 

"The rest of the world has prioritized transportation electrification," Prochazka said, pointing to news that in Norway more than three-quarters of car sales are now electric. "It's clear that we're running to catch the rest, and we can, and I think we will. But it's going to take some real leaning in, to do so."

Globally, China remains the largest EV market and more than 10% of new sales there are electric. Experts say the United States could hit 5% sales in 2021.

While the level of spending is still being debated in Congress, EV advocates appear confident. However, Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have indicated a reluctance to support higher levels of spending.

"There have been a number of things in this bill that people are fighting about, and [Manchin and Sinema] don't like, and they've been kind of going back and forth and a bunch of stuff. But not these credits. The credits seem to have a lot of support," said Levin.

Prochazka was also cautiously optimistic.

"It does seem like Congress and the administration are starting to coalesce around a set of things that feel like they are going to happen," Prochazka said. "But anything can change. ... Right now we continue to believe [they] are going to prioritize transportation electrification as part of the bipartisan infrastructure bill and reconciliation."

The electrification measures also support the Biden administration's focus in environmental justice, and attempts to make EVs accessible to all income levels. According to analysis from non-profit group Climate Nexus, the combined infrastructure and BBB package will provide support for charging in marginalized communities along with the purchase credits.

The measures create an EV charging equity program to direct $1 billion to increase EV charging in underserved communities, and provide $7.5 billion in state grants for charging in low and moderate income communities. And $5 billion in grants and rebates would help replace heavy duty trucks with electric versions, while also supporting charging infrastructure.

The bills being debated include a 10-year extension of automaker purchase credits as well as the 30C Alternative Fuel Infrastructure Tax Credit, said Katherine Stainken, senior director of EV policy at the Electrification Coalition. That's "fantastic, and sufficient" to incentivize purchases and build out the necessary charging stations, she said.

"The long term extension is something to be excited about," said Stainken. "We're looking forward to how that moves the market, because it gives certainty that this is the future of transportation."

There are also credits for commercial vehicles, said Stainken, which will support growth among the medium and heavy duty sector. "That is an area that is really booming right now, with lots of different makes and models coming out."

Labor issues a potential stumbling block 

The structure of the EV purchase credits, which favor domestic production and union labor, have created controversy. The bills being considered provide an additional $4,500 credit for vehicles assembled in union workplaces in the United States. 

Tesla, Volkswagon and Toyota have all opposed the credit structure. South Carolina Gov. Henry McMaster, R, and 10 other Republican governors have urged Congress not to pass tax breaks that would benefit union workplaces over others.

"We are deeply concerned that Congress is considering legislation that gives union labor a competitive advantage over non-union labor in the electric vehicle market," the Republican governors wrote in an Oct. 26 letter to House and Senate leaders. "We cannot support any proposal that creates a discriminatory environment in our states by punishing autoworkers and car companies because the workers in their plants chose not to unionize."

The issue has drawn international concern as well. Canada Trade Minister Mary Ng in an October letter also petitioned lawmakers to “pass legislation that does not discriminate against Canada, your most trusted and reliable partner.”

EV advocates have largely remained neutral on labor issues.

There is "tension" associated with the issue, said Prochazka, but the most vital thing is ensuring an electrified future for the United States. The tax credits are "critical," he said, while also acknowledging "a need to make sure we're prioritizing U.S. manufacturing jobs." 

The additional $4,500 credit is "a big chunk of money," said Levin, noting it gives union automakers "a very significant advantage"

"We've chosen to not really weigh into that particular issue," Levin said. "I recognize that this is a package deal. And there are a lot of different interests that had to come to the table to make this happen."

Article top image credit: CARB Mid Term Report

Much of the national focus around electrification has centered on the transportation sector and the push toward electric vehicles.

But at the local level, a growing number of cities have also increased attention to their building stocks, using electrification strategies that have evolved in scope. 

In the past few years, restricting natural gas hookups in new buildings has been an especially popular strategy throughout California, as well as in other major cities such as Seattle. That tactic is spreading. In November 2021, Eugene, Oregon, moved forward a resolution to mandate electrification in new buildings, which would make it the first city in the state to adopt such a policy.

Recently, some cities have started taking more comprehensive steps to lower emissions, including targeting existing buildings in need of retrofitting. While the aggressiveness of these policies varies, experts say there has been a new level of momentum toward building electrification.

In Denver, local leaders passed an ordinance in November that imposes stringent energy efficiency, renewable energy and building decarbonization requirements across commercial and multifamily buildings, which account for nearly half of the city's greenhouse gas emissions. The new requirements put the onus on buildings larger than 25,000 square feet to achieve 30% energy savings by 2030, a measure leaders expect to reduce building emissions by about 80% by 2040. 

And in Ithaca, New York, local leaders entered into an agreement with Brooklyn-based BlocPower to manage a project electrifying all of the city's buildings, an unprecedented measure in a bid to become carbon-neutral by 2030.

A wave of cities changed their building codes in 2020, a "good first step" that doesn't require much money to be spent and helps build the market for new products, said Mike Henchen, a principal on the carbon-free building team at the Rocky Mountain Institute. But over the past year, there has been a proliferation of strategies beyond just building code changes. 

"I think it's fair to say that in 2021, we've seen a lot of cities trying to take different approaches and find new ways to make progress on this issue," said Henchen.

The focus of decarbonization policies in recent years has been centered on new construction, said Jenna Tatum, director of the Building Electrification Institute, an organization that helps cities transition away from fossil fuels. But that focus began to change over the past year. "This year seems to be the year where more and more momentum is gaining on addressing existing buildings, which is going to be a much more difficult piece to address," said Tatum, who previously worked in the New York City Mayor's Office of Sustainability. 

Trailblazing cities

Ithaca's novel approach, which in part entailed lining up $100 million in private financing to support the transition, excites leaders in the space. But those leaders also acknowledged the difference in scale between Ithaca's 6,000 buildings and the much larger cities tackling the issue.

Observers were impressed by Denver's building performance policy and its implications for existing buildings. Tatum called it the most stringent policy she's seen of any city and "probably gold standard." By comparison, Boston earlier this fall finalized an ordinance stating that buildings 20,000 square feet or larger must achieve net-zero emissions by 2050. 

Importantly, Denver is a fast-growing city with a lot of new residents, noted Sara Baldwin, director of electrification policy at energy and climate policy think tank Energy Innovation.

"Now is such a great opportunity, while we're seeing this growth happen, to set the bar and say 'from here on out, all new growth is going to be with an eye toward decarbonization and net-zero energy buildings,'” Baldwin said. “Otherwise, there is really very little chance that they'll be able to meet citywide goals for greenhouse gas emissions reductions and energy savings.”

Experts expect to continue to see a spectrum of electrification solutions in play for the foreseeable future. “So much of it depends on what is palatable to that local population,” said Amy Bailey, director of sustainability and engagement at the Center for Climate and Energy Solutions (C2ES). For example, “Some cities that have a building energy benchmarking policy are well-positioned to then take that a step further to the building performance standard. So they're already [set up a framework] and this is like the next iteration.”

Cities are still learning a lot from each other, said Henchen, noting that no single city in the world is close to achieving an entirely carbon-free building stock. "Because there's not one proven formula, I think we're seeing a lot of experimentation and trying out different approaches," he said.

Experts are watching a number of cities in the months and year ahead, including New York City, where lawmakers have been working toward banning natural gas hookups for new construction. Meanwhile, at the state level, lawmakers there are considering a more sweeping policy to electrify all new buildings across New York.

Chicago convened a working group in 2021 focused on centering equity considerations in its plans to slash building emissions, as it ultimately aims to power all buildings with renewable energy by 2035. Philadelphia, which owns its gas utility, is also reviewing ways to achieve its goal of carbon neutrality by 2050.

Vexing barriers to wide-scale electrification remain, not the least of which is how to overhaul buildings without worsening the housing affordability crisis that many cities are facing.

A study looking at the potential impact of building decarbonization on affordable housing in Los Angeles, published by planning and advisory firm Arup in September stated: "If not addressed in tandem, the goals of affordable housing preservation and decarbonization will be in conflict." The study recommended that financial subsidies promoting decarbonization ought to target affordable housing that is owned and operated by small owners, nonprofits and others that do not usually have equitable access to capital.  

"These are the projects least likely to transition on their own and create the greatest opportunity to provide social benefit and broad market transformation," the report stated.

While Tatum is enthusiastic about the continued push for building decarbonization, she noted that, to date, the majority of policies enacted have focused on large buildings. Most cities have yet to fully tackle how to expand these types of changes to the significant portions of their building stocks comprised of smaller buildings. 

"We're going to need a whole policy regime to address smaller buildings, and that has started in some places but there's a lot of work that needs to happen in that space,” Tatum said.

Article top image credit: PeterPhoto via Getty Images

President Joe Biden's goal for half of all new passenger vehicle sales in the United States to be electric vehicles by 2030 is achievable, transportation experts say, but it will require industry and government to develop supply chains for raw materials and grow investment in charging infrastructure.

"Anything is feasible if the plan is designed well enough and there is follow through, but there are many hurdles," said Lewis Black, CEO of Almonty Industries, an international raw materials development company focused on tungsten, which has uses in electric vehicles (EVs) and other electrocnics.

Biden in August 2021 signed an executive order outlining the target, with the support of major U.S. automakers and the United Auto Workers union. Tesla, the largest EV manufacturer in the world in 2020, was not invited to the event at the White House, due to its labor policies, leading some industry watchers to worry about the politics of clean transportation and the ability to meet the goal.

Tesla absence a 'glaring omission' 

Tesla was not invited to the White House announcement, which caught many in the EV industry by surprise, as the company sold more emissions-free vehicles in 2020 than any other and has pioneered the industry globally and in the United States.

"Yeah, seems odd that Tesla wasn’t invited," CEO Elon Musk said in a tweet. The White House later confirmed Tesla was not invited because the event focused on unionized automakers.

Black called Tesla's absence "a glaring omission" and said the focus on unionized EV manufacturers leads to "fears this becomes overly politicized."

But experts say the snub is unlikely to have a real impact on the growth of U.S. EVs, particularly as the infrastructure bill Congress is now considering contains $7.5 billion for charging infrastructure and other provisions aimed at the industry generally. That's a small fraction of Biden's initial $174 billion EV ask, which also included $100 billion for purchase incentives that have since been cut from the infrastructure bill, but experts say it appears momentum is building and investment in the sector is rising.

House Democrats press for more EV charging investment 

"I think any dollars of the magnitude we’re talking in the infrastructure bill, even if those were to be reduced along the way — and they have — any level of investment beyond what we’ve seen to date is going to have a real impact," said Stacy Noblet, senior director of transportation electrification and the ICF Climate Center at consulting firm ICF.

There is some enthusiasm for increasing the EV funding in the version of the infrastructure bill being considered in the Senate. On Aug. 9, more than two dozen House Democrats expressed their support for a much larger charging investment.

"By making an $85 billion investment in zero-emission charging infrastructure that will last decades, we can employ tens of thousands of Americans, all while supporting the massive adoption of clean transportation options," the lawmakers, led by Michigan Rep. Debbie Dingell, said in a letter to House Speaker Nancy Peolsi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y. 

The United States badly lags China when it comes to electric vehicle infrastructure, and more investment is needed broadly, said Andrew Dillon, innovation fellow of the energy and utilities practice at consulting firm West Monroe. But he also said the $7.5 billion included in the infrastructure bill is "ample."

"There's a feeling that this is the direction everybody is heading," Dillon said. "There is confidence in the vehicle technology, the economics are lining up, and large research firms are saying EVs will be at cost parity or lower in the next five years" relative to internal combustion engine vehicles.

According to the White House, the 2030 target is "calibrated to provide time for existing manufacturing facilities to upgrade without stranding assets," and those upgrades that will be undertaken as part of a jobs and infrastructure plan will "lean into a path that expands domestic U.S. manufacturing with union workers."

In a joint statement, automakers  General Motors Co., Ford Motor Co. and Stellantis NV, the parent company of Chrysler, announced their "shared aspiration" to reach the 50% goal.

"Our recent product, technology, and investment announcements highlight our collective commitment to be leaders in the U.S. transition to electric vehicles," the companies said. "This represents a dramatic shift from the U.S. market today that can be achieved only with the timely deployment of the full suite of electrification policies" the Biden administration proposed in its Build Back Better plan, including purchase incentives, a more robust charging network, R&D investments, and incentives to expand the U.S. EV manufacturing and supply chains.

The White House announcement "sends a strong message," Dillon said. But he also warned that the U.S. will need to address supply-chain constraints to support the manufacturing of EVs, the batteries they require, and charging infrastructure.

"It's unfortunately a perfect storm," Dillon said, as global supply chains shut down due to COVID-19 at the same time interest in vehicle electrification is growing.

Resolving supply-chain issues is key to EV uptake 

The global pandemic caused industries around the globe to slow, including those that produce materials and parts the EV industry needs. "All industries are suffering, and so the EV industry wanting to accelerate now ... puts an additional challenge on manufacturers," Dillon said.

But this is likely "just a temporary bottleneck," he added, and markets "tend to catch up quickly."

Just returning raw material supply chains to their pre-pandemic levels will not be sufficient, warned Almonty's Black. He sees a growing focus on lofty goals but not the back-end work needed to achieve them.

"There is in no way, shape or form, the availability of the raw materials to produce these vehicles," he said. "The conversation has moved away from the fragility of supply chains, and now, politically, everyone is just sort of headed for the much more glamorous end of these proclamations," Black said.

With investors now clamoring for greater environmental, social and corporate governance (ESG) disclosure, there is growing pressure to source raw materials from areas without human rights or labor violations, said Black.

The level of ESG performance now being asked for "is not available in China," he warned, where many battery materials are mined. "It's a Catch-22. There is demand by politicians to move to the green side, but companies have to conform to standards that are going to add significant amounts of time to put together supply chains."

Are utilities up to the task? 

Currently, Black said, EV sales in the United States are around 3% of passenger vehicle sales, so reaching the Biden administration's 50% goal is "an enormous lift." Policies can offer vehicle subsidies, tax incentives and cheap electricity to boost EV adoption, he added, "but you still have to address the problem, can your electric grid actually keep up?"

A significant increase in EVs is "a real pull on a grid," said Black, noting recent reliability issues in states including California and Texas. "What happens when you start plugging in hundreds of thousands of vehicles, and potentially millions?"

"The good news is, there has been a lot of progress made by utilities," said Noblet. "There is a wealth of information utilities have about what this adoption might look like on the distribution grids."

Kellen Schefter, Edison Electric Institute's director of electric transportation, said in an email that Biden's 50% goal is "ambitious, but achievable." EEI represents investor-owned utilities, and Schefter said they are already investing $3 billion in customer programs to deploy charging infrastructure.

"The increased electricity demand from electric transportation [expected] between now and 2030 is well within the capability of electric companies to accommodate," Schefter said, with a combination of managed charging strategies and smart infrastructure upgrades.

Article top image credit: Win McNamee/Getty Images via Getty Images

The electrification of transportation, heating and other end uses necessary for the United States to meet its decarbonization goals will require the country to double its electricity load by 2050, panelists said at a Federal Energy Regulatory Commission technical conference in May. With that additional load will come opportunities, responsibilities and challenges, they said.

The panelists frequently acknowledged the need to consider issues of equity, affordability and environmental justice throughout the energy transition. "If we don't address those issues, what are we doing? We're not accomplishing anything," said FERC Chairman Richard Glick.

They also raised cybersecurity concerns. It will be a constant battle to secure the grid, said Carlos Casablanca, managing director of distribution planning and analysis at American Electric Power Service Corp. But he added that AEP "does not believe that these risks are brought upon by electrification efforts alone, as these risks already exist in our industry and we actively manage them."

With the United States now aiming to eliminate economywide carbon emissions within 30 years, federal regulators announced the technical conference as a chance to initiate a dialogue "on how to prepare for an increasingly electrified future."

FERC must send 'consistent market signals' 

Commissioners also took the opportunity to voice some of their own concerns.

Commissioner Neil Chatterjee acknowledged that FERC is "not really in the driver's seat on electrification," but the commission has to understand how it will impact the wholesale markets it does oversee. State and federal policymakers are unleashing new electricity demand, and "we must make sure at every turn we send clear and consistent signals to the industry and investment community," he said.

"Mixed signals will delay the development at a time when we should be looking toward the grid of the future," Chatterjee said. But he added that reliability and the creation of efficiency through competition must remain FERC's focus.

Commissioner Allison Clements said she is focused on ensuring customer benefits do not get lost in the cracks between different regulatory jurisdictions. She wants regulators to consider "how we should think about costs and benefits of new investment across the systems," she said, from transmission development to utility meters. 

"Our regulatory structures don't easily provide for optimization of benefits that all of those investments bring and the related savings for customers," said Clements. "Without that optimization, customers are left in less than optimal positions."

Utility loads could double by 2050 

Just how much electricity load will increase between now and 2050 is uncertain, but many estimates indicate doubling is possible.

Jeff Dennis, managing director and general counsel of Advanced Energy Economy, pointed to a Brattle Group study which found that New England loads were likely to double across that time.  

"Electrification will result in significant increases in electricity demand and the generation capacity needed to meet that demand," Dennis said, though "the pace of electrification and amount of energy required for building heating and other uses may vary by region."

Washington will need to "roughly double its electricity supplies," said Glenn Blackmon, manager of the Energy Policy Office in that state's Department of Commerce.

"Our hope is to draw those resources from multiple locations and energy sources across the West, capturing the advantages that different areas of our country have in producing electricity from renewable energy," Blackmon said. "This approach will not only minimize costs but also improve the reliability of our electricity portfolio."

The Electrification Futures Study, developed by the National Renewable Energy Laboratory and other research partners, concluded that "meeting electrified loads requires a doubling of generation capacity in all regions by 2050," Ella Zhou, senior modeling engineer at the lab, told the FERC conference.

The study shows that electrification has the potential to change how utilities operate, Zhou said. Most utilities now see peak electricity demand in the summer, for cooling, but that could shift as more heating loads are powered by the grid. "Participation in the planning and operations of the power system is crucial," she said. 

Ensuring equity 

As more energy loads are shifted to electricity, it is "incredibly important" to remember that low-income groups spend a greater portion of their income on energy and have a higher "energy burden," said Rob Chapman, senior vice president of energy delivery and customer solutions at the Electric Power Research Institute.

"Obviously electrification has the opportunity from an air quality and health perspective to help support those communities," Chapman said. "The flip of that is, we have to consciously think about the affordability aspect and realize many disadvantaged communities are not going to have the capital to invest in emerging technologies."

Energy efficiency efforts can help address some the energy burden inequities, Chapman said. And environmental justice efforts must also look at the impact of transit corridors and public transit on disadvantaged communities, he said.

"As we seek to ensure that underserved communities have access to clean energy, we must be intentional and specific in identifying solutions and programs and involve communities in determining their path forward," said Katherine Hamilton, co-chair of the World Economic Forum’s Global Future Council on Clean Electrification.

Hamilton said the solution to "transition these communities that have been harmed by fossil fuels" includes reducing barriers to entry for energy technologies and markets. That could mean making resource interconnections cheaper, allowing aggregation of resources and co-optimization of efficiency efforts, such as installing heat pumps at the same time other upgrades are made.

All of these efforts include "making sure we lower the barriers to entry and make sure cost-effective, cheaper and more resilient solutions are available to customers who normally couldn't afford them," Hamilton said.

Security 

The electrification of demand and the growing interconnectedness of the grid has created new opportunities for disruption by hackers, the panelists acknowledged. But the industry remains confident this is a risk it can manage.

"As more electric systems 'go digital' or some non-electric products become electric, it is expected that the internet of things will only continue to grow, increasing the potential number of points for cyber intrusion," Casablanca said. "Continued cyber security technology development, collaboration, education and investment across all sectors of industry will be required to continuously mitigate this known risk."

But Casablanca also said the industry is already managing the risk daily, so electrification does not change the fundamental issue.

The industry must address cyber risks in a proactive and forward-looking way, said Chapman, because bad actors are only getting more sophisticated.

"I would suggest right now we have very good efforts underway, in terms of managing cybersecurity, but of course the bad actors always seem to be one step ahead of where we are going as an industry," Chapman said. "That risk only increases, from a resiliency and reliability perspective, as we drive more of our consumers to use electricity as an end use fuel of choice."

Article top image credit: Flickr user woodleywonderworks

Updated building codes would save U.S. homes and businesses $138 billion in energy costs over the next three decades, the U.S. Department of Energy (DOE) concluded on July 21. However, electric vehicle advocates see a missed opportunity to advance charging infrastructure with the new rules.

The International Code Council (ICC) finalized building codes in 2020, as part of a process that gets repeated every three years. DOE issued its conclusions on the energy cost savings of the most recent codes in July 2021, and states and municipalities can now adopt the codes. 

The ICC-approved updates to the International Energy Conservation Code (IECC) would improve energy cost savings in residential buildings by more than 8.6%, relative to the previous code, the agency found. Similarly, the updated commercial building codes could result in energy cost savings around 4.3%. 

The DOE determinations “reinforce the point that many states across the country have a real opportunity to cut energy costs and greenhouse gas emissions by strengthening their codes to these newest versions," Nora Wang Esram, senior director for research at the American Council for an Energy-Efficient Economy, said in an email. She added that the agency's assistance on "stretch code provisions, code adoption, and workforce training will be essential for states to achieve the projected savings."

Efficiency advocates say the new codes are a "leap forward," but they had hoped for more. Electrification requirements for new construction, including for electric vehicle charging readiness, were removed from the final version of the codes by ICC's board, though DOE has indicated some kind of code regarding EV charging equipment could come in the future.

The agency plays a "limited but important role" in the development of the building code, according to Daniel Bresette, executive director of the Environmental and Energy Study Institute, providing analysis and putting forth proposals.

"As the code continues to evolve, it's gong to need to keep up with things happening over the next decade," Bresette said. "We're going to start fueling our cars at home, start plugging them in." Building in that capability up front is much more cost effective.

Electric vehicle provisions left out of final vote

ICC members voted to support the new codes in 2019, including electrification proposals that would have required new home construction to include wiring for electric vehicle chargers. That's a "trivial cost," Plug in America Executive Director Joel Levin said, compared with the cost of retrofitting a home with new wiring for a charger.

"In the long run, building codes are a really important topic," Levin said. "It's sort of a wonky topic not too many people pay attention to, but when you think about building out EV infrastructure, building codes really matter."

However, the ICC Board of Directors, which has final say, left out four electrification provisions. In part, because of objections from the National Association of Home Builders (NAHB), which argued that electrification provisions do not have a place in conservation codes.

"We did not feel, nor did the International Code Council Board, that the appealed proposals impacted the 'effective use and conservation of energy' and did not belong in the 2021 IECC," Craig Drumheller, assistant vice president of construction codes and standards at NAHB, said in an email. "We still believe that to be the case."

NAHB says it does support "voluntary electrification efforts that consider consumer acceptance, the existing housing stock and include incentives that offset higher costs in many areas to purchase and operate an all-electric house."

Bresette said he understands the group's argument, "but I think consumption and conservation are related ... people will change the way they consume energy in their homes and the codes will have to accommodate that," whether it ultimately happens through building codes or another venue like electrical codes.

"I don't disagree there are other avenues," he said.

EV provisions in future requirements? 

DOE did hint in its assessment released July 21 that it wants to see electric vehicle charging readiness in new homes. That would mean homes when constructed would be wired to accommodate electric vehicle chargers.

The agency said it plans to "increase technical assistance to support state and local governments in adopting and implementing the latest model energy codes," as well as with "new and emerging opportunities for more advanced codes that go further on energy savings and pollution reduction, and incorporate technologies like electric vehicle charging."

Levin said he is hopeful some requirement will come, and he pointed to the California Green Building Standards Code, which does require EV charging readiness in new home construction. Most states adopt the ICC but some, like California, set more ambitious requirements.

"If we are serious about shifting to EVs, this is something that rolls out over many years and is important to have," Levin said.

The next round of IECC updates will kick off in 2022, to be finalized in 2024.

According to DOE, the codes finalized by ICC in 2020 will result in about $162 in annual savings per residential unit and will help to reduce the "climate change impacts of America’s buildings sector," which currently account for about 35% of all U.S. emissions and 75% of the nation's electricity use.

“More efficient building codes are key ways to eliminate wasted energy, lower Americans’ energy bills, and reduce carbon emissions that contribute to climate change,” Secretary of Energy Jennifer Granholm said in a statement.

President Joe Biden has committed to speeding adoption of electric vehicles as a means to combat climate change, and his American Jobs Plan included $174 billion for EV investments, including chargers and vehicle purchase incentives. A bipartisan infrastructure deal is still being negotiated, AP reported July 26.

Article top image credit: Flickr; National Renewable Energy Lab

As 2021 Super Bowl viewers learned, parts of Europe are well-ahead of the U.S. in electric vehicle adoption.

Energy providers there have developed an array of services to help business customers make the switch to electric, with large utility companies such as E.ON not just installing and maintaining charging stations at businesses and employees' homes but also advising customers on where to locate chargers and use them to manage an EV fleet.

The U.S. EV services market is not as developed by utilities, but as the federal government and major U.S. automakers step up their investment into EVs U.S. power companies like Duke and Pacific Gas & Electric (PG&E) are finding opportunities more enticing and harder to ignore, according to several experts on utilities and mobility strategy. 

These opportunities, focused on services like vehicle procurement and helping customers use EVs as a distributed energy resource in concert with solar and battery storage, go outside the typical utility skill set. But given their close relationships with corporate customers who may be now considering taking their fleets electric, utilities are in a unique position to offer these services, according to Jim Mazurek, a managing director at Accenture who works on strategy for utilities.

So far, "utilities have been taking different pathways to growing EV demand,” he said, such as exploring private ownership of charging stations and conducting EV rate pilots. Several of the largest utility companies recently announced they are working together on a network of charging stations across the South, Midwest and Plains regions.

"Currently there’s a gap in understanding — what is really happening in the EV market itself?” according to Mazurek. "Who can really give me advice on the vehicle itself? Will there be a better version next year? What is the financing model?

In early February, as the news of GM and the Biden administration's individual plans for vehicle electrification was still fresh, Duke Energy announced that it was forming a new subsidiary, eTransEnergy, that will provide fleet services to customers in unregulated markets who want to switch their commercial fleets to electric.

For U.S. utilities, offering EV services like this is "all new," Chris Nelder, a manager with Rocky Mountain Institute's mobility practice, said. But it may not be new for long. "There is going to be a significant amount of this effort going on as we proceed to widescale electrification," he said.
 

Incentives and disincentives

Both carrots and sticks are leading utilities to consider expanding into these markets where they have not ventured before. On the carrot side, the utility has access to information about when and how much a company uses electricity — information that is key to devising a strategy for EVs. "Nobody has more perspective on a customer's energy use than the utility does," Mazurek said. 

On the stick side, with the use of EVs predicted to grow quickly over the next decade and beyond, if utilities do not take advantage of services unlocked by EVs, then others will, according to Greg Bolino, founder of DG Reimagined, a Michigan-based consulting company helping utilities and other companies make the clean energy transition. An EV fleet management program, for example, can incorporate related services as add-ons, like helping customers use battery storage to work in concert with EV charging to save on energy costs. "But if I'm a C&I customer and a major battery company offers me a solution instead… that [scenario] eats at the utility's revenue," Bolino said. "The disincentives are now overt."

Utility customers also have a strong financial incentive to seek help with EV fleet transitions, according to a recent report from RMI. Without expertise guiding a customer through the process, a fleet going electric can become a "series of very costly errors," the report said, such as buying under-sized chargers that then need to be replaced as the fleet moves to larger EVs.

"Major fleet managers in particular do not have all the knowledge and expertise and experience that they really need to electrify their fleets successfully. There is a lot to know. This is not trivial stuff," Nelder said.

Often the first entity the company making the fleet transition has to turn to is the utility. Connecting enough chargers to power a fleet involves a long approval process with the local utility, which may need to build a new substation in order to accommodate the charging capacity, Nelder said.

Because the utility will be working with the company on EV infrastructure anyway, it can make sense to add on more services related to EV fleets so the utility can essentially become a "one-stop shop," according to Mazurek.

But some utilities may find that offering all of these services in-house is impractical. Smaller utilities may find it more cost-effective to contract those services out to specialized companies with which they would otherwise be competing, he said.

One-stop shop

Duke's new subsidiary eTransEnergy seeks to provide commercial and fleets as well as fleets of municipalities and school districts with "one comprehensive source for transitioning their fleets to EVs, from start to finish," according to a statement from Duke. Those efforts include finding specific types of vehicles that fit customer needs, and managing the performance of the fleet to reduce costs. The subsidiary's services will also involve maintaining the "supporting infrastructure" for EVs, including battery back-ups and solar generation sited at commercial customers' facilities.

A goal for the subsidiary is to make fleet electrification less intimidating for customers, according to Greg Fields, managing director for eTransEnergy at Duke. He takes a "depot-centric view," under which a top priority is to make sure the customer has a home base charging depot that is outfitted with the right kind of EV infrastructure for the fleet's needs. Determining exactly when to charge fleet vehicles from the standpoint of keeping electric bills low can be difficult, given the complex web of demand charges and time-of-use rates, so eTransEnergy aims to guide customers on the most cost-effective charging patterns. "Customers don’t want to be utility rate experts," Fields said.

Unlike Duke's investor-owned utility subsidiaries, eTransEnergy is a competitive business, not subject to regulation by state public service commissions. While it will operate in markets that coincide with the service territories of Duke utilities, due to the ties to Duke, eTransEnergy must abide by a code of conduct that differs legally from state to state regarding how it markets to and recruits customers of Duke's utilities, according to Fields.

Services related to C&I fleet electrification are still part of a relatively "untapped" market, according to Mazurek.  Several other utilities have recently expanded the breadth of solutions they sell to C&I and other customers.

PG&E has an "EV Fleet Savings Calculator" that gives customers "a personalized recommendation that includes estimated costs, savings, and rebates or incentives of up to approximately $10,000" to acquire EVs, according to spokeswoman Ari Vanrenen. The utility also has an EV Fleet program for customers with medium-duty, heavy-duty and off-road fleets that assists with identifying the type of charger the customer needs, developing the configuration of the charging stations based on the customer's space and helping with design, installation and financing.

The Northern California utility has several ongoing pilot projects that are exploring how to better utilize EVs as a distributed energy resource, according to the PG&E spokeswoman. A customer pilot with the San Joaquin Regional Transit District is testing how smart charging and battery storage can lower operating costs and maximize efficiencies for the agency, she said.

In another example, Southern Co. utility Georgia Power has a program called "Will It Work," which collects customer data about its fleet operations and uses it to quantify the potential fuel cost savings of switching to EVs. The customer is then referred to EV procurement services offered by the utility.

In the background of all of these efforts is the prospect of the federal government further nudging fleets toward electrification through incentives supported by the Biden administration. Duke's eTransEnergy is trying to get ahead of that possibility. "We see a lot of folks moving toward 100% electrification," Fields said. "We want to be ready and positioned to go after it when it happens."

Article top image credit: Permission granted by Fermata Energy