Time-of-use (TOU) pricing might seem like the ultimate solution to ensure electric vehicle charging loads won’t overburden the grid. But will TOU rates guide drivers’ behavior when it’s time to...
Can the grid handle the coming electric vehicle load?
vehicle sales in 2009, and more in some regions. 2 Most notably, HEVs have opened the door for the plug-in hybrid electric vehicle (PHEV)—essentially an HEV with a much larger battery that can be charged with grid electricity for part of the vehicle’s primary energy needs. PHEVs might in turn re-open the potential for pure battery electric vehicles (BEVs), which forego the internal combustion engine altogether and run solely on grid electricity. For the foreseeable future, most PEVs likely will be PHEVs using a mix of electricity and gasoline.
Although the mass-market PEVs aren’t available just yet, many major auto manufacturers are planning to launch them in the next year or two. Chevrolet is introducing the Volt, Toyota will offer a plug-in version of the Prius hybrid, Nissan is launching its all-electric Leaf, and Ford is planning an electric version of the Focus. As a result, the potential for powering vehicles with grid electricity already has captured the attention of the power industry. For example, the ISO/RTO Council, a consortium of 10 North American independent system operators and regional transmission organizations, recently released an assessment of PEVs and how they might integrate with electric systems. 3 Several regional collaborations of electric utilities and other entities have been formed to promote the development of electric transportation infrastructure, including the Regional Electric Vehicle Initiative in New England and the Regional Plug-In Electric Vehicle Planning process in southern California. 4
Despite these developments, any forecast of PEV market penetration is highly speculative at the moment. Expectations for how quickly PEVs will penetrate the market depend on their economics compared to gasoline vehicles (including HEVs), their performance, safety, customer acceptance, and public concern about environmental impacts. Depending on assumptions about how these factors will evolve, market-share projections for PEVs range widely.
PEVs currently face a significant economic hurdle due primarily to the high cost of batteries, even accounting for recent and forecast improvements in battery cost and performance. Although electricity is much less expensive than gasoline per mile travelled, the operating cost savings are modest relative to the incremental initial purchase cost of a PEV. Fueling a 35-mpg gasoline vehicle—which would match the 2016 CAFE standard—with $3/gallon gasoline costs about 8.6¢ per mile, or $1,285 per year. In comparison, a PEV that uses 250 watt-hours per mile at 12¢/kWh, assuming it has sufficient electric range to run entirely on electricity, has fuel costs of about 3¢ per mile, or $450 per year. While this is an operating cost savings of 65 percent, or more than $800 per year, the incremental purchase cost of the PEV likely will be many thousands of dollars. Many PEVs will be plug-in hybrids that still rely on gasoline for part of their energy needs; while their smaller battery reduces the purchase cost premium, it also provides a shorter electric range and correspondingly smaller fuel savings.
The PEV’s fuel savings are smaller when compared to higher-mileage non-plug-in vehicles such as HEVs. Until battery costs decline considerably, or gasoline prices rise dramatically, it’s unlikely that PEVs will offer significant cost advantages over non-electric