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Smart Pricing, Smart Charging

Can time-of-use rates drive the behavior of electric vehicle owners?

Fortnightly Magazine - October 2011

dynamic pricing rate structures in which the price signals are event-based.

4. A recent study by PJM and Better Place has suggested that wholesale electricity prices could even increase with TOU rates for PEVs. This further highlights the need to study and understand this issue in more detail. Better Place, Inc. and PJM, “An Assessment of the Price Impacts of Electric Vehicles on the PJM Market,” May 2011.

5. For example, the Chevy Volt is expected to be available in all 50 states . The Nissan LEAF is now commercially available in the U.S. as well.

6. This is presented in an optimistic scenario by the Electric Power Research Institute (EPRI). See Duvall, M., E. Knipping,  Environmental Assessment of Plug-In Hybrid Electric Vehicles. Volume 1: Nationwide Greenhouse Gas Emissions , Report No. 1015325,Electric Power Research Institute, 2007.

7. See, for example, the U.S Department of Energy’s website describing the benefits of PEVs .

8. Note that we are referring to the ability of PEV charging to mitigate conditions where renewable generation is in over-supply. More advanced means would be needed for PEVs to contribute to ramping issues associated with renewables integration ( e.g. by providing ancillary services).

9. Assuming the generation of electricity to charge the PEV’s battery results in lower emissions than burning gasoline, which is usually the case. For further discussion, see Dean Murphy, Marc Chupka, Onur Aydin, and Judy Chang, “ Plugging In: Can the Grid Handle the Coming Electric Vehicle Load? ” Public Utilities Fortnightly , June 2010.

10. This phenomenon has been observed with hybrid vehicles. See Kahn, Matthew E. and Vaughn, Ryan K. (2009) “Green Market Geography: The Spatial Clustering of Hybrid Vehicles and LEED Registered Buildings,”  The B.E. Journal of Economic Analysis & Policy : Vol. 9: Iss. 2 (Contributions), Article 2. Also see, Ed May and Stephen Johnson, “ Top 10 EV Challenges ,” Public Utilities Fortnightly , June 2011.

11. Nissan capitalizes LEAF because it’s an acronym for Leading, Environmentally friendly, Affordable, Family car.

12. We choose the LEAF because it, along with the Chevrolet Volt, is one of the first two PEVs to be produced by a major automobile manufacturer. The LEAF went on sale in four Western states—California, Washington, Oregon, Arizona—as well as Tennessee in December 2010. Because the LEAF necessarily requires charging to operate (the Volt may use an onboard gasoline generator/engine to maintain operation when the battery becomes depleted) it was a natural choice for our analysis.

13. The Nissan Leaf’s specifications are provided here.

14. Assuming each owner charges for four hours, and that a majority of customers plug in their vehicles around 6 pm. For discussion of alternative charging profiles, see Dean Murphy, Marc Chupka, Onur Aydin, and Judy Chang, “ Plugging In: Can the Grid Handle the Coming Electric Vehicle Load? ” Public Utilities Fortnightly , June 2010.

15. While a full charge would take slightly over 7 hours, it’s assumed that customers aren’t entirely depleting their charge before plugging in.

16. 3.3 kW x 4 hrs/charge x 25 charges/ month x 21 cents/kWh = $69