Clearing the air: How EVs are poised to benefit the grid

Bidirectional charging is increasingly popular in new electric vehicle (EV) models. Now featured in at least 21 models available in the United States, it stands to benefit a growing number of consumers. According to Ford, the Intelligent Backup Power system in the F-150 Lightning can power a home for 3–10 days in a power outage. Or EV owners could simply use their vehicles to power their homes during a spike in electricity prices to save money. In a future scenario where most grid customers own EVs, what benefits can we expect?

The what: Overall generation capacity

There’s no question that as EVs become more popular, there will be more energy demand on the grid. But that demand is far less than most people think. California has the highest number of EVs on the road per capita in the United States—3,026 per 100,000 residents—and EVs currently account for less than 1% of the grid’s total load during peak hours. Furthermore, the California Energy Commission projects that EVs will account for less than 5% of that load even when the state’s EV fleet grows to more than 5 million by 2030.

Consumer Reports estimated that if all light-duty vehicles in the United States are EVs in 2050, meeting the additional demand would only require about a 1% annual increase in electricity generation. That’s below the historical 3.2% average annual increase over the last 70 years in the United States, but a reversal of trends in load growth in the last 20 years, as electricity demand plateaued thanks to improvements in efficiency (e.g., replacing incandescent lightbulbs with LED bulbs). Proposed new clean energy projects can serve the expected demand but are stalled due to bottlenecks in interconnection and electricity transmission line capacity; this, in turn, limits how much electricity can be carried from the generation source to local communities. Thankfully, technology like advanced reconductoring can restring existing transmission lines with state-of-the-art advanced conductors that could quadruple transmission capacity by 2035 and do so at substantial cost savings to utility customers.

In May 2024, the Federal Energy Regulatory Commission adopted requirements that transmission providers conduct long-term planning and make investments in meeting future electricity transmission needs. The Biden administration announced more than $30 billion in federal grid investments to expand the grid and regulatory reforms that would allow for expedited environmental reviews and streamlined permitting of qualified transmission line projects. The administration set a goal to upgrade 100,000 miles of transmission lines with modern grid technologies.

The when: EVs and peak load

The grid is built to support peak load demand to avoid outages. There are two types of load peaks. The gross load peak refers to the total gross electricity demand at the highest level of the day and the net load peak refers to the net electricity demand at its highest level when accounting for renewable power generation.

In California, the gross load peak typically occurs in the late afternoon and early evening. The net load peak occurs during the gross load peak as solar generation tapers off around sunset. Because most vehicles are parked for most of each day, EVs can help balance grid supply and demand. Specifically, the overnight hours when EVs aren’t often being driven is typically a good time to charge because this is also when demand, and the cost to supply electricity, is lowest. To incentivize EV drivers to charge off-peak, many utilities offer time-of-use electricity rates that are lower overnight. This can reduce rates for all utility customers because EVs on time-of-use rates generate more revenue for electric utilities than they do costs. New research estimated that EV drivers in New Jersey and Virginia contributed $85.3 million and $18.1 million more, respectively, to utilities than their associated costs.

The how: Smart grids and managed charging

A smart grid that can optimize and supplement available energy sources with managed charging (i.e., demand response) and vehicle-to-grid technology can help reduce grid stress, avoid unnecessary grid investments, and reduce electricity costs for all ratepayers. Managed charging is done with consumer consent and can allow utilities to remotely adjust the amount of power going to an EV while it charges; this can keep energy demand below the threshold of the grid’s infrastructure to avoid outages and still ensure that the vehicle receives a full charge by the morning. Vehicle-to-grid technology, meanwhile, allows EVs that are plugged in to supply energy back into the grid at times of high demand, to minimize the risk of outages. Integrating these solutions into the grid will require investments in smart meters to monitor real-time energy needs and optimize energy distribution accordingly. Tracking energy demand will also allow for proactive planning about where to make grid upgrades, as EV adoption will proceed at different rates. The Biden administration’s Federal-State Modern Grid Deployment Initiative includes commitments from more than 20 states to collaborate with the federal government to accelerate deployment of modern grid technologies like smart meters to ensure that the grid reliably supports vehicle electrification and other future energy demands.

Analyses from the California Public Utility Commission and Kevala, a grid data analytics company, estimated that the costs to upgrade the state’s distribution grid to support an increasing number of EVs could range from $15–$50 billion, depending on consumer participation in managed charging programs. Given this big range, it’s important that current and future EV owners are informed about demand response programs and time-of-use rates that their utilities offer, and that utilities simplify and automate how they implement these programs.