White paper
Literature review on power utility best practices regarding electric vehicles
This literature review analyzes current practices of electric power utilities to plan for the increased deployment of electric vehicles. The review summarizes a wide array of projects, initiatives, and examples where electric power utilities are helping to pave the way for the integration of electric vehicles on to the grid for to maximize their potential benefits to utilities, electric vehicle users, and electricity customers more broadly.
Based on the review, the authors conclude with the following findings, along with examples where related utility practices are being implemented –
- With proper planning, electric vehicles’ benefits to utilities outweigh their costs. It is clear that without any planning or preparation, high electric vehicle uptake could put significant stress on the electric power system and increase maintenance costs. However, with proper planning, transportation electrification can result in more efficient and less costly operation of the grid, provide ancillary services, lower electricity prices for ratepayers, and facilitate greater integration of renewable energy resources.
- Rate structures can influence electric vehicle charging behavior and grid impacts. Research has shown that restructuring electricity prices can influence consumer charging behavior and reduce electric vehicle fueling costs. Time-of-use rates, which offer lower electricity prices during off-peak hours, have already been successfully implemented in many jurisdictions, including California, New York, Maryland, and Germany. More complex systems, such as dynamic pricing, offer even greater benefits to consumers and utilities—such programs may also require smart meters and increased consumer involvement. In contrast, inclining-block tiered rates and capacity-based demand charges tend to present additional, but not insurmountable, barriers for electric vehicles.
- Smart charging can unlock the full benefits of electric vehicles. Although electric vehicles are designed for mobility, their energy storage capability is an important asset, especially as wind and solar power become more abundant. Smart charging allows utilities to effectively use this storage capacity to stabilize the grid and lower net costs, creating savings that can be passed on to electric vehicle owners directly and to all consumers through lower rates. One-way smart charging technologies are nearing commercialization (e.g., in California and the Netherlands), and two-way vehicle-to-grid charging is an active area of research that could provide even greater benefits.
- Greater regulatory clarity and standardization is needed. Uncertainty about vehicle-grid integration and electric vehicle infrastructure regulations and standards may discourage utilities from engaging with electric vehicles. Regulations regarding utility ownership of electric vehicle supply equipment (EVSE) vary greatly among jurisdictions. While power companies in areas such as Québec and parts of Europe have been instrumental in building charging networks, distribution operators in countries like the United Kingdom and Germany are not permitted to own such infrastructure, and regulations in many U.S. states remain unclear regarding utility ownership and operation of EVSE. In nearly all markets, confusion over EVSE hardware and software standards has been a barrier to lower equipment costs and the use of smart charging, although programs in the Netherlands and in Germany have made progress in this area.
- Utilities can play a role in advancing the hydrogen economy. The fueling of hydrogen fuel cell electric vehicles is a fast-growing area of research and could present major benefits for utilities and drivers. Power-to-gas programs (e.g., in Germany) enable the use of excess renewable energy to generate hydrogen through electrolysis. Utilities, especially those that supply natural gas, may also have opportunities to invest in hydrogen distribution, storage, and even fueling infrastructure in order to diversify their business and support clean vehicles, although regulations on this subject are still evolving.
