California Prepares for Influx of Electric Vehicles

Mar 09, 2011 - California Energy Markets - energycentral.com

While electric vehicles are still a relative rarity in California, efforts are already under way to prepare for a future when a lot more people will be relying on the grid to "fuel up." And a new report published this month by Pike Research indicates that future could be just around the corner.

The report forecasts that California will be the largest market in the United States for light-duty plug-in electric vehicles, or PEVs, which includes plug-in hybrids and all-electric vehicles. It predicts sales in the state will grow from about 14,400 in 2011 to 366,000 by the end of 2017. The state of New York, by comparison, will be the next-biggest market, with projected cumulative PEV sales of about 146,000 at the end of 2017.

Further, three of the top four metropolitan markets for PEV sales will be in California, the report predicts. While the New York City area will see the most sales, according to the report, the Los Angeles area, the San Francisco Bay Area and the San Diego area will be second, third and fourth, respectively.

Dave Hurst, a senior analyst with Pike Research, said a number of factors will fuel PEV market growth in California. To begin with, California is one of the few states to offer an incentive, $5,000, on top of a federal incentive of up to $7,500 in tax credits to offset the higher purchase prices for electric vehicles.

The state also has good PEV availability (Chevrolet and Nissan chose to launch their plug-ins here, and Tesla Motors has headquarters in Palo Alto); a more developed charging infrastructure than in other states; a wealth of green-minded, early adopters; and, perhaps most important, high gasoline prices.

"If you're going to compare the cost of charging a Chevrolet Volt" with the cost of fueling a conventional car, Hurst asserted, "the energy cost would have to be extremely high for that not to be [a] beneficial purchase."

The report also quantifies the maximum potential impact PEVs will have on the grid within the service territories of California's two largest electric utilities, Southern California Edison and Pacific Gas & Electric. In Edison's territory, the report predicts the maximum impact will be 498 MW by 2017, and in PG&E's territory, the maximum is about 466 MW by 2017.

Those maximum figures are "if everyone plugs in at the same time and fully charges," Hurst explained.

While it's certainly doubtful that everyone will charge their vehicle batteries at the same time, even a limited number of PEVs, when concentrated in one area, could strain the grid.

"Over the next decade, electricity demand from PEV charging is unlikely to require new power plant or transmission line capacity," notes a recent planning document published by the California Plug-In Electric Vehicle Collaborative, a coalition of stakeholders that includes utilities, government agencies and private industry.

"But even in small numbers, PEVs could stress local electricity distribution networks. Under certain circumstances, a cluster of PEVs in a particular neighborhood could overload or shorten the life of a local transformer and require equipment upgrades."

The state's investor-owned utilities, as well as the larger municipal utilities, have been engaged in efforts to prepare for an influx of PEVs, often as a component of smart-grid initiatives that include dynamic pricing programs.

"We've set up processes and worked electric vehicles into our load growth and maintenance program so they're not being treated any differently than the rest of our load," said Steven Powell, manager of plug-in electric vehicle readiness at Edison.

Even today, utilities are trying to educate the public that they should charge vehicle batteries during off-peak hours. Many already offer time-of-use rates for electric-vehicle charging that offer savings over standard residential rates.

This month PG&E unveiled a new "electric calculator" on its website that allows new or potential PEV owners to get a sense of how much charging specific vehicles will add to their monthly energy bill, given such factors as when and how often they charge.

By way of example, PG&E offers that a commuter living in Dublin, Calif. who charges off-peak (after 7:00 p.m.) and drives an average of 40 miles per day would see her combined monthly gasoline and electricity expenses decline from $330 with a conventional car (that uses gas costing $3.50/gallon) to $185 driving the all-electric Nissan Leaf. This is assuming the driver had typical monthly electricity usage of 700 kWh in the winter and 800 kWh in the summer and signed up for PG&E's E-9A rate, versus a standard residential rate.

One of the challenges going forward, however, is that customers may not always notify their utility when they've purchased an electric vehicle that will be plugged in at home. This will make it difficult for utilities to monitor PEV penetration and clustering.

"We're working with carmakers to voluntarily tell us when people purchase a car," said Denny Boyles, a PG&E spokesman. "We want to look at impacts to transformers in the neighborhood."

As utilities consider various metering options to accommodate PEVs down the road, including the installation of separate meters and sub-meters, discussions are under way at the CPUC and elsewhere to figure out who should bear the costs of installing the meters-the PEV owner or all ratepayers.

Utilities are also looking at ways to streamline the entire process, from installation of meters and charging stations to ensuring customers are clear on the different rate options.

"In the past it was a long, involved process, and we're trying to make it simpler for customers," Powell said. "It's going to take a combined effort by utilities, automakers, electricians and the cities, because they all play a role."

Because California is slated to see the biggest impacts from PEVs in the near term, it will likely be a proving ground for various policies and programs-the most effective of which will undoubtedly find their way to other states.

The Pike Research report predicts that cumulative sales for PEVs across the U.S. will reach about 1.5 million by 2017.

According recent statistics published by the CEC, California currently has about 1,300 240-volt charge points at 400 locations that were installed a decade ago to serve the first wave of PEVs. The CEC has allocated $15 million, with federal matching stimulus funds of $55.8 million, to fund the installation of 4,000 additional charge points statewide [Leora Broydo Vestel].