Can the grid handle a mass switch to Electric Vehicles? California’s Policy Plan to Integrate 5 million EVs by 2030

This past January, Governor Jerry Brown of California signed executive order B-48-18 announcing a program to put 5 million Electric Vehicles (EVs) on the state’s roads by 2030. This lofty goal will require several key developments in the electricity sector, including installation of distributed charging stations which will be funded by $2.5 billion from the state’s carbon cap & trade program, as well as increasing the capacity of grid infrastructure to handle additional EV charging. 

On September 6, 2018, the California Energy Commission announced that it will update its Vehicle-Grid Integration (VGI) Roadmap to ensure it is on track to carry out the executive order. Passed by the California legislature in August of 2018, Assembly bill No. 2127 mandates that the Energy Commission, along with the State Air Resources Board and the Public Utilities Commission, “prepare a statewide assessment of the electric vehicle charging infrastructure needed” to meet the goals set forth in Governor Brown’s Executive Order, and to amend this assessment every two years.

Although the Governor’s goals are optimistic, they are not necessarily unrealistic. In 2017 there were almost 200,000 EVs sold in the US, with Tesla in the lead at 27,060 Model S’s and over 21,000 Model X SUV’s sold. This was a 45% increase in EV sales from the previous year, and a recent survey by AAA indicates that 20% of Americans want their next car to be fully electric. The meteoric rise of EV sales is expected to continue, with some experts suggesting they will account for over 30% of US light-duty vehicle sales by 2030. While these projections bode well for greenhouse gas reductions, they also indicate increasing electricity needs: only 3.29 Mega-watt hours were needed to charge EVs in 2017, whereas 78.74 will likely be necessary by 2030.  

While these projections bode well for greenhouse gas reductions, they also indicate increasing electricity needs: only 3.29 Mega-watt hours were needed to charge EVs in 2017, whereas 78.74 will likely be necessary by 2030.”

Utilities must add capacity and make improvements to current power infrastructure, since adding one light-duty EV to a neighborhood block will be roughly equivalent to adding a small house. This will include installing new transformers that can handle higher voltage, adding new generators, and potentially bringing new power plants online. However, some utilities are encouraging the use of EVs, so much so that agencies such as the Los Angeles Department of Water and Power are handing out hundreds of dollars in rebates to EV owners that charge their vehicles late at night. This is because EV chargers have timers that can be set to run overnight when power demands are very low, so power plants are still producing energy and making money while not adding demand to their peak load time. The ability to keep plants open at these lower rates saves utilities money in the long run. It will be important to ensure that EVs are equipped with timers and to update grid infrastructure, especially at the local level, so that the addition of EV charging does not overload the system or add to peak demand.

Some utilities are also exploring the use of EV batteries as a source of distributed generation to make the grid more resilient overall. The large batteries that power EVs in place of internal combustion engines could act as backup storage for excess electricity during low demand times and feed that energy back into the grid at high demand times. This especially makes sense in conjunction with the electricity “duck curve” that is a product of solar energy. More energy is produced around noon to 3 PM when the sun is shining brightly, but peak demand occurs in the early evening around 5 or 6. Since EVs are often plugged in during the middle of the day while people are at work, their batteries could absorb excess solar energy and feed it back into the grid during peak demand. 

The federal government has assessed the benefits of EV to the electricity sector and now subsidizes the industry at $2,500 to $7,500 per vehicle purchased. The tax credit amount varies with the size and battery capacity of the EV. For any Tesla model, the purchaser will receive a full credit of $7,500. Many state governments have chosen to provide additional subsidies for EV purchases, such as Colorado offering $5,000 for the purchase of any EV or Maryland offering an amount up to $3,000 based off of $100 per kWh of battery capacity. Many economists predict that as the technology improves and EVs become more affordable and mainstream, subsidization will no longer be necessary and by 2030, “EV demand will be driven by market forces, not regulation.”

 Vehicle emissions currently account for about 23% of total greenhouse gas emissions in the US, so a mass switch to EV would contribute significantly to climate change abatement. California is currently forging the policy path for EV integration, and other states should take note as sales continue to increase in the coming years.