DSM Potential Can Grow Alongside PEV Penetration

Utilities are taking note of the rapidly growing adoption rate of plug-in EVs (PEVs) in certain sections of North America. As range anxiety lessens and utility customers work to decrease their emissions from oil & gas, PEV drivers will increasingly rely on the grid to move from point A to point B.

PEV adoption has been uneven across grid operators’ jurisdictions, driving concerns over future locational capacity constraints during peak charging periods. Despite improving technology economics, PEVs might still be considered a luxury good for many residential consumers and thus more prevalent in certain communities. In addition, the loads of commercial and industrial consumers who are looking to electrify their fleets are not often distributed evenly across a utility grid.

To address these challenges, demand side management (DSM) is evolving to allow for better targeted locational dispatch. Technologies such as advanced metering infrastructure and distributed energy resources (DER) management systems provide growing grid visibility, giving grid operators the insights needed to target DSM to areas where PEVs may pose the largest challenge to traditional grid infrastructure.

Three DSM Mechanisms Turn PEVs into Grid Assets

EVs need not be a major pain point for utilities if optimized like other types of DER. Through three DSM mechanisms, behavioral change and automated charging of EVs can convert the technology into a tool for load shifting, renewables integration, and potentially ancillary services support. Tools to maximize the benefits afforded by fleet electrification and broader PEV adoption include:

• Time-of-use (TOU) rates: Economic demand response triggers a change in energy demand directly related to price signals. A recent report notes that utility-driven time-varying rates for EVs have higher rates of enrollment than programs mandated by government bodies or other third parties. By encouraging PEV customers to adopt TOU rates, utilities can incentivize charging during periods of the day when energy prices are at their lowest. In regions where renewable energy changes market economics, TOU rates may result in harnessing daytime solar energy or overnight wind.
• Managed charging programs: Akin to customers of other bring your own device programs, PEV customers may be willing to grant their utility access to charging infrastructure in exchange for a direct monetary or technological incentive. Managed charging programs rely on two-way communication between EV charging equipment and the energy grid. Again, within customer-designated parameters, a utility may be able to pause and initiate charging, shifting energy draw away from periods of peak demand.
• Vehicle-to-grid (V2G) applications: Pilot and pre-pilot programs are testing the capability of PEVs to provide a broader swath of grid services and act as small-scale power plants. Vehicle batteries can help customers engage in rate arbitrage by drawing down low cost power and then dispatching that power either to the facility or the broader grid during higher cost periods of peak demand.

The Need for Stakeholder Education

TOU rates, managed charging, and V2G applications all lay the groundwork for PEVs to play a critical role in future integrated DER programs. However, utilities face a variety of challenges in getting these programs beyond pilot scale, including, in some areas, an unfavorable regulatory landscape. Traditional cost-effectiveness tests may not account for the full range of benefits these programs can provide from wholesale market participation to utility infrastructure relief, standards and compliance assistance, and end-user value. Thus, as steady growth is forecast across global PEV markets, stakeholder education needs to encourage holistic program planning that recognizes PEVs’ ability to support a variety of grid objectives.