The emergence of plug-in electric vehicles into the automotive marketplace is a significant business opportunity for electric utility companies.
In 2012, approximately 50,000 plug-in electric vehicles were sold in the United States, and the market is expected to grow by more than 50% in 2013. When primarily charged at home, these vehicles will, for many families, become the single largest power consumer of any device connected at a residence.
For utilities, plug-in electric vehicles represent a significant opportunity to increase revenue as well as to establish new forms of interaction with consumers.
Plug-in electric vehicles have unique profiles for power consumption, and will be sold in much greater concentrations in urban and suburban areas, which will magnify their impact on power distribution equipment. Understanding how the daily patterns for electric vehicle charging will impact utilities’ equipment, as well as the tools available to incentivize EV owners to charge during off-peak hours, will help utilities better prepare for their arrival.
Many observers have suggested that variable rate plans specific to plug-in electric vehicle owners could be a lucrative business model for utilities. According to a new report from Pike Research, data suggests that such plans may have little impact because the difference in price to the consumer may not justify the effort and risk associated with creating a new rate program for electric vehicle drivers.
The growth of the plug-in electric vehicle market brings a complex set of other challenges, as well, according to the report. Peak demand will spike if and when clusters of electric vehicles plug in at the same time. If their batteries are depleted, plug-in hybrid vehicle owners are likely to charge regardless of peak pricing because in most areas, electricity as a fuel will always be cheaper than gasoline.
The vehicles also create a need for utilities to engage with a new set of previously unfamiliar stakeholders, including carmakers, dealers, fleet managers and passionate EV owner groups. Most importantly, plug-in electric vehicles create a set of unknowns about electricity consumption and infrastructure impacts for utilities, in addition to a temptation to respond to anticipated problems that do not necessarily pose actual risks to the grid or to a utility’s business process.
The report, “Best Practices for Utilities to Prepare for Electric Vehicles”, includes recommendations based on data collected thus far on PEV power consumption, and highlights the lessons learned from many of the leading utilities that have been involved in providing electricity for vehicle charging. Based on these findings, the brief provides best practice recommendations to enhance customer service in engaging with consumers. Also included are guidelines for interacting with regional EV groups, PEV dealers, and local officials, to enable utilities to create a positive experience for PEV owners while receiving the maximum benefit from this new revenue source.
