27 Feb The Win, Win, Win of Electric Vehicles
Three reasons for utilities to join the EV revolution in 2019
BY JOHN MORRIS, VICE PRESIDENT MARKET DEVELOPMENT, D+R INTERNATIONAL
Turns out that 2018 was a milestone year for electric vehicle (EV) sales in the U.S. According to Inside EVs, six consecutive months claimed a spot on their list of top months for EV sales, with December earning the title of the best month of all time. In fact, 2018 saw 361,307 electric vehicles delivered in the U.S., compared to 199,818 in 2017.
What’s driving the EV revolution? Simply put, EVs deliver three wins that their conventional gas-powered cousins cannot: improving the environment, reducing transportation costs, and increasing grid efficiency and revenue for utilities.
Win: Improving the Environment
According to The Department of Energy’s Office of Energy Efficiency and Renewable Energy, EVs produce fewer emissions that contribute to climate change and smog than conventional vehicles. There are two types of vehicle emissions, direct and well-to-wheel. In conventional vehicles, direct emissions are produced through the tailpipe, evaporation from the vehicle’s fuel system, and during the fueling process. These emissions include air pollutants and greenhouse gases such as carbon dioxide and methane. In contrast, EVs produce zero direct vehicle emissions.
All vehicles produce well-to-wheel emissions, or emissions related to fuel production, processing, distribution, and use. However, well-to-wheel emissions on average are lower for electricity since it is generally a cleaner energy source than gasoline. In fact, according to cleantechnica.com, a conventional vehicle creates more than twice as much carbon pollution as an EV.
Win: Reducing Customer Transportation Costs
On average, the up-front cost of purchasing an EV is higher than that of a conventional vehicle. However, the cost gap quickly closes and EVs become cost-effective when you factor in federal and state EV tax credits and other incentives, lower and more stable fuel prices, and less maintenance costs—no need for an oil change!
According to The Department of Energy’s Office of Energy Efficiency and Renewable Energy, on average, it costs nearly half as much to drive an electric vehicle than one that runs on gasoline. Considering that the average U.S. household spends almost one-fifth of its total family expenses on transportation, EV ownership can have a positive impact on a family’s budget.
Win: Increasing revenue and grid efficiency for utilities
No doubt EVs place an increased load on the grid. While that may sound like a bad thing, it actually creates the opportunity to utilize off-peak load to increase revenue and eliminates the need to increase rates for all customers. Each EV will use around $3,000-$5,000 worth of kWh over its lifetime, so motivating consumers to purchase EVs in the near term can pay off significantly.
In order for utilities to prepare for the EV revolution, they will have to align their business strategies to market developments. How will you manage EV load? What grid upgrades will be needed to keep up with projected demand? How will the EV revolution impact rate structures? When will your investments pay off?
At D+R International, we can help utilities uncover the data and resources needed to make sound decisions. In collaboration with utilities and industry partners, D+R developed DRIVE EV Market Services, a holistic solution that helps utilities build partnerships, spot trends, quantify market opportunities, and align business strategies with the EV revolution based on the most current and actionable data.