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Electricity is Expensive. Drivers Shouldn’t Pay For It

Electricity is Expensive. Drivers Shouldn’t Pay For It

Friday, 29 July, 2022 - 09:30

With the rush to electric vehicle adoption, charging networks are being rolled out across countries, government-backing is growing and automakers are promising a host of green cars. Yet, even if all this happens, it’s worth wondering how power grids will handle the demand for all this electricity.


Given the increasing prevalence of power outages globally, I’m not so sure they can. Electricity consumption just from EVs is expected to grow over 25%(1) . Even if charging networks are laid out, the wiring under highways would hardly be enough. Talk to EV drivers who have attempted road trips and they’ll moan about the anxiety associated with finding charging stations. There will need to be more of these as adoption grows, and connecting grids will become even more crucial.


China, the world’s largest market for EVs, may have a solution. Even with high adoption, controlled charging is becoming a necessity to curb the impact on distribution transformers, according to one study. But that also requires an upgrade of grid software, hardware and the way businesses run. Another recent report found if 60% of gasoline vehicles were replaced and charging was largely unmanaged, then national peak loads would rise by over 8%. If managed, however, that would be 2.6%. As a power crisis bites, that difference is significant.


It’s a bit of a chicken-and-egg problem: The infrastructure available will determine drivers’ charging behavior, but grids need to understand demand to come up with strategies. Increasingly, companies are realizing it won’t necessarily be like gas stations, where consumers fill up on the go. It may be overnight at home, during the day at the office, as well as last-minute. Either way, grids must cope and do better. Power distribution will need to expand and be reconfigured, while secondary substations, including transformers, will need to be upgraded — a behemoth task.


There are some (at least part) solutions to help ease the pressure, and many are being put to work in small measures. One is better batteries that take cars further. Still, those remain expensive and at some point, will need to be charged. Large-scale energy storage is also becoming a bigger part of the energy equation as it helps balance out peak demand. China is investing to increase this over this decade to 100 gigawatts. In the US, too, industrial-sized battery use is on the rise in states like California and Maine, with Tesla Megapacks.


A more long-term fix is vehicle-to-grid technology. While traditional power systems were made to go one way — grid to home or business (or EV), this goes the other way around and allows EVs to be part of the power storage solution. But like most huge technology and behavioral shifts that require vast amounts of investment, regulatory support is required to create the right incentives.


China is now working to commercialize this, while putting in place policies to bolster the process. Last year, China’s Standardization Administration said its national standards would be aligned with EV charging needs. Earlier this year, the Ministry of Science and Technology released draft guidelines for energy storage and smart grid technology that focused on key issues, including large-scale AC-DC hybrid power grids and energy efficiency enhancement for different types of consumers. Alongside this, billions of dollars are being put to work to upgrade the country’s power grids.


The way China conquered battery development and became home to the world’s largest, and arguably the most sophisticated, commercial powerpacks, shows its approach to EV energy storage problems works. The path to connecting grids will be similar. It’ll have to be a coordinated effort that will need a lot of subsidies and regulatory support. Put simply, ad-hoc moves to upgrade distribution and transmission are unlikely to power EVs. That’s a lesson for Europe and the US — otherwise, their consumers will be paying even higher prices for power.


Bloomberg


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