The low voltage distribution lines and local substations that deliver electricity to homes and businesses are far from sexy but play a critical role in the clean energy transition. But if electric vehicles and building electrification drive electricity demand peaks into uncharted territory, as predicted, system upgrades will be needed. But just how many “and at what cost, has been impossible to assess given a dearth of data,” Meredith Fowlie, a University of California, Berkeley Energy Institute professor, wrote in a June 27 blog.
But new research from Salma Elmallah, Anna Brockway, and Duncan Callaway shines light on the attention needed to be given to the distribution system, Fowler said. The trio examined circuit-level data on load hosting capacity with neighborhood-specific estimates of the load increases for Pacific Gas & Electric from more EVs and electric heaters. They considered each of PG&E’s more than 3,000 feeders to determine the local distribution infrastructure’s ability to absorb electrification-induced load increases. They consider a range of alternatives because of the challenge of predicting when and “where people will charge their EVs, or how fast the residential electrification situation will actually unfold,” Fowlie pointed out.
Billions of dollars of investment will be required to maintain, upgrade and modernize the network–but just how much will depend on how well or poorly the growth in demand is managed.
Fowlie highlights three of the researchers’ key conclusions:
First: EVs drive the pace of distribution system upgrades
California’s targets assume that PG&E territory reaches 3.1 million EVs by 2030 and 12.5 million by 2050. As a point of reference, PG&E’s service territory covers roughly half of California – so as a rough guess, one can double these numbers to get a sense of how many EVs may be on the roads in the state by 2030 and 2050, and the demand they will impose on the network.
Fowlie estimates “between 95 and 260 feeder upgrades per year between now and 2030” will be needed, “about triple the pace of projects that PG&E has planned for through 2025.” Again, one should roughly double the number for California as a whole.
“Upgrade requirements in PG&E territory will add up to approximately $1 billion between now and 2030” and probably close to $5 billion by 2050, Fowlie writes. That, of course, is music to the ears of investor-owned utilities, who like nothing more than adding more to their asset base on which they can earn an allowed rate of return.
Third: Commercial EV charging holds promise
According to Fowlie “dialing up the share of EV charging that happens at commercial locations does not increase distribution grid costs. You can see this by comparing the upgrade numbers across the “standard” scenario – where 67% of EV drivers are assumed to have access to home charging – and the “more commercial” scenario where 50% of drivers have access to at-home charging.”
What can be done to alleviate the impact of these new and growing loads on the distribution network? Will rooftop solar come to the rescue? Could more rooftop solar reduce the need for distribution cost upgrades?
Distributed solar plus storage may “reduce the need for distribution system upgrades,” according to Fowlie.
More importantly, she asks if it makes “sense to invest in distributed batteries to charge our EV batteries? Back-of-the-envelope calculations say no – probably better to bite the system upgrade bullet so that we can plug our EVs into the grid.”
What else can be done? Will Smart EV charging come to the rescue? “The researchers consider a demand response scenario that evenly distributes at-home vehicle charging between the evening hours of 10 pm and 5 am. They find that this kind of coordination reduces upgrade requirements and associated costs. The costs can be further reduced with more targeted demand response programs.
“Remember that distribution system costs are no higher when EV’s plug into commercial circuits during the day (versus residential circuits at night)” according to Fowlie. “A big advantage of daytime charging is that it can be coordinated to soak up solar PV production (and low wholesale prices). Smart coordination of commercial/at-work charging could deliver bigger system-wide cost savings.”
Research by others suggests that, all else being equal, profit-motivated IOUs have perverse incentives to over-invest in upgrades and – if allowed by hapless regulators – prefer sub-optimal charging patterns by EV drivers since this increases the need for network upgrades, which means they will end up with even more assets in their regulated ratebase.
There is a lot at stake and this editor’s view is that the IOUs will get more of what they want if the regulators are not alert and vigilant. Given the asymmetry of resources between the two, the chances are that the former will prevail.
Fowlie, Meredith, “What Will Electrification Cost (the Distribution System)?”, Energy Institute Blog, UC Berkeley, June 27, 2022, https://energyathaas.wordpress.com/2022/06/27/what-will-electrification-cost-the-distribution-system/