The impact of EV charging on the grid: business models and consumer behaviors

Image by A. Krebs from Pixabay

By Philip T. Krein, University of Illinois at Urbana-Champaign and Zhejiang University, China

An intriguing aspect of electric vehicle (EV) charging is how it will change business models for vehicle energy. In this article, aspects of charging practices and impacts are discussed, in the context of consumer-driven electric vehicles. Practices will be different for vehicle fleets, delivery driving, and large vehicles, and those issues are left to other discussions.

According to the National Association of Convenience Stores, in 2017 there were approximately 150,000 retail fueling stations in the United States. Nearly all consumer fuel is delivered through these. In the transition to EVs, the filling-station model begins to break down. Although station-based, fast-charge points are important, battery wear and tear from fast charging is substantial, and energy delivered at megawatt scales probably will require premium pricing.

Practical EV charging is much different. The experience so far suggests that consumers seek convenience. Thus, access at home, at work, or in community environments enters the picture. There is still a need for fast-charging points to support distance driving, but a substantial portion of energy is likely to be delivered in a distributed fashion. Data from the Federal Highway Administration surveys suggest that only 2.5% of household driving trips exceed twice the average of 29.2 miles per day. The average is not especially useful (a car that does not meet consumer needs will not be accepted in the market), but the data suggest that about 90% of EV energy could be delivered through low-power charge points. Anecdotally, EV owners do not like a filling-station model, seeking convenience. This suggests that only about 10% of consumer EV energy will come from fast-charge stations.

Consumer vehicles are parked most of the time. A filling-station model does not leverage this. A parked EV has the potential to be a connected car—a battery pack engaged with the power grid with opportunities for charge coordination, interactive intelligence, and dynamic energy management. A connected car offers flexibility on how and when energy is delivered. It is interesting that bidirectional energy flow does not alter the basic issues—a “charge-only” system offers timing flexibility and coordination. Parked-car coordination implies business models for service aggregators. For example, a downtown parking garage containing many charge points could offer frequency regulation and other services to the grid.

This discussion implies four major business connections for future EV charging:

  1. Fast-charging stations. These would deliver only about 10% of the total EV energy if convenient, low-power charge points become widely available. A highway scenario might have five vehicles simultaneously seeking about 100 kWh each in 10 minutes, a rate of 3 MW. Energy costs would need to be high enough to recover initial costs.
  2. Service aggregators. A parking facility operator able to manage a substantial number of low-power charge points could coordinate charging and provide grid services to offset costs.
  3. Home and work charging.
  4. Community charging. A store, restaurant, or hotel could offer free charging to customers, or a city could use free charge access to attract customers to retail districts.

A store that offers conventional 120-V outlets to customers would be delivering a typical level of roughly 1.5 kWh per hour of connection. At a restaurant, a two-hour charge would entail only 36 cents’ worth of energy at the national average rate of 12 cents per kWh, so infrastructure costs and installation dominate the economics. At home or work, 30 miles of driving at a rough usage level of 4 miles/kWh requires an energy input of 7.5 kWh per day—at a cost of under $1 per day.

Fast-charging stations involve high power, and coordination with grid operators and the distribution grid infrastructure will be essential. Initial costs will probably be high, so low risk would require well-funded investors. When there are relatively few fast-charge points (as today), vehicle manufacturers could be an investment source, but this is probably not sustainable. The service-aggregator model is interesting in dense urban areas. A downtown parking provider could add outlet infrastructure and install vehicle-to-infrastructure (V2I) devices that interact with individual cars. In the Chicago loop, for instance, monthly garage rates approach $400 per vehicle. Energy costs would add about $10 per month to this, but the aggregator has access to grid service markets.

In a home environment, simple time-of-day rate structures can be quite powerful. Modern EVs have programmable chargers, and low, overnight rates can encourage a driver to set, for example, a 2-5 a.m. window. At work, the same concept could encourage charging when solar power is abundant. With more flexible programming, a grid operator could offer a special EV rate with low overnight energy prices, low solar-linked prices, and high prices in the late afternoon and early evening. A motivated customer would save on energy with proper programming. These rate structures could function with little or no communication between vehicle and grid (V2G), or with basic information such as “I am connected,” “I will be needing x kilowatt-hours,” and “I am full.”

In the case of community charging, some businesses might make charging a loss-leader service. A cost-sensitive business owner could use a controlled outlet, activated either when a customer is confirmed or when a small fee is paid. In businesses such as hotels, the effort to install conventional outlets adjacent to a building and within reach of vehicles is likely to be modest.

A more sophisticated EV interface could support active demand response and take advantage of V2G exchange. In a typical scenario, a vehicle connects (either directly or through an aggregator), the EV charger reports the connection, reports the amount of energy to be purchased, indicates a power limit at the location, and provides a target time for completion of energy delivery. The grid operator has full flexibility on charge rate and timing, subject to delivering the requested energy by the specified deadline. Within the constraints, the grid operator could even carry out fast-charge modulation for regulation services. A vehicle connection becomes a direct source of services, at least until the battery is full. For the consumer, a reasonable energy discount might be sufficient as an incentive to enable demand response control—provided the customer experiences delivery of the requested energy by the required time.


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Effective V2G programs with demand response need accurate, tamper-proof, onboard EV energy metering in order to supplement state-of-charge and battery-health monitors. Chargers need to include active safety management, ground fault protection, and handshaking—and they need to implement EV supply equipment requirements. There must be communications capability. When charging from unintelligent outlets, the charger might need to throttle back current in order to avoid overloads. The vehicle software must securely track usage and interface for billing and external control.

Today, the Department of Energy reports that there are about 44,000 EV charging points in the United States. The above discussion—except for fast-charging stations—implies that conventional electrical outlets should be able to deliver about 90% of consumer vehicle energy. Expansion of conventional outlets for parked vehicles is a different proposition than installation of relatively expensive EV charge points. The economic tradeoffs between fast chargers and conventional outlets will continue to develop, since fast chargers are important for supporting long-distance driving. Even as the number of fast-charge points continues to grow, ready availability of convenience outlets for EV charging is essential for widespread adoption.


About the author:

A research leader in the fields of power electronics and motor drives, Philip T. Krein’s transformative contributions to energy conversion have broadly impacted electric and hybrid vehicle technologies. Krein began working on improving battery management for electric vehicles at a time when few believed this was a technical necessity. He developed a battery-equalization technique using switched capacitor circuits that helped reduce the size and cost of battery-management systems. His method extends the lifetime and efficiency of energy-storage systems, which are critical to the success of today’s electric and hybrid vehicles. His contributions to vehicle-systems optimization include high-fidelity dynamic models of vehicle systems and their interactions, linking fuel cells, batteries, ultracapacitors, and motor drives.

An IEEE Fellow, Krein is Director of the Grainger Center for Electric Machinery and Electromechanics at the University of Illinois at Urbana-Champaign and a Distinguished Professor at Zhejiang University, Hangzhou, China. He was awarded the 2021 IEEE Transportation Technologies Award for contributions to electric vehicle battery management and hybrid system optimization.

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