As electric vehicles continue to rise in popularity, one group of stakeholders could (and should) take advantage of the EV momentum—utilities.
As Michael Shepherd, chairman of energy research and advisory firm E Source, points out, America spends equal amounts of electricity and gasoline—about $400 billion each. With the ascent of the electric vehicle and descent of the gas powered car, utilities have an opportunity to increase their revenues by $100 billion per year while consumers save the other $300 billion.
This isn’t the only advantage that utilities should be capitalizing on—EVs typically charge during off-peak hours, and this helps lower rates for utility customers. But it doesn’t end there, either. EVs have the potential to help utilities stabilize the grid as it deals with the fluctuations that come from using intermittent renewables. By charging EV’s when there are more renewables coming on the grid, and essentially storing that energy for later use, electric vehicles can help our energy grid more efficiently integrate the use of clean renewable energy. Capturing that value could make EVs even more competitive against gas powered cars, leading to advantages both on the grid and on the road.
Hopefully, utilities will realize how good this opportunity is before it disappears. Consumers Energy, here in Michigan, appears to be paying attention. In its most recent filing with the Michigan Public Service Commission, it is proposing to support the development of more than 800 new EV charging stations across its service territory, with the stated goal of “helping promote the widespread availability of charging stations and to facilitate the growing EV market.”
This is a great opportunity for Michigan. But we do need to make sure such initiatives are designed appropriately, ensuring that EV infrastructure is developed strategically and that costs are reasonable for both the EV owners and other ratepayers who are paying for it.
As we reported last month, the “EV revolution” looks to be coming in 2022, but it may depend on whether utilities like Consumers Energy are successful in helping build the infrastructure that is needed to help promote the EV market, especially where manufacturers and other entities currently aren’t. Hopefully, utilities will continue to engage as critical stakeholders in enabling the $400 b. Opportunity.