PJM/Better Place study finds unmanaged charging of 1M electric cars could add $750M in annual wholesale energy costs; need for CNO-managed smart charging
Simply plugging in one million electric cars (unmanaged or ad hoc charging) could add $750 million in annual wholesale energy costs unless smart charging is adopted, according to a joint study conducted by PJM Interconnection and Better Place, released by Better Place. PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.
Consumers who choose to leverage time-of-use (TOU) pricing can see some price relief—less than 10% annually—but the wholesale energy business would still feel the impact of ad hoc charging. Conversely, smart charging one million electric cars via a central network operator can cut in half the increase in wholesale energy costs compared to ad hoc charging or time-of-use pricing while reducing driving costs by one-fifth.
The joint study conducted by PJM and Better Place analyzed the impact of one million electric cars on the MidAtlantic States’ grid. The study considered a distribution of 1 million EVs in the Washington-Baltimore Metropolitan Area and modeled the impact of charging the EV batteries in three scenarios: unmanaged charging; consumer-price-incentivized charging; and managed charging via a Central Network Operator (CNO).
The greater Washington – Baltimore area was selected for modelling because it already experiences transmission congestion issues and is a targeted area for electric vehicle adoption.
The PJM/Better Place team developed a consumer transportation model to predict hourly energy requirements of EVs and generate load inputs for PJM’s nodal pricing market model. PJM ran market model simulations based on the outputs of the energy demand model for each of the three scenarios in five different weeks of the year.
Major findings include:
The CNO-managed charging algorithm charges batteries based on a number of criteria: a) energy needed for next planned trip; b) time until energy is known or predicted to be needed; c) current battery state-of-charge; d) time of day; e) forecasted LMPs (Locational Marginal Prices); and f) real-time LMPs. For CNO-managed charging of 1 million EVs using real-time LMPs, the report found that PJM would save $350 million annually on cost increases due to the added load of EVs, compared to the unmanaged charging scenario&mash;a 45% reduction in additional energy costs that would otherwise be incurred from ad hoc charging of EVs by consumers.
The scenario with time of use (TOU) pricing reflects a distributed intelligence platform with a fixed pricing schedule that does not have a CNO. The two-tier pricing scenario, modeled on the pilot EV tariff developed by Southern California Edison (SCE) for EV charging, provided no significant benefit, according to the model. Compared to the unmanaged charging scenario, there was an additional cost of $32 million (4%) annually.
The analysis was carried out using Better Place’s network models and experience as a CNO. However, the results of this study are intended to be extensible to any CNO that provides managed EV charging.
For the study, the authors distributed EVs by census tract by Median Household Income (MHI), the proxy for affluence, according to the US Census 2000. They assumed EV penetration to be constant in regions with MHIs exceeding $75k. To define EV penetration outside of such high MHI regions, they used an arbitrarily defined parabolic cutoff.
Because of the ad hoc nature and unpredictability of when each electric car would be plugged in, the extra $750 million in annual costs would be borne unequally by market participants and consumers. With smart charging, a central network operator is able to leverage dynamic wholesale energy prices to optimize the entire fleet’s charging at the lowest possible cost and impact to the grid and the consumer. Our customers and utility partners around the world stand to benefit from smart charging.—Hugh McDermott, Vice President of Utility and Smart Grid Alliances for Better Place
Smart charging is possible when there’s real-time coordination through a centrally dispatched grid, which will facilitate prioritization and varying charging rates. Flexible load benefits of EV charging are captured more easily by RTO, ISO and Utility operations through integration more directly into existing operations and practices.—Chantal Hendrzak, PJM’s General Manager Applied Solutions
The goal of the study was to demonstrate the value of the “EV Network Operator (Aggregator)” that manages EV charging and the impact on the wholesale energy market, production costs and ancillary services. The results of the study have been shared with the PJM TOA-AC (Transmission Owners Agreement Administrative Committee).
Stephen J. Schneider et al. (2011) An Assessment of the Price Impacts of Electric Vehicles on the PJM Market