ThisworkwassupportedbytheDOEOfficeofInternationalAffairsunderLawrenceBerkeleyNationalLaboratoryContractNo.DE-AC02-05CH11231andNationalRenewableEnergyLaboratoryContractNo.DE-AC36-08GO28308.

Vehicle-Grid Integration A global overview of opportunities and issues

Authors:

Nihan Karali and Anand R. Gopal

Energy Analysis and Environmental Impacts Division Lawrence Berkeley National Laboratory International Energy Studies Group

Darlene Steward, Elizabeth Connelly, and Cabell Hodge

National Renewable Energy Laboratory Transportation and Hydrogen Systems Center

June 2017

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Disclaimer

This document was prepared as an account of work sponsored by the United States Government. While this document is believed to contain correct information, neither the United States Government nor any agency thereof, nor The Regents of the University of California, nor any of their employees, makes any warranty, express or implied, or assumes any legal responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by its trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof, or The Regents of the University of California. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof, or The Regents of the University of California. Ernest Orlando Lawrence Berkeley National Laboratory is an equal opportunity employer.

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Contents Introduction ................................................................................................................................... 4Survey ........................................................................................................................................... 4Impacts on Transmission, Distribution, and Facility Systems ....................................................... 7Transmission Grids and Integration of Renewable Generation .................................................... 7Distribution Grid Impacts and Peak Demand .............................................................................. 10Vehicle-to-Grid ............................................................................................................................ 17Exporting Power to Emergency Equipment ................................................................................ 18

Business Case for PEV Charging Stations .......................................................................... 19Utility Rates and Regulation ................................................................................................ 24Rates with Lower Demand Charges .................................................................................... 24Time-of-Use Rates .............................................................................................................. 26

Consumer Economics ............................................................................................................. 30Automaker Economics ............................................................................................................ 32EVSE Controls and Networks ................................................................................................. 33

Network Communication, Coordination, and Compatibility ................................................. 34EVSE Cyber Security Issues ............................................................................................... 34Environmental Impacts of Fuel Sources on PEVs ............................................................... 36

Summary and Conclusions ......................................................................................................... 38References ................................................................................................................................. 41Appendix A: Electric Vehicle Initiative Grid Integration Survey ................................................... 48

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Table of Figures Figure 1. Vehicle-grid integration survey results ........................................................................... 5Figure 2. Vehicle-grid integration survey respondents ................................................................. 6Figure 3. Elaad Netherlands EV landscape ................................................................................. 7Figure 4. California Transportation Electrification Assessment “duck chart” ................................ 8Figure 6. Distribution system upgrades driven by PEV charging in the Los Angeles area ......... 12Figure 7. Planning for PEVs on a highly renewable campus ...................................................... 15Figure 8. Policy initiatives to support development of PEV charging infrastructure in Europe ... 20Figure 9. Average installation cost for publicly accessible level-2 EVSE, by EV project ............ 21Figure 10. Rate of return varying utilization rates for a single level-2 charging station .............. 22Figure 11. Rate of return varying prices for a single level-2 charging station ............................. 23Figure 12. National EV purchase subsidies ................................................................................ 24Figure 13. Monthly electric bill of Xcel Energy under the secondary-general and secondary-general low-load tariffs ................................................................................................................ 25Figure 14. Fuel cost for diesel, CNG, and electric buses with medium and high demand charges .................................................................................................................................................... 26Figure 15. Weekday residential charging availability and charging demand in San Diego ........ 28Figure 16. Regional monetized and societal benefits in California ............................................ 29Figure 17. Social benefits of electric vehicles in 2035 corresponding to scenarios of differing market penetration levels; results of the NEVA study ................................................................. 32Figure 18. Schematic illustration of smart grid physical layers and communication and control systems ....................................................................................................................................... 35Figure 19. Diagnostic security module framework ...................................................................... 36Figure 20. Life-cycle emissions in a sample of different countries ............................................. 38

Table of Tables Table 1. Life-cycle impacts of fuel and vehicle cycles ................................................................ 37Table 2. Electricity generation sources in a sample of different countries .................................. 37

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Vehicle-Grid Integration: A Global Overview of Opportunities and Issues

Introduction There has been minimal linkage between the transportation and electric power sectors until recently. However, increasing adoption of plug-in electric vehicles (PEVs) could result in strong linkages and interdependencies between these two critical sectors. Large-scale electrification of transport, which many believe is essential to significantly reduce global greenhouse gas emissions, could substantially disrupt the traditional business models of automakers, power utilities, and oil companies. PEVs offer significant benefits and challenges for the electricity grid. In this report, Lawrence Berkeley National Laboratory (LBNL) and the National Renewable Energy Laboratory (NREL) review the analytical questions and approaches of researchers from around the world who study vehicle-grid integration (VGI). This report was commissioned by the U.S. Department of Energy (U.S. DOE) as a product of the Electric Vehicle Initiative (EVI) and was prepared with input from member country representatives and researchers. This report’s objective is to synthesize global research findings on VGI and provide policy makers a concise summary of the state of the science and critical issues that may require their intervention. The report topics were determined according to priorities emphasized in the responses from researchers around the world to an LBNL/NREL survey. In addition to summarizing the state of research and key findings on priority topics, the report identifies modeling tools of value to policy makers and highlights policy issues that need to be solved to eliminate grid-related barriers to large-scale electrification of transport.

Survey NREL and LBNL developed a survey for partners in the Clean Energy Ministerial, EVI, and other researchers around the world. The survey asked respondents to prioritize various topics related to VGI based on several factors, including the level of difficulty the issues present to the electric power system, the amount of additional research needed, and, to a lesser extent, a sense of each issue’s subjective importance. Appendix A contains the survey, and Figure 1 summarizes the survey results.

Average Priority

Topic Survey Question Number

9 Long term PEV deployment effects on distribution grids 2

9 Business models for utilities to install or support PEV chargers 8

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8.5 PEV and EVSE [electric vehicle supply equipment] demand-side management, charging controls, and balancing charging times to avoid peak demands

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8.5 Grid storage and load-shifting from PEVs 16

8 EVSE network communication, coordination, and compatibility 12

8 Interactions between renewable energy generation and PEV charging activities

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8 Impact of demand charges (expensive charges based on maximum power demanded by an electricity customer) on EVSE charging costs and adoption

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8 Effects of time-of-use rates on PEV charging costs and adoption (whether favorable electricity rates for PEVs drive adoption)

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8 Cyber security issues with EVSE 11

8 Regulation of private utilities or management of public utilities and the relationship to PEV policies

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7.5 How PEV charging affects facility - distribution grid integration, including phase balance

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7 How vehicle-to-grid and exporting power from PEVs for ancillary services can add value to the electric grid

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7 EV deployment or adoption incentives 14

7 How vehicle-to-grid and exporting power from PEVs impacts vehicle and battery life

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6 Environmental impacts of fuel sources on PEV emissions 10

5 Long-term PEV deployment effects on transmission grids 1

Figure 1. Vehicle-grid integration survey results Twenty-four representatives from 10 countries and the International Energy Agency responded to the survey. Figure 2 is a map of the distribution of respondents by country. Canada submitted eight responses, the U.S. and China submitted three responses each, and the remaining countries shown submitted one or two each. Questions and existing research from these respondents were combined with information from an external literature review to address the PEV grid integration issues discussed in this report.

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Figure 2. Vehicle-grid integration survey respondents This report prioritizes the issues from the survey. The NREL - LBNL team will prepare separate briefs on some of the highest-priority items. Survey responses identified certain topics as low and high priority for research, but priority does not necessarily correspond to a topic’s overall importance. That is, for some topics that have been more thoroughly researched than others, the priority for further investigation is low. For instance, the survey question related to the environmental impacts of fuel source on PEV emissions was given relatively low priority compared to the other topics. Respondents noted that although environmental impacts are a concern, the topic is fairly well-understood. Long-term PEV deployment effects on transmission grids were also considered low priority, but the effects on distribution grids were considered high priority. One respondent noted that short-term risks for distribution grids are greater than those for the transmission grid. Our research team considered the relative importance of the questions but noted that every question was prioritized somewhere between a five and a nine on the median scale. In addition to rating the issues listed in Figure 1, respondents were given the opportunity to identify other important VGI issues. Topics identified included:

● EV charging infrastructure incentives and deployment on the building and city scale ● Coordination of energy providers, for example related to “roaming” ● Cost-benefit analysis of new EV-related technologies (e.g., wireless charging,

autonomous vehicles, smart charging, and vehicle-to-grid [V2G] technologies)

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● Optimal charging profiles

Impacts on Transmission, Distribution, and Facility Systems Broadly speaking, VGI research looks at how PEVs can alleviate or exacerbate stresses on the power grid. Our survey attempted to break issues down into discrete components; for example, question 1 focused on distribution grid impacts, question 2 on the transmission grid, question 3 on facility constraints, and other questions addressed grid storage, demand-side management, utility pricing, V2G, and renewable energy generation. However, all of these issues are as inter-related as the power grid itself. The Elaad Netherlands EV-Landscape Diagram in Figure 3 depicts the interaction of all of these factors along with infrastructure, data, markets, consumer choice, and controls related to the grid.

Figure 3. Elaad Netherlands EV landscape Source: Elaad, 2017.

Transmission Grids and Integration of Renewable Generation The most striking distinction of the survey results was the scoring of distribution grid impacts as the highest priority (Question 2) and transmission grid impacts as the lowest priority (Question 1). This could be a result of the potential distribution grid constraints from high levels of local PEV penetration or a result of the fact that extensive research regarding transmission grid impacts has already been performed. Overall, questions related to grids scored highly, particularly the interactions between renewable energy generation and PEV charging activities

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(Question 15); the high priority given to this topic could relate to distributed generation that would impact the distribution grid or centralized generation that would impact the transmission grid. In either case, California and Norway have each explored how PEV penetration could impact their transmission grids. Both have relatively high levels of renewable generation and of PEV penetration. California anticipates confronting a number of issues related to accommodating high solar penetration in coming years.

Figure 4. California Transportation Electrification Assessment “duck chart” Source: Energy and Environmental Economics, Inc. 2014.

The California Transportation Electrification Assessment (Energy and Environmental Economics, Inc., 2014) cites five flexibility challenges related to their anticipated grid, four of which are displayed in Figure 4. Challenge 1 in the figure is associated with increased solar generation in the morning when flexible resources need to either ramp generation down or ramp load up. Challenge 2 is that during mid-day fossil generation will need to operate at minimum levels, and Challenge 3 is the need to be able to rapidly increase generation later in the day as the system peak coincides with solar resources moving off line. Challenge 4 is described as needing sufficient resources to meet peak loads with a margin. Finally, Challenge 5 is flexible resources being able to provide existing and new ancillary services such as frequency regulation, flexi-ramp, and load-following. PEVs could address all of these challenges. They can charge during times of high solar generation and curtail charging when the system is particularly constrained around 6PM. They can provide V2G services to assist with peak loads and flexible resources (Challenges 4 and 5). As for consumers, providing renewable-integration services or V2G can be beneficial to PEV owners if the value of the service is properly remunerated.

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Combining electric vehicles with renewable energy could significantly reduce the transportation system’s carbon intensity. PEVs can also address the intermittency-of-supply obstacle to high penetration of renewable generation resources. Apart from addressing the widely discussed issue of intermittency related to wind and solar resources, PEVs can also charge and store power from hydroelectric power during off-peak hours, which could also reduce system emissions and improve system economics. In Shanghai, it is estimated that managed EV charging could significantly reduce coal consumption and avoid 4.5 million tons of carbon dioxide (Natural Resources Defense Council, 2016). Norway has the highest penetration of PEVs in the world: a 23% market share of passenger sales in 2015 (IEA Global EV Outlook, 2016). The Nordic region also has a high penetration of wind and other renewables (Renewables 2016, Global Status Report). With these factors in mind, SINTEF Energy Research in Norway and the Center for Electric Power and Energy in Denmark explored the transmission grid impacts of 100% PEV penetration of the passenger fleet in the Nordic region by 2050 (Graabak et al., 2016). The researchers found that this level of penetration could increase electricity demand by 7.5%. They also found that spot-based pricing and smart charging would move the vast majority

Figure 5. Potential daily PEV charging loads in Demark Source: Graabak et al., 2016.

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of charging on most days to the hours between 1AM and 5AM. Figure 5 shows potential daily PEV charging loads in Denmark, taken from Graabak et al. (2016).

Gopal et al. (2015) examined the cost of grid integration of battery electric vehicles (BEVs) in India along with renewable energy penetration. Results showed that BEV smart charging lowers the cost of grid integration by 2% (for 15% BEV penetration). The study also indicated that promotion and deployment of BEVs will help (rather than hurt) expansion of renewables in the Indian power sector. Weiller and Sioshansi (2016) found that, at the scale of individual households, PEVs provide clear synergistic advantages for the growing market of end users who own renewable micro-generation assets such as rooftop solar panels. However, the study identified the need for a new communication and control infrastructure between vehicles and the grid, which will require consumer participation and potentially new regulations in electricity markets. A 2013 NREL study explored the potential for PEVs to absorb excess solar PV generation by simulating the Texas grid and identifying changes in peak capacity requirements (Denholm et al., 2013). That study concluded that modest deployment of PV could avoid most of the increase in capacity requirements associated with very large PEV penetrations. Nelder et al. (2016) cited a 2012 Imperial College London study showing that energy storage (including PEVs) can more than halve the curtailment of renewable energy. The avoided curtailment not only saves energy, it actually improves the scheduling of generators and increases the value of wind energy.

Distribution Grid Impacts and Peak Demand Distribution grids can be more constrained than the larger transmission grid because low-capacity components such as low-voltage lines and transformers make distribution grids vulnerable to fluctuations in power demand. Results of our survey (Question 2) reveal concern among some stakeholders that increased adoption of PEVs will necessitate upgrades earlier in capacity-constrained districts than would be the case without increased PEV penetration. Furthermore, respondents strongly prioritized balancing charging times to avoid peak demand (Question 13) as well as grid storage and load-shifting (Question 16), which are all explored in this subsection because these concerns are closely interrelated. PEV penetration affects power system operations in many ways. Large numbers of vehicles charging simultaneously during peak hours would add substantially to the peak load, imposing a need for additional generation and transmission capacity as well as an increased effort to maintain grid safety and stability (NRDC, 2016). At the same time, if two-way communication technologies are implemented, PEVs can be a demand-response resource or even function as distributed energy storage, enabling a reduction in investments in new electricity infrastructure

PLEXOS Integrated Energy Model To explore impacts on a given country and area, policy makers can use the PLEXOS Integrated Energy Model to analyze power grid capacity expansion, power generation dispatch modeling, ancillary services, renewable integration, transmission, smart grids, and transportation. https://energyexemplar.com/software/plexos-desktop-edition/

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and shifting load from peak to off-peak hours. PEVs could also provide ancillary services to the grid (NRDC, 2016).

Multiple models in multiple countries have forecasted load characteristics using various scenarios of PEV adoption, distributed generation penetration, energy-efficiency, and consumer and business behavior in response to price/cost input and other behavior-modification drivers (e.g., Green Ii et al., 2011). Research on forecasting load with PEV integration has focused on the potential impacts of the locations of electric vehicle supply equipment (EVSE) in relationship to grid components and the likely location of distributed renewable electricity generation. Numerous studies have looked at the distribution of PEV charging and its impact on distribution-grid load profiles (e.g., clustering of BEV adoption and charging [Eric, 2014]). These studies include Masoum et al. (2011), Hu, You, et al. (2014), and Verzijlbergh et al. (2014). In the absence of price signals, residential demand for power to charge electric vehicles tends to concentrate during early evening hours when drivers arrive home from work and plug in their vehicles. Electricity demand for other end uses increases at the same time. Concentration of high demand at residences, which lie at the end of the distribution grid, could negatively affect equipment life and reliability, power quality, and energy resilience. Research on PEV impacts on distribution grids has focused on three primary topics: load impacts of PEV adoption, bi-directional energy flow impacts on the distribution grid, and peak shaving. Utilities have extensive experience with forecasting electricity demand based on population demographics and weather, but integrating PEV charging adds complexity to demand forecasting. For example, the California Public Utilities Commission estimated that achieving the state’s target of 1.5 million zero-emission vehicles on California roads by 2025 would, if charging were unconstrained, represent an additional load of 7,000 megawatts (MW), which is equal to about 16% of the 2013 summer peak load (Langton and Crisostomo, 2014). Controls can shift the majority of charging times to off-peak times (Y. Chao et al., 2012). Concerns about the timing and impact of charging underscore the importance of price signals and charging controls, which are discussed in further detail below. To address scenarios of high PEV penetration, extensive analysis has explored the efficacy of methodologies and enabling technologies to reduce and/or smooth grid load (García-Villalobos et al., 2014). There is general agreement that smart-grid technologies that allow timing of vehicle charging to avoid periods of high congestion and/or low distributed generation availability are needed to flatten demand even in scenarios with fairly modest levels of PEV market penetration. However, research on the cost-effectiveness of these

Plug-In Electric Vehicle Infrastructure Model The Schatz Energy Research Center developed a model to simulate when and where individual PEV drivers would use virtual charging stations. The model can be used to optimize EVSE placement and assess the value of vehicle-to-grid technologies. http://www.schatzlab.org/projects/policyanalysis/pev/

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technologies is limited. Analysis has focused on methodologies for integrating PEV charging into existing power distribution structures (Galus et al., 2010). The California Transportation Electrification Assessment (Cutter, 2014) comprehensively analyzes the likely impacts of various PEV adoption scenarios on grid infrastructure upgrades and costs in California. Several PEV adoption scenarios are evaluated using geospatial modeling of expected clustering of PEV adoption and the load-shifting effects of utility rate structures. The assessment covers distribution substations (high-voltage switches, fuses, etc.), substation transformers (low-voltage transformers, busses, breakers, fuses, switches, etc.), primary voltage feeder lines (connecting substations to pad-mount transformers), and circuit equipment connecting to residences (including pole-mounted transformers). Figure 6 shows a map of the 2030 distribution system upgrades driven by PEV adoption in the Los Angeles area for the mixed-rate case (50:50 split between flat rates and time-of-use [TOU] rates) for two adoption scenarios.

Figure 6. Distribution system upgrades driven by PEV charging in the Los Angeles area Source: Cutter, 2014. The study found that the incremental feeder and substation upgrades driven specifically by PEV charging were relatively small: annually less than 1% of the 2012 distribution revenue requirement for the utilities in the most aggressive adoption case (ZEVx3). However, the distribution upgrade costs do not increase linearly with adoption rates. “At higher levels of adoption, the available capacity of the existing system is exhausted more quickly, and the PEV related upgrades are larger in both number and size.” (P. 43 of Cutter, 2014).

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Similarly, the Sacramento Municipal Utility District (SMUD) completed a study in 2017 with the Smart Electric Power Alliance and Black & Veach revealing that in a penetration scenario with 240,000 PEVs in SMUD service territory, the utility would likely need 12,000 new transformers at $7,400 each (Smart Electric Power Alliance, 2017). Although the total costs are about $90M in this scenario, they could mostly be avoided by managed charging. However, charging management needs to be cost effective; the study estimates that the transformer replacement scenario corresponds to about $100 per vehicle. Research has also focused on quantifying the impact on distribution grid infrastructure (lines and transformers) of increased, more variable, and bi-directional energy flows (Green Ii et al., 2011). Turker et al. (2012) highlighted the importance of modeling system-level components such as thermal loading, voltage regulation, transformer loss of life, unbalance, losses, and harmonic distortion levels. Other studies have shown the importance of modeling typical distribution-grid reliability measures, i.e., system average interruption duration index, system average interruption frequency index, customer average interruption duration index, and customer average interruption frequency index (Green Ii et al., 2011). PEV charging affects distribution-system power quality and load. A recent comprehensive review article (Ashique et al., 2017) assesses the primary detrimental impacts of PEV charging, especially direct-current fast charging (DCFC), on power quality and grid infrastructure. These impacts include voltage instabilities, distribution losses, and overloading, which can shorten transformer life and cause performance problems. Harmonic currents, phase imbalance, DC offset, phantom loading and stray flux problems are the most important effects of PEV charging that degrade power quality. Harmonic distortion of voltage and current waveforms resulting from non-linear loads have been studied using detailed models of transformers and PEV charging (Moses et al., 2011; Gong et al., 2012; Dharmakeerthi et al., 2014). Harmonic current components can adversely affect transformer power-transfer efficiency and cause hot spots that shorten transformer life. Harmonic currents also affect other distribution equipment such as the capacitors, meters, relays, switchgears, and current and voltage transformers (Ashique et al., 2017). Input current quality can be improved by introducing voltage or current control of inverters that restricts the harmonic components of the current to be fed back into the feeder. Level-3 chargers with higher efficiencies are expected to alleviate power quality issues and reduce charging time (Ashique et al., 2017). Most systems rarely experience their anticipated peak demand, meaning that if PEV charging is properly timed and coordinated, especially when PEV penetration is low, charging can be accommodated within the margins of the utility’s spinning reserves. A 2013 analysis prepared for the Regulatory Assistance Project found that in the U.S. and Europe, 5% of all vehicles charging at a four-kilowatt (kW) rate, or 1% of all vehicles charging at a 20-kW rate, would keep the PEV charging load within 10% of the maximum potential peak load, which is within the typical reserve margin (M.J. Bradley & Associates LLC, 2013). Similarly, Gopal et al. (2015) analyzed the grid impacts and benefits of BEVs in New Delhi, India. They concluded that BEV

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power demand will be relatively small at all hours, even at the 15% penetration level, compared to other electricity loads in Delhi in 2025.

PEVs have the most impact at the distribution system level if charging demand is coincident with peak load. The risks of this coincident load are exacerbated in residential distribution systems where the availability of charging stations in offices and public areas is limited (Weiller, 2011). A 2014 study by Xcel Energy found that the load on substation transformers would become significant when 5% of residential customers have a PEV, at which point PEVs would add 2–4% to substation transformer peak load (Xcel Energy, 2015).

Juul and Meibom (2011) examined the optimal configuration and operation of the integrated power and road transport system in Northern Europe and determined that PEVs reduce power system investment and operational costs by €6.2 billion or 3% of total system costs and that the introduction of V2G resulted in small additional systems cost savings of €18 million. Using hybrid electric vehicle adoption to forecast PEV adoption, Mohseni and Stevie (2009) showed that significant spatial clustering of PEV owners’ residences can occur and result in extremely high distribution-level loads. These findings imply that PEV charging will need to be timed in order to use spare system capacity. High penetrations of EVSE and DCFC can result in large instantaneous demands. The Tesla Supercharger can charge vehicles at 145 kW and has situated banks of eight or more fast chargers along U.S. interstates. If all of these chargers were used at once, the result would be a large draw on the local distribution system. Similarly, employers like NREL have banks of 30 or more level-2 EVSE ports, which typically provide a maximum charge of 7.2 kW. If all ports are in use simultaneously, the demand can be significant. The red line in Figure 7 shows the impact on NREL’s demand of 20% PEV penetration, and the green line shows how charging management could stagger that demand.

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Figure 7. Planning for PEVs on a highly renewable campus Source: Markel, 2015. Utilities frequently divide billing rates for commercial and industrial consumers into an energy charge on a kilowatt-hour (kWh) basis and a demand charge on a kW basis for the highest monthly peak demand. Every unit of energy consumed incurs an energy charge, but the demand charge corresponds to the point in the month (typically a period of between 15 minutes and one hour) when the customer uses the most electricity. In Figure 7, the purple dotted line shows the typical peak demand. Demand charges compensate utilities for the infrastructure capacity and spinning reserves necessary to accommodate spikes in consumption. Charging at workplaces offers an important opportunity to encourage PEV adoption. However, business owners confront a number of challenges, including demand charges (NAS, 2015). Although one level-2 EVSE port represents only marginal increases in energy consumption for relatively large commercial entities, to the extent that DCFC or multiple level-2 EVSE ports are used during peak power consumption times, this can significantly impact the maximum demand of the commercial or industrial entities. Exceeding the demand threshold by any amount will increase the total cost of energy to the facility and, in some cases, will hold the demand charges at the higher level for many months to more than a year (NAS, 2015). A study by the EV

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Project1 demonstrates the importance of this issue, finding that demand charges could account for more than 90% of the utility bill in some areas (ECOtality, 2013). This percentage will vary significantly depending on the utility’s rate structure and frequency of PEV charging.

Thus, although a customer’s peak occurs only once for a brief period, the effect on the customer’s bill could be far longer, and the increased cost could discourage companies from providing PEV charging. An Idaho National Laboratory (INL) report (2015) investigates the impact of utility demand charges in the Phoenix metropolitan region served by Arizona Public Service Company where these charges are imposed on all but the smallest commercial customers. The per-vehicle charging cost is reduced if more PEVs are charged on a given EVSE port. The results show that if one PEV is charged in the month, the demand charge per vehicle is $482. If 20 PEVs are charged in the month on the same EVSE port, the demand charge drops to $24 per vehicle. If 100 PEVs are charged in the month, the demand charge drops to $4.82 per vehicle.

An Electric Vehicle Transportation Center report (2016) mentions ways to mitigate the impact of workplace PEV charging stations on facility electricity use, including installing photovoltaics (PV) and energy storage devices, using demand-management strategies, and selecting charging stations with the lowest power output or with the option of selectable output power. For a small number of vehicles, demand costs can usually be mitigated through scheduling or active control. However, for a large number of vehicles, for example in a large commercial application, adding to the facility’s existing peak demand may be unavoidable. In this case, facilities can schedule vehicle charging at times when the facility is known to have a lower peak demand.

PV-assisted PEV charging stations can also reduce dependence on the power grid and avoid demand charges. PEVs can act as distributed energy storage although there is a concern that, depending on the latitude and prevailing weather conditions, the payback period could be many years. Tulpule et al. (2013) used a the System Advisor Model (SAM), developed by U.S. DOE/NREL and the Midwest Research Institute (MRI), to analyze the impact of PV-based workplace charging on power-grid economics and emissions. This analysis was performed for the cities of Columbus, OH and Los Angeles, CA to cover different solar radiation levels and finance structures. Results showed financial benefits to the vehicle owner compared to the finances of home charging. Within the lifetime of the PV panels, the installation and maintenance costs of the charging stations would be paid back, and the owner of the facility would earn a profit. Mouli et al. (2016) investigated the possibility of charging BEVs at workplaces in the Netherlands using only solar energy. Their model, developed on MATLAB, included an isotropic sky diffused model and geometric models to estimate the sun’s position. Results showed that local battery storage would not eliminate the PEV–PV charger’s grid dependence in their example, especially because of seasonal variations in that country. The average daily PV energy production differed by five times between summer and winter. This means a grid connection would be needed to supply power for the PEV–PV charger in winter 1 The EV Project partnered with city, regional, and state governments; utilities; and other organizations in 18 cities to deploy about 12,500 public and residential charging stations that were used by 8,650 plug-in electric vehicles. See https://energy.gov/eere/vehicles/avta-ev-project for more information.

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and to absorb the excess PV power in summer. Latitudes distant from the equator will have even more exaggerated versions of this effect.

Vehicle-to-Grid V2G issues (Question 4 of our survey) and associated battery impacts (Question 5) were rated as lower priority than other topics. However, if V2G technologies are implemented, PEVs can supply energy storage that can be used to shift load from peak to off-peak hours, thereby reducing a facility’s electricity bill. V2G-enabling technologies allow vehicles to act as storage batteries for the grid. Energy storage added to established smart-grid networks could facilitate high penetrations of both distributed renewable generation and PEVs, especially in constrained situations such as microgrids. V2G would be especially attractive for systems with large capacity requirements such as for an interconnection with only a few very large generators or very “spikey” electric loads. V2G also has a number of advantages for supplying ancillary services for the grid (Jian et al. 2016). V2G could provide very fast response times in comparison to traditional peaking power plants. This makes V2G attractive for voltage and frequency control. Batteries are also more efficient than most other energy storage technologies. Recent research has focused on a range of V2G applications in workplaces. For example, Ribberink and Kong (2016) used an economic model developed specially for their study to examine the economic feasibility of vehicle-to-building (V2B) applications for a typical office building in four different Canadian provinces. The results showed that V2B applications would be more beneficial when a building’s load profile has sharp peaks and the price of electricity is high. A sharp peak requires fewer PEVs to achieve peak load reduction. Momber et al. (2010) explored the economics of a California office-building scenario in which PEVs provide V2G storage. This study used the Distributed Energy Resources Customer Adoption Model developed by LBNL. Momber et al. found that monthly demand charges drop by 5.85% with full use of the PEVs’ batteries to provide energy storage for the grid.

Although V2G scenarios have been shown to be technically feasible and beneficial to grid management, it is challenging to balance the economics of these benefits against the costs to vehicle owners and costs of implementing infrastructure. For example, Mullan et al. (2012) found that, for the South West Interconnected System of Western Australia, 60,000 electric vehicles participating in a V2G program would be needed to supply spinning reserve. Assuming that the total cost to the utility for ensuring spinning reserve is unchanged from current levels, each vehicle owner would receive a net annual payment of 382 Australian dollars for providing this service. Providing bulk energy for load-following would be even less profitable in this market because the vehicle owner would only be compensated at the production cost for peaking power plants. In the Western Australia study, the vehicle owner would only receive a net payment of 216 Australian dollars for supplying both spinning reserve and load-following. Costs to the vehicle owner would include the additional expense to include V2G capability in the vehicle, charger controls, oversight, and any associated battery wear. Much of the additional cost for the V2G scheme envisioned in the study arose from factors associated with drivers’

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mobility needs and the fact that, although vehicles are, on average, parked the vast majority of the time, they are not always at the same location. Therefore, many more grid connection points must be available than the number of vehicles. Providing communications and management for a large network of charge points entails both costs and potential security concerns. However, at least one company, Nuvve Corporation, has launched a V2G business model in Denmark, providing frequency regulation services using Nissan vans (Nuvve, 2017). The vans can be programmed to limit discharge levels and be available for driving at a set point in time, while Nuvve uses the battery to help grid operators maintain a constant frequency.

Review of the literature highlighted several other areas of interest for research, including analysis of vehicle-grid interactions in microgrids (Jun and Markel, 2012) and smart-grid applications in developing nations (Dada, 2014; Fadaeenejad et al., 2014). The impact of V2G cycling on vehicle batteries has been studied extensively (Peterson, Apt, et al., 2010; Smith et al., 2012; Ribberink et al., 2015). The general consensus is that, although deep discharge of batteries in V2G applications is harmful to battery life, V2G energy flows can be managed to cause minimal damage to vehicles.

Exporting Power to Emergency Equipment According to the Edison Electric Institute, the economic impact of blackouts caused by natural disasters can be significantly greater than the cost of system repairs (Johnson, 2005). PEVs can be a valuable resource during disaster relief efforts in part because many PEVs can export energy from their batteries to power emergency response systems, such as communication equipment, traffic lights, or fuel pumps. PEVs can also be driven to locations where power is needed (IREV, 2016). In September and October of 2015, large wildfires burned in Calaveras County, California. The fires damaged the electricity network, threatened communities, and forced evacuations. Some residents evacuated to a shelter where power was down but where the utility, Pacific Gas and Electric Company (PG&E) was able to use one of the company’s plug-in hybrid vehicles to power the shelter (IREV, 2016). The PG&E vehicle supplied power for two days until a replacement shelter became available. Similarly, in August 2014, the City of Napa, California experienced a 6.0 magnitude earthquake that caused a power outage; as a result, the city’s fire department lost electricity. The fire department had fuel, but, without electricity, was unable to pump fuel into its fire trucks. PG&E subsequently donated a plug-in hybrid truck with exportable power to the Napa Fire Department. The truck is able to export up

Battery Lifetime Analysis and Simulation Tool for Vehicle Applications (BLAST-V) Researchers can use NREL’s BLAST-V to evaluate the longevity and performance of PEV batteries in several contexts, including with vehicle-to-grid technology enabled or with frequent use of high speed charging. In addition, the tool can be used to model optimal locations for placement of public EVSE, including DCFC. BLAST-V can be coupled with the Battery Ownership Model to assess lifetime battery costs and PEV economics. https://www.nrel.gov/transportation/blast.html

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to 80 kW of power and can be used in a variety of applications, including as a back-up generator to pump fuel. After the Great East Japan earthquake of March 2011, Nissan donated electric vehicles and “Leaf to Home” power stations to each of Japan’s 47 prefectures. The Leaf to Home power stations’ two-way charging units allow users to export power to lights, communication equipment, and even basic kitchen appliances. These examples show the potential benefits of V2G integration. Additional analysis is needed to develop techniques for measurement and equitable optimization of V2G energy flows. Policy support is needed to develop a framework to allow utilities, system operators, and vehicle owners to all benefit from V2G energy exchange.

Business Case for PEV Charging Stations Private actors can invest in building EVSE. According to the Clean Energy Finance Forum PEV financing report (2015), private investments can stimulate the market and reduce the costs to local site hosts of installing EVSE. In addition, state policies can encourage and support private investors working together with cities and local communities to attract investment in EVSE. For utilities, the move to electrifying transportation presents a wide range of challenges. PEV-related infrastructure costs include distribution circuit upgrades, with equipment such as transformers, substations, and extra line capacity needed to support the increased EVSE load. However, utilities stand to benefit from PEV drivers as customers, especially because they can charge their vehicles when system demand is low, and perhaps when renewable generation is high. Although installing a public DC fast charger may exacerbate load peaks, the majority of charging takes place at lower speeds at home or the workplace.

Utilities are the most logical partners to help finance the growth of the EVSE market because utilities can accommodate large, long-term investments. In California, the Public Utilities Commission already allowed San Diego Gas and Electric (SDG&E) to spend $45 million to deploy 3,500 PEV chargers under its VGI program and Southern California Edison (SCE) to spend $22 million for the rollout of 1,500 PEV chargers as part of the Charge Ready program.2 Several initiatives have also been launched to increase the number of charging stations in major cities across Europe (e.g., Paris, London, Amsterdam), and national plans have been initiated to increase coverage (ARF, 2014) (see Figure 8, which reflects efforts as of 2013).

2 https://www.greentechmedia.com/articles/read/southern-california-utilities-to-deploy-5000-ev-chargers-in-first-of-a-kind

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Figure 8. Policy initiatives to support development of PEV charging infrastructure in Europe Source: ARF, 2014.

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Automotive manufacturers also choose to invest in EVSE in many instances, largely to sell more PEVs. As a well-known example, Tesla has installed superchargers along highways throughout North America, Europe, and Asia. Tesla provides 400 kWh of free access to the superchargers for original vehicle owners (or access for life of the vehicle if purchased prior to January 15, 2017) (Lambert, 2017). This model is not conducive to direct repayment for the infrastructure investments as much as a way to incentivize PEV purchases. By alleviating range anxiety with a network of superchargers, Tesla can convince drivers to buy their vehicles and, in the process, recapture their investment.

EVSE unit costs have decreased over the past five years as the industry has matured and manufacturers have improved EVSE technology (Smith and Castellano, 2015). In the EV Project, the average installation cost for a wall-mounted level-2 EVSE unit is $2,035, which is 37% lower than the average $3,209 installation cost for a pedestal unit. EVSE installation costs vary among regions (see Figure 9). The primary reasons for geographic differences in cost are labor costs and Americans with Disabilities Act requirements3 in each region.

Figure 9. Average installation cost for publicly accessible level-2 EVSE, by EV project Notes: The EV Project installed public level-2 EVSE in 13 markets around the country. The average installation cost ranged from $2,100-$4,600. Source: Smith and Castellano, 2015. Philip and Wiederer (2010) studied the economics of level-2 and -3 charging stations. Figure 10 shows the rate of return, taken from that analysis, for varying rates of charging station utilization.

3 https://energy.gov/eere/vehicles/ada-requirements-workplace-charging-installation

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Figure 10. Rate of return varying utilization rates for a single level-2 charging station Source: Philip and Wiederer, 2010. Philip and Wiederer also estimated cost differences between level-2 and level-3 charging stations. The mark-up to break even is 19.5 cents for level-3 charging compared to 7.5 cents for level-2 charging. To obtain a 15% return on investment, a per-kW mark-up of approximately 165% on 2010 electricity prices is needed. Figure 11 shows the rate of return for varying level-2 charging station installation costs.

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Figure 11. Rate of return varying prices for a single level-2 charging station Source: Philip and Wiederer, 2010. Many European governments and cities (e.g., Norway, Denmark, the Netherlands, France, UK, Oslo, Amsterdam, Paris, and London) are incentivizing consumers to choose electric-powered mobility. Each government has its own scheme (ARF, 2014). Norway’s is the most generous, with a broad package of subsidies amounting to ~EUR 17,000 when compared to the purchase of a compact-class internal-combustion-engine (ICE) car. The UK pays back to buyers a one-time premium of 4,000-7,000 British pounds (based on purchase price) for all vehicles emitting less than 75 grams of CO2e per kilometer (see Figure 12).

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Figure 12. National EV purchase subsidies Source: ARF, 2014.

Utility Rates and Regulation Our survey explored several utility-specific issues, mainly associated with utility rates, including demand charges (Question 6), TOU rates (Question 7), and utility regulation (Question 9). Utility rates play an important role in PEV adoption, timing of charging, peak avoidance, whether V2G technologies are economical, and the economics of publicly available non-residential charging stations. How utilities are regulated can influence these rates as well.

Rates with Lower Demand Charges Flexibility around demand charges can give owners of DCFC stations much greater potential to recover costs and make a business case for their stations (NAS, 2015). Commercial customers who would be likely to set up publicly available stations are often subject to demand charges in addition to a per-kWh energy charge. Demand charges can be especially challenging for DCFC stations because these stations can create very high levels of peak demand for very short periods of time compared to their overall consumption of electricity.

The Hawaiian Electric Company (HECO) offers two special rates for commercial customers’ PEV chargers. These rates avoid the impact of demand charges and make chargers more commercially viable. The first, EV-C, is a TOU rate that does not include demand charges for off-peak use. The second, EV-F, offers higher per-kWh charges on a TOU schedule but does not apply a demand charge at any time.

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Xcel Energy in Colorado offers a non-PEV-specific commercial rate (secondary general low-load factor) that could be useful for DCFC stations and other equipment whose demand can be high for brief periods but that have low total energy usage (Salisbury and Toor, 2016). This rate entails much lower demand charges of $4.84 per kW than the secondary general rate, which charges $12.84 to $15.80 per kW, depending on the season. This lower demand charge is in exchange for energy prices that are $0.10 to $0.14 higher per kWh consumed. Figure 13 shows what Xcel Energy’s monthly electricity bill would be under the two tariffs (only demand and energy charges) for operating a separately metered DCFC station, at different levels of monthly consumption.

Figure 13. Monthly electric bill of Xcel Energy under the secondary-general and secondary-general low-load tariffs Source: Salisbury and Toor, 2016. For transit agencies, demand charges can significantly reduce the operational savings from electric buses (Salisbury and Toor, 2016). Demand charges can be especially high if buses are charged en route or in the midst of daily operation. Because of the need for high-powered, fast charging to top off bus batteries, electricity demand can exceed 100 kW. TOU charges (which are usually highest during the day when buses would be charging en route) may also decrease fuel bill savings. Buses that charge overnight would benefit from TOU pricing, but buses that charge en route would likely have to pay peak prices for energy use. Transit agencies could benefit from having optional TOU pricing depending on how they charge their buses. Special demand charge tariffs or no demand charges at all (like those offered by HECO and Xcel Energy) for will be very helpful in encouraging transit agencies to adopt electric buses. The CALSTART report (2014) compares fuel costs per mile of two types of electric transit buses (charging en route with four different bus deployment strategies, and charging overnight) to the fuel costs of diesel and compressed natural gas (CNG) buses. Electric transit buses show a clear advantage over diesel and CNG-powered transit buses when no demand charges are

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included, and electric buses still demonstrate advantages when low demand charges, i.e., $5/kW, are included. When demand charges are increased to a medium level, i.e., $10/kW, fuel costs increase by $0.12 per mile for one electric bus charging overnight and by $0.45 per mile for one electric bus charging en route (see Figure 14). In that case, the fuel cost for one electric bus charging en route is higher than the fuel cost for a CNG-powered bus. However, as the number of electric transit buses using single en-route fast chargers is optimized, demand charges can be spread over more buses, and electric transit buses charging en-route gain the advantage over CNG-powered buses.

Figure 14. Fuel cost for diesel, CNG, and electric buses with medium and high demand charges

Time-of-Use Rates Providing attractive electricity rates based on time-of-use can influence consumers’ PEV charging behavior and strengthen grid reliability. LBNL’S BEAM4 model explicitly represents PEVs charging infrastructure and offers a platform to analyze the impact of different charging strategies. Most electric utilities incentivize consumers to charge PEVs at specific times in order to shift the PEV-charging load to off-peak periods. To shift PEV charging to off-peak hours, utilities offer TOU rates, sometimes with special PEV rates. TOU rates can be a win-win solution where the PEV owner pays for charging at a lower rate, and the utility benefits from moving the PEV-charging load from peak to off-peak times. In addition to avoiding increases in peak demand, off-peak charging gives utilities the opportunity to increase electricity demand at a time when they have a large amount of underutilized capacity (NAS, 2015). Typically, the wider the price differential between on- and off-peak hours, the more effective a TOU rate is at shifting charging behavior. However, although time-differentiated rates generally benefit PEV owners, they can be a disincentive if owners need to charge during high-priced time periods (generally midday).

4 See http://www.beam-model.net/ for more information.

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The Rocky Mountain Institute EV Project5 and the SDG&E experimental rate study confirm that price incentives can substantially influence PEV drivers’ residential charging behavior (INL/MIS, 2015). With the approval of the California Public Utilities Commission, SDG&E established three experimental rates and designed the PEV TOU Pricing and Technology Study for the San Diego region. Financial incentives successfully shifted PEV charging demand to off-peak hours. The experimental rates used in the study were established using three different ratios between the on-peak and super off-peak rates; approximately 2:1 (the EPEV-L schedule), 4:1 (the EPEV-M schedule), and 6:1 (the EPEV-H schedule), allowing SDG&E to determine the magnitude of price difference necessary to drive participant charging behavior to super off-peak times. The results show that charging took place predominantly during the super off-peak times (see Figure 15). Seventy percent of PEV owners would shift charging to the cheaper, off-peak hours (at night) when the peak/off-peak rate ratio reached 2:1, i.e., a difference of $0.13/kWh. When the rate ratio reached 6:1, resulting in a $0.30/kWh difference, 90% of PEV owners would adopt off-peak charging. The study also indicates that an incremental number of PEV owners who shift their charging time to off-peak starts to drop when the ratio exceeds 6:1, suggesting that the behavior of approximately 10% of the PEV customers is inelastic to changes in charging prices. Figure 15 shows that although the vehicles were connected to residential chargers for similar times in the two service areas, demand for charging energy was very different in the service area with TOU pricing. That finding indicates that user behavior related to plugging in the vehicles is the same in both regions but that TOU pricing motivates customers to use the timers integrated into the vehicle or charger to control their charging time and minimize their cost.

5 Nelder, Chris, James Newcomb, and Garrett Fitzgerald. 2016. Electric Vehicles as Distributed Energy Resources. Rocky Mountain Institute. http://www.rmi.org/pdf_evs_as_DERs.

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Figure 15. Weekday residential charging availability and charging demand in San Diego Note: The plot shows the maximum, minimum, median, and inner quartile values for all the days in the quarter. Source: ECOtality, 2013. The Natural Resources Defense Council of China used SDG&E ratios to project the load-leveling effects of off-peak PEV charging in Shanghai. The analysis results indicate that TOU pricing implemented to manage charging technologies would have a significant effect on peak load. This study assumes that Shanghai PEV owners are as likely to respond to rate incentives as those in the SDG&E territory, in which case 75% of PEVs in Shanghai would charge off-peak at a 2:1 peak/off-peak rate ratio, and 90% at a 6:1 ratio. At the 2:1 peak/off-peak rate ratio, most PEVs would charge off-peak, cutting the peak-valley difference by 3.7 gigawatts (GW) (from 16.9 GW to 13.2 GW); the annual electricity consumption shifted from peak hours could reach 4.22 billion kWh (NRDC, 2016). On average, each PEV would shift 1.8 kW of load and 2,050 kWh of electricity every year. At a rate ratio of 6:1, the peak-valley difference would be further decreased by 0.7 GW with 5.06 billion kWh shifted away from peak hours.

A pilot project by the Pecan Street Research Institute in Austin, Texas covered a 30-home sample of PEV drivers and found similar results. Weekday charging by the 15 drivers who participated in a TOU pricing trial mostly took place between 11:45PM and 2:30AM, and only 12% of charging took place during the 3PM to 7PM peak hours. By contrast, the 15 participants who did not have the option of the TOU rate charged during peak hours 22% of the time.

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To help inform utility regulation, the California TEA Phase 2 Grid Impacts report (EEEInc, 2014) analyzed the monetized costs and benefits results from the California Public Utilities Commission Total Resource Cost (TRC) test6 to determine whether California would achieve net economic benefits with additional PEV adoption. The benefits include the federal tax credit for PEVs, gasoline savings, and reduced cap-and-trade greenhouse gas allowance costs. The costs include incremental costs of the vehicle, charging infrastructure costs, distribution system upgrades, and avoided costs for delivered energy. Results show a net benefit of approximately $5,000 over the life of a PEV (see Figure 16). The report also evaluates a case including environmental and societal benefits. The Societal Cost Test7 includes benefits for health and reduced reliance on petroleum from the Phase 1 report from TEA and applies a higher estimate of the societal value of reducing greenhouse gas emissions. In this case, the net benefit increases to about $6,600 per vehicle, $1,200 (22%) greater than the net benefit under the TRC (EEEInc, 2014).

Figure 16. Regional monetized and societal benefits in California Source: EEEInc, 2014. The CalETC report also found that the net lifetime benefit of a PEV charging mostly at night under TOU rates was $1,400 greater than the net benefit using flat or tiered electricity rates (EEEinc, 2014). Charging during off-peak hours reduces the cost of generation and defers utility investment in generation, transmission, and distribution infrastructure. The TOU scenario shifts charging to off-peak hours when both rates and cost of delivered electricity are lower. According to the report, shifting charging to off-peak periods significantly increases California’s net benefit 6 See https://energy.gov/sites/prod/files/2014/01/f6/p5-gitt.pdf for more information. 7 Health and reduced reliance on petroleum are described as benefits in the interest of utility ratepayers in California Public Utilities Code (PUC) 740.3 and 740.8.

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from PEVs. The TOU rate scenario results in the lowest net revenues but also yields the lowest costs for both the utility and the PEV owner. Charging during off-peak hours reduces the cost of generation, including carbon allowances, by $740 per vehicle. It also defers or avoids investment in generation, transmission, and distribution capacity for a combined benefit of $640 per vehicle (EEEInc, 2014).

One issue that utilities and their customers must address is the best way to meter the additional electrical load from an EV. If TOU rates apply, then an interval meter is necessary to differentiate between usage during peak and off-peak hours (Salisbury and Toor, 2016). Although an EV-specific meter could be helpful in ensuring that a household’s entire electricity consumption is not subject to TOU rates, the cost of the second meter and its installation may outweigh the benefits. For example, PG&E offers PEV rates for either the entire household or for only the PEV charging station. Customers who opt for a separate PEV meter must pay a $100 fee for the second meter and pay for having a second electrical panel installed, which can cost hundreds of dollars.8 The remainder of the meter’s cost is recovered by the utility through the PEV rate. SCE also offers a choice of PEV rate plans for the whole household or only for the PEV. SCE provides the customer with the separate meter at no up-front cost and will install it, but the customer must pay for any necessary upgrades to the household electrical system; the cost of the meter is recovered through the PEV rate.9 SDG&E likewise provides the separate meter at no up-front cost, but the customer pays for its installation.10 In California, the majority of customers have chosen a whole-house TOU meter rather than a separate meter for just the PEV. Thus, the utility system benefits can be even greater than those provided by the PEV alone when purchase of a PEV motivates a consumer to opt for a whole-house TOU rate.

Consumer Economics The business case for consumers goes well beyond grid impacts and includes vehicle, fuel, and maintenance costs. Some models explore these economic factors in conjunction with grid impacts. However, in all cases, the benefits to the grid of PEV integration cannot be achieved unless consumers adopt PEVs. The up-front cost of PEVs and a lack of infrastructure are two major factors holding back PEV penetration. PEVs must compete effectively with ICE vehicles in meeting consumer needs (NAS, 2015). Over the past decade, multiple researchers have focused on the financial feasibility of PEVs in variety of geographic locations.

8 PG&E. 2017. Electric Vehicle (EV) Rate Plans. https://www.pge.com/en_US/residential/rate-plans/rate-plan-options/electric-vehicle-base-plan/electric-vehicle-base-plan.page 9 SCE. 2017. SCE Electrician FAQs. www.sce.com 10 SDG&E. 2015. “Electric Vehicle Grid Integration,” http://www.westernlampac.org/2015%20Spring%20Conference/Laura%20McDonald%20EVGI%20LAMPAC%20Presentation%20042715.pdf

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Gopal et al. (2015) used the REV model to analyze grid impacts and economics of 5% and 15% BEV penetration in New Delhi, India. This study reveals that BEV operating costs in India are six to ten times cheaper than conventional vehicle operating costs, which is significantly greater than the factor of four typically seen in the U.S. Peterson, Whitacre, et al. (2010) examined the economics of using PEV batteries to store off-peak electricity to meet peak demand in three electricity markets and determined that the potential financial gain from energy arbitrage to PEV owners in the absence of incentives was insufficient to be attractive to car owners. This study used the PLEXOS model,11 a real-life electricity model tool described above in the section on Transmission Grids and Integration of Renewable Generation.

Ribberink and Kong (2016) studied the economic feasibility of V2B application of PEVs for building and PEV owners in Canada. The study evaluated V2B economics of a typical office building for different provinces in Canada to obtain insight on the influence of provincial differences in electricity rates and PEV support policies. Results showed that higher electricity prices and demand charges would increase the attractiveness of V2B application of PEVs for a large office-building owner in the Canadian context. Buildings that have load profiles with sharp peaks, as well as buildings located in provinces with high electricity prices for business, had favorable conditions to benefit from V2B. The authors identify the ideal V2B scenario as one in which the break-even price for the building owner would be much higher than that for the PEV owners. An example would be a province with a low electricity bill for PEV owners and high electricity bill and narrow peak profile for the building owner. The paper also indicates that in general PEVs with larger batteries have more favorable conditions for V2B (Fig 5). However, only in the exceptional case that the PEV battery must be replaced to compensate for battery life loss due to V2B despite a small part of the available battery capacity for V2B being utilized, then a larger battery will offer lower benefits (Fig 6).

NREL’s National Economic Value Assessment of Plug-In Electric Vehicles (NEVA) study analyzed the private and public costs and benefits associated with PEV market growth scenarios (Melaina et al., 2016). Costs analyzed include those for the vehicle, charger, and electricity, but the study did not address potential costs for utilities and the electricity grid. The consumer or private benefits assessed include fuel savings when electricity is substituted for gasoline. The social or public benefits considered results from changes in greenhouse gas emissions and petroleum imports as a result of PEV adoption. The NEVA study found that the fuel savings from switching to PEVs can compensate for the higher costs of PEVs compared to conventional gasoline vehicles, thus generating private benefits. Another conclusion is that

11 See http://energyexemplar.com/software/plexos-desktop-edition/ for more information.

Renewable and Electric Vehicles (REV) Model LBNL’s REV integrated modeling platform assesses the benefits, costs, climate, and primary energy impacts of BEVs, including power system planning, dispatch, and integration of renewable electricity sources (Gopal et al., 2015). The model considers real-world travel demand based on origin-destination data, travel surveys, and demographic data to project BEV adoption, driving behavior, and charging behavior.

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displacing gasoline vehicles with PEVs generates positive social benefits in the form of reductions in greenhouse gas emissions and petroleum imports, assuming the carbon intensity of petroleum fuels remains the same (Melaina et al., 2016). Figure 17, from Melaina et al. (2016), shows how different scenarios result in different expected social benefits. Future research could augment this type of analysis by including PEVs’ benefits to the electricity system.

Figure 17. Social benefits of electric vehicles in 2035 corresponding to scenarios of differing market penetration levels; results of the NEVA study Source: Melaina et al., 2016.

Automaker Economics As mentioned earlier, V2G technology makes it possible to store energy in and source energy from vehicle batteries through bi-directional power flow from/to the grid. If the lifetime mileage of PEV batteries greatly exceeds owners’ travel needs, then PEVs would be able to provide V2G services virtually cost-free, thus greatly increasing the overall economic value of PEV batteries (NRDC, 2016). However, uncertainty about battery degradation from vehicle-grid services is commonly cited as a concern regarding V2G deployment (Wang et al., 2016). According to a battery degradation study by Wang et al. (2016), battery degradation caused by V2G is less significant than battery degradation from driving behaviors; V2G reduces battery life by only about 0.5 years. Similarly, Ribberink et al. (2015) concluded that aggressive driving and fast charging have a significant impact on PEV battery life. This study found the level of battery degradation similar to that found in the Wang et al. (2016) study from intense participation in V2G services, i.e., fully discharging the battery on a daily basis. Less intense use of PEV batteries can still provide useful V2G services with acceptable battery degradation. Manufacturers of PEVs should therefore be encouraged to implement V2G capability in their EVs. However, a lithium-ion battery, which is the most commonly used type for vehicle applications with an average range of 60-80 miles, cost between $10,000 and $15,000 in 2011 (Lee and Lovellette, 2011). Although the price is falling, Nykvist and Nilsson (2015) noted that $150 per kWh is the commonly considered point for commercialization of BEVs, compared to

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2015 battery pack costs in the range of $400 per kWh (DOE, 2017). As the DOE report indicates, estimates for battery costs fall in a range of uncertainty. Furthermore, GM and Tesla have announced battery cell costs that correlate to lower battery pack costs (Field, 2016). However, adding V2G capability may enlarge the price premium on PEVs and require more frequent replacement of batteries. The time it takes to get new vehicle technologies to market poses huge challenges (Gearhart et al., 2014), and large-scale introduction of new technology is very expensive / capital intensive. Automotive manufacturers and station operators need a strong underlying economic case to make such large investments.

EVSE Controls and Networks Achieving the benefits of PEVs and alleviating the concerns about PEVs providing service to the grid requires some form of controlling PEV charging. Questions 12 and 13 from our survey, on networks and charging controls respectively, were both ranked highly by survey respondents.

EVSE Controls EVSE units with grid control and communication capability enable third parties to directly control PEV charging, which can provide benefits at the building, campus, and distribution scale and can enable participation in grid services. Grid control may be linked to the pricing structures described earlier, and in particular can be used to avoid demand charges or take advantage of off-peak TOU rates. Especially in aggregate (e.g., fleets), PEVs can generate revenue for owners by providing ancillary services such as frequency regulation (Merrill et al., 2015). In addition, it has been noted that utility-controlled charging of PEVs can provide a number of potential benefits including load management, electricity system cost reduction, PEV market subsidy, and increased use of renewable sources of electricity (Bailey and Axsen, 2015). One example of the value utilities put on reducing peak demand is the “saver’s switch” program offered by Xcel Energy® in certain areas of the U.S. where participants are offered savings on their electric charges by allowing the utility to briefly shut off air-conditioning units during peak demand periods. However, such utility-controlled charging programs face consumer hesitancy and concerns around privacy and loss of control, among other issues (Bailey and Axsen, 2015). Building owners can reduce energy costs through peak demand reduction from controlled charging of EVs. These cost reductions provide incentives for deploying EVSEs. In addition to preventing PEVs from charging at peak demand times, it is possible to charge them at off-peak hours and use the stored energy to reduce the demand at peak times (Jin and Meintz, 2015). Microgrids can also benefit from controlled charging and discharging of EVs, especially with respect to energy reliability during emergencies (Jun and Markel, 2012). Researchers have modeled a wide variety of integration, control, communication and metering technologies (Reddy et al., 2014; Siano, 2014) as well as characteristics and technical requirements for smart meters and other monitoring and communications technologies (Depuru, Wang et al. 2011) that make up the core of smart grid systems. Primary barriers that have been addressed in research include customer acceptance of utility control of charging (Bailey and Axsen 2015) and the structure of financial incentives aimed at behavior modification (Zhang and Markel 2016).

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Optimizing charge schedules for EVs has been extensively researched. Optimization using dynamic programming-based algorithms (e.g., Lund and Kempton, 2008) and simulations (e.g., Mets et al., 2010) are commonly used methods to inform charging schedules. Charging strategies that consider real-time pricing can benefit both consumers and utilities; consumers can take advantage of inexpensive renewable resources, and utilities can avoid overloading the distribution system (Behboodi et al., 2016). Studies in the U.S., Germany, and Denmark have shown that controlled charging can help increase the use of intermittent renewables (Sioshani and Denholm, 2009; Dallinger et al., 2013; Lund and Kempton, 2008). Bailey and Axsen (2015) find that financial incentives are more effective than environmental incentives, such as those related to renewables, at enticing consumers to enroll in utility-controlled charging programs.

Network Communication, Coordination, and Compatibility It is important to establish standardized PEV technology and interoperability between PEVs and the electricity grid to encourage innovation and commercialization of e-mobility products. Utilities even within one country can have different regulators by region, state, or province. Globalized PEV technology and standards are important for facilitating international adoption of technology and minimizing investment risk for stakeholder groups. Incompatible EVSE networks can make reporting, payment, and even driver access to charging more difficult. To address these concerns, several groups around the globe are working to standardize communication protocols. The Open Charge Alliance is a global consortium of public and private PEV companies working to provide open, interoperable communication protocols for PEV charging infrastructure. The International Organization for Standardization has also published standard ISO 15118 specifying the communication between the electric vehicle communication controller and the supply equipment communication controller. ElaadNL, an initiative of collaborating network operators in the Netherlands that has created a network of around 3,000 public charging stations for PEVs in the country, has compiled information on a number of EV-related communication protocols (ElaadNL, 2016). The protocols span functionalities including smart charging, roaming, reservations, charge-point information, charging, and billing, among others.

EVSE Cyber Security Issues Cyber security touches upon many aspects of the power grid and PEV adoption. Respondents to our survey placed a relatively high priority on cyber security (Question 11). Power grids are being transformed from primarily one-way electricity delivery systems, in which a system operator controlled the dispatch of large, centrally located electricity generation resources, to two-way intelligent transmission and distribution systems that connect many devices and infrastructure components in a continuously monitored and dynamically optimized network (Figure 18). The defining characteristics of the new smart grid paradigm are an increase in connectivity between grid components and fine-grained monitoring of generation

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and consumption of electricity with an accompanying explosion in data (Khurana et al. 2010). Distributed monitoring and control of generators and equipment (e.g., home appliances and PEVs) introduces the opportunities for cyber attacks through interception and altering of data and/or control instructions.

Figure 18. Schematic illustration of smart grid physical layers and communication and control systems Source: Khurana et al., 2010. For PEVs connected to the grid, security vulnerabilities include the communications links between the vehicle and EVSE and the vehicle battery charging control hardware and software. Vehicle systems are expected to be an attractive point of entry for cyber attacks because of vehicles’ accessibility (Rohde, 2017). The U.S. DOE Vehicle Technology Office has funded a three-year project to identify cyber security issues in vehicles and EVSE and recommend cyber security protocols and standards. The effort is being undertaken by the U.S. DOE Grid Modernization Laboratory Consortium, which includes Argonne National Laboratory (ANL), NREL, INL, and Pacific Northwest National Laboratory. The INL team is developing a set of diagnostic security modules that allow the system operator (in the test case, a building energy management system) to intelligently determine whether a PEV or EVSE should be allowed to operate. Figure 19 illustrates the diagnostic security module framework.

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Figure 19. Diagnostic security module framework The consortium is in the process of performing cyber-security assessments of vehicles and EVSE (Ibrahim et al., 2016; Chugg et al., 2016). Research has revealed numerous vulnerabilities. For example, the INL team was able to connect a simple external device to a vehicle’s controller area network bus, in this case under the rear bumper, and unlock the doors, open the trunk, and start the engine (Chugg, Condit et al., 2016). The consortium will work with standards organizations as well as vehicle and EVSE manufacturers to develop new standards for communications hardware, firmware, and software.

Environmental Impacts of Fuel Sources on PEVs Climate and greenhouse gas emissions goals have been a major catalyst of PEV adoption. This connection is relatively well understood in scientific literature, likely contributing to the low ranking of Question 10 in our survey, but many people outside of industry and energy research have questions about PEVs’ environmental impacts. Although PEVs are considered “zero-emission vehicles” because they do not generate tailpipe emissions, PEVs’ life-cycle environmental impacts depend on the source of the electricity used to power the vehicles. For example, the life-cycle emissions of a PEV recharged on a predominantly coal-based power system are higher than for a PEV recharged on renewable sources. Regardless of the source of electricity, PEVs can produce fewer life-cycle greenhouse gas emissions than conventional gasoline or diesel vehicles (Weiller and Sioshansi, 2014). As renewable energy penetration increases over time, which is another common climate-related goal, the environmental benefits of PEVs are expected to increase, especially in terms of

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greenhouse gas emissions. Table 1 summarizes the expected life-cycle impacts of electric vehicles based on electricity (solely) from the listed sources. The data for this table were extracted from ANL’s GREET model (Elgowainy et al., 2013), where the default electricity mix was altered to be 100 percent from each source, as opposed to a mix. As shown in the table, hydroelectric, wind, and solar resources result in the lowest greenhouse gas emissions, with life-cycle emissions coming just from the vehicle itself. Water demand (which is not the same as consumptive water use) is also listed in the table. Although hydroelectric power results in low greenhouse gas emissions, it is the most water intensive of the PEV fuel sources assessed. Table 1. Life-cycle impacts of fuel and vehicle cycles

Life-cycle Impacts (Fuel and Vehicle Cycles)

Power Generation Greenhouse Gas Emissions (g/mi)

Fossil Fuel Consumption (J/mi)

Water Demand (cm3/mi)

Oil-Fired 476 5,732,302 1,033

Coal-Fired 473 4,853,403 902

Biomass 386 595,377 855

Natural-Gas-Fired 246 3,819,384 509

Geothermal 67 356,703 2,177

Nuclear 28 371,110 956

Hydroelectric 27 356,703 7,518

Wind 27 356,703 182

Solar 27 356,703 380

Using the various electricity grid mixes, it is possible to estimate the impacts of a PEV at different regional scales. For example, Table 2 describes the 2011 estimated electricity mixes for six different countries, based on 2013 International Energy Agency data (OECD/IEA, 2013). Table 2. Electricity generation sources in a sample of different countries

Brazil (2011)

China (2011)

India (2011)

Japan (2011)

Russia (2011)

United States (2011)

Oil-Fired 5.2% 0.4% 2.2% 14.9% 4.3% 1.0%

Coal-Fired 6.9% 88.2% 78.0% 28.9% 18.7% 47.6%

Biomass 10.3% 1.4% 4.7% 3.5% 1.0% 2.3%

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Natural-Gas-Fired

6.9% 2.0% 7.2% 33.8% 60.6% 20.7%

Geothermal 0.0% 0.2% 0.2% 0.5% 0.0% 0.5%

Nuclear 6.9% 2.0% 3.2% 13.4% 11.5% 23.4%

Hydroelectric 63.8% 5.3% 4.0% 3.5% 3.6% 3.1%

Wind 0.0% 0.2% 0.2% 0.5% 0.0% 1.0%

Solar 0.0% 0.2% 0.2% 0.5% 0.0% 0.5%

Using the estimated electricity mixes and the GREET-based life-cycle impacts of PEVs by fuel source, the impacts of PEVs can be calculated for each country. Figure 20 describes the estimated life-cycle impacts of a PEV (on a per-mile basis) for six countries. These impacts will change over time as the electricity mix of each country changes.

Figure 20. Life-cycle emissions in a sample of different countries Comparative life-cycle assessment can determine the relative benefits of electric, hydrogen fuel-cell, and other alternative-fuel vehicles. Scenario analysis of different penetration levels of alternative vehicles can estimate the greenhouse gas emissions corresponding to various policies and regions.

Summary and Conclusions PEVs present a host of opportunities for drivers, facilities, fleets, and utilities. These include lower fuel costs, environmental benefits, and local fuel security in addition to the VGI aspects such as integrating electricity demand with renewable energy, balancing consumer loads as a demand-side management strategy, providing ancillary services to the grid, and exporting power from vehicles to buildings, the grid, or emergency equipment. Addressing the associated

GREET Model ANL developed the Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model to assess the life-cycle environmental impacts of vehicles based on different energy inputs. The GREET model allows policymakers to estimate environmental benefits from electrification of the transportation sector as seen above. https://greet.es.anl.gov/

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economics and EVSE management issues introduces challenges that vary by location, physical security protecting EVSE, grid quality, and PEV penetration levels. This report reaches several conclusions based on the wealth of research completed around the world. The first and most foundational is that negative grid impacts of PEVs could be significant if there is large-scale vehicle adoption and charging behavior is not managed. They will vary by region, local PEV penetration rates, and grid characteristics. Both the physical structure of the grid and the strategies employed by utilities to manage electricity flows will be impacted by high and/or geographically concentrated PEV adoption. Low voltage distribution grids are especially sensitive to the changes in electricity demand resulting from high PEV penetration. At the facility level, impacts could include requirements for additional, or larger transformers and/or high demand charges. Increased feeder and transformer capacity might be needed at the distribution level, especially if balancing large amounts of distributed renewable electricity generation is also needed. Every level of the grid may be impacted by PEV adoption around the world. All of these impacts are manageable. One option to manage the impacts is simply to upgrade the grid at various points. This could include new transformers at facilities, upgrades to distribution feeders and substations, and energy storage systems, or it could include charging management. Many of the power system impacts can be controlled to the point where PEVs significantly benefit the grid if PEV charging is managed in one form or another. There are several options for controlling PEVs. Chief among them are EVSE networks. However, PEV driver interfaces, building control modules, and third-party aggregators are options as well. From the utility perspective, this should include rates to encourage vehicle owners to charge at off-peak times and perhaps offer additional benefits to incentivize the return of electricity from PEV batteries at super-peak times through V2G technology. Controlled charging in general and V2G in particular require a cost justification along the value chain. Drivers, automakers, and utilities will all be forced to make various levels of investment, including their time and energy, in order to optimize the benefits of managed charging. Initial research suggests that the battery impacts of targeted V2G utilization may not be as significant as aggressive driving, but the additional cost to enable V2G and warranty the vehicles naturally falls to the automakers, which are removed from the value chain of electricity storage. Financial benefits may need to flow from the utilities to the consumer to the automakers to enable V2G on a broad scale. Environmental and economic impacts both vary by region. This is due not only the electricity mix – which may vary significantly within a country such as in the US – but also to the competing transportation fuels, electricity rates, and petroleum taxes. Cyber security is an important consideration for PEVs and EVSE. Most cyber-attacks to date have focused on vehicles directly, which could equally impact gasoline or PEVs. However, the EVSE, networks, connections to facility control modules, and integration into the electric grid introduce new vulnerabilities similar to those being addressed for smart grids. Laboratories are working to resolve these concerns proactively, but the wide variety of EVSE networks around the world will make that a challenge as well.

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The variety of EVSE networks and communication protocols also makes it more difficult to standardize reporting, payment, and access to charging. This impacts the consumer experience with PEVs as well as back-end controls. As the protocols are standardized, they may create more directed efforts on cyber security from both the black-hat and white-hat communities. Additional research is required in several of these areas as they evolve. To this end, NREL and LBNL will follow this report with a series of briefs addressing the questions deemed highest priority by EVI members and reviewers of this report. Research around the world will continue to foster deeper understating of the key drivers of PEV adoption and opportunities it creates to inform policy makers, utilities, automakers, fleets, energy managers, and drivers; all stakeholders in the VGI conversation.

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Appendix A: Electric Vehicle Initiative Grid Integration Survey Name: Country: Organization: Job Title: Email Address: Phone (with international extension):

Names of Additional Contributors:

EV Grid Policy Issues Importance from

1 to 10 (with 1 as lowest and 10 as highest)

Comments

Long term EV deployment effects on transmission grids

Long term EV deployment effects on distribution grids

How EV charging affects facility-distribution grid integration, including phase balance

How vehicle-to-grid and exporting power from EVs for ancillary services can add value to the electric grid

How vehicle-to-grid and exporting power from EVs impacts vehicle and battery life

Impact of demand charges (an expensive charge levied based on maximum power demanded by an electricity customer) on EVSE charging costs and adoption

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Effects of time-of-use rates on EV charging costs and adoption (whether favorable electricity rates for EVs drive adoption)

Business models for utilities to install or support EV chargers

Regulation of private utilities or management of public utilities and the relationship to EV policies

Environmental impacts of fuel sources on EV emissions

Cyber security issues with EVSE (including differences for Level 1, Level 2, and DCFC)

EVSE network communication, coordination, and compatibility

EV and EVSE demand-side management, charging controls, and balancing charging times to avoid peak demands

EV deployment or adoption incentives

Interactions between renewable energy generation and EV charging activities

Grid storage and load-shifting from EVs

Additional EV Grid Policy Issues

Importance from 1 to 10 (with 1 as lowest and 10 as highest)

Comments

[Include additional ideas here]

Questions Responses

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What research questions have you explored regarding EV grid integration?

What method have you used to determine future EV charging demand by time and space?

What method is used to do power sector planning in your country?

Please list noteworthy reports authored in your country about EV grid integration. Please provide website links if online or .pdf copies if you have them.

What outstanding research questions would you like us to address on EV grid integration?

What positive impacts do you believe EVs could have on the electrical grid?

What negative impacts do you believe EVs have on the electrical grid?

Who regulates utilities in your country? If it varies by jurisdiction, please provide a few examples. Please provide website links if you have them.

What data sources do you have on EV adoption and grid integration in your country? Please provide website links or files if you have them.

What data do you wish you had on EVs and grid integration?