Charging Forward: Top Six Utility Transportation Electrification Solutions Set to Take Off in 2024

Featured on Energy Central and published in their January/February Special Issue

By Hilary Polis

Last year was marked by a mixture of progress and setbacks in the transition to electric transportation in the US. In 2023, we surpassed one million EVs sold in the US, and the EV market share of new car sales grew by over 50% from 2022. Additionally, federal investments to support transportation electrification started to swing into motion as states awarded $130 million to build EV charging stations through the federal National Electric Vehicle Infrastructure (NEVI) Program. However, 2023 also highlighted the scope and scale of the challenges we face in building the ecosystem and infrastructure required to achieve our EV adoption and emissions reduction goals.

This is where the rubber meets the road. The US electrical grid isn’t designed to accommodate an influx of EV charging, especially for fleets and medium-duty/heavy-duty (MDHD) vehicles, and upgrading the electrical grid is proving to be slow and costly. The uneven rollout of EV charging infrastructure has left “charging deserts” that correlate with race and income. While utility EV load management programs are scaling, we are also learning that current frameworks often don’t fully capture their associated benefits. In 2024, utilities are poised to play a crucial role in developing and deploying solutions to address these emerging challenges. Generally speaking, we anticipate solutions based on expansion, innovation, and collaboration. Within these foundational themes are six EV load management and charging infrastructure solutions we expect to play a critical part in addressing the key industry challenges that grew to prominence in 2023.

1| Revving Up EV Load Management: Going Beyond Single-Family Homes

To date, most utility EV load management programs have focused on single-family residential customers. This segment is a natural starting point as residential customers tend to have direct control over their charging behaviors and generally have some flexibility in their charging needs while at home. Although the rapid growth of residential EV load management programs is commendable, utilities face the challenge of managing the ever-increasing loads from public, multifamily, workplace, and commercial charging infrastructure projects. These projects may include chargers that charge at a higher demand and put more strain on the distribution grid than residential charging infrastructure. Moving beyond the residential single-family context will require utilities to serve a heterogeneous population of customers who install charging stations. These site hosts will have different load management needs and opportunities depending on several factors, such as their sector, operation schedules, the vehicle classes that charge at their sites (e.g., light-duty vs. MDHD), and the end customers they serve. For example, electric school buses generally have predictable schedules. They are typically only used Monday through Friday to bring students to school in the morning and take them home in the afternoon. This leaves a wide window when the buses are not in use and can shift charging and export electricity in alignment with grid needs. In contrast, a customer who installs charging in an area intended to serve multifamily residents without home charging will likely want to ensure that the charger is always available to increase charging accessibility, which limits opportunities for load shifting and demand flexibility. Similarly, a site host located along a highway serving customers who need to stop and charge at the end of a road trip will likely have little tolerance for load shed or throttling at their chargers.

In 2024, we anticipate that utilities will make significant progress in gathering information about the charging needs and demand flexibility use cases associated with different non-residential customer segments and “away-from-home” charging scenarios. Given the diversity of charging needs, these data can help support the development of tailored load management offerings for key customer segments, such as delivery vans and school buses, as well as for scenarios like workplace and hotel charging. Alternatively, utilities may employ flexible offerings that allow customers to choose the load management strategies that work best for them. Regardless of the exact offerings made available, 2024 will see an expansion of EV load management initiatives driven by the desire to mitigate the risks that increased EV adoption poses to the grid.

2| Powering Up Charging Infrastructure: Streamlining Energization Timelines

EV charger service energization is the process of connecting new EV chargers to the distribution system. Energizing EV chargers is a complex, multi-step process that involves multiple organizations, including utilities, site hosts, EV charging vendors, Authorities Having Jurisdiction (AHJs), contractors, and government organizations. Delays in the timelines for completing utility service upgrades to support EV charging installations have become an issue for utilities across the US as demand for EV charging installations increases—especially among customer segments that require higher grid capacity to support EV charging, such as those with fleets and MDHD vehicles. Key factors that impact energization timelines include supply chain issues (i.e., shortages of switch gear and transformers), permitting requirements and delays, customer-driven delays, including design delays and changes, and delays in initiating the steps required in the energization process. For projects that require increased grid capacity, the timelines associated with completing grid upgrades can further prolong the process.

Utilities and regulators have begun to address these issues by developing working groups, tools, and trackers to streamline the energization process. The California Public Utilities Commission (CPUC) has required the California investor-owned utilities (IOUs) to map out the detailed steps in the energization process from initial application to charger energization and track the time associated with each step in the process.[1] Agencies, including the California Energy Commission and the Federal Joint Office on Energy and Transportation, have also developed resources to support charging infrastructure planning. We expect 2024 to bring more coordinated efforts between regulators, government organizations, utilities, EV service providers (EVSPs), AHJs, and other stakeholders to identify and address bottlenecks in the energization process and streamline timelines.

3| Futureproofing the Grid: Uncovering “No-Regrets” Upgrade Opportunities

A utility professional once told me that what kept them up at night was the fear that one day, one of their major customers would purchase a large fleet of EVs and then reach out to their utility after the purchase to install high-powered charging infrastructure. Connection times for installing charging infrastructure for larger installations comprised of 20 or more fast chargers can currently take up to two years, according to a 2023 report from the North American Council for Freight Efficiency (NACFE). Without alternative charging options, this could effectively render a new fleet of EVs useless for multiple years.

Futureproofing, or building grid capacity beyond what is immediately needed for current installations in areas with a high propensity to electrify, proactively addresses future EV charging and building electrification needs. Futureproofing can be an excellent preemptive solution in locations such as industrial areas and ports, where it is only a matter of when, not if, building and transportation electrification loads will dramatically increase. In my research, I have found that futureproofing can also help more fully address customers’ charging needs and increase program participation. To support futureproofing, utilities must be transparent about available grid capacities as well as the scope and cost of upgrades necessary to support EV charging infrastructure. By providing this information, utilities can help customers make informed decisions about where to site and invest in charging installations to minimize grid upgrade costs. Utilities have begun to provide this information by hosting capacity maps, and the Electric Power Research Institute (EPRI) has made this type of information available on a federal level through their eRoadMAP tool. In 2024, we expect that more utilities will include futureproofing as an element of their regulatory filings. Additionally, we anticipate a groundswell of efforts to collect, share, and analyze data concerning the scale, expense, and location of necessary grid upgrades to achieve future EV adoption goals and other transportation electrification objectives.

4| Unlocking the Potential of V2X: Assessing its True Value

V2X refers to use cases wherein EVs can communicate with and bi-directionally charge to different end uses, including the grid (V2G), home (V2H), building (V2B), and another vehicle or device (V2L). Valuation assessment results suggest that V2X technology has the potential to provide a much higher value compared to single-directional load management solutions (V1G), albeit at a much higher cost.[2] However, understanding V2X use cases and associated costs is still in the early stages. Several key barriers have impacted the pace of V2X advancement, including but not limited to long interconnection queues and grid integration challenges, the high cost and limited market availability of V2X-compatible vehicles and chargers, battery degradation concerns, and developing markets and compensation mechanisms.

Last year saw marked progress in utilities kicking off partnerships with automaker OEMs to test V2X technologies, including PG&E’s Pilot with Ford and Toyota’s partnership with Oncor. However, most V2X projects are in the pilot stage right now, and while vehicle-grid integration (VGI) can provide a range of benefits to an array of stakeholders, determining the value and enabling valuation remains a challenge. Efforts to unlock the value associated with this technology will drive pilot and program design trends in 2024. An accurate valuation will require pilots that capture critical information to support scale, including benefits (e.g., load shift, bill savings, rate impacts, etc.) and costs (e.g., incentives, technology, program deployment) by use case. It will also require aggregators and providers to develop appropriate financial services models to engage with customers and utility program staff engagement with system planners to appropriately model resource value compared to other DERs. Consequently, we expect utilities to continue collaborating with OEMs to understand the use cases and value propositions for V2X in 2024. Findings from these efforts will inform the scale at which utilities decide to invest in V2X solutions or prioritize single-directional EV load management.

5| Launching New Program Pathways: EV Chargers as Meters

Almost all residential EV TOU rates currently in the market are administered using whole-home metering and are, therefore, inherently whole-home rates. In some cases, utilities have also offered EV TOU rates that only apply to customers’ EV charging; however, these rates have historically required the customer to install a second meter specifically for their charger(s). This is more common on the commercial side, as installing a second meter can be cost-prohibitive on the residential side. In 2022, the CPUC adopted a decision allowing for the submetering of EV chargers. This decision was the first in the country to allow utilities to use the charger as a second meter to measure electricity consumption for settlements and billing, reducing the need for separate utility-grade meters. This decision came as more chargers have become certified by the National Institute of Standards and Technology (NIST) and achieved a proven, tested high degree of accuracy.

Vehicle telematics combines wireless telematics data, GPS systems, onboard vehicle diagnostics, and other technologies to record and transmit data directly from the vehicle. This technology offers EV drivers another pathway to participate in EV load management programs regardless of their charging infrastructure. EV load management programs that leverage EV telematics are gaining prominence among utilities due to ease of deployment and the market potential for expanded customer reach through a bring-your-own-device option. While NIST certification helped establish the credibility of using EV chargers as meters, telematics data has yet to undergo a certification process to verify data accuracy and reliability, and regulators have not approved using telematics for submetering.

Enabling customers to join a TOU rate based only on their EV charging consumption could promote wider adoption of EV TOU rates. This approach may help lower the cost of charging the vehicle and allow customers to forgo installing a costly separate meter to isolate EV charging. Programs that allow customers to participate in an EV TOU rate based only on their EV charging may also appeal to EV drivers who have more ability to shift their EV charging and less ability to shift other energy-consuming activities in their homes. Given the limited deployment of EVSE submetering for load management to date, in 2024, we expect new pilots and programs to provide valuable insights into the customer experience, data quality, and technological reliability of submetered program offerings. We also expect to see utilities, regulators, and technology providers advance the conversation on approving submetering through vehicle telematics.

6| Empowering Equity: Prioritizing Charging Infrastructure Investments for MDHD Electrification and Residents without Home Charging Access

The increase in investment in EV charging infrastructure from the private sector and federal government in the past few years introduced new conversations about the role utilities should play in supporting transportation electrification infrastructure deployment. As EV adoption grows, so does the need for more charging. NREL models found that approximately 1,182,000 public charging will be needed by 2030 to accommodate national EV adoption goals.[3] Current data show that more than 165,000 public chargers have been installed in the US, representing just 14% of the need predicted by NREL models.[4] Following regulatory guidance, several utilities with more mature TE portfolios, including utilities in California, Massachusetts, and New York, have started to adjust their strategies over time, focusing on the installation of light-duty charging infrastructure in areas where lack of investment has created “charging deserts” (e.g., multifamily properties, tribal communities, and environmental justice communities) to support equitable access to transportation electrification, especially for residents without access to home charging.

The routes and operations of trucks, buses, and other large polluting vehicles are often concentrated in environmental justice communities. Recognizing the disproportionate impact of vehicle pollution on these communities, regulators and utilities have begun to direct funding to support grid upgrades and make-ready infrastructure for MDHD charging. This will help improve local air quality and accelerate the market for MDHD electrification, which is still in the early stages. Compared to light-duty vehicles, MDHD electrification generally requires more extensive grid upgrades to support charging. In 2024, we expect to see utilities and regulators continue to monitor for market gaps and barriers to transportation electrification that utilities are well-suited to provide solutions to address. Identifying the appropriate role of the utility in supporting transportation electrification will be a guiding question that regulators will continue to grapple with in the years ahead.

The Road Ahead

As we look forward to 2024 and beyond, it’s clear that the electric transportation industry is on the cusp of significant change and innovation. While the past couple of years brought abundant good news and funding announcements, more recently, threads of EV pessimism have been amplified in the media. On any journey worth pursuing, it is only natural to hit bumps in the road. With the help of utilities and other key players in the energy industry, I still believe we are poised to address the challenges we face in building the infrastructure and ecosystem needed to achieve our EV adoption and emissions reduction goals. From expanding load management programs to streamlining energization timelines, the six solutions we’ve explored represent opportunities for a promising path forward. By facing the challenges of transforming an entire system together, we can continue to progress toward a cleaner and more equitable future.

References:

[1] California Public Utilities Commission. (September 20, 2023) “EV Infrastructure Rule Service Energization.” [Public workshop]

[2] California Public Utilities Commission (CPUC). (2002). Final Report of the California Joint Agencies Vehicle Grid Integration Working Group.

[3] NREL. (2023). The 2030 National Charging Network: Estimating US Light-Duty Demand for Electric Vehicle Charging Infrastructure.

[4] Joint Office of Energy and Transportation. “First Public EV Charging Station Funded by NEVI Open in America.” December 13, 2023.

About the author:

Hilary Polis is an Associate Director of Transportation Electrification at Opinion Dynamics where she leads Opinion Dynamics’ work in the transportation electrification space. Hilary leverages her expertise in vehicle grid integration to help clients understand the intersection of the EV owner and the grid. She provides advisory services to utilties and automakers across the country that are looking to building or scale EV load management offerings including PG&E, ComEd, and Puget Sound Energy. Hilary also has a depth of experience directing research projects to understand the performance of large-scale TE initiatives including SCE’s Charge Ready Light Duty Program, NYSERDA’s Clean Transportation Prize Program, Xcel Energy Colorado’s Transportation Electrification Plan Pilot’s, and Portland General Electric’s TE pilots.

For more information regarding the article, Contact:

Hilary Polis: hpolis@opiniondynamics.com

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