Electric vehicles are the mobile agent of the grid edge. The interest in decoupling transportation from fossil fuel consumption is primarily driven by environmental and economic motives, but grid-edge considerations focus on the system benefits of a large EV fleet. Instead of creating additional peaks by simultaneous charging of large numbers of vehicles, electric cars could make use of excess wind power at night, serve as mobile storage devices, and create new revenue streams for car owners. The EV market segment includes plug-in hybrid and electric-only EVs, vehicle-to-grid technologies, and smart charging solutions.

Deployment and Growth Projections

Plug-in electric vehicles sold twice as well in the first half of 2013 than they did in 2012, according to the DOE. This rate of growth in the market appears to be much faster than in the early phase of hybrid vehicles. Many industry observers point to this as a harbinger of massive success to come. However, even if the share of EVs relative to total car sales is increasing rapidly, it is still small, as the following chart illustrates. The market is bound to reach a turning point in the coming decade. Polk Research found that the U.S. car fleet hit a new record age of 11.4 years in 2013, up 16 percent from 2002. During the same period of time, fuel efficiencies have risen from a miles-per-gallon perspective, so the gap between old models and newer models with better fuel economy could spur increased demand in the short term. The Rocky Mountain Institute predicts that 50 percent of all U.S. vehicles will be electrified by 2050.

Trends, Thought Leaders, Vendors, Ideas

The EV market mirrors many challenges of the grid edge at a smaller scale. Factors to consider include:

  • Standardization: Standardization is a major stepping stone on the pathway to a plug-and-play environment of charging stations. The importance of standards is not limited to charging stations: if electric vehicles are to be part of a dynamic grid infrastructure, standardized communication protocols are just as important as OpenADR for demand response, in terms of creating a single language with which EVs and energy service providers can communicate.
  • New business models: Henry Ford’s factories might have given rise to the American dream, but the model of individual car ownership might not be sufficient to reach high EV penetration. New and emerging paradigms include car sharing, battery switching, web-enhanced leasing, and remuneration for power fed back into the grid. So far, no clearly dominant concept has emerged. Better Place’s battery-switching concept failed in Israel, mainly because few EV vendors enabled switching.

U.S. efforts around V2G remain rare, but they do exist. In a University of Delaware project, fifteen BMW Mini E cars fed power back into the grid in reaction to a charging signal sent by grid operator PJM Interconnection, earning about $5 a day. Cars need a two-way charger for this; standard models of the Nissan Leaf or Chevrolet Volt currently come without these for pricing reasons. Several car companies are currently working on integrating two-way chargers. With more powerful chargers, EVs might participate in the market for spinning reserves.

New metrics for comparison will be a vital part of EV growth in the near future. This is due in large part to the fact that the economics of EVs are considered relative to ICE economics, and as such, having an accurate means of comparison is important. The DOE’s eGallon metric is an example of one such new benchmarks. It compares the cost of regular fuel against the cost to fuel an electric vehicle in a particular state. It is an attractive, easy-to-use tool that condenses a complex market into a simplified format for consumers.

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This is an excerpt from GTM Research's free report Grid Edge: Utility Modernization in the Age of Distributed Generation. Learn more about our grid-edge coverage, Executive Council, and exclusive research at www.thegridedge.com.