Smart EV Charging: What’s in It for You?

Credit: Jessica Russo, NRDC


When people think about buying an electric vehicle (EV), their primary motivation might be to help the environment by driving a zero-emissions car. To boot, the cost savings from driving an EV are on the rise, given the current relative prices of electricity and gasoline, and due to EVs’ lower maintenance requirements. But what if the way EVs are charged could further help the environment, while also padding owners’ wallets?

In fact, thoughtful vehicle-grid integration (VGI) can both help the grid and save drivers money. As discussed in more detail here, VGI encompasses well-planned placement of appropriate chargers, EV smart-charging (controlling when and how charging occurs), and returning power from EVs back to the grid. This can help the electric grid in many ways, such as reducing peak loads, and helping get higher volumes of EVs and renewable energy on the grid. But what’s in it for EV owners to change their charging behavior?

Ways to influence such behaviors can take many forms, but the approaches fall into two main categories: non-monetary and monetary incentives. Suitable incentives are needed to help ensure charging behavior is changed to reach optimal VGI benefits, for both the grid and the EV owner. To this end, utilities, corporations, and other stakeholders also need to be appropriately motivated.  

Non-Monetary VGI Incentives

Providing users with actionable information is the first step. For example, some utilities send push-notifications to their customers via smart thermostats to encourage energy-saving actions on particularly hot or cold days. These have been particularly effective at reducing peak electricity demand at times when the power grid is under strain (see here, here and here).  EVs are great candidates for this type of action too. Some newer demand response providers are now making a game of it. For instance, FleetCarma, a VGI service-provider, is tapping drivers’ competitive impulse to change charging behavior by assigning “points” for good charging behavior, such as charging more during off-peak periods. At the end of the month, EV drivers with higher points see a reduced bill. They may be equally motivated by outperforming their virtual competitors.

Another non-monetary incentive is to enable residents to be able to use personally produced clean energy to power EVs. People who have invested in solar and wind energy want to use their own power. For example, if a driver is primarily charging at home during sunny periods, a solar system coupled with EV charging could eliminate charging costs completely and contribute to an important feel-good factor.

Public and workplace charging is a way to charge EVs using more renewable electricity, for example by using solar during the day when cars are parked at offices. Such charging locations are instrumental in making drivers feel confident that their EVs can be charged no matter where they drive – reducing “(driving) range anxiety” has been found to be vital to spur EV adoption. Given that charging an EV typically takes longer than refueling a gasoline vehicle, public charging infrastructure should be coupled with drivers’ activities such as fast-charging stations at malls or grocery stores, and not-so-fast charging stations at baseball fields and town squares where people might linger longer. Placing easily accessible charging stations in common public places encourages people to charge in concert with their daily routine. Free parking could further sweeten the deal.

Monetary VGI Incentives

Monetary incentives can arguably have even greater influence on charging behavior. Utilities use time-of-use pricing to encourage customers to reduce electricity use during peak periods and some have EV-specific rates to motivate EV charging during off-peak hours.

Credit: PG&E TOU Rates for VGI

Such rates typically apply to blocks of time (such as Pacific Gas & Electric’s six-hour rates). Consolidated Edison (ConEd) in New York offers progressive time-of-use rates for EV owners to encourage off-peak charging with the price difference between peak and off-peak periods being nearly 20 cents per kilowatt-hour (or a 5:1 ratio). A recent Synapse report determined that EV time-of-use rates are an effective way to reduce peak charging, and recommended that utilities adopt a pricing ratio of at least 2:1 on-peak to off-peak.

A newer, more advanced rate approach is real-time pricing, which PG&E in California and some other utilities are piloting. A real-time pricing structure may offer an hourly rate updated daily based on the forecasted peaks as well as expected renewable generation, and communicated to the customer at the start of the day. Utilities in Europe have found real-time pricing has significantly reduced peak loads, while minimizing the waste of clean electricity whenever available.

Credit: Source PEXELS

During extreme weather conditions, when utilities expect a spike in electricity use that could potentially put the grid at risk of a blackout, they can implement special measures to reduce power system stress. Utilities can communicate “critical peak prices” that are higher prices for a fixed period of time, or offer “critical peak rebates” for cutting back energy use during those times. This same concept is applicable to EV charging: during critical peak times customers can delay charging or pre-charge to avoid exacerbating peak usage in exchange for a small payback or reduced charging cost.

Pooling EVs Together to Maximize Grid Benefits

EVs and their batteries are particularly good at providing fast-response services to discharge stored electricity into the grid. In California, the state’s independent system operator (CAISO) offers several avenues for EVs to do so. PJM, which serves parts of the Midwest and Mid-Atlantic regions, allows EVs to provide power to the grid for certain services. In New England, smart charging of EVs can participate as a grid-system resource. That said, because grid operators deal with demand and supply at the large scale, the minimum size of an EV-based resource is between 100 and 500 kilowatts (kW), which is much larger than a single EV. Hence, EVs need to be “aggregated” to allow grid operators to practicably use them. Luckily new third-party companies (e.g., Nuvve, Greenlots and NewMotion) as well as charging station companies are coming to the rescue by offering to pool EVs and offer services in the electricity markets.

Credit: Felix Kramer (CalCars)

While only a few electricity markets allow third parties to offer services, there is increasing interest in this regard, especially in places with large renewable energy goals. This would create new business opportunities for service providers and allow EV owners more options to earn a return on their EV investment.

So, there you have it. EVs do more than just drive you around. With the right systems and incentives in place, EVs can help the power grid and fill your wallet doing so.