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Over the past decade, utilities have seen demand for electricity flatten, while the supply of energy from renewable sources has grown. In fact, on some sunny days and windy nights, renewables generate more energy than the system can use, so their output must be curtailed—a wasted opportunity. As electric vehicles become more popular, they may help resolve both issues—if they charge at the right times.
EVs, thirsty for electricity, will increase demand for electricity. However, if all motorists charge their cars after work, when demand is already high, utilities will need to build more power plants. If, on the other hand, fleet and individual owners can be incentivized to charge their cars and trucks when renewables are producing more electricity, they can consume the energy surplus and avoid making peak demand worse. Of course, different locations will have different options. For example, the figure above shows that charging cars on sunny afternoons could help smooth out California’s demand curve. Other places that are supplied by wind power generated at night would want to charge their cars overnight.
Christophe Guille is a principal, and Joe Herger and Joseph Scalise are partners, with Bain & Company in San Francisco. All three work with Bain's Global Utilities & Renewables practice, which Joseph leads.
Related Bain Brief: Electric Cars Could Recharge Growth for Utilities
Published in May 2018