The Era of Electric Vehicles Could Be Here Sooner Than We Thought. What Does that Mean for POUs?
The conventional wisdom used to be that it would be many years — perhaps when our children or grandchildren are much older — before electric vehicles would be as common on California roadways as gas-powered cars. The thinking was that EVs are stubbornly pricey and out of reach for most buyers without government incentives, and that wouldn’t soon change.
But, surprisingly, there are emerging signs that the era of electric vehicles is coming sooner rather than later. The New York Times reported this month that electric vehicles are on the verge of becoming mainstream thanks to falling costs both for batteries and the plug-in cars themselves, and increasing interest from major car manufacturers.
Volvo recently announced all its models will have electric engines beginning in 2019. Volkswagen is bringing two new electric vehicles to the U.S., and Mercedes plans to begin producing an all-electric SUV two years from now. The times are changing quickly.
There’s more. Fresh data from Bloomberg New Energy Finance forecasts that by the year 2040, electric vehicles will account for 54 percent of new car sales around the globe, and 33 percent of the world’s car fleet will be electric.
If you think that’s a pie-in-the-sky prediction, recognize 2040 is 23 years from now. Twenty years ago Google didn’t exist, and Amazon and eBay were brand new and unknown. The founders of Uber, Lyft and Airbnb were toddlers. A lot can change in two decades.
A sea change toward EVs, if it comes to fruition, could dramatically change the demand profile for electricity in California and the rest of the world. We, as publicly owned utilities, must be prepared.
According to Bloomberg, electric vehicles will “displace 8 million barrels of transport fuel per day nationally (about 8 percent), and add 5 percent to global electricity consumption,” and the “‘peakiness’ of fast-charging load profiles will need to be managed by utilities and regulators through the introduction of time-of-use rates to encourage off-peak charging, as well as storage solutions at the operator site which can mitigate high power demand from the grid.” While “operator-site” storage may be one option, we also need to strongly consider off-peak and pumped-storage hydropower to help charge those cars.
California is likely to continue to lead on electric vehicles and provide incentives that encourage consumers to buy EVs. The state’s current goal is for 1.5 million electric vehicles on roads by 2025, and as many as 5 million by 2030, roughly 1 in 5 of all vehicles in California.
Legislation (AB 1184) from Assembly Member Phil Ting, D-San Francisco, that would create a California Electric Vehicle Initiative could soon be headed to the governor’s desk for his signature. Other pending proposals (there are dozens) would require large utilities to install electric charging stations at school facilities, state parks and beaches within their service territory, expand loan programs so that low- and middle-income consumers and families could purchase EVs, and change sales-and-use tax requirements for EVs.