The disconnect in our electric grid

Since the earliest days of the industry, when gasoline was sold in small batches by pharmacists, generations of auto dealers rarely have had to worry about how their customers planned to refuel the vehicles they bought.

Pumps are everywhere. But plugs? Not so much — not yet.

As automakers jostle to impress Wall Street investors with their latest electrification plans, dealers have to ask: Is a grid that already strains in some areas to keep up with air conditioners and bad weather suddenly going to be able to reliably juice up millions of new vehicles? John Luciano, a Volkswagen and Toyota dealer in Amarillo, Texas, said: "I know the guys in California and some of the others that are really selling a ton of EVs are starting to get concerned."

In all likelihood, the grid can handle it — but it depends largely on how closely you look. While the U.S. is not expected to have a problem keeping up with added demand for energy generation over the next three decades, delivering those electrons effectively to homes, businesses and public spaces via chargers and properly wired buildings is a significant logistical hurdle.

"Over time, utilities will be able to support the increase in demand that EVs will put on the grid — but the key words there are 'over time,' " explains David Reuter, an auto industry veteran who now is chief communications officer for NextEra Energy, the nation's largest utility company and parent of Florida Power & Light.

While Reuter says that utility companies have ample power and infrastructure to service EVs at current growth rates, he notes that it "took many decades" to build out the current U.S. gasoline and diesel fueling infrastructure.

"I think you're going to see a lot of the same take place as EVs start to take over a larger part of the car park nationally," said the former Ford Motor Co. executive, "and as the increase in EVs comes in, there will be changes in the grid and infrastructure needs to support it."

He's backed up in his assessment by Matteo Muratori, senior engineer and team lead at the U.S. Department of Energy's National Renewable Energy Laboratory.

"In some instances, system upgrades will be necessary — new transformers, etc. — similar to what happens when new construction occurs and electricity loads are added to the system," Muratori told Automotive News. But, he added, while those utility upgrade costs are likely to be broadly passed on to ratepayers, as a whole, the U.S. grid system is well positioned to absorb significantly more EVs than are now on offer.

Legacy automakers and their upstart brethren have product plans for scores of battery-electric vehicles over the next several years, as well as large numbers of plug-in electric hybrids that rely on batteries to power short-range trips that make up most daily travel. Whether those nameplates translate to actual buyers willing to put them on the road is an all-consuming, multibillion-dollar question in the auto and power industries, both of which have been preparing for the transition for several years.

For most people in the U.S., electricity is such a ubiquitous part of the background of daily life that it only ever enters our thoughts when it becomes unavailable — as was the case last winter for many residents in Texas during an extended cold snap. But the system that Americans rely on for their electricity is complex and highly regulated — at least outside of Texas — and rapidly evolving.

Expanding and clean renewable energy from wind, solar and hydro now make up a larger percentage of U.S. electricity generation than does coal, which is continuing to decline as a fuel source. Natural gas continues to provide the largest share of power nationally, while nuclear power accounts for about a fifth of generating capacity, according to the U.S. Energy Information Administration.

Utility companies continue to build generation into their portfolios, even as they replace higher-polluting coal-fired plants with natural-gas-powered generation plants, as well as renewable energy projects such as solar fields and wind farms. Among these projects is the giant $1.6 billion, 1,875-megawatt Guernsey Power Station being constructed along I-77 about 125 miles south of Cleveland that will provide energy to more than 1 million homes in Ohio, Pennsylvania and West Virginia.

In its latest Annual Energy Outlook report, which looks at projected energy usage and generation for the next three decades, the U.S. Energy Information Administration doesn't expect EVs to strain the nation's electrical infrastructure — at least given current trends.

The agency projects that electricity demand from transportation will remain less than 3 percent of the nation's total electrical demand through 2050, and says that "current laws and regulations are not projected to induce much market growth" that would adversely impact the nation's electrical grids.

It should be noted, however, that the report does not include any increase in EV sales and resulting electrical demands that might occur if the Biden administration is successful in getting its various EV proposals through Congress.

"Both vehicle sales and utilization [miles driven] would need to increase substantially for EVs to raise electric power demand growth rates by more than a fraction of a percentage point per year," the report says.

Sandwiched between the plants and turbines that generate electricity and the end users is the vast national patchwork of utility companies nationwide. From large publicly traded companies such as NextEra — with $18 billion in annual revenue and about 15,000 employees — to municipally owned power companies and mom-and-pop cooperatives, there are almost 3,000 electricity suppliers in the U.S., each with its own mix of how it generates or purchases electricity and how it delivers it to its customers.

There are three large regions in the U.S.: the Eastern Interconnection, which covers states as far west as the Dakotas down to the Texas Panhandle; the Western Interconnection, which covers 11 states and the southwesternmost edge of Texas; and the Texas Interconnection, which covers the remaining portions of the state.

For the most part, they work in unison to balance power generation and load — with the exception of the Texas Interconnection — as many tragically learned this past winter.

The National Renewable Energy Laboratory's Muratori said that as far as EV charging goes, each region is different, "but there are no major known technical challenges or risks to support a growing EV fleet, especially in the near term," over the next decade.

He said that at the local level, EV charging, though, "can increase and change electricity loads significantly, causing possible negative impacts on distribution networks, especially for high-power charging." But Muratori said utilities of all sizes have been preparing for both light-duty EVs as well as the rollout of electric Class 8 trucks, though "the upgrades needed can be expensive and take a significant amount of time."

At the base of what is a very wide electrical pyramid in the U.S. are users: the residences, commercial and industrial businesses and assorted others that use electricity to power commerce as well as much of their lives.

What is important to understand about these users is that their demand for power isn't uniform; it crests and falls each day, mostly with remarkable predictability, depending on the season. Commercial and industrial demand is at its peak during the day, when most businesses and offices are open and — in normal times — occupied, while residential demand is at its peak in the early morning and in the evening.

These trends make home charging of EVs what might be considered a natural fit, because it can be done overnight when demand elsewhere across the grid is low. Virtually all of the EVs coming to market allow the user to choose when to charge, and many utilities incentivize their rates during these off hours to encourage a more even load. EVs could also serve as mobile storage containers for times when excess electricity generation is otherwise wasted, but this bidirectional charging is not yet a widespread reality.

Despite the pomp and industry fervor about electrification, battery-electric vehicles still represent a tiny subset of sales across the industry. Through May, there were 166,255 new EV registrations in the U.S., more than double from the same pandemic-ravaged period a year earlier but still representing just 2.3 percent of total registrations, according to the Automotive News Research & Data Center.

Industry predictions vary widely on how quickly EV sales will rise. Just last week, Volkswagen Group predicted EV sales would reach parity with ICE-powered vehicles globally by 2030, in part because of strict sales mandates planned for some regions, including Europe and California. But those who believe electric vehicles are the future see anxiety about charging as a main sticking point holding back potential converts.

"Really, the weakest link right now in terms of EV adoption and relating that to the grid is getting people to understand charging," said Dustin Krause, head of e-mobility for Volkswagen of America and a former Tesla executive. "I think we're going to that marketplace over the long horizon where people are going to be buying electric vehicles because the benefits of EVs are going to become so apparent — it's like broadband compared to dial-up."

Even if EV penetration begins to expand far more quickly than it has, Krause says that all of those plugs aren't likely to overload the grid for one simple reason.

"People forget that most EVs aren't going to be charging from 0 to 100 percent every night. Because of the way people drive, they're only going to have to replenish 30 or 40 miles," Krause said. "They're mostly just topping off, so I think we'll be OK."

For EV buyers who can't charge at home, finding a plug will need to become as easy as finding a pump has been.

A number of companies are building local, regional and national charging networks of various types and speeds.

Krause, whose current and former employer have both made staggeringly large bets on the future of EVs, said automakers have been working with U.S. utility companies for years to make sure they're ready for what's coming, and in doing so, automakers have found an eager partner.

"Utility companies realize that this is their chance to be ExxonMobil," he said. "They've been very involved with us. Basically, the biggest thing they're worried about is: How much and how fast?"

"And frankly," added Krause, "that's the question we all have."