Electric Vehicles and Smart Grid Technology Flourish With Competition

 

“Dynamic pricing is the absolute key to integrating electric vehicles onto the grid,” said Commissioner Philip Moeller of the Federal Energy Regulatory Commission (FERC) during his keynote address. “Dynamic pricing can help steer new load of electric vehicles away from peak demand time and make sure the grid isn’t overwhelmed.”

 

Benefits of PHEV integration took center stage during the first panel discussion on obstacles and opportunities. “Electric vehicles provide energy storage capacity, the ability to mitigate demand peaks and valleys across the grid, and realize the full potential of renewables,” said Ken Schuyler of PJM Interconnection. By plugging these vehicles into the grid, clean energy capacity can be stored at multiple points across the grid for access at periods of peak demand.

 

But increasing consumer understanding about charging options is key to a full rollout. “We need to dispel the myth of ‘range anxiety’ of consumers by building charging infrastructure,” said Vincent Lyons of Leggett & Platt.

 

Dynamic pricing, a centerpiece of organized competitive markets, is the key to engaging consumers. “We can’t look at electric vehicles as static devices,” said Bill Reinert of Toyota. “We must get price signals to consumers and aggregate them with the grid.”

 

Once consumers understand how their vehicles can fully interact with the grid, they can see significant economic benefits. This reality was demonstrated at the event by a University of Delaware PHEV partnering in an energy storage pilot program with PJM Interconnection. “This vehicle is providing energy storage and regulation services right now on the grid,” said Scott Baker from the University of Delaware’s Center for Carbon-Free Power Integration. “Each vehicle is earning $120-$200 per month in the PJM market as a regulation and energy storage unit.”

 

 

But not all electricity grids are created equally. “We couldn’t do this in regions of the country without competitive markets because they don’t value regulation services or establish an accurate price to let consumers know how much it’s worth,” continued Baker. “Establishing competitive markets 10 years ago and a price for regulation services resulted in our pilot program vehicles.”

 

Once dynamic pricing and consumer engagement are in place, the innovative applications will follow, according to the second panel’s discussion of market support for electric vehicles. “Electric vehicle integration is a Manhattan Project for our time,” said Commissioner Robert Powelson of the Pennsylvania Public Utilities Commission.

 

“PJM has proposed to go from hour-ahead price and capacity forecasts to five-minute ahead markets to empower greater storage and more accurate compensation (to PHEV owners),” said Stu Bresler of PJM Interconnection.

 

Wholesale markets such as the one administered by PJM are just one side of dynamic pricing benefits. An active retail market is integral to engaging consumers. “Illinois has the largest real-time dynamic pricing program in the country with about 20,000 consumers participating,” said Chris Thomas of the Illinois Citizens Utility Board. “Data shows that once people were introduced to dynamic pricing, they started making better energy decisions. It is a transformational technology because it enables consumers to lower the cost of their transportation.”

 

Texas’ organized market, America’s wind energy leader, has also become a hotbed for PHEV innovation. “We predict 80-90 percent of all electric vehicle charging will be done at home at night, which will balance well with the state’s wind assets and demand patterns,” said John O’Brien of NRG Energy. “Technological advances in electric vehicles can combine with competitive markets to usher in transformation to smart grid integration.”

 

Smart grid integration in organized markets can also benefit transportation systems beyond electric vehicles, as evidenced by a pilot program between Viridity Energy and the SEPTA transportation system. “We are installing a 1.5 megawatt storage battery that stores power from regenerative braking systems for rail system reliability,” said Allen Freifeld.

 

In the end, competition is critical to consumer buy-in and grid integration. “Unless electric vehicles are in competitive markets, society will pay a price because consumers won’t be rewarded for shifting power consumption,” concluded FERC Commissioner Moeller. “A consumer can now get compensated for sending power from their vehicle to the grid – you can’t do that in non-competitive markets.”