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Will EoT be the Killer "app" that Energy Internet is waiting for?

Farah Saeed, Research Director, Digital Grid, Frost & Sullivan
Farah Saeed, Research Director, Digital Grid, Frost & Sullivan

Farah Saeed, Research Director, Digital Grid, Frost & Sullivan

Whether you believe in climate change or not, the recent California fire devastation caused by drought is very real and alarming. California has been on the path of taking preventative measures for many years including this year with the passing SB100. This adds the state to a growing list of regionsand cities that are committing to 100 percent renewable power. To support this evolution smart grid is becoming increasingly important to provide and enable the necessarybi-directional communication, decentralized and distributed power, demand side management, and microgrids. Frost & Sullivan estimates that at this rate, smart grid is on the path of reaching approximately $94 billion in revenues worldwide by the year 2024. Electrification of transportation (EoT) is a direct outcome of measures taken to curtail the impact of greenhouse gas and therefore will also act as a key disrupter to the electric grid.

Today EVs represent only half a million vehicles on the road that are concentrated in just a few regions, including California, Hawaii, Washington, Oregon to name a few. The combination of regulatory push for clean energy and carbon neutrality combined with changing consumer perspectives will drastically push the number of EVs on the road. In fact, EVs are expected to reach price parity with internal combustion engine (ICE) vehicles by 2025.

Utilities are actively evaluating the type of impact EVs will have on grid imbalance. In fact, research indicates that California will add one GW in peak demand once it meets its goal to have five million EVs by 2025. The average form of distribution transformer in residential area will have a power rating of 25 kVA that can serve five to seven homes whereas PEV using a Level 2 charger will use approximately seven kVA. Hence, there is a fairly high risk of transformer deterioration. To add to this, according to the DOE 67 percent of T&D assets today are at or past their planned life. In fact, 60 percent of transformers in the U.S. are more than 25 years old, making the grid highly vulnerable and subject to failure given any tremendous imbalance.

Despite these challenges utilities also see this as an opportunity to enhance their offerings and gain stronger customer loyalty. But this obviously requires investment to an already tight and thinly budgeted industry. There is no one solution fits all needs and will be dependent of local energy policies, tariffs, and demographics.

Our research indicates that in interim utilities will be looking at demand side management (DMS) as the first approach towards managing vehicle charging load. These are already being implemented to support growing presence of DER and to meet state level energy efficiency policy goals.

Longer term batteries could even support the grid in terms of voltage optimization and minimizing duck curves. Due to an aging infrastructure, utilities must also look at upgrading actual physical infrastructure as well and will have to take place in parallel to adopting DMS. This will be in the form of digital substations, digital relays, and upgrading to smart transformers.

Replacing the entire infrastructure is obviously fairly cost prohibitive and would require a fairly strategic approach to avoid disruptions and compromises. Therefore utilities will have to look for answers in the form of more localized power such as micro grids, evaluating how blockchain can ease transactive energy. Future technologies such as 5G, V2G, and blockchain are all going to play an instrumental role going forward.

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