Utilities and Transport Electrification

Published April 3, 2022

PHOTO CREDIT: JL IMAGES / Shutterstock.com

Understanding the Role of Utilities in Transportation Electrification Planning

Utilities play a key role in enabling transportation electrification and supporting private sector investment. The shift to electric vehicles will have major impacts on electricity grids and require both investments and smart approaches to manage the transition effectively. The Infrastructure Lab convened a group of experts to share their perspectives on planning and policies that can accelerate the uptake on electric vehicles.

Below are some of the highlights from the conversation.

  1. Varied Approaches: The role utilities can play in supporting EV infrastructure rollout depends on several factors including utility structure, existing grid infrastructure, energy sources powering the grid, local electric vehicle market maturity, and the regulatory and policy environment. Regardless of local conditions, direction from the regulator or government is key to establishing the framework for utilities to engage.
  2. Consider Timelines for Delivery of Infrastructure: Electrification is coming, and utilities need to be ready ahead of time with the necessary electrical infrastructure in place. Given the rapid pace of change, the timelines required for utilities to adapt and prepare for future demand is short. For example, the predicted doubling of capacity on the system requires new substations which can take 5 years in Ontario to get approved and construct. The time to start planning is now.
  3. Future Proof Investments: Electrification goes beyond transport and many systems are transitioning to cleaner energy sources, which will transform how they function. Grid capacity, modernization and management will have to increase significantly, which will put a strain on the grid. Regulators need to work with utilities to future-proof investments so different communities have systems built that are ready to deal with the increased demand.
  4. Rate Design: Rate design is a good place to start. This includes time-of-use pricing and demand charge reform. These rate designs support the deployment of electric vehicles and infrastructure. Time-of-use rates, such as the one in Ontario, help reduce the cost of fueling and make driving electric more economic. Cheaper rates at night, when demand on the grid is low, also helps to even out the peaks and troughs in energy demand. Demand charge reform can remove barriers to investment in fast charging and bolster the roll out of charging infrastructure.
  5. Work with Heavy Users and Early Adopters: Utilities and regulators can design unique rate structures for potential heavy users including public transit agencies or organizations with larger fleets to build a critical mass. Jurisdictions can also set up special rate classes for multi-unit dwellings, or car share programs to accelerate adoption of electric vehicles and help spur investment in charging infrastructure.
  6. Smart Charging Low Hanging Fruit: Demand response and smart charging have the potential to be an important part of balancing the grid and can be deployed today. While vehicle-to-grid has the potential to also provide grid benefits, regulatory barriers and issues with battery wear and tear need to be addressed. Smart charging is already being utilized in several jurisdictions to help manage the grid.
  7. Build in Equity: Several jurisdictions are taking innovative approaches which include utilities offering staggered rebates for charging stations. This can target rebates based on a variety of factors including income, or building type, as well as providing access to electric car share. This can help ensure that there is fairer access to electric vehicles and the benefits, including cleaner air and lower running costs that come from that transition.
  8. Spreading Costs: There are many benefits to electrification including reduced air pollution, lower cost of living, and reduced emissions. Funding the transition should be fairly spread between beneficiaries including utilities, ratepayers, taxpayers, and companies. Over the long term the economic, environmental, and social benefits substantially outweigh the upfront costs and present an attractive investment proposition if packaged right.

The Speakers: