Joseph leads the North American operations of ev.energya global provider of electric vehicle (EV) charging software.
The world has changed fundamentally in recent years. Countries such as the United States, the United Kingdom and Germany have had to deal with their natural gas supply as a result of economic sanctions. This could raise the prospect of scheduled power and gas outages to ration the limited supply. In Europe, about 20% of the continent’s electricity is generated from natural gas, while in the UK the figure hangs around 35%. In October, the United Kingdom’s National Grid Electricity System Operator (ESO) outlined two scenarios for the winter of 2022, during which the country’s gas-dependent electricity supply could fall below breaking point.
But impending winter blackouts aren’t limited to the “old continent”: in the US a quarter of Americans live in a region at risk of power outages or grid emergencies in the winter of 2022, according to a review of the North American Electric Reliability Corporation (NERC). The underlying causes are similar to those in Europe, where natural gas is the main source of US electricity 38.4% of the total generation. NERC’s assessment paints a bleak picture for winter, ranging from electricity shortages on cold winter mornings in the Southeast, where electric heating systems are dominant, to ongoing blackouts in New England, where natural gas storage infrastructure is limited.
Learning from the UK
In the UK’s worst-case scenario outlined, where the country experiences gas shortages, three-hour blackouts would hit British households on “those deepest, darkest nights in January and February.” In a slightly brighter scenario, where the UK’s gas supply remains secure, but the country cannot import electricity from its European neighbors as they struggle with their own energy shortages, blackouts could be avoided through a voluntary energy conservation programme. My company and dozens of others have helped with this program and the early results are promising.
The good news is that Europe and the UK are proving – and to have proven during sustained summer heat waves – that demand-side flexibility programs can prevent the worst-case blackouts that NERC, National Grid ESO and other grid operators are planning. Like their UK counterparts, some US utilities are also testing so-called demand response programs and are focusing on electric vehicles as a key source of flexibility. Light-duty EVs provide a particularly great source of flexibility for utilities and grid operators, as they require only 2.5 hours to charge over an average 12-hour time frame when they remain plugged in, according to analysis by BloombergNEF and my company.
Three steps to reduce winter blackouts
EVs need not be liable for energy grids and power grids. If managed intelligently, their flexibility can be used as a source of resilience this winter. Here are three steps companies can take:
1. Set up new EV pilot programs.
States with a peak in winter, from New York to Alabama, are great places to test a managed EV charging program. Business leaders may face challenges exploring these pilots in a way that is manageable, within budget, and no larger than a scale that would require approval from a utility or energy regulator.
I’ve found it best to start with a small group (e.g. 100-200) of EVs and limit the entry to one vehicle or charger manufacturer with a large market share, such as Tesla or ChargePoint. This can keep the program simple from a technology perspective. By having one goal and linking it to the needs of the power grid, such as reducing the demand for EV power over a given time frame, the results can be easily measured.
2. Scale up existing EV charging programs.
Keeping pilots simple and focused gives companies a clear litmus test to see if the program works. When it’s time to scale up, I’ve found that successful program expansions tend to maximize market coverage for vehicle brands and charging networks, encompassing both private EVs and public transit charging infrastructure. This requires public-private partnerships.
A major challenge in keeping EV programs equitable is the income and wealth disparities that prevent lower-income and minority households, particularly immigrant households, from access to a vehicle. As more ride-hail fleets go electric, taxis like To enjoy or Earth rides can become an important part of the solution.
3. Ensure that drivers are fairly compensated.
Ultimately, EV drivers, whether taxi drivers or families, offer charging flexibility and expect to be compensated in some way. Cash is king, and payment platforms can be a great tool for companies to transfer compensation to EV drivers easily via PayPal or Venmo. (Disclosure: My company uses PayPal and Venmo to pay out rewards to users.) Keeping incentive levels flexible and tied to the flexible value each EV actually delivers can help ensure programs remain cost-effective. Consider paying out a range of different incentives depending on how EV drivers participate.
The UK’s resilience to blackouts so far – even in the face of winter snow storms (paywall) – should give us hope. By adopting hard lessons learned from our friends across the pond, I think we can be optimistic about weathering this winter’s storm.