Are time-of-use rates the key to managing how EVs charge?

Published on June 22, 2020 in Electric Vehicles by Chad Saliba

Learn more about time-of-use rates and how they can be used to spread the load between all electric vehicles.

It took nearly a decade for the number of EVs on North American roads to pass the 1 million mark. But from here, the tally is expected to grow to about 12.5 million electric vehicles by 2030, according to Guidehouse Insights. To put that number into perspective, that would be one EV for each resident of New York City and Los Angeles combined. With each new EV, utilities face an urgent challenge: how to convince those electric car drivers to avoid charging during peak periods.

Utilities are preparing for a future in which electric vehicles are commonplace and are used as an asset to manage energy load. Consider this:

While a “full charge” from empty to full might require eight or more hours, most drivers only need to pull juice for a couple of hours sometime between arriving home in the evening and the next morning before hitting the road. In other words, there could be a 12-hour window (or longer) for an EV driver to add the 10 or so kilowatt-hours. The driver usually doesn’t care if those kWh are replenished immediately upon returning from work around 6 p.m., or if it happens in early in the morning when the vehicle’s onboard scheduler or a smart meter is used to initiate the flow of electrons.

Spreading the load with time-of-use pricing

An EV driver usually doesn’t care when his or her car charges, as long as there is enough range available when needed. But utilities care a whole lot when millions of EVs charge. There are enormous economic and environmental consequences when masses of EVs all charge during a time of peak demand — for example, at the same time as when households are turning on air conditioners, running the washer or dryer, or turning on a big screen TV.

The key to spreading the load from all the electric vehicles is time-of-use (TOU) pricing. More than 50 North American utilities offer time-of-use or other special EV rate plans. They have learned through experience, and in survey after survey, that EV drivers will happily shift charging to hours when the price-per-kilowatt-hour drops, commonly during the middle of the night.

This chart below illustrates the variability of EV charging behavior across three service territories. This example consists of charging patterns in service territories with: a) no time-of-use rate structure, b) a static residential time-of-use rate structure, and c) a behavioral EV load control program.

Time of use rates graph

Percent of daily electric vehicle charging load by time of day.

Persuading consumers to charge off-peak rather than actively controlling when the charging occurs, is called a “passive” approach.

The technology for active charging management is in the works. With smart home IoT, homeowners can control a network of connected household devices, such as thermostats, lights, and locks. Very soon, cars, charging stations, stationary storage batteries, and home solar panels will be similarly connected in an “Internet of Cars” or “Internet of Energy.”

At that point, vehicle-to-grid technologies will enable consumers and utilities to control the charging of millions of EVs using AI-powered algorithms — and even to use energy stored in electric-car batteries to power homes and other buildings. When these technologies are ready for prime time, charging times for masses of electric vehicles will be managed with laser-like precision. In essence, EVs will become a part of grid infrastructure.

EV data is the new oil

The first step for both a utility and EV owner is to get real-world data about EV driving and charging patterns. Geotab Energy’s SmartCharge Rewards makes this possible. By installing a compact device in their car, owners can log into a dashboard to see how much energy their vehicle is using, as well as information on trips, safety and maintenance.

Here’s where that device, which takes one minute to install, comes in handy for utilities. Problems can occur with time-of-use plans when drivers sign up for cheaper rates to charge during off-peak hours but then don’t charge when they should. Drivers end up neglecting those better rates and instead charge when they get home, during peak hours when the prices are high.

Geotab Energy’s SmartCharge Rewards gives utilities the ability to monitor actual EV charging patterns. Thanks to a data link between the EV and the web, grid managers can follow all the real-world peaks and valleys of charging by individuals, as well as the cumulative impact from every EV in a territory.

Moreover, the “Rewards” part of the program gives utilities the ability to incentivize desirable charging behavior with better rates, perks, cash prizes, and social-media badges. Charging at a time that’s most advantageous for the health of the grid becomes gamified with a set of reporting tools to let everybody know how much money and CO2 is being saved.

The importance of a dynamic tool like this is that EV ownership is changing fast. There can be unintended impacts from time-of-use EV rates. For example, you might shift hundreds or thousands of electric-car drivers away from charging between 6 p.m. and 9 p.m., only later to discover that many of those drivers initiate charging simultaneously at midnight, putting a strain on local transformers and the grid.

Flattening EV-related load profiles shouldn’t be a game of whack-a-mole, squashing a group of EV drivers from charging at one peak period only to create a different sudden rise at another undesirable time. Again, designing and implementing a successful TOU rate program requires ongoing data and a continuous effort towards enlisting drivers to become a part of the solution.

A win-win for drivers, utilities, and the environment

When done right, EV charging becomes a win-win-win situation. Drivers save money with rewards and cheaper rates. Utilities save on infrastructure. And everybody contributes to the use of greener energy because more EV charging takes place when wind, solar, and other renewable sources are abundant.

Learn how to profile and manage EV charging load with solutions for electric utilities by Geotab Energy.

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Geotab's blog posts are intended to provide information and encourage discussion on topics of interest to the telematics community at large. Geotab is not providing technical, professional or legal advice through these blog posts. While every effort has been made to ensure the information in this blog post is timely and accurate, errors and omissions may occur, and the information presented here may become out-of-date with the passage of time.

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