California energy officials issued a sobering warning this month, telling residents to brace for potential blackouts as the state’s energy grid faces capacity constraints heading into the summer months.
In Sacramento, officials said California’s grid could face a potential shortfall of roughly 1,700 megawatts, which would affect the power supply of between 1 million and 4 million people this summer. That number would likely be exacerbated by an additional shortfall of 5,000 megawatts in the case of extreme heat and further fire damage to existing power lines.
And since the state has committed to phase out all new gas-powered vehicles by 2035 — well ahead of federal targets — the additional load from electric vehicle (EV) charging could add more strain to the electric grid.
“Let’s say we were to have a substantial number of [electric] vehicles charging at home as everybody dreams,” Ram Rajagopal, an associate professor of Civil and Environmental Engineering at Stanford University, who authored a recent study looking at the strain electric vehicle adoption is expected to place on the power grid, told Yahoo Finance. “Today’s grid may not be able to support it. It all boils down to: Are you charging during the time solar power is on?”
EV charging in the race to net-zero emissions
The alert in the nation’s most populous state highlighted the delicate dance utility companies face in managing warming temperatures with tightening energy supply as the country moves rapidly away from fossil fuel generation to meet ambitious targets aimed at drastically reducing emissions.
California has set out to become a leader in the green transition, aiming to rid its electrical grid of all carbon sources by 2045. The state is already the nation’s top producer of solar, geothermal, and biomass energy, according to the U.S. Energy Information Administration, with renewables accounting for more than 30% of the energy generated in the state.
But as California creates a template for other states to follow, Rajagopal says it is also exposing some critical gaps that are likely to strain the power grid in the race to net-zero, especially in the transportation sector, where the acceleration of electric vehicle adoption is already underway.
“Business as usual will no longer be the case,” he said. “I really believe we need to balance our need for reliability and our desire for a clean grid.”
'Like adding one or two air conditioners'
Globally, the number of electric vehicles is expected to swell from 7 million to 400 million by 2040. The transition to zero-emission cars is estimated to add 2,000 TWh to annual energy demand by 2050 — a 40% increase — according to a study by global advisory group ICF.
Rajagopal’s team of researchers at Stanford developed a model framework to help utility companies around the world calculate charging patterns to better manage electricity demand. In California, it found that peak charging demand would more than double by 2030 if EV owners opted to charge in the evening at home.
“The use of an electric vehicle is like adding one or two air conditioners to your residence in terms of its energy increase,” Mike Jacobs, Senior Energy Analyst at Union of Concerned Scientists, told Yahoo Finance. “So when the local utility engineer looks at this, he thinks of that air conditioning in the afternoon and the electric vehicle coming home at the same time.”
Jacobs said the transition will mark a dramatic adjustment in behavior. Utility companies and service operators, who have long grown accustomed to “a predictable shape” and schedule in energy usage, will be forced to more actively manage the grid to avoid surges. Likewise, drivers will be forced to adapt to new charging times, with some being asked to plug in at work during the day, while others commit to set hours at night to ensure even distribution of energy capacity.
In Concord, Massachusetts, where Jacobs lives, his local utility has already asked that he set a timer on his electric vehicle so he is not charging until after 10 pm at night in exchange for a discounted rate. Technology that allows the grid and cars to communicate directly is likely to follow, he said.
A study from Boston Consulting Group estimated utility companies with two to three million customers will need to invest between $1,700 and $5,800 in grid upgrades per EV through 2030 in order to reliably meet the surge in energy demand.
“If you can charge the vehicles in the middle of the day or in the middle of night, it is almost not a worry because our system is built to meet that evening demand, that peak,” he said. “So spreading it out a little bit more, especially shifting it to sunshine hours when the solar is strong, makes it less of a concern.
'A 4-D puzzle'
The transition to reduce emissions is complicated by the existing energy mix: More than 60% of U.S. power generation still comes from fossil fuels. Without a clean electricity source for EVs to plug into, greenhouse gas reduction would be limited to 67% for vehicles, compared to 2020 levels, according to ICF.
Battery energy storage is expected to play a critical role in bridging the divide and would allow the grid to tap into full capacity in the hours when the sun isn’t shining or the wind isn’t blowing.
Tom Jensen, CEO of Norway-based Freyr Battery (FREY), which designs and manufactures lithium-ion batteries, said each battery it manufactures has the capacity to store four hours' worth of energy for 20 years.
“You can deploy large amounts of 4-hour storage using lithium-ion batteries coupled with solar and wind, and you can upgrade or overhaul the entire U.S. energy system either in three large regional grids or in nine smaller but still very large grids,” Jensen said. “That is technically feasible to do within the next couple of decades, but of course, it's an unprecedented level of investment into overhauling the energy system.”
Jensen cautioned that meaningful decarbonization is unlikely until roughly 80% of the battery supply chain is developed using renewable energy — a goal Freyr plans to reach by 2025.
“It's like a 4-D puzzle because you have policy, you have economics, and you have the engineering and you have people's acceptance,” Rajagopal said. “Engineering-wise, you can have 20 viable solutions, but maybe they don't satisfy the other three and then those are useless. Once you crack the code you will be able to help so many regions around the U.S. and across the world to transition, [but] you’re going to have to suffer through it to learn.”
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita