How Electric Vehicles Can Economically Benefit Electric Utilities

By Jonathan Susser | December 15, 2016

Transportation accounts for about 28% of U.S. energy consumption, and we rely heavily on imported oil to fuel the hundreds of millions of vehicles on our roads — 91% of the sector’s energy use comes from petroleum. But the growth of electric vehicles (EVs) is transforming the way we think about transportation, and the use of domestically produced electricity to power our vehicles is a huge opportunity for electric utilities.

The widespread adoption of EVs could raise electricity demand by up to 38% at a time when growth is flattening. Thanks to the flexibility of EV charging, this new demand will not automatically require new generating facilities. Utilities can encourage or manage charging to occur when it best aligns with their existing capabilities. For example, time-of-use rates can incentivize charging during off-peak times, when electricity demand is low; in certain parts of the country, customers can be asked to plug in at night to take advantage of wind resources; or more active demand response measures can be explored to control charging output.

time of day charging chart 2
Time-of-use Rate Example

Utilities across the country — from investor-owned to electric co-ops — are pursuing these efforts to integrate EVs as seamlessly as possible. In turn, they are increasing revenue in ways that can benefit them and their customers, even non-EV owners, with the new sales putting downward pressure on electricity rates.

At Advanced Energy, we work to provide utilities with the resources they need to implement programs and educate their customers and members about electric transportation. We create handbooks and other materials, help host trainings and craft strategic plans to guide utilities on steps to support EV adoption. As utilities raise consumer awareness and excitement around EVs, we’re glad to be a helping hand.