How to determine a utility’s EV ‘tipping point’

Electric vehicle sales are growing in the U.S., but at a slower pace than expected. A recent Bank of America analysis projected that EVs will make up 30% of American car sales by 2030 — far short of the Biden Administration’s goal of 50% by that date.

Even if EV sales aren’t rising as quickly as hoped, they could still be the single largest driver of demand growth in the decade to come. And utilities know they need to be prepared, but adoption rates differ by service area, so there’s no single answer for when and how utilities should ready the grid for the EV charging loads to come.

A new white paper from Camus Energy and AES, however, examined the moment when the benefits of implementing changes like managed charging will exceed the costs for AES Indiana, a utility serving more than 500,000 customers in Indianapolis. The findings, the companies say, can be applied to other utilities anticipating new EV load.

For AES Indiana, the tipping point is when 5% of customers have installed residential EV chargers, which is expected to come in early 2029. Preparing for that moment, the report found, can save the utility $7.3 million from 2025 to 2035, and unlock $75 million each year in capital flexibility.

A significant portion of those savings comes from having enough behind-the-meter capacity to defer infrastructure upgrades, such as to feeder lines and transformers. 

The report recommends system-wide peak management and local distribution capacity management through integrated distribution planning, as well as transitioning from time-of-use rates to grid-optimized managed charging programs. 

However, knowing when to invest in these capabilities remains tricky. “As a result, utilities may wait to invest in these capabilities until it’s abundantly clear that doing so will provide net benefits for customers,” the report found. “But waiting has consequences.” 

AES and Camus outlined five steps: 

1. Identifying EV locations and establishing the system’s current baseline load, using geographical and other datasets for the whole territory, as well as Camus’ composite data model; 
2. Model future EV adoption, feeder line by feeder line, using data from the National Renewable Energy Laboratory’s vehicle charging profiles data set and a conservative reference case from the Energy Information Administration;
3. Select EV charging coincidence assumption, based on both standard utility planning practices and on real-world charging patterns seen in AES Indiana;
4. Assess the grid impacts of a business-as-usual approach, including two types of EV load profiles: observed behavior, and a planning scenario (with standard and behavior-informed coincidence assumptions); and
5. Quantify benefits and costs over a 10-year span, which included both direct benefits (system-level peak demand savings, for instance) and indirect benefits (like capital flexibility), as well as direct costs (like rebates for participants). 

The resulting tipping point of 5% system-wide EV adoption for residential customers, the report notes, is “lower than many utilities expect.”

It may seem like 5% adoption is too low to be considered a tipping point. But the study found that 5%, at least in Indiana, is the point where a subset of neighborhoods see much higher EV adoption, and therefore have access to enough grid flexibility to defer upgrading certain feeder lines and transformers. 

“The coincident charging sessions for these feeders and transformers drive the initial set of deferrable equipment upgrades, which in turn provide 70% of the benefits in the tipping point year,” the report found. 

The overall benefits, the authors found, aren’t just financial. They include better-utilized grid infrastructure and more efficient operations, as well as increased customer satisfaction. Waiting to invest, however, can lead to “shocks to the system” like new system peaks and stress to existing infrastructure. 

Also, the report acknowledges, utility processes can take years. Taking advantage of the “tipping point” can require action to set up customer programs, get new rates approved, and secure equipment for new projects years before it actually arrives.