Which Electric
Car Australia?

New report finds growth in the use of EVs unlikely to create a power demand crisis

Despite what the doomsayers in the fossil fuel industry and their supporters in Parliament think, a new report has actually found that the growth in the use of EVs is unlikely to create a power demand crisis.

The report by McKinsey & Company uses information from Germany to predict the effect on California’s power grid. It found that the uptake in EV’s is not likely to cause large increases in power demand through 2030 as it potentially adds about 1 percent to the total but it will likely reshape the electricity load curve. The most pronounced effect will be an increase in evening peak loads, as people plug in their EVs when they return home.

While significant, the peak-load growth in residential areas is not as dramatic as some assume. That is because while a single EV can easily double peak consumption at the individual-household level, the aggregation across many households (those with and without EVs) reduces the relative increase in peak load.

Because the regional spread of EVs may vary significantly EV adoption hot spots and other concentrated points of charging, such as public fast charging stations will see significant increases in local peak loads. The volatile and spiky load profiles of public fast charging stations will also require additional system balancing. Unmanaged, substation peak-load increases will eventually push local transformers beyond their capacity, requiring upgrades. McKinsey’s analysis predicts that capital-expenditure requirements as a function of national-level EV penetration will follow an S-curve shape. In other words, while investment needs will be modest at low EV penetrations, they jump rapidly as the number of EVs increases and eventually level off again at high penetration levels.

Energy providers can address this situation by implementing time-of-use electricity tariffs, a measure that could halve the increase in peak load. They can also deploy more local solutions, such as co-locating an energy-storage unit with a transformer that charges the unit during times of low demand. The storage unit then discharges at times of peak demand. As the cost of batteries continues to decline rapidly, using energy storage to smooth load profiles will become increasingly attractive.

Credit: McKinsey & Company