PHEVs: Will the Grid Be Ready?

There's no doubt that plug-in hybrid electric vehicles (PHEVs) show tremendous promise: They have the potential to curb climate change, reduce the cost of transportation, and liberate us from foreign oil. As such, it's a pretty good bet they'll be in high demand when they hit the market in a few years. But can the electric grid support the accompanying increase in power demand?

The answer, it seems, is: It depends. It depends on where you live and how quickly new technology enabling vehicle-to-grid communications can be developed.

Although plug-in hybrids are several years away (2009 or later), politicians, auto companies, municipalities and the electric utilities are fawning over the technology like proud parents watching baby's first steps. Ford and GM recently unveiled plug-in hybrid concept cars, joining with Nissan, Toyota, Honda and others that have publicly stated interest in manufacturing plug-ins. The mayors of more than 50 cities and 150 utilities have joined the Plug-in Partners consortium, and municipalities in 41 states have promised to purchase plug-in hybrids as soon as they are available.

Plug-ins' Promise

For consumers, the main attraction will be PHEV's significantly lower operational costs when compared to traditional gasoline or even today's gasoline-electric hybrids. That savings is potentially huge, as electricity costs per mile work out to about 1/4 to 1/3 of that of gasoline, depending on the region and price of crude oil. A report by the Department of Energy's Pacific Northwest National Lab (PNL) estimates that a plug-in priced within $4,600 of an average vehicle will pay for itself within 9 years. The report assumes an average vehicle today getting 27.5 miles per gallon, with gas at $2.50 a gallon, and the car is operated in a region with average electricity prices. If gas prices rise or if plug-in hybrids cost less, the payback period could be much faster.

The PNL study states that if the national power grid were optimally utilized at all hours of the day, it could provide enough power for plug-in hybrids to comprise up to 73 percent of the nation's cars, vans, SUVs and light duty fleet. What's more, switching from gas-only vehicles to mostly plug-in hybrids could reduce the importation of oil by up to 52 percent, according to PNL.

The PNL study compares the power consumption of plug-in hybrids with the national electricity consumption data from 2002 and does not factor in expected increases in power demand or planned additions to the power grid, according to Michael Kintner-Meyer, one of the authors of the study. (According to the Department of Energy, electricity demand will grow by 11.4 percent between 2004 and 2015.)

Even if the electricity used to charge plug-in hybrids is produced primarily from fossil fuels, burning that fuel at the power plant, rather than in a car's engine, is more efficient: The "well to wheel" efficiency of vehicles powered by electricity generated from natural gas and coal is superior to that of petroleum vehicles (31 and 22 percent versus 13 percent respectively), according to data from the Federal Energy Regulatory Commission.

Not Ready for Prime Time … Yet

Plug-in hybrids won't be ready for market until researchers develop vehicles with batteries that can power a vehicle for up to 40 miles. However, the real story is that if this technical challenge were met today, the electric power infrastructure in many states would not be ready to accommodate a significant migration to plug-in hybrids.

The reason is that using the grid's excess capacity to power plug-in hybrids would increase electricity use by up to 24 percent, according to PNL estimates. The PNL report says that while parts of the South and Mid-Atlantic would be able to support a high-percentage of plug-in hybrids, other areas of the country would have to add new power plants if they want to go beyond a small percentage of plug-ins.

Little Electricity to Spare

For example, even in a best-case scenario where PHEVs are recharged only during off-peak hours (6 p.m. to 6 a.m.) and a new "smart grid" management system is created that optimizes power distribution to vehicles against demand, California and Nevada's current infrastructure could handle a mere 15 percent of the vehicles as PHEVs, according to the PNL report. In Oregon, Washington and other parts of the Pacific Northwest, the grid could withstand even less: a maximum of 10 percent plug-in hybrid vehicles. Compounding the problem for the Northwest U.S, according Kintner-Meyer, is that region's reliance on hydropower for electricity. Unlike coal or natural gas power plants that can increase their output by burning more fossil fuel, hydropower plants produce a steadier stream of energy that cannot be increased to meet additional demand, he says. (See sidebar Controlling Demand)

Ironically, California and Oregon are the most likely places where demand for plug-in hybrids would initially be the greatest, based on the current purchases of hybrids. The states ranked first and second in the most hybrid registrations per 1,000 residents in 2006, according to HybridCars.com.

However, it will take many years of plug-in hybrid sales before additional power generation capacity will be needed, according to James Lyons, chief engineer for electrical systems at GE Global Research. "The existing grid can support a bit of night time charging... there is not a need for immediate new power generation," Lyons says.

Shifting Air Pollution

Plug-in hybrids are gaining broad support from municipalities because in most regions they will clean the air by reducing the production of greenhouse gases and other emissions. According to the PNL study, PHEVs reduce greenhouse gas emissions by 27 percent when comparing the emissions of gasoline vehicles with the output from the current mix of coal, natural gas and renewable power plants.

However, in a region of the power grid that encompasses the upper Midwestern U.S. (Nebraska, part of Michigan and the Dakotas and the Canadian provinces of Manitoba and Saskatchewan) and primarily uses coal for electric power, "improvement in greenhouse gas emission could be zero or slightly negative," according to PNL.

Total volatile organic compounds (VOCs) and carbon monoxide (CO) emissions would be reduced by more than 93 percent by shifting to plug-ins. However, particulate emissions would increase by 18 percent (primarily from coal power plants), and total sulfur oxide emissions (SOx) would more than double, according to PNL.

Not in My Backyard

While cities with sizeable plug-in hybrid populations would undoubtedly have cleaner skies, the air around the coal and natural gas power plants that supply them with electricity would be dirtier. Running power plants that were previously underutilized all of the time would increase localized pollution and cause maintenance costs to skyrocket, according to PNL's Kintner-Meyer.

Utilities usually activate their cleanest resources first, so dirtier power plants would likely be used more often as plug-in hybrids become popular. However, Kintner-Meyer says the oldest power plants would probably wear out quickest, prompting utilities to build new cleaner plants, which could cut down on emissions in the long term.

Clark Gellings of the Electric Power Research Institute ( EPRI) says that "even old coal plants that haven't substantially modernized... are still better at controlling emissions than gasoline vehicles."

Who Gets the Credit, Who Gets the Blame?

The shift of emissions from tailpipes to smokestacks could also complicate the job of environmental regulators who may be considering capping greenhouse gas emissions. For example, an automaker might claim that reduced the emissions from its fleet by adding plug-in hybrids, while electric utilities are actually increasing their total emissions. "Who is getting credit for this (emissions reduction)?" Gellings says. One potential complication for regulators -- both industries might want to receive credit if mandated emissions caps are enacted.

A Long Way to Go

Rick Tempchin, the director of retail distribution policy for industry consortium Edison Electric Institute, says his group has not started to study how plug-in hybrids could impact the power grid, but "we are a long way from 20 percent market penetration." Tempchin says utilities have successfully adapted to the increased demand of new electric appliances and devices such as iPods and DVD players. "On the other hand, the electrification of the transportation industry is fairly unique," he says.

Dialogue between the auto and power industries to tackle these issues would most likely be handled by the Electric Drive Transportation Association, which is co-chaired by members of both industries. While no studies or proposals regarding plug-in hybrid standards have been undertaken, the subject came up during an EDTA meeting in December, according to aptly named spokeswoman Jennifer Watts.

Does This Parking Space Come With an Outlet?

The question for people who don't own a home with a garage but want to purchase plug-in hybrids would be where to recharge their batteries. GE Automotive director of new markets Tim Dummer says 42 percent of homeowners have garages to park their vehicles, while 75 percent have easy access to plug their vehicles into an electrical outlet.

For the rest of the potential plug-in hybrid owners, parking garages could install outlets, or companies could enable their employees to charge up while at work. To pay for this service, intelligence would be built into meters at the public outlets to bill credit cards and provide time of day pricing information. Or, the vehicle's power management system could contain identification information that is linked up with the owner's utility bill to streamline bill processing, according to EPRI's Gellings.

Several Canadian provinces feature public garages with outlets for plugging in heaters to keep cars batteries from freezing during frigid nights, so there is a precedent for installing public outlets, according to Andy Frank, a professor of mechanical and aeronautical engineering at the University of California at Davis.

Frank says plug-in hybrids can make solar power more cost effective for homeowners since plugging the car in is cheaper than paying at the pump. "Today's Sun can be tomorrow's driving," he says. A small solar array could be paid for by driving a plug-in hybrid within six years, and then "you get 25 years of free driving," according to Frank.

PHEVs as Battery Backup

Plug-in hybrids are also garnering interest for their potential to serve as a backup power system for homes or to reinforce the power grid itself. The "vehicle to grid" scenario would take power from vehicles at times when it is needed by a homeowner or if utility is under stress.

"Vehicle-to-grid is a great idea," says EEI's Tempchin. In the event of a power outage, a plug-in hybrid could power a home's lights for up to several hours, replacing the need for a backup generator. Utilities that are experiencing high demand could pay vehicle owners a premium to keep the power flowing, he says.

Predicting Rate Changes

How widespread adoption of plug-in hybrids will affect electricity prices is dependent on a lot of variables, making estimates difficult today. In the short term, utilities would be able to generate more money from their existing power plants, which could lower retail prices. However, if older less-efficient power plants are put into action to satisfy the increased demand during off-peak hours, the cost could go up. Also, if power plants wear out more quickly, investments in new power plants would be spread across all customers and would therefore increase rates.

Because plug-in hybrids hold great promise in making transportation more affordable and sustainable, consumers will likely be lining up to buy the vehicles when they arrive, as long as they're priced right. Widespread adoption, however, requires careful planning to minimize their impact on the power grid.