Electric Vehicles Loom Large in U.S. Power Grid Modernization

Customer engagement, time-of-use charging rate incentives could help electric distributors manage demand

DENVER (February 9, 2023)—Since its inception, the U.S. electric grid has mostly operated smoothly as one synchronous machine with a one-directional flow of electricity to meet the nation’s predictable power needs. However, as older centralized thermal resources are being replaced with more variable renewables and long-distance delivery systems are showing their age, that synchronicity appears to be declining. U.S. power outages are up 64% this decade compared to the previous decade.

According to a new report from CoBank’s Knowledge Exchange, age, weather and the generating resource mix is undermining U.S. power systems faster than the infrastructure can be replaced, reinforced and possibly re-envisioned. 

“The U.S. electric grid is experiencing something of a mid-life crisis”, said Teri Viswanath, lead power, energy and water economist for CoBank. “It’s not just that the nation’s power system is aging; it was designed and built with the presumption of a stable climate and a centralized, unidirectional flow of electricity. But that premise is quickly changing.” 

During periods of system stress, upstream grid operators are increasingly turning to large customers to voluntarily curb their power use. But as grid management technologies evolve, this manual upstream coordination might give way to an increase in downstream controls, with a greater amount of electricity "traffic flow” coordinated at the distribution level. 

EVs and chargers: Grid disruptors or grid balancing tools?

Electric vehicles are poised to have a monumental impact on the power grid. And they could prove to be the greatest grid disruptor, or possibly the most effective grid-balancing tool. EV adoption in the U.S. is happening faster than originally anticipated and rampant, uncontrolled charging could pose a major threat to local distribution networks. However, if the integration challenges are effectively addressed, the associated grid benefits could be enormous.

Because the average car spends about 95% of its life parked, EV owners have few timing constraints for charging, giving electric distribution cooperatives ample opportunity to match charging load with optimal resource availability. Electric co-ops that effectively coordinate with their membership could conceivably level out daily electricity demand on the network. Additionally, they could potentially even store excess renewable energy in these mobile batteries during extended vehicle idle periods to meet system peaks. 

According to Viswanath, the key for electric co-ops is to develop and promote the right set of market signals to bring about the desired behavioral shift from its member-customers. 

“The widely prevalent flat rate pricing structure that doesn’t account for time or location incorrectly assumes that each kilowatt hour consumed imposes the same cost on a utility,” she said. “Time-of-use and other time varying rate structures will not only prove to be more equitable but might actually shift some of the load to a lower cost time of day.”  

Electric co-ops have the power to influence EV drivers and fleet operators to charge at optimal times that will save customers money and benefit the grid by more efficiently utilizing assets, added Viswanath. 

Read the report, The Fix for the Electric Grid's Mid-life Crisis Might be in the Garage.

About CoBank

CoBank is a cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 76,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

Media Contacts

Julie Davis
Corporate Communications

Leslie Hagele
Corporate Social Responsibility

Dave Harding
Knowledge Exchange