By 2030, electric vehicles are forecast to make up over
half of all new cars sold in the U.S.
That could put a big strain on our nation's electric
grid, an aging system that was built for a world that
runs on fossil fuels.
Electricity demand across the United States is really
expected to increase in coming decades, somewhere
between 14% and 19% by 2030 and between 27% and 39% by
2035.
Over the past decade, demand only increased by about 5%.
But now "electrify everything" has become a
strategy and a mantra for the clean energy movement,
calling for the electrification of
transportation, but also of space heating for homes and
offices, household appliances like stoves, and
to the extent possible, processes like iron, steel
and chemical production. About 60% of electricity
generation in the U.S. still comes from fossil
fuels, and so electrifying all of these sectors isn't a
climate solution unless we also invest in a major
buildout of renewables.
So you electrify as many things as possible and you
then decarbonize the supply of electricity, and in so
doing, decarbonize the economy.
That happens to be happening at the exact same
time.
So we have both supply side and demand side drivers of
big grid needs.
That means we need major changes to the grid.
More high-voltage transmission lines to
transport electricity from new wind and solar power
plants to the areas where it's needed most, smaller
distribution lines and transformers for last mile
electricity delivery, and hardware like inverters that
allows customers with home batteries, EVs and solar
panels to feed excess electricity back into the
grid. But it's not going to be cheap.
In a study commissioned by the California Public
Utilities Commission, Shumavon's grid analytics
company, Kevala, forecasts that California alone will
have to spend $50 billion by 2035 in distribution grid
upgrades to meet its ambitious EV targets.
And that's just one state's transportation sector.
Other parts of the country and the economy are
electrifying quickly, too.
When you carry this through to the whole country and you
think about beneficial electrification, we're
probably talking about a number that looks more like
3.5 to $5 trillion.
But the U.S. Is not on track to spend anywhere near this.
And building the high-voltage, interstate
transmission lines that are key to greening our electric
grid is a bureaucratic nightmare, given all the
utility and regulatory agencies involved.
Permitting can take a decade or more.
But our nation's grid needs are at least starting to
gain attention.
So this is a known problem, but it is also a very hard
problem. It's endemic to the way that power has been
generated in this country since we started building
electric grids.
Scrambling to avoid the worst impacts of climate
change, the Biden administration has set an
ambitious target of creating a 100% carbon-free
electric grid by 2035.
But with electricity demand increasing every year,
that's going to require a massive buildout of both
renewable energy resources and grid infrastructure.
An owner of a new Tesla Model 3, who drives the
national average of around 14,000 miles per year, would
use about the same amount of electricity charging
their vehicle at home as they would on their electric
water heater over the course of a year, or about
ten times more electricity than they would to power a
new, energy-efficient refrigerator. Larger
electric vehicles, like the Ford F-150 Lightning, would
use more electricity than a central AC unit in a large
home.
And then it's not just electric vehicles, but it's
building heating and cooling. And Congress just
decided we wanted to manufacture silicon chips in
this country. Those use a lot of power.
And you're hearing about artificial intelligence
everywhere, and that's a lot of churning chips
somewhere in a data center.
So we got a lot of power demand coming to this
country when we really didn't have any for the last
like 25 years.
By 2035, light-duty electric vehicles, a segment which
excludes large trucks and airplanes, are projected to
comprise about 14.6% of total electricity demand, up
from just 0.6% today, according to data from
Princeton's Zero-carbon Energy Systems Research and
Optimization Laboratory, or ZERO Lab.
This number represents an optimistic scenario in which
the provisions in Biden's Inflation Reduction Act
prove highly effective. In this same scenario,
residential electricity use, such as heating,
cooling and lighting, will represent about 34% of
electricity demand, while commercial use in places
such as offices or data centers will be about 26%,
and industrial uses such as iron, steel and paper
production will represent about 20%.
But though transportation is projected to use less
electricity than these other segments, it's driving
the overall increase in demand, especially in the
short-term. The electricity use of light-duty vehicles
is projected to increase 3,400% by 2035.
Compare that to a mere 18% increase in the residential
sector or 7% growth in the commercial sector.
Today we have about 470-ish thousand vehicles connected
to PG&E's grid.
We have a goal of connecting 3 million,
building out the grid to connect 3 million vehicles
by 2030.
PG&E's service territory in Northern and Central
California covers about one in seven electric vehicles
in the U.S. How it handles the EV transition could
serve as a model for the nation, but it's no easy
task. The utility is tied to a four year funding cycle
for grid infrastructure upgrades, and Krefta says
that the currently allocated funding relies on
outdated data that didn't anticipate such rapid EV
adoption. That has PG&E applying for numerous state
and federal grants that could help it meet its
electrification targets.
I think right now people have an overly simplistic
view of what electrification of
transportation means.
What I actually would caution is that it's very
much a double-edged sword.
If done right, it will be phenomenal.
If mismanaged, there are going to be a lot of upset
people, and that is a real risk.
That's a risk for regulators, that's a risk
for politicians, and that's a risk for utilities.
If the nation doesn't match the EV boom with a
comparable boom in grid infrastructure buildout,
Shumavon says that drivers can expect charging
difficulties. That could look like long queues or
only being able to charge at certain times and places.
And an overly strained grid will be more vulnerable to
extreme weather events and prone to blackouts, which
California experienced in 2020 and has only narrowly
avoided since.
The most straightforward way to meet growing electricity
demand and keep our electric vehicles charged is
to bring more energy resources online, preferably
green ones. But though it's easy to site coal and
natural gas plants close to population centers, the best
solar and wind resources are usually more rural.
As the United States tries to move its power and
electricity generation from small, local, regional,
fossil fuel-powered generation points to a
renewable grid, a clean grid, you're going to have
to completely remake that because wind power comes
from places where the wind is blowing.
Solar power comes from places where the sun is
shining. Wind and solar power are not generated
exactly where there are large sources of demand for
energy.
That means that what the U.S. really needs is more
high-voltage transmission lines, which can transport
solar and wind resources across county and state
lines. These large power lines will also help address
the intermittency of renewables, because if the
sun isn't shining or the wind isn't blowing in one
state, green electricity can be imported from
whatever region happens to be windy or sunny at that
moment.
But Gramlich says that while we're constantly spending
money replacing and upgrading old lines, we're
hardly building any new ones.
I think we need probably about 20 or $30 billion a
year on new capacity, new line miles and new delivery
capacity. We're spending close to zero on that right
now.
Princeton's ZERO Lab found that the Inflation Reduction
Act has the potential to cut emissions by about 1
billion tons by 2030.
But if transmission doesn't expand beyond its historical
growth rate of 1% per year, over 80% of these reductions
could be lost, since the growth of wind and solar
would be severely limited.
We're going to need 2.3% growth in transmission lines
per year to be able to maximize the benefit that
the Inflation Reduction Act is bringing to our energy
system.
Shumavon agrees that while we must build more, we also
need to build smarter.
So historically, planning for the grid has happened
mostly by looking at trends and waiting until capacity
is needed to be added and then adding that.
It's been essentially, straight line assumptions
that you can do in Excel.
But as consumers adopt solar, home battery storage
and EVs, their electricity use has become more
difficult to predict and for utilities to adapt to.
In Kevala's study for the California Public Utilities
Commission, the company utilized power use data
collected from customers smart meters in combination
with demographic and purchase history data to
forecast when customers are likely to adopt green energy
technologies like solar power or EVs based on what's
in their economic best interest. That data can
provide utilities and regulators with insight into
exactly when and where the grid needs upgrades, helping
to get all the stakeholders on the same page so that
hopefully permitting for local distribution lines as
well as larger transmission lines can be expedited.
So certainly we all understand that we'll need
new wires or bigger transformers or things along
those lines. But the grid is actually managed, it is
operated, and the tools that are necessary to
operate the grid will need to evolve to be able to
support the level of complexity that we are
talking about.
The U.S. electric grid is actually made up of three
distinct grids, the Eastern, Western and Texas
interconnections, which are almost completely isolated
from each other, save for a few small connection points.
That means that very little electricity is exchanged
between them. And though there's widespread agreement
that a national grid would be better, actually building
the large transmission lines that would make this
possible is a regulatory headache.
Building more transmission is like herding cats.
If you think about those 3,000 plus sources of power
generation spread out all throughout the United
States, every single utility, county,
stakeholder, regulator that needs to be involved in
order to get the approval to put a new line of
transmission up, it is pulling teeth.
And who's supposed to pay? How much, and how are we
going to decide? And then permitting is another area.
You know, all these horror stories you hear about a
transmission line that takes 18 years to get
permitted. You know, that's true.
That's happening.
Before new energy projects like solar or wind farms can
get grid-connected, they undergo a series of impact
studies to evaluate what new transmission equipment
is required, how much it will cost and who will pay.
The list of projects took somewhere in this process is
massive.
There are two terawatts of power generation stuck in
these queues, compared to there's only 1.25 terawatts
of generation operating in the country.
So more than the amount we have operating is stuck in
these interconnection queues.
1,350 gigawatts of that potential capacity comes
from over 10,000 new energy generation projects, the
overwhelming majority of which are solar or wind.
The remaining 680 gigawatts are energy storage projects.
But in the meantime, distributed energy resources
like residential, solar and battery systems can help to
pick up the slack as customers can generate their
own power, sell excess electricity back to the grid
or store it for later use.
And automakers are increasingly equipping their
EVs with bidirectional charging capabilities, which
allows customers to use EV batteries to power homes or
provide electricity back to the grid just as a regular
home battery system would.
Tesla doesn't currently offer this functionality,
but has indicated that it will in the coming years,
while other models like the Ford F-150 Lightning and
Nissan Leaf already do.
We're doing a lot of work right now with different
automakers to really kind of understand what it would
take to enable that vision of the future.
So what does it mean to connect your vehicle to your
home? How can you leverage your vehicle to charge
whenever there's renewables on the grid and they're
clean and low cost and then discharge back to the grid
during the evening hours?
While it's clear that electrifying the nation's
vehicle fleet, as well as the clean energy transition
overall, relies on a large investment in grid
infrastructure, experts agree that current funding
falls far short.
There's a $2.5 billion program called the
Transmission Facilitation Program, but there's only
$2.5 billion there.
And we spent $2.5 billion on transmission in a month
and a half. Just it's like a drop in the bucket.
The Inflation Reduction Act also includes $3 billion in
funding for transmission line buildout.
But though these numbers sound impressive, they're
far from the 20 or 30 billion per year that
Gramlich says we need for such a massive
infrastructure expansion.
And even if we did start spending big today,
transmission lines take years to build.
There's going to be an in-between period where the
need is very high, but the transmission can't be built
during the time period where the need happens.
And distributed energy resources are going to play
a very active role in managing that process
because no other resources will be available.
I would imagine we're going to end up depending on
batteries. I would imagine we're going to end up
depending on micronuclear reactors.
I'm going to imagine that we're really going to focus
and there's going to be a lot of emphasis on energy
efficiency and energy timing use.
PG&E, for example, is thinking about how to
optimize charging times for large electric vehicle
fleets.
So one thing that we're trying to do is to work with
some of these companies that are putting in
substantial loads to provide flexible load
constraints where we can say, you can only charge 50
EVs at 7 p.m. but at 2 a.m.
you can charge all 100, or you can charge 90 of your
EVs.
Krefta hopes these constraints are temporary
though, and says that as the grid evolves, PG&E is
looking to implement dynamic pricing,
incentivizing consumers to use more electricity during
off-peak hours through lower electricity rates.
But ultimately, many believe that what's needed most is a
legislative deal on transmission infrastructure
buildout.
Democrats seem pretty lined up around the need to build
out transmission, mainly because of their interests
in clean energy growth.
Republicans seem to want permitting reform for a wide
variety of infrastructure, that includes fossil
infrastructure.
If Democrats and Republicans can agree to expedite
permitting for all types of energy infrastructure,
fossil and renewable, Gramlich says that's where
we might see a deal. West Virginia Senator Joe Manchin
is spearheading this effort, with a Biden-backed
permitting reform bill introduced in May after
similar measures failed last year.
The politics will be tricky to navigate, but whether
it's this bill or another effort, something has to
give and soon.
We need to start yesterday and get this done very soon.
We don't have very much time at all if we want to
actually meet our decarbonization targets.