Towards an Ontario Action Plan for Plug‐In‐Electric (PEVs)

 

The Waterloo Institute for Sustainable Energy (WISE) prepared: Towards an Ontario Action Plan for Plug‐In‐Electric (PEVs) in collaboration with Plug’nDrive, the Ontario Centres of Excellence (OCE) and the Centre for Energy Advancement through Technological Innovation (CEATI).
The Executive Summary of the report has been given below, to see the full report please click here.

 

Executive Summary

Given Ontario’s generation mix, especially after coal plants are phased-out, migrating to electric vehicles in the transportation sector makes overall economic and environmental sense in the long term. We have conducted a comprehensive multi-disciplinary study to assess the implications arising from adoption of plug-in hybrid and electric vehicles (PEVs) in Ontario on a large-scale.

 

We highlight potential concerns that need to be addressed but focus on specific measures, approaches and policy initiatives relevant to the Ontario context. We have drawn from the existing knowledge base2 and available data worldwide for insights, but with a view to applicability for Ontario. The study goes one step beyond a road map exercise to provide some firm answers based on our analysis of the Ontario system. In addition, we have identified barriers and issues that need to be addressed, provide some recommendations and where gaps exist in the knowledge base, and suggest a path for R&D if appropriate.

The report is structured in the following main tracks:

  2. 1.  Auto Sector Developments and Needs: In this chapter, a review is provided of the current state of the art, the evolution of key enabling technologies and some of the technological challenges and barriers for large scale implementation of PEVs in Ontario. The focus is on battery technologies and hybrid vehicle architectures and in the identification of some of the key technical, environmental, and social aspects of these technologies. Challenges in the consumer acceptance of these vehicle technologies are also identified because they will impact how fast they would be adopted or not.
  4. 2.  Electricity Sector Development and Needs: In this chapter, a detailed review and analysis of the relevant issues and related literature associated with the impact of PEVs on Ontario’s grid and electricity market are presented. All pertinent issues related to the impact of PEVs on Ontario’s generation, transmission and distribution systems as well as the associated electricity market, and the effects and limitations on the adoption of PEVs in Ontario of these systems and market are discussed in detail. Thus, the chapter is divided in four main sections, each discussing respectively the interplay of PEVs and generation plants, PEVs and the transmission system, PEVs and distributions networks, and PEVs and the electricity market, in general as well as in the particular case of Ontario.
  6. 3.  Consumers, Communities and Markets: The purpose of this chapter is to identify the “non- technical” barriers and policy issues related to the implementation of PHEVs within the Province of Ontario. A range of issues are presented, and within each, we draw upon work in other jurisdictions and begin to “bring the issue home,” i.e., to identify the implications for Ontario and to recommend strategies to reduce, or ideally to eliminate, the particular barrier. Early attention to this emerging agenda that we sketch out would, we believe, serve Ontario well in the longer-term.

The report closes with the main conclusions and recommendations resulting from the analyses and discussions presented throughout the document. Particular emphasis is put on identifying the most relevant issues to Ontario that may facilitate or hinder the adoption of PEVs in the Province, from the technical, consumer, policy, regulatory and market points of view. Specific recommendations to address the gaps are made, including the identification of areas where R&D investments may be necessary in the context of Ontario to allow a smooth transition from gasoline to electrons in the Province’s transportation sector. The following is a summary of the main conclusions and recommendations:

Infrastructure Issues:

  • Large-scale adoption of PEVs across Ontario will certainly not happen overnight. Even with the existing incentives and continued support by key stakeholders, it will take anywhere from 3 to 5 years for PEVs to begin to assume any noteworthy share of the market and longer for a critical mass to emerge.
  • Development of the necessary infrastructure needs to be targeted at specific segments in different communities and regions and over different time frames, since adoption rates will vary from one region and municipality to another.
  • Detailed assessments of market potential will be required and coordination of activities amongst planning agencies, utilities and auto manufacturers based on sharing of results will be necessary to ensure the requisite infrastructure is in place when needed.
  • For the 2010-2015 timeframe, charging needs can be managed with existing options without significant disruption. Beyond 2015, the planning process, further informed by emerging data on consumer acceptance, would be expected to address future needs.
  • There are no significant installation and operation challenges and costs for Level 1 overnight charging.
  • An upgrade to the Level 2 home garage charger could be provided either at a small cost (or as an incentive) to the first adopters. The cost of the equipment and the installation could be shared between the utility and the customer or the auto maker.
  • Level 3 fast charging capability will be necessary for those customers who opt for it. The technology is under development, but this premium service option, when available, can be targeted at those willing to pay for it.
  • The utility should install override controls (with customer agreement) and encourage the customer to charge at times when it is best from a utility operations perspective, based on established programs such as the Peak Saver program for demand response.
  • Workplace charge stations will be necessary to develop consumer acceptance of PEVs. The cost of installation and electricity use can be recovered in a number of ways, such as including it as part of the monthly parking fees paid by individual users; payroll deductions or within the employee’s benefits package.
  • Public charge stations installed in high traffic zones can provide all three options for charging but at different prices. The public installations could be led by either a utility-municipality partnership or private sector entity investment.
  • Region-specific or neighborhood specific “maps” of vehicle purchases and demand for charging stations need to be developed. These “maps” will aid in understanding where clusters are emerging, to minimize problems for utilities and to pin-point location of charging points.
  • Even though the grid and electricity market are currently able of supporting some level of PEV charging, significant PEV penetration levels will definitely impact the grid and its associated electricity market. Thus, careful planning will be required for a successful transition to PEVs.
  • Our analysis shows 10-15% penetration of PHEVs in the light-vehicle transportation sector will have a minimal effect on the grid and electricity prices, as long are charging takes place at night (off-peak hours). This will likely be the case for some time after the introduction of PEVs in the market in the next 3-5 years.
  • Vehicles should be preferably charged at night; this will even have a positive effect on grid operation by reducing the growing generation dispatch problems in Ontario at base-load conditions.
  • Charging of PEVs during on-peak hours will have a significant effect on the grid that will have to be planned for, especially in highly populated areas such as the GTA where PEV concentration and early adoption may be significant.
  • With wider adoption of PEVs, grid planners will not only have to consider the additional PEV-charging load for system planning but also be aware of formation of geographic “clusters” with the potential for negative impacts on the system.
  • A renewed emphasis on planning, with a special focus on understanding growth of clusters, will be necessary to ensure requisite infrastructure is developed to meet the needs in the 5 to 20 year timeframe.
  • The projected levels of PEV adoption would not threaten the stability of the electric grid as long as a good proportion of the chargers are “smart” and the utility has some override capability over PEV charging. Whether this becomes an impediment to consumer acceptance needs to be established through additional studies.
  • To mitigate and manage the impact that high penetration and concentration of PEVs, “smart charging” strategies and technologies will have to be developed and deployed. This will facilitate the charging of vehicles at certain desired hours such as off-peak hours and/or during high wind or solar generation outputs.
  • Smart charging technologies will require the availability of smart grid infrastructure that permits two-way communication among the IESO, LDCs and PEVs. Thus, smart grids need to be planned and developed considering PEV charging as an integral part of the load and the associated energy management systems in households and buildings.
  • In the short term, incentives to shape the load curve could include the provision of free home and public charge spots, as well as free or cheaper electricity at off peak times to allow for a capital deferral strategy for investment in the grid.
  • With high penetration of PEVs, even if all charging takes place at night, there will be upward pressure on electricity prices. If these prices are conveyed in a timely manner to the PEV owner and/or smart charger, then optimal charging decisions can be made, thus “discouraging” charging at high-price hours while “encouraging” charging at low-price hours.
  • Vehicle-to-Grid (V2G) as well as Vehicle-to-House (V2H) technologies present many potential advantages to the grid such as voltage and frequency regulation, as well as providing energy storage for wind and solar power generation. However, these technologies will not be economically feasible until several of the issues with batteries are resolved. Since battery and smart charging and grid technologies will likely improve in the long-term, R&D on technologies is needed now to be ready for deployment.
  • Standards for PEV charging devices, installations and communications are currently under development by a variety of institutions. These communication standards will be very much dependent on the standards finally adopted for smart grid applications, which are currently under debate. However, the majority of Smart Grid device developers and manufactures are leaning towards the adoption of ZigBee communication profiles and WiFi technologies for home area networks.

Institutional Aspects:

  • We recommend a “champion” agency should be identified and empowered to ensure the policy goals can be attained.
  • To promote sustainable mobility, the planning efforts must also address social science issues such as urban land use, transportation infrastructure investment, parking and charge stations and strategies for reducing congestion such as promoting public transportation and bike lanes.
  • The lead agency would work with all stakeholders to develop a clear set of regional plans for implementing the electric mobility initiatives. This would include the purchase and/or lease of vehicles, the early enablement of construction of charging stations and the creation of incentive packages in preparation for large-scale roll-out.

Consumer Issues:

  • Fuel costs strongly favor PEVs with a per kilometer cost estimated to be 3 to 5 times lower than for a standard gasoline vehicle. The capital costs, however, are higher and require significant further development for full commercial feasibility.
  • The up-front higher cost issue will require a policy response and a detailed consideration of the credits that may accrue through reduction of the externalities imposed by GHG emission and air pollution. These additional costs will likely decline with greater uptake.
  • To overcome customers’ reluctance to the higher initial capital costs for the vehicles, partnerships with financial institutions and automobile dealers need to be developed so that low-interest loans for plug-ins, based on projected lower operating costs from gas savings, are offered.
  • A business strategy is needed to capture all key incentives such as vouchers for home chargers, coupons for free off-peak electricity, and other rebates, which could be bundled at the time of purchase so that the capital cost barrier is lowered to the greatest extent possible.
  • There is a need to balance “consumer” and “fleet” approaches for early investment in new vehicles. A fleet-driven approach must consider what mechanisms would contribute to eventual “spillover” into a mass market. A consumer approach may wish to target high fuel consumption users to improve charging point profitability.
  • Specific actions can be taken so that consumers can effectively become a part of the PEV- transition. For example, the concepts of sustainability and environmental stewardship can be made more tangible by providing visible benefits, including, for instance, preferential parking locations (similar to disabled access) or free downtown parking, access to HOV lanes and reserved airport parking.
  • Education plans for consumers, municipal governments, local business and utilities should be created. These would including test drives and develop “quick lease” options for individuals and fleet consumers through effective partnership with financial institutions.

Auto Sector Challenges and Battery Issues:

  • High battery costs and uncertainty in key parameters render consumers, automakers, and utilities unwilling to assume the risk of ownership. Thus, issues related to batteries have implications for all aspects of the chain.
  • There is a strong need to improve battery durability with thermal issues becoming much more critical as energy and power densities are increased. The most important component of the PEV is the battery pack that influences the primary cost, range, and weight.
  • One promising feature of a limited range PEV (< 100 km in an all-electric mode) is the fact that it meets the needs of most urban and sub-urban families for most of the time. For an extended trip, the range anxiety is diminished by the fact that the vehicle can be operated by in a hybrid mode supported by a “conventional” gasoline engine.
  • The size of the battery back and its cost can be optimized to cater to the needs of most of the consumers. For this consumer segment, charging at home during off-peak hours with low cost electricity and without any requirements for major electrical upgrades to the home is a positive feature that would enhance acceptance.\
  • The low-daily-mileage characteristic of current drivers is why PEVs have potential to displace a large fraction of per-vehicle petroleum consumption. Studies are needed to provide Ontario relevant estimates of the magnitude of this petroleum displacement benefit.
  • Customers with higher expectations for a vehicle to be used to drive longer distances and desire to charge as a faster rate will require batteries capable of a high recharge rate, upgrades to the home outlets and an appropriate refueling infrastructure away from home. This is a challenge that needs to be addressed through technology developments to ensure that rapid recharge does not have an unacceptable impact on battery durability and performance.
  • In the present market and technology development context, the economic competitiveness of long all-electrical range vehicles (> 200 km) appears questionable, requiring a wide deployment of a rapid-recharge infrastructure. The battery in this case is expensive, and without significant incentives or additional benefits may not have great appeal to the consumer.
  • More accurate life-cycle analyses are needed to better guide decision makers considering PEVs in transportation strategies. The potential of post-PEV battery repurposing for grid applications such as ancillary services and backup power require more detailed life-cycle analysis as well as demonstration projects in order to better assess the viability of these applications.
  • Better, higher fidelity, modeling and in-field data for PEVs is needed. Of particular importance to fill a notable void in understanding is the need to determine the actual drive cycles of drivers in Ontario. This also included assessment of the interaction of driver habits with various PEV components.
  • The challenge of the battery will continue to be the dominant considerations in realizing the vision of sustainable mobility through electrification. Besides the technical barriers that need to be overcome, especially if V2G/V2H applications are to be considered, there is a role for business models to help reduce some of the adoption barriers over time. Some of the main business models identified include: battery leasing; mobile phone-style transportation contracts; vehicle leasing; and car-clubs.

Current battery designs and regulations result in over-design relative to an optimal case that would promote a faster adoption of PEVs. Possible solutions to address this issue include: promote early battery replacement by changing the battery design requirement; promote a strong secondary use market with applications in the utility T&D sectors; develop technical and economic research to quantify key life-cycle parameters; and allow utility rate-basing of battery purchases for key grid applications.