Real-time pricing could help keep electric vehicles from burdening the grid
Utilities use this strategy to encourage drivers to charge their cars when demand is low, such as at night.
(Photo credit: TheDigitel Myrtle Beach / CC by 2.0)
Electric vehicles can help reduce carbon pollution from transportation. But as more people transition to EVs, charging a lot of cars could burden the electrical grid.
“It’s going to be really costly if we don’t do this in a smart way,” says Cate York of the nonprofit Citizens Utility Board.
If lots of EV drivers are charging their cars in the middle of a hot summer day when many people are also running the AC, utilities may need to fire up backup power plants to meet the extra demand.
Those backup plants are often older, more costly to run, and highly polluting.
So to encourage customers to use electricity at off-peak hours, some utilities have started offering what’s known as real-time pricing plans. They charge customers less for the electricity they use when demand is low – for example, at night.
That can help utilities avoid using backup power plants. And research shows that in Illinois, EV drivers with real-time pricing plans would cut the supply portion of their bills by more than half.
“So for electric vehicle owners, this is an excellent way to promise them savings and then also make sure that people are charging their electric vehicles overnight, which is going to be the smart way to go about the future of transportation,” York says.