WASHINGTON -- Simply “plugging in” 1 million electric cars could add $750 million in annual wholesale energy costs unless "smart charging" is adopted, according to a joint study conducted by PJM Interconnection and Better Place. Though consumers who choose to leverage time-of-use pricing can see some price relief -- less than 10 percent annually -- the wholesale energy business would still feel the impact of ad hoc charging, the study found.

Conversely, “smart charging” 1 million electric cars via a central network operator can cut in half the increase in wholesale energy costs compared to simply plugging in or time-of-use pricing while reducing driving costs by one-fifth, researchers concluded.

The joint study conducted by PJM and Better Place analyzed the impact of 1 million electric cars on the Mid-Atlantic states’ grid. The study modeled the market and pricing impact of 1 million electric cars and related charging infrastructure. The greater Washington-Baltimore area was selected for modeling because it already experiences transmission congestion issues and is a targeted area for electric vehicle adoption.

“Because of the ad hoc nature and unpredictability of when each electric car would be plugged in, the extra $750 million in annual costs would be borne unequally by market participants and consumers,” said Hugh McDermott, vice president of utility and smart grid alliances for Better Place. “With smart charging, a central network operator is able to leverage dynamic wholesale energy prices to optimize the entire fleet’s charging at the lowest possible cost and impact to the grid and the consumer. Our customers and utility partners around the world stand to benefit from smart charging.”

Better Place, based in Palo Alto, Calif., is a provider of EV networks and services. PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. 

“Smart charging is possible when there’s real-time coordination through a centrally dispatched grid, which will facilitate prioritization and varying charging rates," explained Chantal Hendrzak, PJM’s general manager of applied solutions. "Flexible load benefits of EV charging are captured more easily by RTO, ISO and utility operations through integration more directly into existing operations and practices.”

Sam Jaffe, research manager at IDC Energy Insights, added: “Most electric vehicle drivers will want to be able to plug in according to their own needs, but unmanaged charging on a large scale will be costly for everyone -- the driver, the utility and the grid operator. A centrally managed model can result in significant cost savings and improved grid stability, without impairing the fueling needs of the EV owners.”

The goal of the study was to demonstrate the value of having an EV network operator that manages EV charging and the impact on the wholesale energy market, production costs and ancillary services. The results of the study have been shared with the PJM TOA-AC (Transmission Owners Agreement Administrative Committee).

A complete copy of the white paper can be found here.