With a broader range of market options and a growing infrastructure, the passenger electric vehicles (EVs) market is projected to have 11.4 million EVs on the road, with cumulative sales of 12 million EVs and a value of over $400bn by 2025, GTM Research said Oct. 18 in announcing a new report.
This growth in EV adoption will create many points of complexity for grid operators and other electricity market stakeholders. In GTM Research’s recent report, “The Impact of Electric Vehicles on the Grid: Customer Adoption, Grid Load and Outlook.” The report, which is available for sale, is meant to provide a perspective on how customer adoption and grid load will unfold.
While electric vehicles hardly make a ripple in today’s domestic power demand, the situation will change over time, according to GTM.
To-date around $3bn of federal incentives have supported the growth of the EV market, GTM said in a news release. Many states have also offered their own incentives.
Furthermore, electric vehicle adoption is supported by consumer economics and a growing sentiment that EVs can support de-carbonization. “A price and energy cost analysis of conventional, hybrid and electric vehicles illustrates that the EV has the lowest lifetime cost even in a low oil price environment,” says Timotej Gavrilovic, the author of the report.
However, questions around the impact of adoption on the grid, and how in turn, that will affect consumer trust, still remain. “The impact of EVs on the electricity grid, estimated at 1.4 TWh in 2015, depends on how quickly consumers and the utility infrastructure can adapt to this growing market,” Gavrilovic said.
Policy, incentives and overall renewables penetration present variables in different regions and their respective grid operations. Gavrilovic adds that, “California and Hawaii are among the first geographies facing the most challenges resulting from renewable and EV penetration. These challenges led them to increase their efforts to innovate in demand side management (DSM). EVs are just one of many possible technological solutions in the DSM toolbox that can support overall renewable and de-carbonization goals.”
The electrification of passenger vehicles has become increasingly a part of de-carbonization conversations in energy policy. Prior to 2010, Energy Information Administration (EIA) estimated a total of 57,000 EVs in use.
Between 2010 and 2015, EV sales surpassed 400,000 vehicles with a value of $15bn, GTM said in a summary
As long as current trends of increasing consumer interest and decreasing costs continue, EV adoption could increase to 12 million vehicles by 2025. This market growth will have a significant impact to existing and planned grid infrastructure, creating opportunities for existing stakeholders and new market players who can create integrated solutions for the EV driver, electric utility, wholesale energy market and aggregators.
GTM Research is a division of Greentech Media.