Houston — As states such as Florida adopt electric vehicle infrastructure legislation, electric utilities face uncertainty about how much power demand could be affected, in light of the recent crash in oil prices, analysts said Thursday.
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On Wednesday, Florida's GOP-controlled House of Representatives approved Senate Bill 7018, "Essential State Infrastructure" for the signature of Governor Ron DeSantis, a Republican. Support in both chambers was bipartisan.
The bill directs the state Department of Transportation to "recommend a master plan for the development of electric vehicle charging station infrastructure along the State Highway System" by July 1, 2021, in consultation with the Public Service Commission and the state Office of Energy.
Goals of the plan include identifying types of possible locations of EV charging stations to support both short- and long-range travel, expand EV use and serve evacuation routes.
Dylan Reed, director with Advanced Energy Economy, a business group focused on secure, clean and affordable energy, on Thursday said, "Regulatory certainty for electric vehicle charging infrastructure will unlock investment in the state and make Florida a national leader on electrified transportation."
As of the end of June 2019, Florida had the seventh-largest total of battery EVs registered since 2011, according to Auto Alliance, the US automakers' trade group.
Roman Kramarchuk, managing director of global power, emissions and clean energy at S&P Global Platts Analytics, said Thursday that the current low-oil-price environment could "theoretically" make EV sales growth "more challenging, as the total costs of ownership of [internal combustion engines] will decrease relative to EVs."
However, Jon Jacobs, a PA Consulting energy and utilities expert, said, "I think that near-term oil price fluctuations will not affect the long-term trends toward vehicle electrification and the need for more judicious usage of fossil fuels."
"Oil prices have been relatively stable in the United States for a number of years yet support for transportation electrification, sales of EVs, announcements of new models and development of charging networks have all increased," Jacobs said Thursday.
Felix Maire, a Platts senior analyst focused on electric vehicles, said, "We generally see the availability of public charging infrastructure as key to support a rapid EV adoption."
"Policymakers will play a key role in facilitating the development of a public charger infrastructure," Maire said Thursday. "Several states -- e.g. California, Minnesota or Oregon -- are implementing some levels of utility EV charging infrastructure programs."
However, California's big three investor-owned utilities complained this week that a Public Utilities Commission staff EV infrastructure proposal is too involved and cumbersome, and that it would delay by years the effort to put 5 million zero-emission vehicles on the road by 2030.
For example, Southern California Edison, in its comments on the PUC rulemaking, said, "Rather than limiting investments in transportation electrification while it develops a strategic long-term framework for widespread adoption of EV infrastructure, the commission should authorize large-scale programs with a streamlined review and approval process in the near term."
Matthew Cordaro, a former Midcontinent Independent System Operator CEO who now resides in New York, said, "Aggressive EV measures will ultimately serve to increase [power] demand over time but not in the short term."
"It will probably be in excess of five years before any measurable effect would be seen," Cordaro said Thursday. "In the meantime there is no reason to assume plans for deployment could not be developed relatively quickly."
PRICE WAR'S EFFECTS
Neil McAndrews, head of Austin, Texas-based Enterprise Risk Consulting, said the oil glut may "cause lower sales over the next couple of years" of EVs, but the Florida bill's July 1, 2021, plan deadline "corresponds to other forecasts of adoption and therefore is reasonable."
Joshua Rhodes, a research associate at the University of Texas Energy Institute, said the oil price war's impact on vehicle choice "will depend on how long it goes, but in the long run, I don't think it will have much of an impact."
"Projections for EV deployments get more bullish every year, so I think that they are going to come faster than most think," Rhodes said Thursday, adding that the July 1, 2021, deadline is "plenty of time to develop a plan."
In contrast, Campbell Faulkner, senior vice president and chief data analyst at OTC Global Holdings, an interdealer commodities broker, described the Florida EV infrastrurcture plan deadline as "crazy aggressive bordering on religious fanaticism."
The oil price war "will likely slow EV adoption due to the overall economic effects, as total vehicle sales should slow."
If EV sales do take off, Faulkner said, "the grid does not have anywhere near enough capacity to handle the move to electric vehicles."
"Between aging infrastructure and a grid [that is] parameterized towards meeting industrial demand, adding a glut of new vehicles will greatly tax dispatch and reliability," Faulkner said.
However, Timothy Fox, vice president and research analyst at the ClearView Energy Partners consultancy, offered a less alarming outlook.
"Relying on three scenarios (low, base and high), we estimate that electric vehicles represented between 0.15% and 0.60% of total U.S. electricity consumption in ... 2018, suggesting that opportunities for meaningful load growth from electric vehicle adoption nationwide may be years ahead," Fox said in an email Thursday.