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Biden's infrastructure plans may help EV adoption if used properly: experts

Highlights

Compared with FDR's rural electrification

Concern about 'wrongly placed' spending

Big load demand, grid upgrades foreseen

Houston — The Biden administration's infrastructure plans offer opportunities to drive deployment of electric vehicles in commercial fleets and consumers' driveways via installation of charging stations and relevant transmission and distribution system upgrades, attendees of a Platts Global Power Markets Conference panel learned April 14.

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During a panel discussion entitled "EV evolution," Cathy Zoi, CEO of EVGo, a company that installs EV charging stations, compared the need for "public-private partnerships" for EV deployment to the Roosevelt administration's rural electrification efforts in the early 1930s, when about 75% of cities had electricity, while 75% of rural locations had none.

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EVGo can install a charging station in about four weeks, Zoi said, but obtaining the various regulatory approvals and ensuring the utility can handle what could be substantial loads at a particular location may take nine months to a year, Zoi said.

S&P Global Platts Analytics forecast in February that battery electric light-duty vehicle sales would total more than 300,000 in the US in 2021, up by more than 61,000, or more than 25%, from 2020. The forecast is for more than 2.1 million sold in 2030, more than 5.1 million in 2035 and almost 9.2 million in 2040.

Plug-in hybrid light-duty EV sales are forecast to approach 175,000 in 2021, more than double 2020's total, grow to more than 511,000 in 2030, rising to more than 1 million in 2035 and approach 1.7 million in 2040.

However, panel discussion moderator Peter Tertzakian, deputy director of ARC Financial, Canada's largest energy-focused private equity manager, noted that in the context of the US total registered vehicles approaching 300 million, such EV sales are tiny.

'A kick start'

Tertzakian raised the concern that federal stimulus funds could be "wrongly placed," in terms of not providing the most benefit for the most people at the least cost.

Reuben Munger, managing partner of Vision Ridge Partners, which manages investment in "sustainable real assets," said the use of federal funds to deploy electric school buses could raise questions about balancing equity – "everybody gets a free [electric] school bus," for example – versus utility, such that electric school buses can achieve a tipping point via economies of scale.

"A kick start" could help prove in three or four years that such EV technologies are "not just cleaner and healthier, but also cheaper," Munger said.

Some systems have used Volkswagen "dieselgate" settlement money to make such deployments, Munger said.

"It's not a question of 'free market versus non-free market," Munger said. "It's what do you want to make happen."

Tod Hynes, founder and president of XL Fleet, which helps electrify light- and medium-duty trucks up to a maximum gross vehicle weight rating of 26,000 pound, said, "We're definitely seeing a lot more incentives coming" for the adoption of EVs in commercial uses, but today's global battery production barely could supply 4% of the world's vehicle production.

"The auto industry is absolutely massive, so it's going to take time," Hynes said.

Effect on the grid

Platts Analytics' forecast for power load growth caused by EV sales indicates it would grow from a negligible amount in 2020 to about 10 GW by 3030, about 20 GW by 2035 and more and 40 GW by 2040.

Zoi said that just a few years ago, 50-kW EV chargers were considered fast, but EVGo now deploys 350-kW chargers. Tertzakian noted that a concentration of several such chargers in one location – with a commercial fleet, for example – could create a substantial load on a grid.

Drew Murphy, Edison International's senior vice president for strategy and corporate development, said various power utilities may have different needs, in terms of how much investment is required to encourage EV use. Edison International's Southern California Edison utility, for example, "doesn't require significant upgrades to most of the grid." The company continues to invest in energy efficiency, distributed energy resources and demand response to manage power demand spikes that might result from widespread EV adoption, Murphy said.

"We don't foresee most load growth until after 2030," Murphy said.

Edison International has plans to spend more than $400 million to install EV chargers in affordable housing environments, "mainly apartment buildings," Murphy said.