The business model revolution is happening, whether utilities like it or not.
We have previously investigated how utilities can integrate distributed energy resources (DERs) into their business to fully enjoy the benefits it has to offer. We have also looked into how they can make the most out of renewable energy projects, and how they can participate in smart city projects to stay relevant, for example.
With so many changes taking place in the industry, the traditional model of operations for utilities is quickly being phased out in favour of more innovative and communal approaches. Austin Energy, the publicly-owned energy provider for the area of Austin, Texas, is particularly eager to ride the wave of electric vehicle (EV) innovation, promoting several projects aimed at successfully integrating EVs into the grid.
One such project is Electric Drive, launched last year. Electric Drive is an electric transportation hub in downtown Austin powered entirely by renewable energy. It features dedicated parking for two EV charging stations, including a fast-charging DC port, as well as a solar-powered kiosk that can recharge electric bikes, scooters, motorcycles, laptops and mobile devices using integrated USB ports and electrical outlets.
"Electric Drive is a community showcase located downtown where people can see and utilise sustainable transportation technologies, like car charging, bike and car share services, and more. This showcase is at the heart of the Seaholm EcoDistrict, which includes beautifully repurposed space like the retired Seaholm Power Plant, green buildings, and public art installations," says Karl Popham, Manager of Emerging Technologies and EVs at Austin Energy.
Electric Drive is a component of Austin Energy’s Plug-In EVerywhere, which was launched in 2012 and allows EV drivers to charge at over 650 charging ports throughout the city — including DC fast charging — for a membership fee of $4.17 a month.
The practical and low tariff serves as an incentive for people to own EVs. "We want the tariff easy enough for people to understand and we want to encourage them to make the switch to EVs. We will also sell year-long memberships to car dealers, so they can provide one free year of charging to the customer acquiring an EV alongside the car purchase."
According to Popham, projects such as these are a good source of revenue for the utility, as well as a good way to closely attend to customer demand. The positive profitability comes in large part from the project model itself: "It's almost like the gym membership model. People subscribe a lot, but a lot of them just leave it in their glove box as a convenience in case they need it."
The membership fee for the Plug-In EVerywhere project covers a widespread network of public charging stations across Austin, and they are fully powered by renewable energy. "People can charge their EVs as much as they want in the public infrastructure for that price,” says Popham.
EV360: membership programme for EV charging
Plug-In EVerywhere also has a residential charging counterpart: the EV360 programme, a time-of-use rate pilot programme for EV residential charging.
Participating customers can get off-peak charging at home for a fixed rate of $30 a month allowing them to “charge as much as you want at home with the exception of three hours of peak every day during the summer. You can also charge as much as you want on the public network."
According to Popham, the success of this project lies in the fact that it takes advantage of the utility's supply patterns. "85% of all charging is done at home, that’s where our revenue is. That’s the most profitable load a utility like us can have, because it’s done at night.
"That is all profit, basically, because in our energy market, electricity can literally hit zero at night, even a little negative, depending on our wind subsidies, because there’s more generation than demand. We’re leveraging existing infrastructure that is behind the customer’s meter, so each EV is adding basically a third to their home consumption at a time where demand is much lower and grid market pricing properly reflects that."
Shared autonomous electric vehicles
Another exciting prospect for Austin Energy is the introduction of shared autonomous electric vehicles. The idea for the project comes from the behavioural patterns in car ownership, its inefficiency and inadequacy.
"In our territory, we have about a million residents and we also have about a million cars, so we're looking at a 1:1 car to person ratio, and the car is usually parked 95% of the time. You only use it 5% of the time. It's one of the most ridiculous, inefficient big purchases you can make when you actually look at how you use it," explains Popham.
"We're seeing a lot of shifts away from peak car ownership, especially for the younger generations, as they seem less interested in owning a car. They want to pick up their phone, press a button, someone comes to pick them up, takes them where they want to go and they're done.
"We're working with companies to bring shared electric autonomous vehicles, and autonomous vehicles are more efficient than single vehicles - they can drive far more miles a year. We want that on an electric platform, and we also want it shared, and these features working together can greatly drive down costs."
Why should utilities integrate EVs?
EV adoption is no longer a matter of if it will happen, but when. Looking at a utility that is carrying out so many projects in the EV arena puts such questions into perspective. With so many revenue opportunities to be had, and with the energy industry already going down the path of innovation with EV integration, the question becomes why shouldn't utilities become active players in this field?
"You have something that’s coming into your territory whether you like it or not, and why wouldn’t you want to incorporate that into your overall strategy?” says Popham. “By being proactive you can help lead that discussion and be a subject matter expert. Why not lead the charge and be part of your destiny?"
"The opportunities are obvious, like shifting the demand during times when it’s most profitable for you to service that. In our case, it’s not only our most profitable times, but it’s also when we have a lot of wind power coming in at night. Transportation electrification allows you to maximise your capital investments in renewable energy projects. Any organisation in our industry who is not working to capture the opportunity to convert transportation fueling from petrol to electricity is putting their heads in the sand at some point.”