Electric vehicles (EVs) will be a major disruptor for the US electric power sector, with the number of EVs in the US projected to increase from 1.5 million in 2020 to 10–35 million by 2030. A new study released by economists at The Brattle Group concludes that an investment in the range of $75–125 billion would be needed across the electric power sector supply chain by 2030 to serve 20 million EVs—the target selected for the analysis—including adding 1–2 million public chargers.

The Brattle analysis focuses primarily on light-duty vehicles; electrification of commercial fleets and freight trucks will further magnify electrification-related opportunities.

While this creates a large opportunity for the electricity industry to increase sales and infrastructure investments, it also comes with new challenges that will need to be addressed.

Several industry drivers—such as declining electric vehicle costs, expanding EV model choices, increasing charging infrastructure, and growing market awareness, along with favorable federal and state policies—have created an attractive market for increased EV adoption. The Brattle study shows the following system impacts of the growing EV fleet:

• 20 million EVs will add about 60–95 TWh of annual electricity demand and 10–20 GW of peak load, requiring 12–18 GW of renewable generation capacity and 1-2 million public chargers. (Over the past 5 years, public EV chargers increased by about 40% per year, a rate that must be maintained over the next decade to install an additional 1–2 million public chargers by 2030.)

• Investments will likely be composed of: $30–50 billion for generation and storage; $15–25 billion for transmission and distribution (T&D) upgrades, and $30–50 billion for EV chargers and customer-side infrastructure.

• Total annual gasoline savings of $12 billion/year translates to an 8.6-year societal payback period for the investment. If the value of avoided greenhouse gas emissions is included at $50/ton, the payback period decreases to 7.2 years.

• The batteries installed in 20 million EVs will have up to 1,600 GWh of electricity storage capacity. They could feed up to 300 GW of power back into the grid to help integrate renewables once large-scale vehicle-to-grid (V2G) operations are viable. This V2G storage capability vastly exceeds the grid’s current and projected storage capability.

While EVs and chargers are becoming more common in our everyday lives, the industry is really just seeing the tip of the iceberg when it comes to the impact that EVs will have on the grid. System planners across the electricity supply chain need to better understand and prepare for the impacts of EVs, including the opportunities for EV participation in balancing the system.

—Michael Hagerty, a Brattle Senior Associate and study coauthor

The Brattle study notes that utilities are well-positioned to invest in a substantial portion of the infrastructure necessary to drive EV adoption and to help achieve the ambitious policy targets for transportation electrification.

Transportation electrification poses uncertainties for electric utilities, but also creates opportunities to drive accelerated decarbonization, manage grid reliability, improve asset utilization, and become more customer-centric organizations. While this analysis focuses primarily on light-duty vehicles, electrification of commercial fleets and freight trucks will further magnify electrification-related opportunities.

—Sanem Sergici, a Brattle Principal and study coauthor

The Brattle authors also offer the following recommendations for industry planners and policymakers:

• Proactively develop an EV roadmap to maximize opportunities and reduce the barriers to EV adoption, including developing detailed EV adoption forecasts and EV-specific retail rates.

• Craft regulatory policies that articulate societal (including non-energy) benefits of EV adoption, such as the Total Value Test framework that Brattle co-developed with EPRI.

• Facilitate collaboration across the EV supply chain to reduce existing market barriers, such as targeting under-served markets that are not prioritized by private investment.

The report, “Getting to 20 Million EVs by 2030: Opportunities for the Electricity Industry in Preparing for an EV Future,” is authored by Brattle Senior Associate Michael Hagerty, Principal Sanem Sergici, and Associate Long Lam.