The greatest roadblock to developing smart grids in the US is not high up-front investment, good news when 65 million electric vehicles could be on the road by 2025, according to the results of a recent annual electric utility industry survey. Infrastructure firm Black & Veatch queried over 500 qualified industry participants about some of the most prescient issues of the day and the results may surprise you.
The top issues the industry is concerned about in 2012 are aging infrastructure, reliability and the environment. Aging infrastructure steadily crept to the top of the list over the past three years – in the 2009/2010 survey the issue ranked sixth in a list of the top ten. The importance of security has also gained importance according to the survey participants.
Given the prevalence of coal in the US power generation portfolio, it is not surprising that carbon emissions legislation has remained the top environmental concern three years running. Stricter EPA coal plant regulations have made generating electricity from the fuel more challenging for utilities.
“We are seeing a continued shift away from coal – it is still a meaningful part of the portfolio – but the trend is [for] turning away,” Dean Oskvig President and CEO of B&V’s energy division, recently told Breaking Energy. If the regulatory burdens were not challenging enough, strong price competition from natural gas has made coal a tough choice for power regulators.
Natural gas prices have increased in recent weeks, however, and a hot summer could exert further upward pressure on gas prices. “Higher prices make marginal gas units less economic compared with coal units previously substituted away,” Citi’s commodities strategy analysts said in a recent note. “High power demand [for summer air conditioning] also calls up most power plants to generate, including coal, thereby reducing coal-gas switching,” Citi said.
One striking result from the survey was industry anticipation that electric vehicles will account for an estimated 7% of total electric load by 2025, which according to B&V’s analysis would equate to roughly 65 million vehicles on the road in the next 13 years – up from about 100,000 today.
Aside from getting about 20% of the US population to purchase an electric car, another significant barrier to this level of uptake ties back to the aging infrastructure issue that is vexing the industry. “The main problem is at the distribution level with transformers. A typical residential setting can only add about one or two EV’s before spare transformer capacity is used up and the equipment fails,” said Oskvig.
Check back soon with AOL energy for an article about a technology that addresses aging transformer concerns.
“Transformers are also used to resting at night because peak [power usage] is during the day,” Oskvig pointed out. “EV uptake may be more gradual than people think,” he said.
