EXTRA! Vehicle-to-Grid Expansion Saves Planet!

The phrase “energy crisis” is thrown around nearly constantly these days. From concerns about gas consumption to political instability in some of the world’s most important oil producers, fears of a future crisis are dominating news cycles and public discourse. It's only a natural reaction to be scared of what might happen if fossil fuels dry up or become too expensive for the average consumer to purchase, and these fears are driving consumers, businesses, and governments towards renewable energy. That being said, in the automotive industry, EV adoption has been painfully slow. Many companies have reneged on promises to convert their lineups to all electric powertrains within the next decade, citing slowing consumer demand, high production costs, and lagging battery technology as reasons for continued commitments to ICE vehicles. Ironically, California, the state with the most widespread adoption of EVs, has the opposite problem: excess energy from overproduction and underconsumption. 

During certain times of the year California simply produces far more electricity than it has a need for. During the spring months especially, temperatures have not yet reached the sweltering summer highs commonly associated with July and August. With those summer temperatures, the demand for electricity increases to incredible levels, putting strains on the power grid and at times forcing rolling blackouts to safely manage consumption. A month like April is a completely different story. Most residents are enjoying agreeable temperatures, plenty of sunshine, and cool evenings. This leads to reduced demand but elevated renewable energy generation. Simply put, the state’s push for solar panel installations has actually outpaced the need for energy generation during certain times of the year. Moreover, California has yet to devise a solution to this problem beyond selling some of it to neighboring states, leading to excessive amounts of energy going unused and eventually being wasted.

A report published a couple of weeks ago highlights the surprisingly large amount of power wasted by overgeneration. California’s Independent Systems Operator, which manages more than 80% of the state’s electricity, reported that as of July 7th, the state had wasted over 2.6 million megawatt hours of renewable energy - most of it coming from solar. Remarkably, this is enough energy to power every home in the San Francisco area for an entire year. As a result of this, solar panel installations have dropped off a cliff because many homeowners and businesses feel that it is no longer financially viable to do so. The California Solar and Storage Association reported that solar panel sales dropped 66% in Q1 2024 compared to the same period in 2022. Worse, something like 17,000 green energy jobs have been lost across the state. These are all troubling trends to say the least, but the automotive industry has an obvious solution: electric cars. 

A common fear circulated amongst those skeptical of EV adoption is that the power grid will be unable to keep up with demand. In layman's terms, too many EVs will be trying to charge at the same time, driving prices up and potentially overloading the grid. However, in California, the state leading the US in EV adoption by far, they are facing the exact opposite issue. If California wants to find a way to utilize that extra energy, they should turn even more towards EVs. EVs paired with V2X and bidirectional charging are the perfect solution to managing excess power generation. EVs are a scalable solution. If electricity is available at rates which significantly undercut petroleum, consumers will be encouraged to buy more of them. Inexpensive electricity makes a lot of financial sense for residents and businesses living in a state with some of the highest living costs, gas prices, and taxes in the US. People and businesses that purchase EV chargers for their property can buy energy storage batteries to save power for a later time. Tesla has taken the lead on this with their Powerwall, not only allowing owners to store cheap electricity for later, but to even sell it back to the grid when demand increases during daytime highs. An EV owner with bidirectional charging technology enabled can sell electricity during the day and recharge at night once demand on the grid drops. Putting it simply, EVs and EV chargers are a great method for conserving green energy that would otherwise go to waste.

As technology continues to progress, so will power consumption. Soon, it is likely that other states may face similar challenges to California. Places with mild spring temperatures and plenty of sunshine could possibly find themselves discarding power before the summer heat sets in. Luckily, EVs can use up this demand, giving customers a green method of personal transportation at a fraction of the price of gas. The automotive industry should stay the course and continue their push towards electric vehicles because it is a viable way to help the environment - even in ways that they sometimes do not expect. Solving the growing energy crisis takes on many different forms, and the market must continue to adapt and innovate to meet these new challenges as they arise.

Learn more about how the AutoMobility Advisors team can help you and your business seize the amazing opportunities to serve the new mobility market. Click on the link below and get in touch, we'd love to talk with you!

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