What utilities companies can do to prepare for electric vehicle growth
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- Apr 9, 2019 6:00 pm GMTApr 9, 2019 6:01 pm GMT
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Electronic vehicle (EV) adoption is now transcending sectors — and as transportation electrifies, this creates notable opportunity for electric utilities.
But to reap the potentially transformative benefits of transportation electrification, utilities need to have the proper framework in place. In preparation for EV adoption (by residential and commercial customers), it is critical for utilities to implement a holistic approach to transportation electrification — one that ensures the infrastructure, systems and services are in place to align the goals of utilities and their customers. By proactively planning for transportation electrification with a truly integrated solution, utilities can drive customer satisfaction and bolster stakeholder value.
Transportation electrification and the opportunity for utilities
According to our new report, the transportation industry is in the midst of a slow but decisive shift away from gas and diesel and toward electricity as a transport fuel. As our report — Transportation Electrification: A Guide to Planning, Deployment, and Operations for Utilities — points out, EVs are projected to follow a significant upward trajectory over the next 20 years. By 2025, it’s expected that EVs will constitute 11 percent of total passenger vehicles, while by 2040 that number may reach 55 percent.
There are a number of factors behind the surge in transportation electrification, or TE. One key element is a notable increase in the drive range of EVs. Whereas the average drive range for an EV in 2015 was 114 miles, it’s expected to reach 275 miles in 2022. Beyond elevated drive ranges, there are an expanding variety of EVs entering the market, ranging from SUVs and pickup trucks, to delivery vans, shuttles, electric buses, and long-haul semi trucks.
For utilities, the momentum within the EV sector has created a fork in the road. On the one hand, they can follow the path of circumspection, acting only after broad industry shifts take place. On the other, they have a chance to act proactively and decisively, by embracing TE and identifying immediate-term opportunities to begin laying the groundwork for this major societal shift.
For utilities that choose this latter path and actively prepare for TE, there are a number of potential benefits. On the customer side, utility support of TE will enable their customers to lower transport fuel costs and at the same time contribute to cleaner air and support state and societal carbon footprint reductions. And for utilities, support of TE opens up new avenues for infrastructure investment, increasing grid utilization, as well as the opportunity to deliver new value-added services. Beyond these advantages, utilities that prioritize TE initiatives now have the potential to significantly influence the growth of TE moving forward, including the shaping of regulatory policy and the evolution of EV charging infrastructure. But reaping these benefits demands a strategic approach.
Launching an integrated TE program plan
In order to successfully meet the broad shift toward electrified transportation, utilities need a holistic TE program plan — one that both enables seamless cross-departmental communications while stepping up to address the new EV owner customer experience.
While TE initiatives will vary according to utilities’ individual core business objectives as well as state policy, there are several critical factors that should guide the creation of any successful TE initiative:
- Define a cohesive program strategy: Of the successful TE initiatives that we evaluated, one common denominator emerged: cohesion. Rather than implementing the end-to-end stages in separate and siloed ways, successful initiatives integrate workflows into a cohesive program. This integration goes a long way toward defining key roles, formalizing necessary handoffs, and eliminating bottlenecks.
- Oversee effective workflow management: A lack of process clarity is one of the elements that will hold a TE initiative back. In order to preempt internal inefficiency, successful TE plans must be guided by clear and decisive workflow management. Certain software solutions and established processes can play a role in better managing workflows by actively monitoring for things like customer dropout rates.
- Ensure alignment with core objectives: For a TE program to be successful, it needs to align with a utility’s overarching objectives. By building a TE initiative alongside core business objectives, and aligning to customer needs, utilities can leverage their TE initiatives to build a range of value-added offerings. This can both lower costs for customers and meet their demand for sustainable energy options, while opening up new avenues for utility services and value.
By following these steps in their creation of a TE plan, utilities can approach the wave of electrified transportation with a plan that’s built for long-term success — both in terms of delivering customer satisfaction and driving more stakeholder value.