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Prediction: Fleets of ACES Vehicles Dominate the Power Industry Dialogue in 2030

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The Transportation-to-Grid: New Business Models to Capture Value in the Energy Cloud white paper, published 3Q 2019, introduced the notion that the foundation of future value in the emerging transportation-to-grid (T2G) platform is autonomous, connected, electric, and shared (ACES) transportation modes. This platform describes the opportunities created by the electrification of transportation—from passenger vehicles to transit systems to port operations—and the electricity grid.

Because this platform is expansive, the example illustrating its power and potential most tangible to today’s conversation is the electrification of vehicles, including light duty (LD), medium duty (MD), and heavy duty (HD). Vehicles in the T2G platform are electrified, connected with intelligent devices, and eventually employ equipment for highly automated capabilities.

Through 2030, expect the focus to be on the connected and electric portions of ACES delivered through the traditional retail model. Globally, annual LD vehicle sales with built-in telematics—telecommunications and information processing systems—are expected to total 37 million vehicles in 2019 and reach 114 million vehicles in 2028. As electric powertrains appear in larger shares of these vehicle sales, the movement toward ACES vehicles is expected to grow in number, sophistication, and complexity. Consequently, so too grow the business model opportunities in the T2G platform.

The deployment of ACES vehicles in mass is an area with significant potential growth and material implications for the power industry from electric load growth and variability factors. Take the recent unveiling of the full-fledged autonomous Origin vehicle from Cruise Automation—General Motor’s automated vehicle subsidiary. Though light on details, including release date, the announcement clearly communicates to consumers that the ACES vehicle of the future is slated to transport at least six people, without a steering wheel or pedals. Certainly, consumers are currently skeptical of transitioning to an ACES lifestyle. They need careful convincing that this new mode of transport is safe, reliable, affordable, and efficient. This highlights a likely major application of these future ACES vehicles for robotaxi services, automating the provision of ride-hailing services. The significance of reducing transport prices through these technologies will disrupt vehicle usage patterns, with higher vehicle occupancies potentially reducing energy requirements due to this efficiency. However, the overall energy system impact may be complex, with demand increases in some cases depending on the transport maturity of a particular urban regions.

Enter the ride-hail company Lyft’s self-driving car service piloted in cities such as Las Vegas. With more than 50,000 rides completed as well as broad exposure in the media and experientially through events such as the 2020 International Consumer Electronics Show (CES), early adopter consumers are beginning to meet their future ACES lifestyle—one ride-hail at a time. Continued careful curation of consumer confidence in an ACES future by ride-hail companies and other market stakeholders, coupled with the potential for mass ACES vehicle production by automakers, offers a bold new future for electrified ground transportation. Such is the case regardless of whether the focus is on moving people (e.g., Cruise Origin) or goods in the case of Amazon’s well-reported order for 100,000 electric delivery vans from the Michigan-based start-up Rivian.

That bold new future presents significant and variable load growth for the power industry to prepare to accommodate. The T2G white paper offers a business model focused on this opportunity area termed Load Orchestrator. This model focuses on the value created by vehicle-grid integration—i.e., the interconnection of plug-in electric vehicles (PEV)[1] to electric distribution networks. Potential value for capture through this model results from approaches to monetize unidirectional (V1G) and bidirectional (V2G) power flows.

So how much power will flow to PEVs? For this view, dive past the 114 million annual sales of vehicles with built-in telematics to look at the power flow to vehicles with electric powertrains. Navigant Research expects 127 million PEVs in-use globally by 2030 (LD, MD, and HD). Power flows to these PEVs represents more than 422 TWh of load annually. This energy content equates to roughly 248 million barrels of oil or enough energy to power more than 38 million homes for one year.

The prospect of this much load coming online across global electric distribution networks will likely give operators pause—particularly as load growth comes from expanding fleets of ACES vehicles operating at high uptimes or hours of operation. Yet, arrival of ACES fleets does not spell doom for grid managers and planners, who are highly adept at keeping their systems humming.

As the power industry evolves toward larger batters and faster charging, ACES fleets present utilities with load management challenges at the localized level where capacity constraints and other asset limitations create great risks from large additions of unplanned load. Getting ahead of these challenges requires careful forecasting considerations and new types of asset management strategies designed to take advantage of ACES fleets’ bidirectional power flow capabilities. The bidirectional nature and potential of ACES fleets present Load Orchestration opportunities, where utilities, aggregators, and customers work together to exact value from vehicles to provide grid services and greater environmental benefits.

Between now and 2030, key questions for utilities to address include: 

  • Do you have the data necessary to optimizes ACES fleets as assets on the grid?
  • Do you have the customer insights and engagement strategies necessary to tap into these valuable assets?
  • Are the current demand side management/distributed energy resources programs, which are based on simple, one-way appliance-oriented structure, positioned to help both utilities and customers succeed in employing ACES fleets for their grid and environmental benefits?

Our prediction is that the collective global effort to address these, and other, rapidly evolving questions around ACES fleets unfurls a vibrant dialogue across the intersected power and automotive industries. This dialogue draws deep engagement from the broader mobility ecosystem and the governing bodies responsible for keeping people and systems safe, as actors vie through disruptive experiments to capture emerging value from ACES-driven load growth.


[1] PEV include all battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV).

Derek Jones's picture

Thank Derek for the Post!

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Guidehouse
Guidehouse is a leading global provider of consulting services to the public and commercial markets with broad capabilities in management, technology, and risk consulting.

Discussions

Matt Chester's picture
Matt Chester on Jan 31, 2020 1:45 pm GMT

the foundation of future value in the emerging transportation-to-grid (T2G) platform is autonomous, connected, electric, and shared (ACES) transportation modes

Really neat stuff-- thanks for sharing Derek. I can't help but wonder how bizarre my grandchildren will one day find it that we all owned and drove our own cars that we filled with gasoline. 

"Uphills, both ways" I'll be sure to tell them!

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