Beneficial Electrification, A Potential Win-Win for T&D Utilities, Regulators, and Environmentalists
According to a Boston Consulting Group report released last week, transmission and distribution (T&D) utilities stand to gain significant value from aggressive investment in grid capacity that facilitates the transition to an electrified transportation sector. The report’s estimated $3 to $10 billion in “new value for an average utility” is based on a utility serving 2 to 3 million customers, larger than any Maine electric utility’s customer base. Nonetheless, the opportunity to increase bottom lines while also reducing vehicle emissions remains applicable in Maine, particularly in areas where the loss of larger industrial customers like paper mills have left underutilized portions of the grid.
In particular the report recommends T&D utilities rapidly mobilize investment in the following areas:
- Strategic planning and development of a vision for support of beneficial electrification:
- Develop targets for electric vehicle (EV) adoption and charging station usage and quantify emission reductions resulting from achieving those targets; and
- Introduce EV incentives or rebates, such as dynamic, time-of-use pricing or rate redesign to encourage customers to charge their EVs during off-peak or “shoulder-of-peak” hours, e.g., the middle of the day or later in the evening.
- Partnerships with EV, charging station, autonomous vehicle, and shared vehicle providers and manufacturers to capitalize on growth in these markets and facilitate entry of those goods and services that rely on the grid;
- Broad coordination of grid enhancement initiatives across an individual T&D utility;
- New skills and expertise in charging infrastructure and market-ready approaches to serving EV charging customers; and
- Rapid execution to capture opportunities in the short term, which requires a departure from the typical multiyear timeframe for T&D investments.
Maine T&D utilities, already well aware of the potential of beneficial electrification, may find actionable recommendations in Boston Consulting Group’s analysis of investments to capitalize on opportunities in the transportation sector. If you have questions regarding this report or other utility matters, please contact Verrill Dana’s Energy and Utilities Group.