With the rise in demand for electric vehicles, utilities must explore strategies that help them reliably provide the energy that is required for these electric cars. Let’s take a look at one of these strategies: the promotion of time-of-use programs, which seeks to promote charging at off-peak hours.
With the electric vehicle trend becoming more and more prevalent, utilities must minimize the impact of new energy loads required by these cars to assure service quality and avoid unnecessary grid expansions. An effective strategy to achieve this is to promote time-of-use (TOU) programs to encourage customers to charge their vehicles during off-peak hours.
TOU programs are grounded in the fact that energy demand varies throughout the day, with the lowest usage time being at night or very early in the morning. By offering this sort of program, utilities control energy loads, meet the overall demand at each hour of the day and avoid acquiring more generators to supply the energy service. A study in the Netherlands revealed that “if off-peak charging were successfully introduced, even a 100% switch to electric driving would not require additional generation capacity(1).
A SEPA survey of 34 utilities showed that nearly 60% of them would engage in research on time-of-use (TOU) pricing or other rate-design issues(2). Although electricity demand seems to be a complex issue when it comes to electric vehicles, TOU programs have eased the management of this type of demand.
Electric vehicle owners can also take advantage of these kinds of programs to conveniently charge their cars at lower rates. Furthermore, the customers who enroll in time-of-use programs receive rebates that provide them with usage credits to lower their bills. For example, a utility will grant consumers US$8 monthly credit, the equivalent of about 175 free miles, for charging during off-peak hours(3).
Today, different utilities are implementing TOU programs and rebates in states such as Massachusetts, California, Texas, and Minnesota, demonstrating their ability to adapt to the changes that the market demands. However, utilities will need to count on systems that enable them to swiftly create rate offerings according to their customers’ needs and get insight into usage patterns to design more tailored time-of-use programs.