Boulder, CO, U.S.A. --- (METERING.COM) --- June 29, 2009 - More than 5 million electric vehicle charging stations are due to be installed worldwide by 2015 with the industry reaching an annual value of $1.9 billion by that year, according to a new study.
Cleantech market intelligence provider Pike Research says that hybrid electric and all electric vehicles (collectively EVs) are now seen as the future of clean transportation and the United States will surpass one million total charging station installations in 2015. However, due to government directives to build 500,000 EVs annually starting in 2011, China will become the world leader in charging station installations, with almost half of annual sales in 2015.
For utilities and grid operators, the additional power delivery to EVs through charging stations provides substantial opportunities and challenges, Pike Research says. Off-peak charging can create new revenue streams for utilities by better capitalizing on under-utilized equipment.
However, standalone charging station sales will be hampered by the poor return on investment from the charging stations alone because charging will be free or inexpensive (below $1) at many locations. Even fully utilized, direct revenue from standard rate charging stations would likely take decades to repay. Thus the majority of standalone charging stations will be publicly funded, or built by retailers that give away the electricity to attract the more affluent EV owners. The majority of revenue will come from value added services, such as point of contact marketing services.
Regarding the load, Pike Research says the expected volume of EVs through 2015 is highly unlikely to significantly impact regional grid capacity. However, local distribution equipment (at the individual residential block level) is at risk if several neighbors should plug in their vehicles simultaneously during peak demand. Even at a slow charging rate, the demand of two or more EVs combined with their household energy use could overwhelm a transformer to the point of equipment failure, if that transformer was close to capacity before the EVs were added.
Moreover, the potential benefits of using EVs to store intermittent renewable energy and shift peak energy loads will be largely unrealized by 2015. Vehicle to grid (V2G) services require new standards for communicating and monitoring the upstream flow of electricity, and smart grid equipment that has yet to be designed. Utilities will view bi-directional energy transfer V2G with trepidation, and instead will focus their attention during the first half of the 2010 decade on understanding and adapting to the increased peak demand. Residential EV charging stations will positively impact the sales of home photovoltaic systems as consumers aspiring to drive as green as possible will buy both together.
Pike Research says that auto manufacturers and potential charging station operators cannot wait for the other to reach critical mass before expanding production, and development must be done in concert for EVs to be successful. Auto makers will give priority in allocating new EVs to metropolitan areas with the strongest perceived demand and infrastructure support for EVs. Public organizations and private companies looking to secure vehicles for their region will need to build out some infrastructure in advance of the vehicles becoming available. Auto manufacturers will have to commit to production volumes before sufficient charging infrastructure exists.
The U.S. automotive industry is now extensively retooling to be able to manufacture hundreds of thousands of EVs per year. Failing to establish EVs, either through lack of charging infrastructure or an inability to meet consumer expectations, would be devastating to the industry. Therefore, extensive public and private effort and resources will be dedicated to smoothing their interaction with the grid, Pike Research predicts.