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Electric Vehicles

Dynamic Electricity Pricing Cuts Both Ways for EVs

Yes, charging when power is cheap will save you money — but not everyone has that luxury.

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Different prices on electricity.
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There’s no escape when gas prices spike. You might know a station across town that’s always a dime cheaper per gallon than everybody else, but that’s about the best a driver can hope for. There’s no service station down the street that sells half-price gas after midnight. No Chevron is changing its gas price moment by moment, its big neon sign flashing like a stock ticker.

That’s exactly what’s possible as the world moves to electric cars, though. Electricity markets are complex and volatile, responding moment by moment to movements in energy supply and demand, weather, and other factors. Cars, when they’re left plugged in all day or overnight, can take advantage, charging whenever electricity gets cheap.

This dynamic environment, offering flexibility in price and in time, opens up money-saving opportunities for EV drivers that were impossible in the one-price-fits-all gasoline days. But it also creates potential drawbacks — at least for those who have fewer choices about when and where they charge.

Andrew Peterman, the director of advanced energy solutions at Rivian, touched on this topic last week during the future of mobility session at Heatmap’s New York Climate Week event. Peterman says Rivian owners do 80% to 90% of their charging at home on level 2 plugs, where the vehicle might remain parked for 14 to 16 hours.

Suppose you live somewhere like California and you come home from work in the evening. Everyone else is returning home just then, too, turning on their home A/C and causing a spike in electricity demand. “If you plug in your vehicle then and start charging immediately, you're adding strain to the grid,” he said. “But you have this really long dwell time where you may only need to charge for a few hours or a couple of hours.”

The solution — scheduling the EV to start charging later — is a core feature that’s available in many electric vehicles. Rivian is working on the step beyond that: partnering with utilities to create smart, demand-responsive charging that defers fueling until the price has fallen below a particular threshold. Given the volatility of energy markets, that’s something best handled autonomously, freeing the car’s owner from having to check on energy prices or guess when they’ll be lowest.

Those smart charging setups will pave the way for the next phase in the smart electric home: the virtual power plant, where a homeowner’s solar panels, EV battery, or home backup storage could feed power onto the grid to help balance the system during stressful times. VPPs represent yet another way the smarter grid could save electric car drivers money — in this case, making some back by letting the grid borrow energy stored in the vehicle.

What these strategies have in common is flexibility — allow the car to sit plugged in all night at home until you leave the next morning, all workday if there are plugs available at the office, or all day long if you don’t need to leave the house that day. It’s a smart approach. Our cars, while made for driving, spend most of their lives sitting around doing nothing. But not everyone has that luxury.

We’ve mentioned the problem before in terms of the convenience tax: For people who can charge at home and don’t have to drive a vast distance every day, EV ownership is more convenient than driving on gas. Say so long to stops at the gas station; just refill your battery every night in your own garage. For people who can’t regularly charge at home, it’s worse. Going to a public DC fast charger for 20 minutes is more annoying than the old-fashioned gas station pump and go.

The same thing holds for money. Those who can charge at home have much more control over the cost than those at the mercy of public charging infrastructure. Some of the Tesla Superchargers near me in the Los Angeles area cost $0.60 per kilowatt-hour in the middle of the day, when people are out and demand is high, but pricing drops to more like $0.35 in the wee hours of the night. If you can wait until midnight to charge, then you can save a huge percentage. Other networks are similar. EVgo charges the highest rates during the 4 to 9 pm period of peak demand and the lower rates during “super off-peak” hours from midnight to 8 am.

Not everyone, though, has the time flexibility to go sit in the dark at a charging station to save a few bucks.

It’s going to get even weirder than that, too. Tesla has begun to employ dynamic pricing that changes not only based on time of day, but also on station business. Prices jump if more of the plugs are in use, a move that could be read, ostensibly, as an attempt to balance charger traffic by creating an incentive to drive to less busy ones. In practice, some users say they’ve started driving to a Supercharger with one promised price and found a higher price when they arrived, just because a few other cars had arrived in the intervening minutes. (Ionna, the fast-growing charging network that represents a collaboration of the major automakers, said in an August blog that it maintains a single price all day long, at all of its stations, so drivers don’t feel like they’re being duped.)

As Peterman said, most EV drivers charge at home, where they have more control over how much they’re going to pay than at either the gas station or a public charger. But as more people think about switching over to electric so they can quit gasoline, they’re going to find the question of how much it costs to drive to work gets a lot more complex than it used to be.

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