The challenge, the study pointed out, will be the initial funding. The Obama administration may be amenable to some investment, however. Just last week, the president that he would double the number of hybrid vehicles in the federal fleet to set an example for the nation.
Show Me The Money
An RTO such as PJM doesn’t own any assets. Instead, it is charged with controlling electricity delivery reliability and operating a market that pays wholesale prices for energy. In addition to frequency regulation, grid regulators require RTOs to meet certain standards with lost generation, price markets and black starts after power outages. Historically, maintaining a frequency of 60 hertz is vital for industry and other electric-powered machinery.
Frequency regulation is now the most lucrative market of the four, , and that’s why PJM sees an opportunity for Postal Service plug-ins.
Regulators require PJM to maintain a frequency regulation of 1 million kilowatts. Assuming that one electric vehicle has a power output of 15 kilowatts, PJM would need just over 60,000 such vehicles to meet 100 percent of its frequency regulation requirement.
For the past five years, PJM and other North American RTOs and independent system operators (ISOs) have paid $25 to $40 per megawatt hour for any equipment — which can include vehicles — participating in the regulation market, Huber says.
That’s how the Postal Service could cash in. At the range of reimbursement rates listed above, each of those 144,000 delivery vehicles plugged in for 12 overnight hours could earn between $4.50 and $7.20 per day. Sheer volume elevates that to real money — $237 million to $378 million annually. Even a fraction of that fleet earning money off the grid would pay off for the Postal Service.
The global power company AES already earns $600 to $960 daily from PJM’s regulation market because it keeps a megawatt stationary hooked to the grid 24 hours a day.
From USPS to Your Garage
While PJM is zeroing in on fleet vehicles that are parked all night, drivers of passenger car plug-ins shouldn’t feel left out. Utilities and RTOs nationwide are exploring how to tap into this potential bonanza of reserve power.
Constantine Samaras, an associate engineer at the nonprofit Rand Corp., is confident that plug-ins will become technologically efficient enough to be an integral piece of greening up the grid and the entire transportation sector.
He points out that replacing traditional cars with 10 million plug-in hybrids — models that can go 40 miles in all-electric mode — can reduce U.S. oil imports by up to 500,000 barrels daily, depending on what type of fuel is powering the local grid. That same fleet could slice emissions of heat-trapping gases by an estimated 5 to 20 million metric tons per year.
Furthermore, data from the U.S. Census Bureau indicate that 94 percent of American households could now charge a vehicle via home electrical outlets. That huge majority puts Samaras in clear agreement with the Electric Power Research Institute about making residential plug-in infrastructure a priority for utilities, regulators and all levels of government.
Pricing these low-emission but relatively expensive vehicles so American fleet operators and homeowners will open their wallets is a tricky business in a world of fluctuating fuel costs and so many other moving targets, Samaras says. Settling on the magic numbers for incentives such as tax credits and utility rebates is a balancing act for even the most skilled number crunchers.
Thus far, however, the White House seems undeterred. The Obama administration has dedicated $2.8 billion in stimulus grants toward electric vehicle research and development, according to a DOE spokeswoman. That complements the department’s 2010 electric vehicle R&D budget of $114.6 million — more than a threefold increase over the 2008 budget figure.