If the state taps an untapped opportunity in the electric vehicle market, New Jersey could reap significant economic and environmental benefits, including lower energy costs for everyone, according to a new analysis.
“The state has an awful lot to gain if we get this right,’’ said Pam Frank, CEO of ChargEVC, a coalition of car dealers, electric utilities, and manufacturers of charging stations. “The question is: ‘How the heck do we do this?’’’
The benefits, hurdles, and steps facing the state were debated Friday as experts from the energy sector discussed the ramifications of transforming the transportation sector by electrifying it at a NJ Spotlight roundtable in Hamilton. The issue, a top priority of the incoming administration of Gov.-elect Phil Murphy, should lead to cleaner air, lower energy costs, and a vastly changed energy market, panelists said.
According to an analysis, the emerging EV market in New Jersey could result in more than $2 billion in net economic benefits 2035, even when including the cost of installing the infrastructure and enhancing the electric power grid, according to Mark Warner, a vice president of Gabel Associates, which conducted the study.
“It changes the electric market in a really profound way,’’ Warner said of widespread adoption of plug-in vehicles. EVs are going to flatten out the energy load of the entire grid, largely because most people will charge their cars at night, when the demand drops dramatically. “When you change the load curve, you change the cost of energy,’’ he said.
“Everybody’s cost of power is going to come down because of the change of that load curve,’’ Warner said. “And it adds up to a lot.’’ The analysis is expected to be released to the public early in January.
During the discussion, there was little disagreement about the consensus argument made by many clean-energy advocates that plug-in vehicles are critical to the state’s efforts to reduce its carbon footprint. Transportation accounts for about 40 percent of the state’s greenhouse gas emissions.
Cleaning the air
“The car has become the technology that can clear the air,’’ said Frank, adding it probably has the most impact of anything she has seen in her lifetime. The Gabel Associates analysis found electrically fueled cars are up to 70 percent and as much as 80 percent cleaner than the average gasoline-fueled vehicle.
New Jersey also is a partner in California’s zero-emission vehicle program, which mandates ever-increasing electric vehicles be sold in the state each year, beginning in 2018. The state has about 14,000 plug-in vehicles in use now, said Kevin Miller, director of public policy for ChargePoint, a manufacturer of charging stations. It has more than 600 installed in New Jersey, he said.
New Jersey, however, is lagging behind other states in getting consumers to buy those vehicles — a problem created by a huge price differential between the alternative-fueled vehicles and conventional cars and too few charging stations accessible to the public.
“Right now, consumers don’t want to buy ZEV cars at anywhere near the numbers mandated,’’ said Jim Appleton, president of NJ CAR, a trade group representing car dealers who are under the gun to meet those requirements by selling the vehicles.
In New Jersey, just 1,000 ZEVs, or two-tenths of one percent of the car market here, were sold last year, Appleton said. This year, the California mandate requires 24,000 to be sold, or 4.5 percent of the market. Between 2018-2025, more than a half-million plug-in cars need to be sold under the law.
Other states are getting more such vehicles on the road through financial incentives, a strategy ChargEVC and some lawmakers have embraced. The coalition hopes to get 330,000 plug-ins on the road here by 2025 by offering rebates to consumers, possibly funded by money New Jersey will receive by rejoining a regional initiative to curb carbon pollution from power plants.
It also means the state government taking a more aggressive role, according to Assemblyman Dan Benson (D-Mercer).
“We need to lead in a way that we haven’t in New Jersey,’’ Benson said, such as requiring the state to begin purchasing EVs for its car fleet and playing a role in helping consumers.
A map to get there
The coalition has laid out a road map in how the state gets there, Frank noted. “These are not initiatives that are going to touch our state budget,’’ she added.
The top priorities would include developing a fast-charging network around the state that would eliminate the biggest barrier to adoption of electric vehicles — range anxiety, the fear a car will run out of power before it can be charged.
Closing the gap between what it costs to buy a plug-in car and a conventional one needs to be addressed, noting rebates could help achieve that goal. Frank said. “It’s cash on the hood that will move these cars,’’ agreed Appleton.
In building out a charging infrastructure, the state also will need to focus on whether new buildings are EV-ready, how to provide charging at multi-dwelling complexes, and establish guidelines for utilities, Miller said.
For electric utilities, more rapid adoption of plug-ins will lead to increased revenues, eventually to increased costs to reinforce its power grid. Once the penetration rate reaches between 5 percent and 10 percent, utilities will need to invest in various upgrades, such as replacing transformers in residential neighborhoods, Warner said.
“It’s not going to like break the grid tomorrow,’’ he said, although reinforcement efforts will have to pick up by utilities at a 30 percent penetration rate by plug-ins.
But Karen Lefkowitz, vice president of utility of the future for Pepco Holdings, said New Jersey is behind other states in some ways, particularly advanced metering, which allows utilities to more closely monitor energy use locally. Such upgrades will help Atlantic City Electric, a subsidiary of Exelon Corp., to better manage the grid.
“The path to where we need to get to is pretty well documented in other states,’’ Lefkowitz said.