electric vehicle charging
Credit: Noya Fields / Flickr

Total net benefits range from $4.6 billion to $30 billion by 2050 and could help all utility ratepayers.

A recent report says increasing the use of plug-in electric vehicles in Minnesota will reduce utility bills, improve air quality and create an infrastructure allowing utilities to manage increasing demand.

The cost-benefit analysis shows net benefits statewide could range from $4.6 billion to more than $30 billion depending on the level of plug-in electric vehicle adoption.

The study describes two scenarios. The “moderate” scenario suggests what it would take to meet market penetration goals the state established for 2025. The second option looks at what it would take to reduce greenhouse gas emissions from 2005 levels by 80 percent by 2050.

The more aggressive strategy results in more savings from reduced electric bills and annual vehicle costs as well as improved air quality. It also requires a spike in adoption, as Minnesota currently has around 6,300 plug-in electric vehicles. Under the high scenario, that number would need to hit 1.9 million vehicles by 2030 and 5.8 million by 2050.

The study was commissioned by the Natural Resources Defense Council, Charge Up Midwest and Fresh Energy. (The Energy News Network is an editorially independent publication of Fresh Energy.)

“The benefits for the high [plug-in electric vehicle] option are significant,” said Andrew Twite, Fresh Energy senior policy associate. “The net benefits could be up to $30 billion by 2050 for all Minnesotans, not just those with plug-in vehicles.”

Here are four takeaways from the study.

Electric vehicles can save every Minnesotan money on utility bills.

By 2050, Minnesotans could save $171 annually on electric bills through increased utility revenue and managed off-peak charging of vehicles, the report says.

Over a likely 10-year lifespan of an electric vehicle, a utility could earn $1,000 to $1,242 in net revenue from electricity sales for off-peak charging. Additional revenue creates “downward pressure on future rates, delaying or reducing future rate increases, thereby reducing customer bills,” the report says.

Owning an electric vehicle will save a little money, then more.

Anyone excited about saving a treasure from electric vehicles will be disappointed for a while. In 2030, the annual cost savings under the moderate approach amounts to $7, or less than a ticket to a local movie theater. Going with a high adoption scenario, it jumps to $31, enough for a few more tickets.

The news gets better by 2050, when cost savings are projected to be $473 to $548 annually for electric vehicle owners. The report does not figure in the $7,500 in federal tax credits now available to electric vehicle buyers.

And should gas prices rise faster and battery costs and car prices drop faster than expected, the equation could change much faster.

Maintenance of electric vehicles is also substantially less than gasoline-powered vehicles because of fewer moving parts. The report says that by 2050, Minnesotans will have saved as much as $9 billion in vehicle costs.

Electric vehicle owners will have to change behavior to shift electricity load to lower demand times.

Key to not overloading the grid is to have vehicles charging from roughly 9 p.m. to 9 a.m., which utility programs can incentivize. The share of charging done during off-peak times by customers using this rate has ranged from 90 to 95 percent over the past two years, the report said.

The challenge will be to move drivers away from charging the moment they get home from work — the high demand times of 5 p.m. or 6 p.m. — to later times. Some electric vehicles come with timers to push charging to a later time, but utility programs may require better marketing of overnight charging programs.

Clean air will be a major benefit of plug-in electric vehicles.

Plug-in electric vehicles offer Minnesota an opportunity to be less dependent on foreign oil and supply from other states. Minnesota has no oil reserves, but it does have domestically generated wind and solar. Using those sources naturally leads to less air pollution.

Annual greenhouse gas emissions could drop as much as 17 million tons annually by 2050 from Minnesota’s continued transition to cleaner sources of electric generation and its adoption of plug-in electric vehicles. Nitrogen oxide emissions could decline significantly, too. By midcentury the public health and environmental benefits could reach $11.1 billion.

Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.