Economic, Social and Environmental Dimensions of PHEV in the Smart Grid

Abstract

Overcoming the technical hurdles to implementing plug-in hybrid electric vehicles (PHEV) technology into the smart grid is only one aspect of this disruptive transitional process. To ensure the rapid diffusion and efficient integration of PHEV in the smart grid, a range of governance, economic, social and environmental dimensions must also be considered and challenges addressed. Providing a robust governance framework is paramount, as it will drive both positive and perverse industry behaviours. Such frameworks must provide a set of rules and incentives to promote a stable market environment for PHEV roll-out over the long-term. Importantly, a well-designed governance framework will underpin the necessary economic thrust for an PHEV market to get established and grow. Such business drivers are sometimes not immediately obvious and are hard to quantify under current market conditions, such as quantifying the monetary benefits of distributed PHEV for the purpose of grid peak demand management and control. The economic drivers of PHEV are largely related to the capacity and related cost of energy storage and the provision of distributed power systems for resupplying them as required. Social dimensions are often multi-faceted and complex, but without convincing consumers that PHEV is a necessary transformative technology that is also economically and environmentally superior to traditional transportation methods, PHEV will never gain sufficient traction. Moreover, many people are still not convinced that the battery systems used in PHEV, which are mostly composed of Lithium, are sustainable. Proven cradle-to-grave environmentally friendly sourcing and life cycle management strategies for PHEV batteries is essential to ensure that this technology is acknowledged as a better solution than traditional liquid and gas transport fuels. To seize the full suite of opportunities and benefits available from PHEV technology, all of these intertwined challenges must be addressed in an integrated manner. Untangling these issues and many others and then formulating multi-pronged strategies to overcome them in a concurrent fashion, is a challenge, but one which must be undertaken in order to progress PHEV diffusion in society globally. This chapter seeks to unpack these four non-technical dimensions to PHEV diffusion.