Charging Fast and Slow: Quantifying the Real-Life Value of EV Charging for Users, OEMs, and the Grid
Date and Time
Location
A Harvard-China Project Research Seminar with Christian Kaps,
Assistant Professor of Business Administration, Harvard Business School
Abstract: Managing electricity demand is critical for lowering the cost of electrified products, integrating intermittent renewables, and reducing grid expansion needs. With its often flexible demand, electric vehicle (EV) charging has long been considered a promising candidate, yet many managed charging programs have not scaled. We analyze why this is the case and identify several challenges to existing programs, focusing on two business models: smart electricity consumption (V1G) and demand response (DR). After grounding the analysis in a stylized model, we leverage a longitudinal dataset of over 20,000 EVs and 1.5 million charging events across the U.S. to empirically study managed charging. We find that V1G with time-of-use pricing saves EV owners up to $300 annually but increases the utility's wholesale generation cost, a misalignment that in 75% of markets cannot be costs-effectively eliminated by paying owners to adjust charge timing. For DR, the top 10% of customers provide 5.2 times the average vehicle's value, and only 9.4% of vehicles can be profitably enrolled. We identify which charging behaviors predict profitable DR customers and how this interacts with utilities' prices. We further analytically show when V1G and DR may be misaligned, and show empirically that V1G participation cannibalizes 16-46% of DR returns, highlighting challenges with stacking value streams. Our findings help EV manufacturers decide which programs to offer, in which markets, and which customers to target or behaviors to incentivize. We highlight where utilities and regulators should adjust tariffs to better align EV owners' incentives with market outcomes.
Speaker Bio: Prof. Christian Kaps is an Assistant Professor of business administration in the Technology and Operations Management (TOM) Unit at Harvard Business School. Kaps' research focuses on emerging topics in renewable electricity generation and storage - notably how new technologies, sustainability behavior, and policies shape the energy market of the future.
His primary research interest is in the energy transition with a particular focus on how the evolution of storage technologies shapes capacity and investment decisions in renewable power and fossil-fuel plants. Additionally, he focuses on the role that customers' sustainable behavior plays in accelerating the adoption of new technologies and how local differences influence the setup of power markets around the world. While his main research focus is on the energy field, Kaps' interests lie in the areas of sustainability and technology innovation more broadly. As he believes that no single actor can solve climate change related challenges alone, he has partnered with firms ranging from storage startups to large renewable investors like AWS for his academic work.
Sponsored by the Harvard-China Project on Energy, Economy, and Environment at the Harvard John A. Paulson School of Engineering and Applied Sciences.