MJB&A has evaluated the costs and benefits of increased penetration of plug-in electric vehicles (PEV) in the state of Michigan. The study estimated the benefits that would accrue to all electric utility customers in Michigan due to greater utilization of the electric grid during off-peak hours, and increased utility revenues from PEV charging. In addition, the study estimated the annual financial benefits to Michigan drivers from owning PEVs–from fuel and maintenance cost savings compared to owning gasoline vehicles–and societal benefits resulting from reduced gasoline consumption and associated greenhouse gas (GHG) emissions.
Two different penetration levels between 2030 and 2050 are utilized to estimate costs and benefits. The “Moderate PEV” scenario is based on levels of PEV penetration included in an on-going future planning analysis being conducted by the Midcontinent Independent System Operator (MISO), which is the regional transmission organization that covers Michigan. The “High PEV” scenario is based on Bloomberg New Energy Finance’s (Bloomberg) July 2017 forecast of U.S. PEV sales through 2040.
If Michigan PEV adoption follows the trajectory assumed by MISO, the net present value of cumulative net benefits from greater PEV use in Michigan will exceed $8.6 billion state-wide by 2050. If Bloomberg’s projections for national EV sales are achieved in Michigan, which would result in even greater PEV penetration, the net present value of cumulative net benefits from greater PEV use in Michigan could exceed $31 billion state-wide by 2050.
A large portion of the direct financial benefits to Michigan drivers derives from reduced gasoline use - from purchase of lower cost, locally produced electricity instead of gasoline imported to the state. Under the Moderate PEV (MISO) scenario, PEVs will reduce cumulative gasoline use in the state by more than 5 billion gallons through 2050, helping to promote energy security and independence, and keeping more of vehicle owners’ money in the local economy, thus generating even greater economic impact. In addition, this reduction in gasoline use will reduce cumulative net GHG emissions by 26 million metric tons, which would provide an additional societal benefit of $1.5 billion, from reduced pressure on climate warming.
The full report of the Michigan analysis is available here.
This study was conducted by M.J. Bradley & Associates for the Natural Resources Defense Council and Charge Up Midwest; it is intended to provide input to state policy decisions about actions required to promote further adoption of electric vehicles. Charge Up Midwest is a partnership of environmental and clean energy organizations actively working to increase electric vehicle deployment throughout the region in Illinois, Missouri, Michigan, Minnesota, and Ohio. More information on Charge Up Midwest is available here.