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Electric Vehicles and the Energy Transition: Unintended Consequences of a Common Retail Rate Design

Author

Listed:
  • Megan R. Bailey
  • David P. Brown
  • Erica Myers
  • Blake C. Shaffer
  • Frank A. Wolak

Abstract

The growth of electric vehicles (EVs) raises new challenges for electricity systems. We implement a field experiment to assess the effect of time-of-use (TOU) pricing and managed charging on EV charging behavior. We find that while TOU pricing is effective at shifting EV charging into off-peak hours, it unintentionally induces new and larger “shadow peaks” of simultaneous charging. These shadow peaks lead to greater exceedance of local capacity constraints and advance the need for distribution network upgrades. In contrast, centrally managed charging solves the coordination problem, reducing transformer capacity requirements, and is well-tolerated by consumers in our setting.

Suggested Citation

  • Megan R. Bailey & David P. Brown & Erica Myers & Blake C. Shaffer & Frank A. Wolak, 2024. "Electric Vehicles and the Energy Transition: Unintended Consequences of a Common Retail Rate Design," NBER Working Papers 32886, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32886
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    Cited by:

    1. Dong, Zeyang & Liang, Jing & Linn, Joshua & Qiu, Yueming, 2025. "How Do Residential Greenhouse Gas Mitigation Technologies Affect Electricity Prices and Consumer Welfare?," RFF Working Paper Series 25-28, Resources for the Future.
    2. Pascal Heid & Kevin Remmy & Mathias Reynaert, 2024. "Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing," CRC TR 224 Discussion Paper Series crctr224_2024_615, University of Bonn and University of Mannheim, Germany.

    More about this item

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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