Electric Vehicles and the Energy Transition: Unintended Consequences of Time-of-Use Pricing

Megan R. Bailey, David P. Brown, Erica Myers, Blake Shaffer and Frank A. Wolak

American Economic Review: Insights, 2025, vol. 7, issue 4, 550-66

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.

JEL-codes: C93 D91 L62 L94 Q42 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/aeri.20240476

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