Navigant Research Blog

To Make Fast Charging Economical, Sites Need Frequent Visits

— July 27, 2015

The number of battery electric vehicle models on offer in the United States is expected to grow significantly during the next few years, with Audi, Chevrolet, Ford, Tesla, and others all expected to add to their fleets. For these models to be successful, the expansion of direct current (DC) fast charging stations to keep the cars charged will need to keep pace. While the business model for hosting a fast charging site is improving, offering the service can become quite expensive when demand charges are incurred.

According to a new report from the Idaho National Laboratory, offering DC fast charging can increase a host site’s utility bill by 15% to 100%, depending on the rate schedule. The report, which culls data from the U.S. Department of Energy’s (DOE’s) EV Project, illustrates how charges can vary greatly depending on the service territory.

How It Works

Utilities assess demand charges each month if a business exceeds specified amounts of power consumed within peak hours during a single period, usually tracked in 15 minute increments. DC fast chargers can boost power consumption by up to 60 kW, which, depending on the rate schedule and overall power consumption, is more than enough to push many businesses into demand charge territory.  And demand charges aren’t a one-time event, as they are levied monthly for up to a year or more.

For small business owners looking to fast charge electric vehicles (EVs), the price can be especially steep. The report states that “power demanded by DC [fast charging] has a more significant impact on electric utility costs for smaller commercial businesses than for larger ones.” In one example, a single charging session that puts a location above its allotted power consumption could cost $482 for that month and subsequent months. DC fast charging locations often charge $10 or less for a single charging session (such as NRG’s growing EVgo network that charges $0.10 per minute in Denver), which could create significant losses for site owners.

Therefore, if demand charges are incurred, sharing that cost among many charging sessions will make offering EV charging more economical, according to the Idaho National Laboratory. Understanding how offering DC fast charging will impact the utility bill is complicated, as each utility offers multiple tiers and rate schedules for power consumption.

Other Options

An alternative to the often severe demand charge fees is to purchase an energy storage system that would power the EV chargers at times of peak demand. Several companies, including Nissan, are entering the energy storage market to serve this developing niche.

Demand charge rate structures are a moving target in some areas as they undergo periodic revisions, which can sometimes result in contentious public utility commission hearings, as is happening now in Austin and Oklahoma.  Simplifying and limiting the fees for offering DC fast charging, such as through separate EV metering or rates, could encourage today’s reluctant business owners who are wary of the fiscal impact to begin to offer the service.

 

EPA Looks to Make EV Charging More Energy Efficient

— July 24, 2015

The U.S. Environmental Protection Agency (EPA) wants to reduce the energy consumption of electric vehicle supply equipment (EVSE) by developing its first ENERGY STAR specification for this category of products. As we know, electric vehicle (EV) chargers are idle for the majority of the day, and the specification will address the amount of power consumed while not in use.

The ENERGY STAR program will initially focus on alternating current (AC) (Level 1 and 2) charging, but the EPA is also looking at direct current (DC) charging.

According to the EPA document:

“Emerging EVSE could include features such as the ability to receive DC power from PV panels or local storage; provide DC power to other devices in a building via USB, Ethernet, or other power transmission medium; supply AC power to a building or specific appliances; coordinate power distribution with other entities in the building; include electricity storage internal to the EVSE; and enabling transmission of power from a vehicle to a home.”

Enabling DC chargers to share the incoming power via USB, AC power, Ethernet, or other media is an interesting way of getting more value out of available power. DC chargers are only used in short bursts for fast charging, so finding ways to smartly manage them as a building resource makes sense. Building in a power converter enables the charger to integrate into other stationary devices, such as using DC power from a solar panel locally instead of sending it back to the grid where its value is often less. I haven’t seen any DC chargers that can do this today, so it will be interesting to see how manufacturers develop products with these capabilities.

Paying to Park

Car Charging is looking at increasing the utility of EV chargers through a different approach. The company is assessing a fee of $0.08  per minute to EV owners who leave their vehicles plugged in but not charging for longer than 15 minutes after the charging session ends, according to PluginCars.com. The 15-minute grace period seems sensible, as many customers receive automated alerts when charging is completed. The fee is a considerable incentive for people to be conscientious about moving their cars after a completed charge, which makes them available for other (revenue-generating) charging sessions, which is critical for EVSE to become profitable.

At the EV Roadmap Conference starting July 29 in Portland, Oregon, I’ll be moderating a panel where several industry luminaries will be discussing the latest innovations in smart EV charging. Stop by and check it out, or leave a comment here with questions for the panel.

 

Longer-Range LEAF Aims to Alleviate Anxiety

— July 1, 2015

At Nissan’s recent annual shareholder meeting, CEO Carlos Ghosn announced that the driving range of the LEAF battery electric vehicle (BEV) would be extended to 125 miles (200 km). The update is expected to reinvigorate sales of the LEAF in the United States, which fell by 25.5% during the first 5 months of 2015, according to hybridcars.com.

That BEVs have a shorter driving range than internal combustion engine (ICE) vehicles is one of the factors that has limited sales, as drivers on longer trips don’t want to have to worry about having enough juice to get to their destination. If the U.S. Environmental Protection Agency (EPA) gives the LEAF the proposed 125-mile range rating, that would be a boost of nearly 50% over the current 84-mile range. Since 125 miles is well beyond the range of most daily round trip commutes, more car shoppers would likely consider switching to a LEAF.

Ghosn also said the company has a prototype battery that could give the LEAF up to 310 miles of range, which would make it much more competitive with ICEs. Other BEV manufacturers, including Ford and General Motors (GM) are targeting a minimum of 200 miles of range for their next-generation BEVs to battle the upcoming Tesla Model 3.

According to Navigant Research’s Electric Vehicle Geographic Forecasts report, by 2018 (when several 200-mile range BEVs priced under $50,000 are expected to be available), annual sales of all plug-in electric vehicles (PEVs) are expected to have grown by 168% over 2015 sales.

Decoding the Data

The U.S. Department of Energy (DOE) is conducting a study to see how households with both LEAFs and ICE vehicles  apportion their driving miles. As previewed during the DOE’s Annual Merit Review meeting, the study will survey 37,000 consumers and study in depth the driving habits of 144 households. According to preliminary data from the study, 60% of LEAF households drive the BEV more than their ICE car, and the study looks to understand factors such as greater range or access to charging infrastructure that could increase electric miles driven.

BEVs are suitable for two-car (or more) households where the ICE is used for longer trips. However, the share of households with multiple cars (currently at 57%) is expected to steadily fall in the future as carsharing programs and other mobility services remove the need for a second car. According to the recently published Navigant Research report Urban Mobility in Smart Cities, participants in North American carsharing programs are expected to grow by 10% annually to more than 4 million by 2021.

 

New Efforts Address EV Affordability

— June 29, 2015

Power_Paddle_webThrough the first 5 months of 2015, according to data from Hybridcars.com, plug-in electric vehicle (PEV) sales are down in the United States by 4% from 2014. This is due, in part, to the current price of gasoline being lower than the 2014 price by $0.89 cents per gallon (per the U.S. Energy Information Administration), as well as the drop off in sales of the Chevrolet Volt in anticipation of the updated model coming out soon. In fact, if the year-over-year Volt sales are ignored, the rest of the industry is actually slightly ahead of last year’s pace.

The higher upfront cost of PEVs is clearly one of the major hurdles to greater electric vehicle (EV) sales, along with greater consumer awareness of their benefits in reduced fuel cost, performance, and drivability. The higher price tag precludes many prospective buyers from considering a PEV, although several models are below the current average new car transaction price of $33,363, according to Edmunds.com.

Making PEVs more affordable would bring in EV buyers from a broader audience, as data from a recent Navigant Research survey of consumers in the United States indicates that the interest in PEVs is not limited to high-income families. Of the survey respondents who reported having an income between $25,000 and $50,000 annually, 15% said that they preferred their next vehicle purchase to be a PEV, which was higher than those with income of $50,000 to $150,000 annually (9%).

Incentives and Research

California is trying to make PEVs more appealing to lower-income families in areas where air quality is a concern. New programs for people living in the San Joaquin Valley Air Pollution Control District or South Coast Air Quality Management District provided incentives of up to $9,500 on a PEV purchase depending on the individual’s income level. While it won’t prompt a spike in nationwide sales, a successful program could encourage other regions to similarly target getting more PEVs into lower-income households.

The European Commission is also targeting lowering the cost of PEVs through three research projects. As reported by Automotive Fleet, the 3Ccar project is focusing on reducing the cost of the electronic components, which, along with the battery pack, are the primary contributors to the additional cost of PEVs. Greater volumes of PEV sales will lead to more competition in electronics, which will lower the cost and result in more sales.

Utilities are stepping up by creating programs to make EVs cheaper to operate and to make recharging easier. On June 8, the Edison Electric Institute signed a memorandum of understanding with the U.S. Department of Energy (DOE) that will make utilities more active participants in reducing the cost of electric transportation and to build on the DOE’s goal of making EVs as affordable as a gasoline car by 2022. Greater utility involvement is critical to reducing EVs’ operational costs as well as providing the baseline charging infrastructure for consumer confidence that EVs can be recharged wherever drivers need to go in urban areas.

 

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