Navigant Research Blog

Colorado Charges Forward with Plan to Support EVs

— February 8, 2018

While California garners deserved headlines for being the most ambitious state in promoting EVs, Colorado is pushing with its own aggressive agenda. On January 24, Colorado Governor John Hickenlooper announced the debut of the Colorado EV Plan to a crowd outside Colorado’s Alliance Center. The plan, developed in support of his 2017 executive order Supporting Colorado’s Clean Energy Transition, outlines specific programs, strategies, and goals to electrify travel corridors around the state to support the widespread adoption of EVs.

In his speech, Hickenlooper announced Colorado was eighth in EV market share last year, and that the Colorado EV Plan is “a big step toward pushing that forward.”

The plan’s five goals include:

  1. Increase adoption of light duty EVs to reach goal of 940,000 EVs in Colorado by 2030
  2. Increase the number of electric transit vehicles to 500 by 2030
  3. Increase the number of employers that provide workplace charging to employees
  4. Develop strategies and partnerships that prepare property owners for future investments in EV charging infrastructure and electrify challenging facility types
  5. Lead by example by accelerating the purchase of EVs for agency fleets and investment in EV charging infrastructure

Charging Infrastructure Expected to Benefit

The plan details that 15% of the $68.7 million Volkswagen (VW) settlement funds that the state will receive will go toward light-duty EV charging infrastructure, the maximum allowable under the settlement terms. Colorado also intends to capitalize on public-private partnerships and the grants provided through new and existing programs.

Hickenlooper spoke to how the plan fulfills Colorado’s commitment to the Regional EV West memorandum of understanding (discussed in a previous blog). This bipartisan effort brings together eight states (Arizona, New Mexico, Colorado, Utah, Nevada, Wyoming, Idaho, Montana) to connect and electrify over 7,000 miles to establish the Intermountain West EV corridor. The plan also mentions that Colorado will investigate opportunities to partner with cities, manufacturers, and transportation network companies (i.e., Lyft and Uber) to support the electrification of a variety of mobility options.

While the plan is good news for EV enthusiasts, it also marks declining support for other alternative fuel vehicles. The plan commits to changing the ALT Fuels Colorado program—which since 2014 has provided grants for the construction of publicly-accessible compressed natural gas, propane, and EVs—to begin directing funds toward the build out of the EV fast-charging corridors.

Colorado currently has only 53 DC fast-charging stations, and Hickenlooper stated that, “we probably need 4 times that, but the demand [for charging infrastructure] is not going to decrease, it’s only going to increase.” Increasing public charging infrastructure will relieve some of the anxiety that prospective and current EV owners may have about vehicle driving range.

Demand Is Great, but What’s the Cost?

The high estimate scenario for the goal of 940,000 EVs on the road by 2030 requires as many as 632 fast charger stations to support the EV population, or 580 additional chargers in the next 12 years. According to Navigant Research’s recent report, DC Fast Charging Equipment for EVs, this would require approximately $60,000 per charger, or $34.8 million. With the VW settlement funds of just over $10.3 million allowed to be used for EV charging infrastructure, this leaves the Colorado Energy Office looking for another $24.5 million from the private sector, the ALT Fuels Colorado budget, or other funding opportunities to build out the infrastructure needed to support almost 1 million EVs in the state.

 

Finding Value in Public EV Charging Infrastructure

— December 19, 2017

Although the chicken/egg debate still looms over EVs and public charging infrastructure, the market is now moving forward under the assumption that mass adoption of EVs will require a sufficient network of public charging infrastructure. Public fast charging infrastructure along highways enables regional travel, and fast chargers in and around metro areas can support drivers who don’t have a home charger. Navigant Research expects EV supply equipment sales to grow from around 875,000 in 2017 to over 6 million in 2026 to meet the needs of the growing EV market.

Public Charging Availability Bolsters the EV Market

Public chargers represent a relatively small percentage of this total growth, but well-established and reliable public charging networks are considered an important factor for prospective EV owners. Publicly available charging networks give consumers the confidence that an EV will serve their driving needs, even if they are likely to do the vast majority of their charging in-home.

The business case for public charging remains difficult. For the private sector, high installation costs and low utilization rates can make it difficult for any profit-driven business model, particularly for a business model that only uses pay-to-use as its source of revenue. In addition, any profit-driven business model for the buildout of EV charging infrastructure encounters challenges of providing sufficient and equitable charging networks throughout entire communities.

Examining Business Drivers

What are the business models that will drive the rollout of public infrastructure that Navigant Research’s forecasts project?

  • Automaker investments: These are a key driver to fast charging networks, with OEMs looking to replicate the Tesla Supercharger network model—but not necessarily as a free-to-use option.
  • Retail partnerships: Retail businesses have been popular targets for EV charging networks, with charging typically provided for free and seen as a tool to attract customers and increase sales. If the rollout of fast chargers in metro areas takes off, retail outlets would also be good locations because they would provide the driver something to occupy their time during a 15-minute charging session. There are also hypothetical business models that would use revenue-sharing strategies to offset costs of public chargers while still capturing the increased sales revenue from EV customers.
  • Electricity demand and grid services: Many utilities are interested in the value that EVs can provide. A utility-provided charging network may provide a utility with increased electricity sales in the long run. It could also provide the ability to utilize EVs for grid services through the utility’s provided chargers, which could offset costs in the long term.
  • Equitability: Public sector stakeholders that see equitable charging access as a priority may be able to justify the use of public funds for the increased equitability of the charging network. For some public agencies, decarbonization goals will also drive investment.

Visibility Is Crucial

If EVs are to continue to penetrate the market at an increasing rate, prospective buyers will need to see charging networks that support their use and enable them to travel without range anxiety. Identifying value will be critical for the rollout of publicly available charging infrastructure, which in turn has an impact on EV sales growth.

 

Mountain West States Buy In on Regional EV Fast Charging Network

— December 14, 2017

To support the growth and adoption of EVs on their regions’ roadways, governors of eight Mountain West states signed a memorandum of understanding (MoU) to work collaboratively on a regional EV fast charging network spanning across 5,000 miles of freeway. They will also work on a plan for the EV charging infrastructure to link their states together. The states that have signed on so far are Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming.

Anticipating EV Population Increases

These states have recognized the growth of EV populations and anticipate EVs will continue to penetrate the markets. As discussed in our Market Data: EV Geographic Forecasts report and illustrated in the following chart, Navigant Research expects sales of over 1.6 million plug-in EVs (PEVs) by 2026 in North America.

Historic and Projected Sales of PEVs, Base Scenario, North America: 2012-2026

Source: Navigant Research

Pursuing Goals

The goals of the MoU are to accomplish the following:

  • Coordinate station locations to maximize use and minimize inconsistency between charging infrastructure.
  • Develop practices and procedures to encourage the adoption of EVs and address range anxiety.
  • Develop operating standards for charging stations.
  • Incorporate EV charging stations in the planning and development process.
  • Encourage automotive OEMs to stock a variety of EVs in participating states.
  • Collaborate on funding and finding opportunities for the network.

Direct current (DC) fast charging stations will cost between $150,000 and $200,000 each. It would require 50 to 60 stations to electrify the key travel corridors in Colorado, according to officials.

Following in Their Footsteps

Unsurprisingly, West Coast states have already tackled a similar project. In 2013, California, Oregon, Washington, and British Columbia signed on to the Pacific Coast Action Plan on Climate and Energy. They committed to the creation of an electrified highway corridor connecting the three states and the province. In the years since, the governments have been able to install a network of DC fast chargers along Interstate 5, Highway 99, and other major roadways dubbed the West Coast Electric Highway.

Tackling the Funding Puzzle

The Mountain West states are looking for sources of funding as they move forward with their own plans for a regional highway. While the West Coast Electric Highway project was able to capitalize on federal grants and funding to capture investments, the current administration and majority party seem less keen on assisting the adoption of EVs, meaning the Mountain West states may have to look elsewhere. Colorado has identified and is already planning on using some of the funds received from the Volkswagen settlement, Electrify America, to drive interest in public-private partnerships to develop its electrified highway infrastructure. That being said, the MoU does not specify funding requirements or timeframes for the project or any of the states.

Absent the support of the federal government, the success of this regional project rests on the political will of the state governments and continued support from elected officials, automakers, utilities, and planners.

 

The Peer-to-Peer Future of EV Charging

— November 1, 2017

In cities where EV drivers believe they have limited access to publicly available charging infrastructure, the resulting range anxiety hinders plug-in EV (PEV) adoption rates. VW’s subsidiary, Electrify America, required investment in infrastructure because of the dieselgate settlement, which should help reduce range anxiety in many areas. A variety of new technologies are bringing new value to the existing EV charging infrastructure, a trend that could also help ease range anxiety and grow the EV market.

Communication Standards

Many standards from organizations such as the Society of Automotive Engineers have been established for communications between EVs and EV supply equipment (EVSE). Of note is International Standards Organization (ISO) 15118, which specifies a common understanding of all processes between an EV and EVSE. Specifically, ISO 15118 standardizes the communications between the EV communication controller and the supply equipment communication controller. The communication standards enable everything from bidirectional charging to transaction services. Vehicles that comply with ISO 15118 will allow for automatic owner account authentication at charging points that both prevents data manipulation and initiates seamless smart charging of EVs. The establishment of this standard enables bidirectional charging, which can provide utilities with grid services and creates the groundwork for the buying and selling of electricity between the grid, EVSE, and EVs.

RFID Technology

South Korea has been aggressively trying to support and expand its EV fleet. In 2015, the City of Seoul partnered with company Power Cube to give out special electric charger cables to enable drivers to recharge their vehicles at 100,000 locations with standard outlets. These cables are equipped with RFID readers that scan an RFID tag attached to the power outlet to be used. Power Cube then processes the transaction by transmitting the driver’s identity, time, place, and electricity purchased via a 3G wireless module included in the charging cable to Power Cube. Power Cube bills the user later, and then pays the electricity provider.

Seoul hoped that the giveaway would incentivize more private EV ownership; as of the program launch, the majority of EVs in Seoul were owned by public sector entities. It intended to give out all 100,000 cables by 2018. Each cable costs 1 million won (about $917) and has a charge capacity at 3.3 kW. While there has been no coverage of the program since its inception, there continues to be a market opportunity for transaction authentication in the EV charging space, with the City of Busan’s launch of a similar program in 2016.

Blockchain Technology

Blockchain could offer a low cost and reliable way for transactions to be recorded and validated across a distributed network with no central point of authority. It also removes some of the technological barriers associated with dynamic and wireless charging; these services can use blockchain technology to record and validate the purchase of electricity from these chargers automatically, without driver intervention.

In Germany, blockchain technology can be used to authenticate and manage the billing process for EV charging stations. For example, Car eWallet will enable a driver’s car to pay for charging, with no need for pulling out a credit card.

Share&Charge, another e-mobility service, has completed its pilot in Germany and is partnering with eMotorWerks to bring its services to California. Participation in the pilot will be based on a first come, first serve basis. Share&Charge uses the Ethereum blockchain because of its support for smart contracts. It creates a token on this chain and users provide/receive payment in these tokens that then can be redeemed for traditional currencies.

Although the use of these services for widespread dynamic charging services is still a ways down the road, these EV-focused transactional services could expand publicly available charging infrastructure by enabling point-to-point sharing of private EV charging stations. They could also enable future applications such as toll payments and carsharing services.

Navigant Research’s upcoming report, Wireless EV Charging, focuses on how wireless charging technology has become increasingly more efficient over the past couple years. A growing number of pilot programs and applications are popping up around the world. As these actors move forward with expanding charging infrastructure, developing technologies may help process and authenticate future transactions.

 

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