Navigant Research Blog

EV Charging Enters Consolidation Phase

— March 13, 2013

The ChargePoint/Ecotality joint venture, announced last week, underlined the fact that the EV charging sector is experiencing a bout of consolidation.  Earlier, Car Charging Group acquired New York-based Beam Charging, which will strengthen its presence in New York City.  This will be especially interesting if Mayor Bloomberg’s commitment to add 10,000 public parking spots by 2020 comes to fruition.  Better Place closed operations in North America and Australia.  In the United Kingdom, Chargemaster acquired Elektromotive last year.  These were two of the biggest charging equipment providers in the United Kingdom, so Chargemaster’s move positions the company well for the growing U.S. market.

This inevitable consolidation will continue, and it’s healthy for the industry.   There are too many companies chasing after too small a market right now.  This is not to say the EV charging market is small – please, no more stories on the “dying EV industry” – but Pike Research has found that there are well over 100 companies competing in the EV supply equipment (EVSE) sector globally.  These include not just companies that sell their own EVSE units but also “third party providers” that sell and service EV charging equipment made by others, like CarCharging Group.  Many of these companies are competing primarily for the commercial charging market – that is, units installed for use at offices, fleet depots, apartment buildings, parking garages, and a slew of public facilities like airports and retail outlets.

Globally the market for EVSE was around 180,000 units in 2012.  Half of those were residential units, so that means just 90,000 in commercial sales.  It doesn’t take complicated math to figure out that, if the market were evenly divided among the 100-plus companies offering EVSE, that would be a pretty small revenue base.

Catch-Up Time

Looking at the U.S. market alone, we estimate that sales of commercial EVSE were around 20,000 in 2012.  These units serve a total fleet of plug-in vehicles that reached around 71,000 at the end of 2012.  That is simply not enough demand to maximize utilization of these EV stations.  The PEV market is growing fast, so station utilization will rise and begin to match the expectations of the EVSE providers.  But for the near term, the EVSE market is out ahead of PEV sales, and the market will struggle to sustain the number of players wanting a piece of it.

So more consolidation is ahead, as companies look to secure a single geographic market or expand their portfolio of EVSE offerings by partnering with companies that have complementary technology.  For the moment, the industry would do well to focus its resources on the current EVSE equipment and networks in order to give PEV drivers the most seamless user experience possible.  This means keeping track of the basics, such as making sure equipment is working when drivers show up.  But it also means focusing on “interoperability:” making it easy for drivers to find and use all available EVSE units, something that the industry has been working on – by featuring stations from competing providers on a network app or enabling drivers to pay for charging without needing a network pass – but is still a long way from achieving.


Does Daylight Saving Time Save Energy?

— March 13, 2013

Having moved the clocks forward for Daylight Saving Time (DST), I thought it would be interesting to revisit the energy impact of DST.  I expected to find a plethora of data extolling the virtues of DST.  Instead I found a mish-mash of data and opinions.

DST was first adopted in the United States during World Wars I and II, but it wasn’t until the energy crisis days of the 1970s before it was widely adopted across the country.  A 1975 study by the U.S. Department of Transportation investigated the energy impact of DST and found that it reduced the country’s energy use by 1% each day.  A more recent 2008 U.S. Department of Energy (DOE) study found that extending DST to the second Sunday in March through the first Sunday in November reduced electricity use by 0.5% each day during the added DST weeks.

I also found some state-specific studies, most notably this 2007 California Energy Commission study that found starting DST early in California had no significant energy impact and this 2006 National Bureau of Economic Research study from Indiana that found DST actually increased energy use for Indiana residents by 1% to 4%.

Looking at other countries’ research produces even more conflicting information on the subject.  With so much contradictory information, isn’t it time we re-evaluated this practice as a country?

Wake Up

It’s questionable to use a 40-year old study as the validation for any practice.  Energy-use profiles have certainly changed from the 1970s to today.  One of the biggest changes is the increased use of air-conditioning across the country.  Sure enough, the 2008 DOE study said that Southern states saw the least impact from the DST extension, likely due to air-conditioning.  Undoubtedly, other factors like increased appliance penetration and plug loads have changed how we use energy compared to 40 years ago.

By no means am I saying we should abandon DST.  However, as DST also comes with a lot of headaches (and at least one night of interrupted sleep), we should really have a better grasp of why we’re doing it.  It’s been over 40 years since we had a thorough, nationwide study on the impact of DST.  For a country whose government is going through a budget crisis, we owe it to ourselves to know if a practice first started in 1918 is still delivering value.


In Wake of Sandy, Connecticut Expands Microgrid Program

— March 12, 2013

In late October of last year, as Tropical Cyclone Sandy tore through the northeastern United States, more than 8.5 million people lost power at some point during the storm.  Microgrids kept the lights on in parts of New York, New Jersey, and other locations in New England.

The Connecticut Microgrid Grant and Loan Pilot Program was first proposed in July 2012 and administered by the Department of Energy and Environmental Protection (DEEP) Bureau of Energy and Technology.  While the program was initially suggested as a response to Tropical Storm Irene, the project gained momentum after Sandy, and will culminate with state funding for a number of microgrids.  Connecticut Governor Dannel Malloy’s recent budget proposal increased funding for the program by $30 million, in addition to the $15 million already slated.

The first selection round was completed in late February, and of the initial 36 proposals, 27 have been vetted as technically feasible; 8 of those 27 were approved pending the correction of design issues.  These projects include police stations, hospitals, and other critical loads that need to be protected from power failures during emergencies.  Wanting to learn as much as possible about the potential risks and benefits of various microgrid configurations, DEEP encouraged novel technologies and imposed no size constraints on the microgrid projects.

Fossil Fuel Limits

In an interview, Veronica Szczerkowski of DEEP said that the program includes a number of requirements and nuances that set a higher standard for compatibility with utility operations from previous deployments of privately owned microgrids.  First, state funding is limited to the design, engineering, and utility interconnection costs of each project, and will not fund customer-owned generation or energy storage assets, the latter of which come with the largest price tags among microgrid enabling technologies.  Since there may be split ownership of grid infrastructure with this new fleet of microgrids, state funds will flow to microgrid asset owners and developers as well as to utilities.  Second, utilities will be required to own and maintain all non-private distribution grid assets interconnecting with customer-owned microgrids.

Perhaps the most novel aspect to the DEEP microgrid program is that all microgrids supported by state funding must have sufficient fuel onsite to run the microgrid for 2 weeks and have access to fuel for a total of 4 weeks.  This prerequisite constrains microgrids based on fossil fuels.  One of the projects that moved into the second round is a hospital with 5 MW of diesel generators.  A rough calculation means that the hospital would have to have more than 85,000 gallons of diesel onsite to run at an average of 3/4 load for the required 2 weeks.  While from an energy surety standpoint, such a condition makes sense, especially for critical loads, even if such storage requirements are unwieldy.

Given these fuel requirements, the DEEP microgrid program encourages various clean technologies.  In addition to solar and wind energy sources, fuel cell deployment is also emphasized since Connecticut is home to a number of fuel cell manufacturers, including FuelCell Energy, Proton Power, and the recently acquired company UTC Power (which will be sold under the ClearEdge name).  In fact, 10 of the 27 projects include fuel cells in their proposals, accounting for about 28% of the total capacity.

Even though there are a number of unknowns in the Connecticut program, one thing is clear: the project will be a testing ground for how to implement microgrids on a wide scale, and the outcomes will undoubtedly inform future publicly funded programs.

Peter Asmus contributed reporting to this blog.


Building Energy Management Evolution Accelerates

— March 12, 2013

The building and property management industries have been invigorated over the last few years by the advent of building energy management systems (BEMSs) that harvest, visualize, analyze, and report energy-related information in buildings.  The market is crowded and highly competitive worldwide; over 300 players  from Azbil to Zerofootprint  offer solutions that tie energy-related data to the decision makers that are in a position to act on them.

No two of these BEMSs are exactly the same.  Each offering pulls in unique data sets, runs proprietary algorithms on the data, and provides a front end designed to report the information in the most actionable way possible.  The overwhelming number of solutions and the fast pace of BEMS technology evolution have made it difficult for many software vendors to grasp the state of the art today and how best to differentiate their products.  These conditions have also led many would-be BEMS customers to hesitate to invest in BEMS technology, as they are waiting for the products to mature and commoditize before making major investments in new enterprise technology.

Given the complexity of the BEMS market structure, Pike Research has developed a typology of BEMS technology to provide a simple way to understand the market.  As explained in Pike Research’s recent research brief, Building Energy Management Technology Landscape, the landscape for BEMS technology can be classified based on the four primary types of data upon which the platforms are built:

  • BMS/BAS data
  • Facility operational data
  • Utility data
  • Enterprise-level data

This data is then folded into the software applications available today, as shown in the diagram above.

Most of the offerings available today focus on squeezing value out of one of these data sources.  However, some software platforms allow users to access and compare data from a much broader range of sources.  For example, Schneider Electric’s StruxureWare platform ties in information from the building management system (BMS), utility bills, asset management schedules, and corporate sustainability metrics into a single interface.  Other players with a stronghold in one type of data management are increasingly looking to diversify their features to gain broader reach.

As software vendors look to elbow their way into a competitive position in the BEMS market, the existing offerings will continue to expand.  What will the market look like in a few years?  Some consolidation is inevitable, either through targeted acquisitions of specialty firms or the demise of insufficiently differentiated offerings.  Yet, firms in this space need to be mindful not only of providing robust solutions independently, but also of the opportunities available through strategic alliances with other firms and interoperability.  The rapid expansion of this market means there’s opportunity for many players to succeed – but many will fall aside as well.



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