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Surge of Growth for Southern California EV Charging

— February 4, 2016

Machine parkingThe Southern California electric vehicle (EV) charging market is about to get a surge of growth, as the first utility-led charging deployment programs have been approved by the California Public Utilities Commission (CPUC). Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) each received the go-ahead for their proposals to deploy thousands of EV charging stations within their service territories.

This marks a major transition in the EV charging market in California, as utilities had previously been forced to sit on the sidelines while the plug-in electric vehicle (PEV) market launched and EV charging demand grew. This meant that utilities could not directly participate in a market that could provide a significant new revenue stream over the long term. The CPUC’s December 2014 decision to allow utility ownership of EV chargers has opened a new avenue for funding charging deployments via a stakeholder with (relatively) deep pockets and a stake in the growth of electricity as a transportation fuel.

California did have something of an EV charging gold rush when the U.S. Department of Energy (DOE) funded two major public charging deployment programs in 2009. The ChargePoint America and The EV Project programs resulted in over 6,300 public and private charging station installations (excluding residential). California got around a third of these; roughly 2,000 Level 2 and direct current (DC) fast charging stations were deployed in the state from 2011 to 2013. At the same time, California saw its DC fast charging installations grow thanks to the settlement between the CPUC and NRG Energy. The company, through its EV charging arm eVgo, committed to installing 200 fast chargers under this settlement from 2012 to 2014.

Charging Stations on the Rise

This new surge of stations will target a different segment of the market. The focus on public stations is waning somewhat, as utilization rates of public Level 2 stations have been mixed and as the market anticipates long-range battery electric vehicles (BEVs) that will have little need for short-term opportunity charging. What the PEV market does still need is charging at workplaces and at condos or apartment complexes. The DOE reports that there are 5,500 charging stations deployed at office facilities operated by its 250 partner companies in the DOE Workplace Charging Challenge. Navigant Research estimates that in total there may be around 9,000 charging stations in workplaces in the United States.

While this is a good start, workplace chargers need to expand beyond early adopters, as offices are going to be key to supporting PEV charging needs. SDG&E has said it will target multifamily communities, another critical next frontier to support increased PEV demand. SDG&E notes that 50% of its housing consists of multi-unit dwellings, representing a large and relatively untapped market for PEV drivers. Through all of this, utilities will need to manage the deployment process carefully to ensure that chargers are being placed in the best locations; that their charging company partners are secure, long-term partners; and that funds are optimized to buy charging stations that provide necessary data and management capability but are not over-equipped for the job they’re asked to do.

 

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.

 

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