Navigant Research Blog

Utilities, Regulators Push Forward on EV and Infrastructure Plans

— May 3, 2018

Across America, utilities are beginning to take advantage of EVs as an electricity asset by investing in charging infrastructure. There is new motivation to install charging infrastructure as EV sales increased by over 20% in 2017 from 2016, despite overall vehicle sales decreasing. Business models for these charging programs and pilots vary widely, from rate-basing investments to leasing charging infrastructure and having a customer-owned and operated model. With several options, expanding infrastructure programs in all states is becoming more feasible, and many utilities are taking advantage of this momentum.

State by State, Charging Is Expanding

Baltimore Gas and Electric, Potomac Electric Power Company, Delmarva Power, and Potomac Edison Company have submitted a petition to spend $104 million to support charging infrastructure in Maryland. The program would build out 2,400 charging stations across Maryland in residential, workplace, and public charging areas. The Maryland Public Service Commission is expected to make a decision on the petition in the next few months. The state wants to expand the number of EVs on its roads to 300,000 by 2025, and these new proposed charging stations are a key step toward reaching its goal.

In Missouri, Ameren has proposed an $18 million charging program known as Charge Ahead that would install about 1,200 charging plugs (about 600 stations) in its territory. If approved, Ameren will partner with third-party charging companies to install the stations near interstate highway corridors, workplaces, multifamily housing, and other public areas. The chargers would be a mix of DC fast charging and Level 2. Prices for charging at these stations will be determined by the third-party operator.

Eversource was part of a rate case in the Massachusetts Department of Public Utilities, part of which passed on November 30, 2017. As part of the order, the utility received the green-light to invest $45 million in charging infrastructure, which will mean installation of around 4,000 Level 2 charging plugs at businesses and 67 DC fast charging stations along major roadways. Under this program, Eversource will cover the cost of installation and—in disadvantaged communities—it will offer a rebate for partial cost of the charger.

The Public Utilities Commission of Ohio recently approved American Electric Power’s (AEP’s) Electric Security Plan (ESP). The ESP allows AEP to expand access to EV charging and other renewable generation to ensure grid reliability. As part of the program and other partnerships, site owners will be able to apply to AEP to recoup a portion of their initial EV supply equipment construction costs.

Utilities in the Lead

Given the continuing EV market momentum and Volkswagen diesel-gate state settlement funding for charging infrastructure via Electrify America, utilities are well positioned to continue expanding charging infrastructure and offering educational support for prospective EV buyers. Increasing charging stations will decrease customer concerns around charging availability and range anxiety, leading to more EV sales nationwide. As new utility charging programs are announced monthly, it seems the trend of utility involvement in charging infrastructure installations will likely continue to quell consumer charging fears and prompt EV adoption.

 

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.

 

India Gears Up for EVs

— January 9, 2018

In 2017, governing officials announced that India plans to sell only electric cars by 2030. The announcement was part of larger climate goals put in place by the country under the Paris Agreement—goals which the country is currently projected to meet despite being the third-largest polluting country on the planet and home to over 1.3 billion people. Some speculation of whether this market shift is possible in the allotted time period has surrounded the announcement, but banning the sale of conventional, gas, and diesel-fueled vehicles has become more popular in recent months, especially across Europe with France and the UK announcing bans by 2040. With some of the world’s most polluted cities, meeting its all-electric sales goal will help India reduce emissions and meet climate goals.

Steps to Promoting EVs

Since India’s announcement of EV-only sales by 2030, several steps to increase adoption have occurred throughout the country:

  • Partnerships will allow for collaboration on EV and mobility technology as follow:

Toyota and Suzuki announced in November 2017 that they will co-deploy EVs for the Indian market beginning 2020.

Mahindra and Renesas have partnered to place Renesas as the technology partner of the Mahindra Racing Formula E team. The technology will be used to produce electric road cars as well.

Ola will partner with Tata Motors to add EVs to Ola’s cab fleet in Delhi.

Uber has inked a collaboration with Mahindra to pilot EVs in Delhi and Hyderabad by March 2018. The two will also collaborate with other stakeholders to set up public charging stations in major cities around India.

Tata Motors announced a partnership with Jayem Auto to launch the Nano EV under the name Jayem Neo.

  • New market entrants will allow for increased adoption rates.

Hyundai Ioniq plug-in hybrid will be released in India in 2018.

Honda’s Indian subsidiary is in the process of adopting an EV strategy that allows for affordable vehicles suitable for Indian roads.

– Suzuki, with its partnership with Toyota discussed above, will produce EVs for the Indian market with technical support from Toyota.

  • Government policy announcements promoting adoption and awareness of EVs are now occurring routinely.

– The government introduced smart chargers for EVs in December, with a plan to install 150 of the charging stations in the next 12 to 18 months.

The Maharashtra government is finalizing purchasing EV incentives for manufacturers and consumers—additionally, the national government is reportedly in talks to release purchasing incentives.

– The national government approved standards for EV charging stations via suggestions from the Committee for Standardization of the Protocol for Charging Infrastructure.

– The national government approved use of digital payments for charging of EVs.

Challenges Remain

The actions put forth to increase adoption and awareness of EVs in the Indian market are encouraging, but challenges remain for such a large market, leading to more doubts that the country will be able to reach its 2030 goal. Since charging infrastructure is crucial to adoption, the country will need to rapidly continue expansion of charging station installation, particularly in densely packed cities. Over 90% of EVs sold in India in 2016 were two-wheel vehicles, meaning OEMs will need to tailor model availability to this more popular market segment in India, in addition to four-wheel EVs. Finally, purchase incentives from differing levels of government could spur adoption by making vehicles more affordable in a country which ranked 150th globally in gross national income per capita in 2015.

 

The EU Continues to Lead EV Charging Policy

— November 4, 2016

EV RefuelingThe European Union (EU) continues to be at the forefront of policies to spur plug-in electric vehicle (PEV) charging. Since 2014, EU countries have been under a directive requiring member states to develop a plan to install PEV chargers on a broad scale by December 31, 2020. Public and semi-private charger availability is extremely high in the Netherlands and Norway, with other countries like the United Kingdom, Finland, and Denmark having increasingly high levels of public charging networks. The EU is also leading on interoperability and roaming, which lets drivers easily access public chargers across many networks and multiple countries. This is a key feature if the growth in public charging is to lead to greater PEV sales—which is, after all, the EU’s real goal. This has led to Europe outpacing North America in charger sales in Navigant Research’s Electric Vehicle Charging Services near-term forecasts.

Now the EU looks to be pulling another lever for the charger market: a draft directive requiring new homes to be built with charging infrastructure. The draft directive reportedly says that any new or substantially renovated home will need to be equipped for EV charging beginning in 2019. It also indicates that starting in 2023, buildings must have one out of every ten parking spaces at a building equipped for EV charging.

This directive can help drive PEV sales for several reasons. First, home buyers will be made aware of EVs and EV charging by the presence of infrastructure in new homes. Secondly, having the infrastructure installed removes some of the friction that can hinder interest in PEVs among consumers, such as understanding how home charging occurs, whether it requires an electrical upgrade, and the potential cost of such an upgrade.

Details Yet to Be Determined

However, the devil is in the details, which are yet to come. A few key points:

  • This directive could well create a scrum among charger providers looking to gain some advantage through a mandate-driven market. The directive should avoid specifications that favor certain charging companies, which would effectively hand them the new home EV charger market.
  • It should also ensure that the requirements will allow for meeting the needs of an evolving PEV market. For example, longer range battery EVs will be increasingly prevalent and would benefit from higher power charger capability.
  • Coming innovations in charging should be considered. For example, how will wireless charging be accommodated? By the time this directive goes into effect, several OEMs will be offering wireless charging as an option with their PEVs. Will the directive attempt to encourage smart charging capability, or leave that to the end user? Smart charging will become increasingly important to manage growing EV loads, particularly in the 2023 timeframe when the parking space mandate would go into effect. Indeed, there could be opportunities for building owners to aggregate PEVs for grid services.

Combined with ongoing efforts in Europe to install more public infrastructure and fast charging networks, this directive should make Europe a surging market for EV charging, potentially outpacing North America beyond 2017.

 

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