NewEnergyNews: ORIGINAL REPORTING, JULY 8: WHY THE FUTURE OF ELECTRIC VEHICLES DEPENDS ON UTILITIES, AND VICE VERSA/

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YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY, August 23:

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  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution
  • THE DAY BEFORE

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    WEEKEND VIDEOS, July 15-16:

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    Founding Editor Herman K. Trabish

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    Wednesday, July 08, 2015

    ORIGINAL REPORTING, JULY 8: WHY THE FUTURE OF ELECTRIC VEHICLES DEPENDS ON UTILITIES, AND VICE VERSA

    Why the future of electric vehicles depends on utilities, and vice versa; Only utilities can build out EV charging infrastructure right – Greenlots CEO

    Herman K. Trabish, February 20, 2015 (Utility Dive)

    Of the three ways to get electric vehicle chargers to big market scale, the consensus emerging among EV enthusiasts, ratepayer advocates, and business leaders is that utility leadership may be the best choice.

    In 2011, President Obama proposed having a million EVs on U.S. roads by the end of this year but today there are perhaps 300,000. Only utilities have the money and people to give would-be electric vehicle buyers enough places to plug in to reach that kind of goal, observers say.

    “Utilities have to be the ones because it will take a longer time and cost more than a private company will give it,” explained Greenlots CEO Brett Hauser. “Utilities can rate base the charging infrastructure upgrades and consider what is best for the community. Private sector financial concerns will focus the infrastructure on narrower, more affluent markets.”

    Government subsidies for charging infrastructure are typically workable only at the local level where municipalities know their transportation systems, Plug-in America Executive Director Jay Friedland explained. The private sector has been significantly more successful, with leaders like ChargePoint, Eaton, and Tesla making significant progress.

    “The third model is utilities,” Friedland said. “So far, only NRG Energy has jumped in but that is the beginning of the utility model.”

    California’s Utility Reform Network and other ratepayer advocates haveexpressed interest and concern about rate impacts from utility involvement.

    “I agree that utilities should do EV infrastructure but, like smart meters, the monies spent need a lot of scrutiny,” observed NC WARN Energy Expert Nancy LaPlaca.

    The price you pay

    “Some say the rate-based infrastructure buildout will be too expensive for utility customers, but PG&E's estimate for 25,000 level two charging stations and 100 DC fast chargers was only $0.70 per month to the average residential customer,” Hauser said. “Consider the alternative: EVs are coming. They are going to add considerable load. Pay $0.70 per month now or pay $10 or $20 per month later for grid upgrades to keep service reliable and the grid stable.”

    Greenlots was selected by Southern California Edison (SCE) to supply software for the utility’s pilot workplace charging study. Greenlots’ certified open automated demand response (Open ADR) software has been operating since October 2014 in the 80 EVSE level two chargers installed at nine SCE campuses.

    SCE study data will be assessed by the end of this year. The utility wants to better understand consumer behavior when offered fee-based charging at different price points and different demand response options.

    “SCE employees who drive EVs to work are offered three pricing options at the payment kiosk,” Hauser said of the pilot study. “They can pay the standard rate to get a level two charge no matter what the need for demand response might be. Or there are two discounted rates.”

    For the less discounted rate, the EV driver chooses a level two charge but allows the system to provide less than the full level two charge if there is a demand response event.

    People who drive plug-in hybrids or for another reason don’t need a level two charge can access the higher discount by opting for only a level one charge. “They would not need to be curtailed for a demand response event unless it was a major emergency,” Hauser said.

    The study will look at:

    how automatic EV load curtailment can impact peak load

    the best opt-in/opt-out DR program procedures

    customer response to pricing strategies

    cost-effective system development

    customer engagement

    how DR can protect local transformers in EV cluster areas

    how to better manage site- and region-specific load with EV charging DR

    controlling system costs with open standards

    use of EV charging and DR in day-ahead and hour-ahead electricity markets

    “The capability of shedding three to seven kilowatts across hundreds of thousands of endpoints is valuable to utilities and so they need to figure out the best way to pass that value to the end-user,” explained Jeff Turner, an EV Project Engineer with utility BC

    Hydro’s subsidiary Powertech Labs. The lab is currently using Greenlots software.

    Greenlots has previously supplied software for chargers built by Eaton, ABB, and Signet, among others, is used by charging stations in 13 countries, and has about a third of North America’s DC fast charger market. The SCE study is, Hauser said, among the first larger scale installations to use both this OpenADR platform and Open Charge Point Protocol (OCPP) for electric vehicle charging.

    Greenlots selection by SCE may have been at least in part because its software is the only platform to have certification to International Electrotechnical Commission (IEC) specifications from the Open ADR Alliance through an independent third-party, Hauser said.

    The bigger picture

    Global revenue from EV charging equipment is expected to grow from today’s $81.1 million to $2.9 billion by 2023 and annual U.S. sales of workplace charging systems will reach over 63,000 by 2020, according to Navigant Research

    The SCE study is independent of the utility’s larger proposal which, along with proposals from California’s two other investor owned utilities, awaits final approval by California regulators.

    The Southern California Edison (SCE) $355 million Charge Ready Programswould run five years, from 2015 through 2019, and result in a rate increase of $0.001 per KWH, or 0.1% to 0.3% of the average bill. SCE would locate, design, build, own, and maintain the electrical infrastructure. Customers would choose, own, operate, and maintain the charging stations.

    Phase 1, a one-year pilot, would cost $22 million and deploy up to 1,500 charging stations. Phase 2 would cost an additional $333 million and deploy up to 30,000 charging stations by 2020.

    Pacific Gas and Electric (PG&E) wants to install 25,000 level two chargers and 100 DC fast chargers at a cost of $653.8 million, applied across its ratepayer base. Ratepayers would see no bill impact in 2016 and 2017, according to PG&E, and costs would reach only $0.001 per KWH over the next five years, adding an estimated $0.70 per month to the typical residential customer’s bill from 2018 to 2022.

    The San Diego Gas & Electric (SDG&E) $103 million electric vehicle-grid integration (VGI) plan was designed to test customer response to variable rates for vehicle charging.

    It would build 5,500 charging stations, primarily at multi-family housing and workplaces, between 2015 and 2025. The capital cost would be approximately $59 million and operations and maintenance over the ten years would add $44 million.

    “Everyone talks about the utility death spiral but it is largely exaggerated,” Hauser said. “Just like everybody else, utilities have to evolve and find better ways to communicate and interact with their customers.”

    Another Greenlots feature that may have helped win the SCE bidding is that the software “enables the utility-customer relationship and opens up a new utility business opportunity,” Hauser said.

    “SCE is testing a three price level system now. But they could have everyone pay the same price when they plug in and then, if there is a demand response event, push real-time pricing information to EV drivers via SMS and give them the option to opt in or out.”

    And, crucially, the message would come from SCE, not Greenlots, Hauser said. The utility interacts directly with the customer, opening the way for a new utility business relationship that could be part of the next utility business model.

    Kicker: Innovation

    “The utilities will play a major role, but don't discount government or Uberstyle entrepreneurial disruption,” Friedland said. “The tricky part, like the early days of the internet, is how do you monetize, and since there is a real consumable – electricity as a fuel – it can't all be free.”

    Once the utilities get on board, and especially if they get low carbon fuel standard credits for participation, the build out will accelerate.

    “But, and it is a big but, the utilities are not going to be as driven to find innovative solutions,” Friedland challenged. “Utilities are unlikely to think outside of the box. They will go for more traditional infrastructure.”

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