Automakers and Utilities Filling the Gaps in Charging Infrastructure
By John Gartner · March 03, 2015

EV charging station in Monmouth  Consumers new to understanding plug-in
electric vehicle (PEV) want to have confidence that they won’t run out of
battery power, which requires a modicum of EV charging infrastructure to be
located in the areas where they drive. Even if they don’t utilize public
charging often (if at all), charging stations provide peace of mind to PEV
owners. The U.S. Department of Energy has invested more than $130 million to
provide a baseline of charging infrastructure, but the private sector has
not kept up with rate of EV sales in funding publicly accessible charging

According to the DOE’s Alternative Fuel Data Center, there are 22,949 public
charging outlets in the United States. This does not include EV charging
stations located at homes, or privately operated for the exclusive use of
fleets or other specific EV owners. This compares to an estimated 280,000
light duty PEVs on the road today in the U.S., according to data from
Navigant Research’s recently published report, Electric Vehicle Charging
Services. That’s less than one public charging station for every 10 vehicles
on the road. A more appropriate ratio of one station per 4 PEVs sold would
help to expand sales by providing readily accessible access to power.

Companies offering EV charging, however, continue to find it challenging to
receive an acceptable ROI given the current usage rates and the fee
structure of public EV charging. So which entities can be patient enough to
wait for a longer payback from installing EV charging stations, while
receiving other ancillary benefits? The answer is utilities and automakers,
which have both recently stepped up efforts to expand charging

Changing the Rules
In the few states where EV charging ownership by utilities is not
prohibited, utilities have started to take the lead in installing EV
charging equipment. Kansas City Power and Light will install 1,000 charging
stations, and Georgia Power Company will install 50 charging stations, in
addition to offering incentives to consumers to buy home charging equipment.
In deregulated Texas, CPS Energy and Austin Energy both operate EV charging

The floodgates in California were opened in December, when the state’s
Public Utilities Commission rescinded a rule prohibiting utility ownership
of charging networks. Three of the largest utilities in the state, SDG&E,
PG&E and Southern California Edison (SCE), have all filed requests with the
CPUC to operate charging stations in the state.

SCE wants to spend $350 million to install up to 30,000 chargers and to
provide rebates for third-party EV charger purchases. SDG&E’s more modest
plan would install up to 5,500 EV charging stations. In February, PG&E
requested permission to install 25,000 chargers at a cost of $654 million.
These utilities can afford to invest more than $1 billion in EV charging
stations because the costs would be passed on to ratepayers, who would see
slight increases in their monthly bills. The payback is likely to take
longer than the 3 years that third parties supplying EV charging services
usually expect, but as PEV sales grow and traffic at public charging
stations rises in future years, ownership of EV charging assets could become
profitable for utilities.

Better than [ice]
Utilities would also benefit from integrating these charging stations with
their own smart grid initiatives, so that charging could be managed to
minimize the impact on peak loads. Duke Energy’s pilot program for smart EV
charging in Erlanger, Kentucky, will expand to other Duke service
territories in 2015. Utilities can use EVs for regulation and demand
response services, which could be more cost-efficient than relying on
natural gas peaker plants or other distributed resources. Also, most
regulated utilities are encouraged to reduce loads through energy
efficiency, which can lower their overall revenue. Load from EVs, however,
are generally given a free pass as they are replacing petroleum products
with electricity.

Automakers also have an inherent interest in the expansion of charging
infrastructure – it helps them sell more PEVs. While Nissan has been
installing EV charging infrastructure in Japan (where charging stations now
reportedly outnumber gas stations) since the Leaf first went on sale, the
company is also installing 1,100 fast DC charging stations in the U.S. Tesla
Motors was the first automaker in the U.S. to significantly invest in
charging infrastructure with its proprietary Supercharger network.
Competitors BMW and VW recently announced they are teaming up to install 100
fast chargers across the U.S. This trend of automaker involvement is likely
to continue as more companies will recognize the benefits of expanding
charging networks as a lucrative marketing vehicle.

Automakers and utilities have long collaborated on pilot EV charging
projects, and BMW and PG&E announced in January that they will be
compensating BMW i3 owners for participating in demand response programs.
Because of rising CAFÉ standards and the ZEV requirements in California and
other states, automakers need to sell PEVs, and reducing the cost of owning
a PEV, by enabling motorists to participate in grid services managed by
utilities, is a logical pathway. Look for more states to be petitioned by
utilities for permission to directly participate in EV charging station
ownership and to develop EV-friendly compensation plans and rate structure.
Playas are mostly motivated by the ego drive ...
EVLN: U.S. Exxon Mobil EV-charging-network Game afoot

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