Widespread electric vehicle adoption hinges on utility investment in charging infrastructure — a process fraught with payback challenges and difficult strategic choices. In the first of a three-part series exploring those options, clean mobility consultant Jeff Turner looks at business case scenarios for DC fast-charger expansion
One of the first questions EV drivers get from their friends and family is often about driving range and charging: How far can your EV go, and how do you make longer trips?
But if you ask any EV driver what their favourite aspect of owning an EV is, there’s a good chance they’ll tell you how they love waking up to a full charge in their driveway every morning and how rarely they’ve had to use public charging stations.
This leads to a challenging paradox in the EV world — public charging stations need to be there to convince people that they can make the switch to an EV, but those charging stations ultimately see relatively little traffic.
Electric utilities can play a big role in addressing this Catch-22. But a few things are needed to make it happen.
Initial focus on key corridors
Much of the charging infrastructure deployment to date in Canada has focused on establishing geographic connectivity along key highway corridors with “fast-charging” stations that allow a typical EV to charge to 80 per cent in 30 minutes (more on that approximation later).
Canada is actually doing pretty well on this front. Thanks to investments by the federal government, provincial governments, electric utilities and a handful of private companies, Canadian EV drivers now have access to a number of charging networks that can get them from Victoria to Halifax.
But while this coast-to-coast connectivity is an important symbolic milestone that will reassure potential EV buyers, ongoing investment in charging infrastructure is essential to make sure there is a base-layer of charging infrastructure that can meet the demands of a growing EV population.
By that measure, much of this country’s existing fast-charging infrastructure suffers from two key limitations:
Inadequate charging power: As outlined previously on this site, the 50kW charging speed of many fast chargers leaves something to be desired. While they can recharge a 2011 Nissan Leaf with 117 kilometres of range to 80 per cent in about 30 minutes, the batteries in EVs with 400 kilometres or more of range take longer to charge. Dunsky’s research suggests that charging at 150 kW, with the potential to replenish 300 to 400 kilometres of range in 30 minutes, is an essential development for EVs to appeal to a broader slice of the population. An increasing number of vehicles are coming to market that can charge this fast, and we should be building infrastructure in anticipation of them.
Too few chargers: The majority of fast-charging sites across Canada can only charge one EV at a time. First-hand accounts from Canadian EV drivers suggest this is already leading to some headaches on peak travel days, and our own modeling has shown that many jurisdictions need to be thinking of charging stations with four, eight or even more chargers each to avoid line-ups in the near future.
Here’s where the Catch-22 comes in. While there may be pressure for greater charging capacity, that doesn’t mean there’s a solid business case for private investment. Peak demand might be strong on busy weekends, but overall utilization of fast chargers remains low.
The reason: most of the time, people charge their EVs at home or at work. According to FleetCarma’s 2019 “Charge the North” report, only about 5 per cent of EV charging occurs at public fast-charging stations. Contrast this with gas-powered vehicles that purchase 100 per cent of their fuel from a gas station, and the economic obstacle to building the “gas station of the future” with 1/20 of the potential revenue becomes clear.
Broader business case
What’s needed are opportunities to build a broader business case for public fast-charger deployment that looks beyond simply selling electrons. These three are the most compelling:
Companion retail: Some retailers may enjoy having a captive audience with 20-30 minutes to kill in their store. I have clothes that I purchased at an outlet mall that I would never have shopped at it if it hadn’t been next to the fast charger half-way between Vancouver and Seattle! Convenience stores, coffee shops, grocery stores and other outlets may see EV charging as a way to lure customers, although they’ll need to take a close look at the math based on the expected EV traffic in the area.
Carmaker incentive: Some automakers have seen fast-charging deployment as a necessary investment to enable sales of their EVs. Tesla, which has been deploying high-powered, multi-port charge stations since 2012, is the most obvious. But Volkswagen and Ford are among other EV makers now entering the charging game.
EV-driven load growth: A growing number of electric utilities are investing in public charging infrastructure on the basis that it will accelerate EV adoption, which in turn increases utility revenue through overall growth in electricity demand. While public fast chargers may only provide roughly 5 per cent of an EV driver’s energy needs, the electric utility is in the unique position of being able to recognize revenue from the remaining 95 per cent of that driver’s charging, whether it happens at home, at work, or on the go.
The preceding models aren’t mutually exclusive. Different stakeholders can potentially collaborate, stacking their motivations together while sharing the cost of deploying and maintaining charging infrastructure. And in all cases, government funding programs, such as Natural Resources Canada’s Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative, can help to build an even stronger business case.
With the federal government looking to ensure climate action is at the heart of the post-COVID-19 recovery, building on this initiative with increased funding is a promising opportunity to support shovel-ready infrastructure projects that will accelerate the electrification of the transportation sector.
However, for electric utilities important questions remain as to potential requirements to upgrade grid capacity. That takes money. The next article in this series will look more closely at their options for making these investments, and what this all means for utility ratepayers.
Check out part two of this series here!
Jeff Turner is the Senior Research Lead for Clean Mobility at Dunsky Energy Consulting, where he supports a variety of government and utility clients in their efforts to decarbonize the transportation sector and accelerate the adoption of electric vehicles. Jeff also sits on the board of Electric Mobility Canada.