Former NADA Chairman Geoff Pohanka recently published an article on demand power charging via Real Clear Energy. You can read an excerpt of the article below, with a link to the full piece.
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The road to widescale electric vehicle adoption faces many challenges….and not limited to vehicle affordability and concerns of an inadequate charging infrastructure. In this article, I will explore another barrier that is infrequently discussed…the challenge of achieving public fast charger (DCFC) profitability.
A reliable and convenient network of public fast electric vehicle chargers is a prerequisite to achieve the Biden administration’s greenhouse gas regulations that require nearly 72% of U.S. light duty new vehicle sales be fully electric (BEV) or partial plug-in electric (PHEV), by 2032. The vast majority of EV owners now charge at home but this is likely to change with greater EV adoption since many live in a condo, an apartment, or have street parking. Home charging is simply not a possibility. Many older homes lack sufficient amperage in its electrical service, often requiring thousands of dollars of upgrade besides the cost of a level II charger.
Factors that impact DCFC profitability include low utilization percentages (due to the high percentage of home charging and that EVs represent less than 1% of the total US vehicle fleet)….and also high operating costs from demand power charges. Demand power is typically the highest electricity usage during a 15 minute period in a billing cycle and utilities charge a premium for it. By measuring spikes in power demand and charging a higher fee to supply it, a utility is better prepared to deliver electricity under all power demand scenarios and be able to afford to invest in the infrastructure to do so. The cost of demand power at my office location is $3.41 per kW….which is 22 times more than the overall cost of electricity.
Many utility companies specify the maximum power demand a customer is allowed per month. Exceeding that maximum power demand over consecutive months often results in the customer being moved to a tariff with a higher demand charge. Energy experts have told us that this has lead to power bill increases from $100,000 to $200,000 annually for some auto dealerships, due spikes in power demand caused by their use of EV fast chargers.
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