The electric vehicle (EV) market has grown by leaps and bounds, with annual U.S. sales surpassing 1 million vehicles for the first time ever. Tax incentives for EV purchases are coming into force, and funding for charging infrastructure is increasingly available.
Utilities will continue to play a key role in the future of EVs, as they revamp and manage the grids that support continued electrification. This process is not without challenges, however — as utilities know all too well, load balancing to handle spikes in charger usage will be an ongoing process, and the more distributed nature of the grid will require infrastructure upgrades and the use of creative rate structures.
Making public charging successful has long-term benefits for utilities, so now is the time to invest in the right strategies. “It’s not just residents of a utility’s service area using public chargers — it’s non-residents too, so these broaden the customer base,” says Frank Fata, Utilities Senior Director at FLO, a leading provider of EV charging solutions.
At this crucial moment, utilities should be keeping an eye on developments across the energy and automotive sectors to ensure they bring their expertise to the ongoing EV transition. Here are three steps to stay ahead of the curve:
1. Be flexible with demand charges
One of the biggest challenges with EV chargers is managing spikes in electricity demand as drivers need to power up at certain times of the day. Utilities use demand charges, a per-kilowatt charge based on the peak amount used during a billing cycle, to support the infrastructure and supply that meets this demand.
Prohibitively expensive demand charges may depress EV charger infrastructure development by discouraging operators from installing them. But, suspending demand charges entirely places a heavy cost burden on the utility. One way to compensate for demand charges is to replace them with a specific EV rate for high powered charging sites rather than apply a disproportionate penalty that fails to provide an attractive ROI.
Utilities aiming to thread this needle may also consider phased or tiered structures for demand charges, such as National Grid’s program in Massachusetts. This 10-year initiative offers up to a 100% discount on demand charges for the first year, with a sliding scale of discounts based on following usage.
2. Approach load management technologies thoughtfully
Managing spikes in electricity demand goes beyond the money — it’s also critical to grid functionality. The proliferation of energy storage capabilities provides options for utilities, but these technologies should be weighed carefully when installing Level 3 direct current fast chargers (DCFC).
“There are obvious benefits to having integrated battery storage in a DC fast charger, but there are also some unique considerations,” says Alan Chau, Head of Applications Engineering at FLO. “On the plus side, batteries shave the peak and can make chargers less expensive to install because they don’t require a high-voltage grid tie-in.” This can be useful in remote locations where more mature infrastructure for fast charging isn’t available.
“However,” Chau continues, “if batteries deplete, they have less energy for charging. They go into energy recovery mode, and that lowers the kilowatts that the EV driver can get,” he says. Drivers can become frustrated that the DCFC they sought out can’t charge as quickly as expected. And, for drivers on long trips or even their daily commute, these shortfalls can impact their ability to conduct necessary travel.
There are additional options for load management and energy storage to support EV charging, even if embedded batteries aren’t right for a particular site. A microgrid approach with utility-scale energy storage onsite provides multiple benefits for users and the grid, and it can facilitate charging sites along remote highways where capacity is low.
“This type of energy storage softens the ramping effect on the grid to help minimize that single peak power threshold point that will ultimately determine the demand charge,” says Fata. “Utilities and site hosts can also take advantage of local renewables like solar or wind generation to charge the batteries off-peak,” he adds.
Another option is to use chargers with power-sharing capabilities. With the FLO UltraTM charger, for example, charging ports can share power to optimize available energy.
“Typically, EV charging rate peaks at the start of the session, and then slows down to improve the long-term health of the vehicle’s battery,” Chau explains. “Our technology redirects that residual capacity to a second car charging at the same time.” These continual developments in energy storage and charger technology provide utilities with many strategies to address peak shaving and load management.
3. Collaborate for supply planning
Finding the right partners is key to all of these activities, and by working with multiple stakeholders, utilities can influence the type of charging infrastructure in their territory as well as its location. Offering rebates or incentives is an ideal way to do so. With charger rebates available for commercial entities through the Inflation Reduction Act, utilities can offer make-ready incentives to ensure the civil engineering and electrical work is completed safely and in locations with suitable capacity.
They can also work with charging network operators to locate DCFCs at sites with sufficient capacity. Operators such as FLO have valuable data on EV driver concentration and public locations where chargers may be needed most. This information can be married with utilities’ own capacity maps for efficient planning.
“The best way for utilities to implement EV charging infrastructure is to provide ideal locations where capacity is available in their service territory,” Fata says. “We bring market research data on where chargers are needed, and together, this information provides guidance to developers or retailers.”
Driving decarbonization with EVs
EV adoption will continue to increase, and utilities are already playing a vital role in building the clean, electrified infrastructure that makes it possible. With regulations, incentives and technologies constantly evolving, managing all the changes our grids will require may seem overwhelming.
But utilities have many of the tools they need. “Utilities have the expertise, the geographic reach and the technology to support EV charging, and having these charge points increases their customer count,” Fata says.
By strengthening their partnerships and managing load and cost demands, utilities can continue to deliver safe, quality charging experiences and build sustainable growth for their business — and lasting reliability for their grids.
Contact FLO to discuss EV charging solutions in your region.
