Plans for a network of ultra-fast electric vehicle chargers – the kind that could charge your vehicle in just 15 minutes – could be on hold because proponents have discovered that their business model may be threatened by a hidden network cost.
The problem is about the implementation of so-called “demand charges”, which are a different way of billing consumers – instead of only charging for the amount of electricity used, consumers are also charged according to the maximum amount of power they draw at any one time.
The idea of demand charges is not a controversial one, although its implantation has been – particularly when consumers are billed heavily for high demand use that occurs outside of peak demand. This practice – which hits Sunday morning tea parties at churches, for instance – are considered unfair.
Proponents of ultra-fast EV charging networks say they could also be unfairly penalised – because their heaviest use is also random and most likely outside of peak events.
Paul Fox, from the Australian start-up known as Fast Cities that hopes to build a network of ultra-fast charging stations, estimates that demand charges could add around 30c/kWh to the cost of charging from these facilities.
Fast-charging, such as the network that Tesla built for itself around Australia – in the absence of alternatives – is often provided free, but the sheer scale of investment to build enough to meet demand from a growing EV fleet means this will not last long.
In a presentation made at the All Energy conference in Melbourne last week, Fox cited demand charges as one of a number of barriers to ultra-fast charging.
Others were the long lead time for grid connections (4-6 months), the lack of standard connection conditions, the lack of transparency of network hosting capacity, and high connection costs. Many are the same complaints for developers of solar farms, battery storage, and other big loads.
It is the demand charges that Fox is most worried about now. “We think there should be an exemptions for ultra-fast charging. We’re not trying to start a war, we just want to get the discussion going.”
His argument is that demand charges are mostly designed for small to medium commercial and industrial customers who have largely predictable and stationary loads driven by the production processes, but the consumer still has the discretion to load shift if needed. Energy is a small part of ongoing costs.
But public fast chargers have an unpredictable use, limited ability to load shift, energy is a large part of their overall costs, and unlike small factories, which have high asset utilisation, fast charging stations use only 4-16 per cent of their assets.
Fox says his company is likely to install two ultra fast chargers at each site – at least until the penetration of EVs grows. Each charger is 350kW, with both going at once, that equates to 700kW.
“Imagine though that after a while the number of EVs increases. You could have 6 chargers on the site but it is unlikely that all are operating at 350kW at the same time. When and if it does, the site will be charged for the whole month at that rate.
“We had an expert look at the way demand charges are calculated, and they found that loads in a factory where it fixed. Mobile loads don’t apply. We think there should be an exemption.”