Victoria asked to ditch “out-dated” network fees making EV fast-chargers unviable

The Victorian Government is facing calls to intervene and prevent ‘out-dated’ electricity network tariffs being imposed on electric vehicle charging stations, that threaten to make the rollout of new fast-chargers unviable.

Under a draft tariff determination issued by the Australian Energy Regulator for Victorian electricity networks, electric vehicle fast-charge stations could be slugged with network demand charges, which electric vehicle advocates say are unfair, and do not reflect chargers ‘actual contribution electricity network demand.

Under the current network tariff regime, electric vehicle charging stations may be charged network demand tariffs in the same way as major industrial energy users for their use of the electricity network.

This arrangement applies despite electric vehicle chargers being used intermittently, whereas traditional industrial users continuously draw upon the grid throughout the day.

Electric vehicle advocates say that the network charges are out-dated and the financial hit caused by the network charges could potentially hamper the roll-out of new electric vehicle charging infrastructure.

While the AER noted the concerns in a draft determination of charges that would apply between 2021 to 2026, it suggested that it may still seek to impose the charges in their current form.

“Some stakeholder submissions received in response to the Victorian distributors’ proposals raised concerns that demand capacity requirement thresholds and charges may act as a barrier to the rollout of electric vehicle public charging stations, as these costs are prohibitive while utilisation of public charging stations is still low,” the AER says.

“We are in agreement that tariffs need to be designed in a way that does not prohibit rollout of electric vehicle charging stations. However, we view the demand capacity requirement thresholds as a suitable means to reflect the distributors’ costs for providing the required capacity to large business customers, including electric vehicle charging station operators.”

The AER will make a final determination on the network tariffs following a period of consultation, but the Electric Vehicle Council has called for Victorian energy minister Lily D’Ambrosio to consider intervening, to protect electric vehicle charging infrastructure from exorbatant tariffs.

The Victorian government could decide to directly regulate the application of network tariffs and their application to electric vehicle charging infrastructure, effetively sidestepping the Australian Energy Regulator’s determination.

“If the energy sector does not address this barrier, it will make establishing and running an EV charger in Victoria very unappealing to private sector investors,” chief executive of the Electric Vehicle Council Behyad Jafari said in a statement.

“(Energy minister) Lily D’Ambrosio has very correctly noted we need to encourage as much private sector investment in Victorian charging as possible, but the AER’s decision threatens to undermine that.

“If you impose the same energy costs on fast-charging stations as large warehouses you are going to cripple Victoria’s promising transition to electrification for a generation.

“Right now, Australian governments should be doing all they can to nudge people toward cleaner, quieter, and more reliable electric options. Slapping a massive industrial tariff on the fledgling fast-charging station sector runs completely counter to that aim.”

The issue raises the prospect of further costs being imposed on the fledgling electric vehicle industry. The South Australian state government has announced its intention to impose new road use charges on elecric vehicles registered in the state, as the government seeks to make up for reduced taxes that would normally be collected from vehicle users from fuel tariffs.

Australian Greens transport spokesperson, Janet Rice, suggested that issues relating to charges imposed on electric vehicle users could be addressed the completion of a National Electric Vehicle Strategy, that has been promised by the Morrison government, but has yet to be released.

“Electric vehicles are a key part of the solution that we need to tackle the climate crisis. Australia is lagging behind countries around the world that are taking real action, under governments that are providing clear, concrete support for electric vehicles,” Rice said.

“That vacuum at the Commonwealth level shows up in the recent decision by the South Australian government to impose an additional tax on clean, green electric vehicles. We need a coordinated national approach to encourage the uptake of electric vehicles, not ad-hoc state approaches that make them more expensive.”