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DC Fast Charging - the right choice for your utility?

06/27/2019

Next week, North Carolina will become the latest state to open an RFP to allocate funds for DC fast charging (DCFC) from the Volkswagen settlement. Companies, towns and utilities across the state will vie for a piece of $3.45 million allocated for DCFC. Public Power and Cooperative utilities, particularly those located along interstates, seem to be very excited about these opportunities. After all, who doesn't love free money?

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However, utilities should think very hard about whether DCFC are the right choice for their customers/members and community. What benefits do DCFC bring, and what are the costs?

The benefits of DC fast chargers are a bit hard to quantify. Increased traffic to your service area - which is particularly interesting to rural utilities along interstates - is one possible benefit. This increased traffic can - in theory - lead to out-of-town visitors spending money locally instead of in the next town over. However, little research has been done on the real-world impact on traffic and the local economy. Would people hanmg around in town after they're done charging? Unlikely.

The next possible benefit is even less tangible: being seen as a leader in EV adoption. But, DCFC alone cannot drive local EV adoption. Utilities have to market EVs to their customers that could best use them. Only a very small number of trips require quick rate DCFC . Most of the time, workplace or home charging is more than sufficient. The last benefit of DCFC could be increased kWh sales, but utilization of public charging is low, even in high EV penetration areas. Those currently adopting EV's are doing so because the mileage range already fits their commuting and lifestyle driving patterns.

If the "benefits" of DCFC aren't all they're cracked up to be, what about the costs? First is the cost of equipment and installation. An Idaho National Laboratories paper from 2017 estimates the initial cost of a 60kW, 6 head DCFC installation at $392,000, and a 350kW, 6 charging station installation at $1,728,000. After installation, there are continued maintenance and operation costs, estimated by INL to be $170,000 per year for the 60kW installation and over $500,000 for the 350kW installation (see chart below)

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The specific economics of your utility may be different, but it is clear, on-going costs are high. There are two potential ways to offset these costs, and the most obvious is to charge customers for the electricity they consume at a DCFC station. However, to get a 10-year payback on the investment, EV drivers would need to be charged nearly $0.80 per kWh, which is roughly equivalent to $8 per gallon for gas. At those prices, EV drivers would likely charge elsewhere, further pushing back the break even point. The other option to reduce costs would be adding solar, storage or both to the installation. This would reduce the kW demand and kWh energy required for the station, but upfront and maintenance costs would be higher. Regardless of the strategy, DCFC installations are unlikely to break even, much less make money for the utility, in the short or medium term.

Considering the high cost, even with federal and state grants and incentives, and nebulous benefits, are DC fast charging stations a sound investment for your utility?

What if, instead of spending $150,000 per year on maintaining a DCFC installation, your utility marketed EVs to your customers, and had effective EV load management? Then your kWh sales would increase by about 3,000 kWh per vehicle, and with effective load management, all that growth would be off peak.

 

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