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The end of hardware-based EV programs?

09/2/2020

Is it time for utilities to unplug hardware-based electric vehicle (EV) load control programs and switch to virtual EV load management programs? For those with AMI meters, the answer is decidedly yes.

If your utility has been running a smart charger load control program or has used in-car telematics devices, then you know first-hand how challenging it is to get enough EV owners to participate in the program. Most programs never get more than 10% of EVs to participate, a far cry from the 30-50% needed in order to shift a meaningful amount of EV load. And, you also know about the high program costs, not being able to enroll most Teslas, complicated installations, dropped Wi-Fi connections, lost telematics devices, and warranty claims. Your programs may also have run into COVID-19 concerns with customers who do not want to have service technicians visit their homes (and vice versa).

Since EV load management programs need 30% to 50% of EV owners to participate to have a material peak reduction impact, and because hardware-based programs are likely not going to get us there, how do we reach that goal? For us, the lessons came the hard way over the past four years. We wanted to do it the same way most utilities have traditionally handled load management - using load control technologies. While we did find some niche applications where smart chargers worked well, for example in multi-family housing, the majority of EVs were in single-family and two-family homes (or town homes) and we simply could not get enough of those EV owners to adopt a preferred charger model or want to install telematics devices. Initially, our customer acquisition costs (marketing and rebates) were nearly 5 times the value of load shifting. Although we lowered the incentives and marketing costs, customer acquisition costs were still higher than 2 years of savings from peak reduction.

A few years ago, hardware-based load control programs were the only commercially available ways to manage EV charging. Your utility had to do something to prepare for an EV future, so you chose the best available option. In 2016, we were one of the first organizations to run hardware-based load management programs for utilities using the first commercially available smart chargers. We learned the hard way what the limitations of those approaches are, and why we eventually dropped all hardware-based residential EV load control programs. Here are a few things we learned along the way:

1 - Remove barriers to entry
The single most important factor for an EV program to be successful is the participation rate. Today, in most utility programs, fewer than 1 in 10 eligible EV drivers are participating.

What drives massive market adoption? One option would be extraordinarily generous incentives, but that probably isn’t the best choice. A better way is to lower barriers to entry to maximize participation. Installing a particular brand of charger, or putting a device in your car are barriers. This is particularly true for Teslas, which don’t have an OBD-II port and can plug directly into a 240-volt outlet or because most Tesla owners prefer to buy Tesla branded chargers that are not load controllable . This is why hardware based programs rarely enroll more than 20% of eligible vehicles, and even 10% is a reach target.

The good news is our Bring Your Own Charger® (BYOC) uses no hardware and enrolls on average 50% of eligible EVs!

2 - Keep costs low
Even in parts of the country with high capacity and transmission costs, the annual capacity costs of an average EV are under $250. Is the all-in cost of your hardware-based program under $250 per EV per year? Probably not! That means your other customers are subsidizing the costs of your EV programs. Just considering the costs for hardware, cost of managing load control events, network fees and other provider costs, hardware-based programs can easily be $150 to $250 per year. That’s before the added costs of customer incentives and indirect costs such as missing the monthly or annual peak, or disconnected devices that are not load controllable (often over 10% of total charger population). If a load management costs more than the value of load shifting, your utility may be better off doing nothing at all.

The good news is BYOC uses no hardware, and our per-vehicle costs are lower than any hardware-based solution!

3 - Passive load shifting is better than active load management
Our first EV programs used active load management. We were constantly chasing the peaks, trying to predict the best days and times to control, while still providing the best possible customer experience (because no one likes having their charger turned off too often!) It is challenging to try to hit every single peak event especially in markets where missing the one single summer peak hour can mean getting zero peak savings for the entire year. We also had to worry about device connectivity or Teslas that never “woke up” from load management events (which caused negative customer experiences).

What we learned from the experience was that it was better for both the customers and the utilities to offer a program with clear times when charging was allowed instead of “chasing the peak” with load control events. The BYOC program reliably shifts load 5 days a week, 52 weeks a year because the cars are programmed to avoid charging on peak. Besides saving on peak demand or capacity costs, the program also allows utilities to procure the off-peak energy at a lower cost and improve the system load factor.  BYOC is “set it and forget it” program for EV drivers and they never have to worry about having a full charge, because their schedule is set and they’re good to go.

BYOC Logo + slogan PNG Image Size 600px

Where do we go from here?

Hardware-based EV load management programs have been the industry norm. It is still the first thing many utilities consider when they’re exploring their options, and regulators have often been willing to approve them in pilot programs even if they were perceived as expensive. However, many utilities now have significant experience operating those hardware-based programs, and like us, have learned their lessons the hard way. The Bring Your Own Charger® (BYOC) program offers those utilities the next generation scalable EV load management solution that can quickly enroll thousands of EVs and deliver significant customer benefits.

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