Battery charging solutions need strategic planning in some US states

13 July 2018 3 min. read

Battery charging stations for electric vehicles have yet to see wide scale deployment in America. One issue faced by US operators is high ‘demand charges’ which limit the cost effectiveness of high-speed charging. Coupling battery storage to stations is, according to a new study, able to offset high-demand charges – making station operations cost effective.

Governments and businesses are realizing the huge amount of action – both individual and collective – required to combat the spectre of climate change around the globe. The changes required are already momentous, in part due to decades of inaction. One area of acute need is the transportation sector, which contributes not only to greenhouse gas emissions but also localised pollution from exhaust. As such, wide scale battery electric vehicles are projected to see rollout over the coming decades, even in the US.

New analysis from McKinsey & Company considers one of the challenges battery electric vehicles (BEVs) will face in their transition to mass deployment – charging stations. While in Europe efforts are likely to see EU level engagement, the US remains relatively fragmented with various barriers to rollout – even in states that have strong climate credentials.Demand charging effect on total cost remains highRecharging vehicles remains a key factor in the roll-out of electric vehicles. Such vehicles are dependent on batteries which, while having increased range, do need to recharge frequently. Recharging technology is such that a number of solutions exist, from slower charging from AC outlets at home or at work, to more dedicated DC charging solutions. The latter can, as the technology develops, recharge batteries in relatively short order – a top line DC charging station rated at 350 kW is able to replenish up to 60 kWh of electricity within 10 minutes. A more modest 150 kW charging station is able to replenish up to 60 kW in around 25 minutes.

While recharging stations are popping up around the US, the way utilities charge their non-residential customers in some states makes current rollouts uneconomical due to high overhead costs. The expense does not result from the electricity itself, but for the way in which so-called ‘demand charges’ are calculated. These charges are variable by state, and cover the fixed costs for power plants, power lines, transformers, etc.

When consumers arrive at charging stations, they want to recharge their car quickly and get going. Yet the faster the car is recharged – in the current supply model – the more it costs in demand charges. The charges are effectively calculated by how much electricity is drawn over a period of time. One can think of the battery as a 1 litre bucket which is filled by a tap. Tap A fills the bucket to full in 2 hours, while tap B does so in 1 hour. The latter tap can open wider, but the wider it opens, the more it costs the charging station operator.

The changes in charging cost between tap A and tap B can be significant. For a charging station with 150 kw capacity, with one car charging at the station at any one time, the monthly costs can run up to $3000-$4000 – making the current model not economical to customers or operators for such high-speed charging.Battery storage chargingAccording to the consultancy, there are a number of options available that are able to mitigate these high-demand charge costs. Standalone battery technology prices have fallen sufficiently to make extra 150 kWh batteries affordable. One or two such batteries coupled with 'narrow-tap' usage of the facility would be able to significantly reduce the high-load times at slow charging stations between demand cycles. If effectively staggered, the cost reductions could be as much as 73%, making charging stations more cost effective.

Additionally, operators could install batteries that charge from the grid at off-peak hours, and then distribute the power to users later on, without drawing power at high-cost times. In the long-term, changing pricing models or economies of scale could render battery additions redundant, even while operators could continue to offer services to the grid with stationary batteries.