March 17, 2019 by Zachari Shahan
Below is a chapter of our free report Infrastructure for charging electric vehicles: Guidelines for cities. This report was prepared by a working group for charging electric vehicles and electric vehicle leaders CleanTechnica i GreenVai.
Regardless of how many EVs are currently registered in your city – many more come, and soon, and you should be saved.
For you, this can mean investing in your own infrastructure, developing a plan, or enacting laws or regulations for fostering a private market. Discussion is ongoing on whether to invest in infrastructure before the massive EV appearance, or to wait until they become far more common – the so-called dilemma of chicken and eggs in our industry. Even if it's just one charging station, we encourage you to start now, to get your own experience with EV charging and the habits of local drivers.
Basic elements in balancing costs and revenues
Whether it's a public or private entity, there are a number of proven ways to finance the EV charging infrastructure, and then generate revenues from it. Although we do not propose any specific approach here, we consider it important that you have a clear understanding of the real costs and key drivers of the cost of these activities and sustainable business models.
- Fixed costs: Hardware, installation costs (capital costs), capacity costs
- Variable costs: energy costs (energy and energy), service, maintenance, operations (invoicing, invoicing)
Revenue comes from a mixture:
- Price per charge, kVh, minute / hour charging and / or minute / hour parking
- Usage – how much charging is used
- Other uses of the charging station or areas – such as sales on the charger and sold concessions
Charging infrastructure costs
Hardware and installation: First, it is necessary to find and choose the appropriate location, as well as appropriate approvals and contracts for its use (landowner, ODS, energy regulator, etc.). connect to the network (where needed) and determine where the charger will connect to the network.
When free, the concrete foundation should be poured in order for the charger to stand. Or need it
be attached to a wall or other object.
The appropriate parking space next to the filling must be secured, reserved and marked.
For outdoor chargers, covered baldachin is worth considering.
When it comes to the charger, there are two main types of chargers used for public charging:
AC 2 chargers: The cost of this infrastructure can be up to 500 € if they are placed in private premises and are intended for one user or closed user group. If they are public – which would be more common in the case of municipalities – the charger will require a more robust design and construction and most likely will have to have the ability to recognize and collect each EV user. Therefore, charging must be "smart" – equipped with IT intelligence and capable of communicating with the IT system of the charging operator. In this case, units will cost 1500 € +. These prices do not include installation costs. Significant savings on chargers are applied if they are integrated in a configuration (hub) together, where several offices use one intelligent central communication unit and intelligent energy management.
Fast DC Chargers: Despite a significant drop in their cost over the last few years, DC chargers remain expensive and cost more than € 25,000 each. The fact that high-power equipment turns into higher costs for physically connecting the charger to the network, or even upgrading the connection point to the network (transformers and other equipment). This could lead to an installation cost of up to € 40,000. Another consequence of fast chargers is the high demand for electricity, and therefore the high demand from ODS on a monthly basis. These are fixed costs and are usually paid monthly regardless of whether the charger is often used or not. Connection costs represent the most important part of operating costs and should be carefully considered together with energy costs and maintenance of the unit.
Capacity: Is the fee paid to the ODS on the basis of the kV power connection. These costs vary significantly between countries and even between different ODSs. It's different if you are connected to a low-voltage or medium-voltage line through your own transformer or not. In any case, it is a significant driver of costs, especially in the case of fast charging technology. As a fixed cost, capacity charges have the most significant impact on the overall economy in low-environments.
Energy costs: In the house and some billing in the workplace, the very price of energy is the biggest – and sometimes the only – the variable cost. However, when it comes to public infrastructure, it is only a part of the overall cost structure, especially in the case of fast charging. This is why charging at home or at work could be as cheap as 2 € / 100 km, while the cost of public charging AC or DC must be higher, as you can see in the table below.
Maintenance: Like any other machine, charging stations require occasional maintenance – sometimes in the background with their IT software, and sometimes on the physical unit.
Billing, billing and customer support: This work includes pricing, creating a billing and billing system for each user, maintaining this system and its security, and removing errors when technical issues arise. Real-time customer support is also important. New people meet the system and routinely invite questions, and it is clear that the answers to them are vital to providing a positive user experience and satisfied customers. These are complex, long-term and human-intensive tasks carried out by the charging operator, which are essential for the successful operation of billing services.
Collection of infrastructure revenue
The main drivers of revenue are the price you are charging for energy or time in combination with the rate of use of the charger. Here's a simple table that shows an example of the costs in relation to the balance of revenue that a billing company needs to estimate.
As you can see, the main variable inputs are the price for the customer and the use. Their adjustment will help you find sustainable operating costs.
(Note: These are just illustrative figures that are included to reflect cost and income considerations, but not to divide certain figures from the industry.)
Revenues can also be generated in other ways, such as:
A) Advertising at the charging station.
B) Concessions. Depending on who owns the station and the nearby services, the total charging capacity should include if people buy food and drinks during charging.
Grants – such as the national government, the European Commission DG Move, or the Executive Agency for Innovation and Networking (INEA) – are one of the main ways that infrastructure – especially fast chargers – is financed (or co-financed) in Europe. The Applicant issues the Request for Proposals (RfP) for a specific project, companies are applying, and the winner is selected on the basis of the above criteria. Often, grants are not for the full cost of each part of the infrastructure, requiring the private entity to somehow co-finance the rest. Nevertheless, especially in Central and Eastern Europe, this is a very common approach. Municipalities should encourage central governments to prepare specialized funding schemes specially designed for municipalities and communities. Development of alternative fuels infrastructure and decarbonisation of transport are among the main priorities of the EU and it is therefore appropriate to include different sources of EU funding.
Note on free charging
While the motivation of public authorities to provide infrastructure for electric vehicles does not only need to be commercial, it is important to introduce early fair charges for the use of chargers early.
Free charging can look like a good way to start the market – and that would be. However, this sends inaccurate signals about the cost of charging / using electric vehicles and creates shocks and crashes later when free / subsidized charging is complete. It underestimates the ability of commercial operators to create sustainable business in the community.
On the other hand, there are other commercial models that do not require payment from the driver. For example, the Go To-U model includes site owners / owners who pay stations and provide them free drivers as a way to capture the EV driving market. This model works well for them.
The National Public Electricity Charging Network for Electric Vehicles in Scotland, ChargePlace Scotland, with 700 points of this letter, is also largely free for users, above an annual fee of 20 pounds. This is otherwise subsidized by the Scottish Government.
Related: 10 EV Charging City Tips – # CleanTechnica Presentation