When it comes to charging commercial battery electric vehicles, a good motto is: Make no assumptions.
By now we probably all have heard the horror story of the regional transportation district in Denver that ended up paying 60% more per mile to power their electric buses than it did to power their diesel counterparts.
That kind of thing really throws the whole TCO out of whack.
So what is the reason for the increased cost? It’s a little thing called a demand charge. An associate of mine was talking to Muffi Ghadiali, founder and CEO of Electriphi Inc., who explained demand charges this way: “When you design a new site the utility has to come in and make sure there is enough capacity so they can meet the energy needs of the site.”
In other words, they have to plan for peak demand. Consider this example: your normal consumption is 700 KW but if you are charging a lot of vehicles at one time you might hit 1.5 MW. The utility has to make sure that 1.5MW is available all the time because it does not know when you will hit peak demand. This involves installing the right infrastructure to supply that demand. In order to recover the cost of the infrastructure needed to deliver that peak demand, the utility looks at your maximum power usage in a given month to determine peak demand and then charge a fee for that when you operate at that peak. Think of it as a penalty.
How costly can it be? According to Ghadiali the cost of electricity is usually somewhere between 10 and 20 cents per kilowatt-hour. Demand charges are in the dollars per kilowatt range.
Unfortunately many fleets are not aware of this and failure to include it in the cost calculation can leave them frustrated when they discover the true cost of charging.
Enter something called managed charging. Here’s a very simplistic example of how that works. Your 10 vehicles all show up back at your yard at 6 p.m. and you know they will be there until 6 a.m. the next day. In addition, you know their routes for the next day. With managing charging rather than plugging in all 10 vehicles at once, the first vehicles gets charged and then the next one and the next one sequentially. In some cases you might have the capacity to charge two trucks at the same time without hitting the peak demand.
Of course we know in the real world that all your trucks don’t come in at the same time nor will they all be in the yard for the same amount of time and in some cases you may not know where they are going the next day.
Managed charging (or smart charging as it is sometimes called) can help you avoid these demand charges. It uses sophisticated algorithms to determine when to charge trucks, how many to charge at one time and to what percent capacity they need to be charged. All of this is in an effort to help you avoid demand charges.
The time to start thinking about how your CBEVs will be charged is before you even purchase the first one. You must understand the true costs of charging as well as what you can do to mitigate demand charges.
The trucking industry is a small place and if folks start hearing stories like the one from Denver they may stop looking at CBEVs as an option because of what they perceive to be a higher cost of charging. However, with a little planning, most fleets will be able to avoid demand charges and will find that “fueling” a CBEV costs less than fueling a diesel-powered vehicle.
It’s all about making sure everyone has the right information.