The Mobility House Perspective: Why Billions in U.S. Funding Alone Isn’t Enough to Achieve EV Goals
The U.S. has set an ambitious goal to reduce greenhouse gas emissions (GHG) by 50 percent by 2030. The Inflation Reduction Act (IRA) and the Infrastructure Investment & Jobs ACT (IIJA) passed earlier this year aim to help achieve this goal. Knowing electrification of transportation plays a major role in reducing GHG emissions, parts of the IRA’s $385 billion for clean energy projects have been specifically earmarked for electric vehicles and the associated infrastructure.
Throwing money at this problem isn't going to solve it alone.
Numerous challenges still need to be overcome if we expect to deploy infrastructure quickly enough to accommodate EVs on the power grid in a timely fashion. Despite federal mandates, unprecedented approval for public funding, and commitments from vehicle manufacturers, this once-in-a-generation push to revolutionize the energy and transportation industries is happening against a backdrop of supply chain constraints, labor shortages, an inflationary environment, and ongoing skepticism about whether or not the electric grid can handle such an influx of EVs. These challenges are already significantly slowing down deployment of charging infrastructure today, which we know is the prerequisite for vehicle deployments in the future.
If these constraints go unaddressed, the U.S.’ EV rollout – and its associated impact on national climate goals – are at risk.
While the federal government has recognized this problem and activated the Defense Production Act to address supply chain issues and accelerate production of grid components, this only addresses existing shortages prior. In addition to making more grid components, we also need a concerted effort to use technologies, policies and other tools to not only plan infrastructure with fewer components but also use existing infrastructure more efficiently.
Utility Roadblocks
Whenever a new electric fleet hits the road the electrical infrastructure needed for charging it is substantial. But, what happens when charging requirements exceed the site’s existing load capacity?
Typically, the facility director works with the utility on upgrades and expansions to accommodate the fleet’s electrification plans. A basic utility upgrade such as replacing a transformer might cost a million dollars and require more than a year lead time under the best of circumstances. Those lead times have now multiplied due to supply chain backlogs. A school district in California, for example, is currently facing a 72-week wait on a new transformer.
Automated Load Management
Automated load management (ALM), however, has proven to be a more affordable and efficient alternative to capacity upgrades, at least to help achieve near-term electrification projects. ALM enables charging energy management providers to autonomously control how much power each charger can draw at a time, based on an agreed-upon overall site load and grid limit, to safely and reliably allow the installation of EV chargers that may cumulatively exceed the site connection size. By avoiding massive grid upgrades and using existing infrastructure more efficiently, load management turns what would otherwise be a deal-killer into what many are seeing as an opportunity for greater fleet management.
By increasing the utilization of a site’s energy infrastructure, ALM strategies can allow fleet operators to install phase one of their charging depot immediately, even while they may be waiting for upgrades for phase two and beyond. This not only reduces their reliance on critical equipment availability such as transformers and switchgear, but also reduces labor costs to build and operate the system.
Though still considered fairly new in the U.S. compared to Europe, ALM technologies have already been successfully deployed by some of the nation’s leading fleet operators.
King County Metro in Seattle, Washington, currently operates a first-of-its-kind charging infrastructure pilot at its South Base Test Charging Facility that tests the capabilities of both plug-in and overhead chargers from three different manufacturers. During the design stage, it was determined that the site’s twelve charging ports would need a combined nameplate electrical capacity of 4.63 MW.
Installing a transformer large enough to serve the full estimated nameplate would have cost King County Metro $900,000 to $1 million and taken more than two years to complete. After modeling the site with an ALM system, King County Metro was able to use a 2.5 MW capacity transformer, and the ALM system enables oversubscription of installed equipment by balancing charging to maintain the site power limitations. It also allows King County Metro to meet their daily charging needs while minimizing operational expenditures on the utility’s time-of-use and demand charges.
Charging With On-Site Power Generation
Installing solar-plus-storage microgrids at charging depots is another creative alternative to utility expansion. Take the Brookville Smart Energy Bus Depot in Maryland, for example. Through solar-generated electricity, the city’s transit buses can charge from the site’s own renewable power supply rather than relying on the utility grid. And, it provides resilient backup power to the fleet even in the event of a grid failure.
Just as renewable energy is becoming more prolific among home and business owners, its benefits are equally appealing to electric fleet operators. A public transportation agency in the Western United States looking to expand its existing charging infrastructure is now considering a combined microgrid and ALM solution after being denied a service upgrade request by its local utility. Not only does solar make the electric fleet even more sustainable, it provides greater electricity independence.
Piecing Together the Financing Puzzle
Federal funding is a drop in the bucket of what will ultimately be needed to electrify U.S. transportation. Though this funding is a good start, massive private investment will be needed. Unfortunately, securing capital financing can be challenging, and many fleet operators do not have the budget to pay out-of-pocket.
Charging-as-a-Service (CaaS) is a new and growing financing innovation that can help solve this challenge as well as take over once federal funding runs out. Rather than making a large upfront payment, CaaS providers bundle the design, equipment, installation and construction of charging infrastructure with the cost of operation, maintenance, and energy into a single dollar-per-mile or fixed monthly price for fleet owners.
Electrifying Transportation in 2023 and Beyond
While it’s easy to be discouraged by the obstacles blocking infrastructure upgrades as we look to electrify public and commercial vehicle fleets en masse, there are technological solutions to keep projects moving forward by minimizing or even delaying upgrades entirely. As a bonus, fleet operators experience lower capital costs for installing charging infrastructure and lower monthly electricity costs during operation.
The opportunities arising from new government funding and policies that encourage transportation electrification are a step in the right direction, but they can only take us so far. We are going to need to use every technological and business innovation tool available to accommodate new EVs coming onto the grid and make meaningful progress.
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About the author: Gregor Hintler has spent the past five years with The Mobility House, as a product director and now Managing Director USA. The Mobility House is a charging solutions company that builds and operates EV charging and energy storage solutions.
