Published on October 14th, 2017 | by Nicolas Zart0
Intelligent EV Charging Startups Shouldn’t Copy The Gas & Utility Business Model
October 14th, 2017 by Nicolas Zart
Ten years ago, the world crashed and caught many out-of-touch companies unprepared. All of a sudden, clean and green projects popped up and enthusiastic business models sprouted left and right. The tone was optimistic, betraying a deeply archaic business model unable to address its consumer needs. Some of the things witnessed were truly creative, out-of-the-box business models that innovated and were revolutionary, if not evolutionary. Ten years later, intelligent charging infrastructure is on the rise, thankfully.
A Charging Infrastructure That Pays You
If you’re like us and still lament that vehicle-to-grid (V2G) and vehicle-to-home (V2H) technology hasn’t been more implemented by now, you’re not alone. Honda and a few startups have made big announcements but haven’t gotten very far as far as offerings for their clientèle. The technology and the business case have been harshly held back by utilities and their power lobbies.
V2G is using an electric vehicle’s battery pack in such a way that it can send electricity back into the grid, and V2H is using it as backup power or a regular power source for your home. An average EV should be able to give anywhere from a day to four of electricity, within reason, depending on its capacity. Think of the life-saving consequences this could have with tornadoes or earthquakes. This is what we mean by an intelligent charging infrastructure. With smart V2G systems, customers could even get paid to charge flexibly and discharge at certain times. Such options could potentially make EVs more affordable for many.
The cost of living relative to middle class incomes has risen for decades, with no end in sight. EVs have the potential to eventually reverse the trend in one segment of the market. While owning an EV these days can mean free charging, only a few companies have been serious about implementing an intelligent charging infrastructure. For instance, if you have a Nissan LEAF, you can go to certain Nissan dealerships equipped with a CHAdeMO system and charge for free. The Mitsubishi Motors headquarters in Southern California also lets their EV drivers charge for free after work hours.
If you don’t live close to those dealerships or places that let you charge for free, a quick call to your utility might still let you switch to a better tariff. Charging at night you could spend pennies on the dollar for every mile driven compared to a car with internal combustion engine (ICE).
Ovo, Intelligent Charging Infrastructure
Ovo is an energy company in the United Kingdom that offers a fair amount of renewable energy, currently up to 33% of its portfolio. It is yet another company that is revisiting the idea of charging and getting paid for it. Although the concept is not necessarily new, we are happy to see it coming back. What Ovo plans to do is install its chargers in homes and manage them for you at “off-peak” hours. It will detect when fewer people are using electricity and when the cost is low. When rates go up, the charger switches the EV to V2G and feeds electricity back to the grid to sell back your electricity to your utility.
Although this system raises a few issues, mainly around utilities’ outdated business practices, it does also mean more wear and tear for batteries and reducing their charging cycle lifetime. How much is that worth to people?
According to Stephen Fitzpatrick, CEO of Ovo: “It provides an economic benefit for electric vehicle owners. … So they get more use of out of the vehicle that they’ve got parked in the driveway.” But the trick is to get utilities on board — those same companies that lobby hard against their customers installing solar panels on their homes and becoming energy producers. According to Fitzpatrick: “In other words, the value of the electricity that’s stored in the battery goes up by a factor of five.”
This concept has sent utilities in a fight mode against its customers, which they often can’t fathom becoming prosumers. Utilities are still lobbying hard against owners using their rooftops for solar energy and getting adequate compensation for it, after all.
Can Intelligent Charging Infrastructure Handle Millions of EVs?
Although it’s hard to predict when we will have millions of EVs on the road, our national grid in the USA is suffering from decades of deferred maintenance. And as we watch the second wave of EV adopters, we need to avoid all charging at the same time. Thankfully, almost every EV includes a setting to charge at certain off-peak hours. While many will be tempted to charge whenever and pay for it, smart owners will embrace a smart charging infrastructure. Without that, it would mean building more power stations — ideally, clean energy ones.
In a talk I had with Ed Kjaer in 2007 at the Southern California Edison Pomona Center Dream Garage, Ed (who has been involved with corridor electrification), said most utilities are trying to maximize and optimize the way they manage electricity. They are not necessarily trying to build more power stations, which involves serious costs and meeting ever more stringent climate rules.
Advertising For a Free & Intelligent Charging Infrastructure
Another option is to charge for free with an advertising system covering the costs. This is something Volta has been doing for a long time. Stay tuned for a new story on that company that’s coming up.
The idea is fairly simple. Imagine a mall strip that pays to have a charging station installed. They could have shops advertise and bring in customers on a regular basis.
Either way we look at it, traditional businesses are wearing thin and wearing customers’ wallets even thinner. We welcome audacious and bold new concepts that help EV drivers save more money and re-establish a more balanced economy.
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