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Leading the Charge

ReNew Canada, in partnership with Nissan Canada, brought government and industry together to discuss how to create a strategy and business model in time for widespread adoption of electric vehicles.

Posted on February 28, 2012

Michael Nemat is a self-described “tech geek” who can’t resist innovation. When he realized he could get an $8,200 rebate on a new electric car from the provincial government, “that sealed the deal,” says the Ottawa resident. He got his car a few months after applying for the rebate, and was able to find one outlet in his condo that would accommodate an electric vehicle (EV): a Level 1 (120-volt) outlet on the roof of the parking garage. “I was charging fine for about two months, and then I got an email from the board asking me for the specifications of my car,” says Nemat. “It implied that I’d basically been trying to steal electricity.”

Nemat is now trying to come to a fair agreement with his condo board, the members of which say they shouldn’t pay to “fuel” EVs because they don’t pay to put fuel in other cars.

This isn’t a unique experience for early adopters of this relatively nascent technology. Recently, a Vancouver-based reporter encountered the same attitude when he was given an EV to test drive for a few weeks. Over the course of only two days, the writer found numerous angry notes on the car’s windshield demanding that he not charge in his multi-residential building.

While it’s true that Nemat is one of no more than 100,000 EV owners in Canada, several provincial governments are expecting those numbers to increase, and they’re showing their commitment to the burgeoning technology with funding for pilot projects and public charging stations.

What’s lacking, however, is developing an overarching strategy to guide the process of preparing Canada’s electricity market and infrastructure for EVs. During our roundtable discussion, hosted at Nissan’s Toronto offices, manager of Toronto Hydro’s electric vehicles project Tom Odell said, “There needs to be more dialogue around setting a cost for the sale of electricity at public charging stations.”

According to Canada’s Electric Vehicle Technology Road Map, written in 2010 as part of a joint government-industry effort, there will be 500,000 highway-capable plug-in electric-drive vehicles on the road by 2018. Before that happens, industry and government need to work out who pays for new charging stations and infrastructure upgrades and, perhaps more importantly, how to control the price of electricity at public charging stations.

Capacity

Every roundtable participant agreed that the barrier to widespread adoption of EVs is not Canada’s capacity to generate enough electricity. PowerStream’s then senior VP, smart grid and strategic support (he has since retired), Ed Chatten, called capacity issues a “bogeyman” for EV adopters.

Ontario is expecting 495,000 EVs by 2020 (five per cent of vehicles on the road). Based on the kilowatt hour (kWh) requirements of the average EV and a grid capacity of 34,882 megawatts (MW), that’s only about four per cent of the province’s current capacity.

Not only is there enough electricity, but baseload generation is essentially going to waste during off-peak hours. Cara Clairman, president and CEO of Plug’nDrive Ontario, said, “Right now Ontario has a surplus of electricity, particularly at night. Hydro and nuclear is base load power that we can’t store; Ontario is often required to dispose of it at night by giving it away to other jurisdictions.”

“I think that’s the great promise of battery-operated vehicles,” said Chatten. “They’re a pragmatic, cost-effective storage technology as opposed to some science fair project probably two decades away from commercial realization. If it could take especially peak wind generation overnight, then turn that into mobile storage that could be reinjected into the grid the following day, that’s got merit and solves an evident problem.”

“Ontario has a great story if we can encourage people to do the nighttime charging,” agreed Clairman.

The potential pitfall in that scenario is that drivers may not charge during off-peak hours. Many drivers may also be charging in one area, or cluster, at the same time. Once more EVs are on the road, it’s possible that enough of them could plug in during peak hours and push the grid beyond what it has been programmed to support.

Clay Luthy with IBM Energy and Utilities said to counter any system overload, some jurisdictions may have to increase the average for peak charge during high-demand hours.

But in order for local distribution companies (LDCs) to consider making those changes, they first need to have a sense of where these clusters of EVs will be.

“We haven’t quite figured out how to keep local distributors in the loop on these things in Ontario,” said Clairman.

Data points

In an attempt to gather that information, Toronto Hydro is participating in a study with the Centre for Urban Energy at Ryerson University. The utility is providing the centre with its grid maps showing where it expects adoption is going to cluster and, based on that, where the red zones are going to be. “We’re working with customers who are installing charging stations to deploy metering and understand what their charging behaviour is, searching for the elusive cluster to see if we can push the grid,” said Odell. They’re currently watching a cluster in Leslieville, a neighbourhood in Toronto’s east end. “We’re trying to see what happens during winter peak and summer peak, that’s the only way you can really ascertain what will happen.”

“We really need that information,” said Odell. “It’s early, but we’re late to the party in Ontario.”

Jill Hughes, director of the Ontario Ministry of Transportation’s (MTO’s) transportation policy branch, recognizes the need to better understand the utilization, trend, and patterns related to EV. “There’s a need for that profile and for the long-term thinking,” she said.

What the MTO is not yet sure about is how to share information with the utilities, leaving industry players like Chatten with questions. “To what extent can that information be shared with the utility?” wondered Chatten. “For instance, can Nissan, under current privacy legislation, share that info with a local distribution utility so we know where we’ve got a cluster in the first place—what are customer issues around that?”

One possibility is to create an incentive to report charging usage through the government’s rebate program. Those getting a government rebate may, as a quid pro quo, be asked to share some information so that the LDCs know where those clusters are.

Odell said that Toronto Hydro’s approach has been to use the small amount of budget allocated to its pilot program to incent customers to allow the utility meter their location.

In California, a leader in EV adoption, the public utilities commission is looking for a way to better alert utilities to electric vehicles in their service territory. The State’s investor-owned utilities have proposed what Luthy called “an information clearinghouse” in order to link EV registry data to the utilities that need to serve them, giving them a better idea of how many EVs are being driven, and where they’re located.

“I think people are starting to realize that there needs to be a higher level of oversight,” said Luthy. “This needs to be done in an orchestrated way; it can’t be a bunch of independent networks and EV markets operating autonomously.”

Charting the way

California’s plan formed out of a white paper that the regulator published five years ago. It addressed how to get the electric vehicle service providers who were interested in getting into the market and delivering some of the charging services and how that was going to be reconciled with the roles of the distributor—something that has yet to be addressed in any Canadian jurisdiction. Odell said, “There seems to be very little dialogue around the issue and I would suspect that lack of dialogue is holding private industry back from deploying public infrastructure—it’s definitely stopping utilities from deploying public infrastructure.”

“It really is the role of government and the regulator to steer some of this,” he added.

SunEdison’s government affairs manager, Sarah Simmons, suggested that perhaps it would help the process to set up an office or hub that was centred on EVs, similar to the renewable energy office the Province of Ontario set up when it began building the Feed-in Tariff program.

Andrew Bowerbank, special advisor, Magna Closures, said he helped put in a proposal to the Ontario Ministry of Energy through EC3 Initiative to develop a route map, some sort of a short-term leadership table that everyone could gather around. “We got a very quiet response.”

Public charging stations

The dialogue may be stunted when it comes to how to manage this process, but there have been a wealth of announcements from provincial governments showing their commitment to furthering EV adoption by funding public charging stations.

According to Manitoba’s Electric Vehicle Roadmap, it would cost jurisdictions without existing plug-in points (Manitoba already has over 500,000 Level 1 chargers in homes, garages, business, and parking lots) $1 billion to install the necessary charging stations.

In August 2011, Ontario announced an $80-million fund to channel seed money to public and private companies who want to develop electric car recharging facilities. It’s also offering a $5,000 to $8,500 rebate on electric cars and “green licence plates” to let EV drivers use high occupancy vehicles (HOV) lanes—the same one Nemat was granted.

This January, Quebec announced it will have Canada’s first public charging network for plug-in EVs. The Electric Circuit will be a system of 120 public charging stations, located mostly at St-Hubert Restaurants, RONA, METRO, and near subway stations.

More than delivering power, Quebec’s circuit is designed to deliver confidence, soothing the nerves of potential EV adopters who are worried about running out of power on the road. The concern is, according to most, unfounded, making many of these public stations more cosmetic than utilitarian.

“People think there’s a range anxiety issue, but once they start driving, they get over that,” said Clairman. A recent UC Davis study confirmed that range anxiety disappeared after three to four weeks of driving. Forsyth, who drove a Nissan LEAF to the roundtable, said, “If the [parking garage] I parked in had a plugin, I would have charged, but I didn’t have to and it didn’t stop me from coming downtown.”

The LEAF has a range of about 160 kilometres, making most commutes charge-free—an important concern especially for the Greater Toronto Area, where most EV drivers will be commuters living outside of Toronto.

And while public charging stations create what Bowerbank calls “profile,” multiple studies have shown that 90 per cent of charging will happen at home. Ontario’s Smart Grid Strategy plans for 300,000 charging stations (residential and public) over the next five years. The Province is only planning on investing $700,000 over that same time period. The expectation is that the rest will be rolled into the purchase price of the EVs and/or covered by the private sector. In fact, Nissan provides customers with the option of rolling a home charger installation into the cost of the lease or finance when they buy an EV like the LEAF. They work with Aerovironment on the installations.

Given all of these factors, would some of the funding being funnelled into public charging stations be better directed to upgrading the electricity distribution system’s infrastructure?

The day of this roundtable session, the Ontario Energy Board denied a request for a rate increase to help pay for upgrades that, according to Toronto Hydro, will prevent major issues in the future. With Toronto Hydro struggling to get funding to upgrade some of its basic infrastructure to avert failures, the likelihood of getting additional funding for these types of upgrades seems slim.

Clairman’s concern? “Some cities that have gone out with a very aggressive public charging model have actually suffered because right now some of those stations are not used enough; then it looks like a boondoggle. It is important to be very strategic in terms of public charging deployment to avoid such problems. ”

Her ideal scenario? “Something like what Pollution Probe is doing or what Ecotality did in California, which is to do a proper mapping where you look at the demographics and the likely locations where charging stations are going to be needed and you put them there, and you don’t just happen to put them where there’s some willing real estate provider.”

Charging stations are, in fact, being installed by commercial retailers across Canada looking to draw in new customers by offering free charging. A restaurant in Granville Island near Vancouver called Edible Canada recently installed one in its parking lot. “You can pull in, charge your car and go to the restaurant, instead of going down the street and look for parking,” said GE’s EV expert, John Wade, who helped with the installation.

Price setting

The problem these public charging stations present is that it allows anyone to offer electricity at whatever rate they choose.

While the cost of installing a public charging station can run from as little as $2,400 up to tens of thousands (depending on location, subsurface conditions, how many panels are required, and how many chargers are in the installation), Neetika Sathe, a senior manager with Nissan’s marketing department, pointed out that once the initial installation is complete, the cost of electricity is very cheap. “It’s cheaper than offering a cup of coffee to your customer,” she said.

That restaurant on Granville Island is asking for $2 per charge; others are offering it as a free service to customers of their establishment.

“You’re talking about a mall management business model,” said Odell. “We’re now saying that the price of the transaction is going to be set by a mall in Burlington, [Ontario].

Nissan’s Ian Forsyth’s two cents: control through regulation may not be possible. “No matter what you do, there will always be competition,” he said. “If a mall wants to offer EV charging for free, it’s going to be free. You’re never going to establish a cost.”

Odell agreed: “I think that all of the early public stations are going to be at low or no cost for that reason and also because it isn’t being managed in the context of a larger, systematic deployment.”

But he added that the issue of rates in a public charging environment will eventually need to be settled. Chatten agreed: “The issue of mobile load has to be addressed in a broader sense, as opposed to specific one-off installations.”

The internal combustion paradigm

These charging stations are being set up with a gas station model. The problem is, electricity can’t be sold like petrol.

Bill Smith, senior VP, energy, at Siemens, said, “When you go to fill up at a gas station, you don’t pay to use the gas pump, you pay for the gasoline. It’s going to be a real challenge, and if people see it as free—much like the internet, which started free—it’s very difficult now to try to tax it and control it.”

Maggie Allan, director of property management policy with the Ontario Ministry of Infrastructure, said, “The charging stations we currently have in place are strictly for [our] fleet, so it’s a different kind of business model.” When it comes to public charging stations, the ministry is still not sure what the appropriate business models look like. “Assuming that we will charge for the electricity consumed, how, then, do you charge the person for the use, what’s the appropriate use? And again all of those things need to be worked out because of the role of the regulator.”

It’s this failure to work out a unique model for selling electricity for EV charging, especially at public charging stations (which Luthy points our includes a charging post in a multi-residential building) that has led to experiences like Nemat’s.

“We need to get away from the internal combustion engine paradigm,” said Odell. “It may end up putting us in the ditch.”

The feeling some people have that if they pay for infrastructure upgrades they are subsidizing a very select few who are going to drive EVs is, again, partly due to an incorrectly drawn parallel between gas-fuelled cars and EVs. “It’s an attitude that I think will create an issue for all of the infrastructure suppliers except for [charging stations] installed in the home,” said Forsyth.

The major selling point for EVs is that they’re cleaner and cheaper to drive than gas-fuelled cars. Drivers may be able to completely charge at home at one-seventh the cost they’re currently paying for your fuel. Why, then, are charging stations being developed like gas stations when what sells EVs is freedom from the pump?

It may be because this is a greater shift than government, and even industry, realize. “You have this fundamental change of how you interact with, essentially, your electricity providing device. It’s no longer metering a stationary house. You’re metering a mobile entity,” said Luthy.

Luthy says we need systems that allow for interoperability and flexibility at public charge posts. Basically, each charging station needs to be able to uniquely identify each user so it can charge them the rate they have negotiated with their service provider.

Eventually, when enough EVs are on the road, there will be a need for more public charging stations—and cities had better be ready, says Luthy, who cautions that there should be no rush to install Level 3 charging infrastructure.

The difference between a Level 1 or 2 charger and Level 3 is the difference between a big infrastructure upgrade and a simple installation. Rather than an incremental load over a building, “Level 3 is a building,” said Odell. “When you’re talking about fast charging on the 401 [highway], then you’re talking about a substation on the 401.”

Smith said, “At some point, saturation is going to overtake any Tim Horton’s or mall infrastructure’s ability, even with smart charging. I think it puts current infrastructure in question and creates management issues for local distribution companies.”

So, why not do what we can now to mitigate some of the issues?

Forsyth said, “Infrastructure, in my mind, always is a lot of long-term planning. Retrofitting is hard; forward thinking is always easier. We’d really like to see [EV infrastructure] built into new homes, multi-unit buildings, and workplaces.”

Bowerbank is working with EnerQuality and the Building Industry & Land Development Association (BILD) on a plug-in-ready house program. If the program is adopted, new home buyers who go pick out counter tops can also see a charging station with a vehicle plugged into the garage and perhaps they will pick that as an upgrade. “It has to be part of people’s basic reality,” said Bowerbank, “not just a science experiment, or a luxury for the rich.”

3 Responses to “Leading the Charge”

  1. Chris Hill says:

    I would be happy to attend future meetings like this one at Nissan. Having Electric Mobility Canada, the national association for the EV industry, at these meetings could provide useful resources.

    Chris Hill
    President & CEO
    Electric Mobility Canada

  2. David Wilson says:

    With smart meters, I don’t see why there couldn’t be an even lower rate for power when the demand drops near the baseload (and the spot price often goes negative) to encourage owners to charge at night at home.

    You don’t need to recover that energy from the EV batteries during the day. You are reducing the daytime peak by having the EVs use battery power during the day as long as they are incented not to charge during the day.

    Disclosure: I also have a heat storage technology that could use such a nightime minimal rate.

  3. [...] ReNew Canada – Leading the Charge [...]

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