NRG Restructures Its Business – Money-Losing EVSE Division Shifted To GreenCo.

OCT 11 2015 BY MARK KANE 33

NRG Reset

NRG Reset

One of the latest NRG eVgo Freedom Station

NRG eVgo Freedom Station

NRG announced last month “NRG Reset“, which will affect mainly its solar and charging divisions.

In an excellent blog post, Navigant Research’s Richelle Elberg, notes:

“On September 18, NRG Energy announced a restructuring designed to firm up the balance sheet of its core business and move the cash-losing solar and electric vehicle charging businesses into a new company, dubbed GreenCo. NRG’s stock has fallen by a third this year, and with interest rates poised to rise, investor pressure forced the move.”

NRG intends to provide GreenCo with $150 million for maintaining financial discipline.

NRG CEO David Crane said:

“Now is neither the time to abandon GreenCo nor to transfer its full value to someone else, but it is very much the time to impose a new higher level of financial rigor on GreenCo befitting the type of capital discipline imposed on entrepreneurial startups by venture capitalists.”

NRG Reset

NRG Reset

The electric charging division, EVgo, which we believe is a money-losing division, will be included in GreenCo together with solar.

Only time will tell whether this means lower investment and slower expansion of the charging network, but we are pretty sure this move is a result of fulfilling a $100 million dollar legal commitment the company was forced to employ by the government as penance for some prior wrongdoing (over-charging of Californians during the energy crisis of 2000-2001 on their monthly bills).

According to Navigant Research, outlook for solar doesn’t seem too strong:

“But 18 months later, the losses at GreenCo have become too much for NRG’s investors to stomach. I looked at other public solar companies and, sadly, analysis of SolarCity’s financials don’t fill me with hope, either. The long-term lease model and aggressive marketing employed by solar firms recently have ballooned losses and reduced working capital, and long-term debt has grown.”

Both the solar and charging infrastructure businesses probably need to be more patient.

Source: Navigant Research

Categories: Charging

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33 Comments on "NRG Restructures Its Business – Money-Losing EVSE Division Shifted To GreenCo."

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People tailgate with Escalades, not PHEVs. I still can’t figure out why the only NRG charger I’ve come across has been at Patriots stadium??

In DC it’s very much the same. NRG installed lots of Solar at the Redskins stadium and I believe they have done it at the Philadelphia Eagles’ stadium too. I think, they have a contract with the NFL.

The “Linc”, home of the Philadelphia Eagles, ha a solar array(NRG), but no public chargers of any type as far as I am aware. You would think that they’d have L2 or even L3 setup, but they do not. Funny to that one of the players(Connor Barwin)dives a Tesla. Last summer I attended a Phillies game (Citizens Bank Park is right next door) and ran into a real problem due to no nearby charging. I made it home in my Mitsubishi I-MiEV Ok, but it was close. My mistake by not fully checking, I know.

Lou

The NRG station at Gillette Stadium is at Patriot Place, the adjacent shopping center. No tailgating at that location. There are three CHAdeMO chargers on Route 1 not far from the stadium, so they’re the best places to charge.

My Leaf has made it to every Patriots Game for the last year and there are a couple of Teslas as well. So, it’s not just Escalades.

If you’re looking for NRG stations in the Boston area, they’re located at the Simon Malls mostly. I’ve mainly used them when I travel in Vermont where they have quite a few locations.

Out here in California their charger are in much more sensible locales… Premium outlet malls and such… they work well and add great value to range extension for small battery EVs like my Nissan LEAFs, Kia Soul EVs, Volkswagen eGolfs Chevy Spark EVs BMW i3s or Mitsubishi iMievs. All of which have DC Quick Chargers.

It does not surprise me in the least that NRG is losing money on their electric vehicle charging stations. Even though I am a evGO customer and I try to use their charging stations when I can, I think the entire business model NRG has imployed for siting chargers is very questionable. NRG tends to cluster chargers in cities, some located within a few miles of each. Did I say questionable? I meant stupid. I understand the concept that clustering chargers allows people that can’t home charge, such apartment dwellers, access to a charging. But electric cars are still relatively expensive and people who buy them are probably going to be able to home charge. Clustering chargers and expecting people to use them all the time is ridiculous. If a person home charges then most trips will be within the range radius of electric vehicle, which is also where the clustered chargers are. Most people are not going to travel outside of their home charging range radius because there are no charging stations outside the radius. NRG should have followed the Tesla model and spaced a lot of thier charges along highways. I love my electric cars and being able… Read more »

HAHA, NRG apparently did this to avoid JAILTIME for the CEO, for bilking California Ratepayers during the ENRON time-frame.

So they don’t seriously care if their chargers are “stupidly placed within a few miles of each other”.

Now, since everyone forgot about NRG’s larceny, they’re dumping the, effectively court ordered restitution.

So looks like the subsequent divested company is going to soon go ‘tits-up’, or else they must find a way to increase revenue and/or lower costs to make a go of it.

So enjoy all the fast chargers while they are there.

That is exactly what I am thinking too. Looks like they are separating the charging station unit (of which a large part was established to satisfy the settlement with California) to let it die off without affecting the main company. However, I’m thinking California would have at least something to say about if they really do that.

There’s a huge difference between Teslas and every other EV. Teslas go 200-300 miles and can get 165 miles back in 51 mins on a 90kW Supercharger. Supercharger charging speed drops after 80% charge which is 165 miles on a Tesla P65 or more on newer Tesla P80 or higher. On the other hand, every other EV, such as Leaf, goes 84-107 miles and can get 67-85 miles in ~30 minutes on a CHAdeMO charger. So with Tesla, they can space charger 160+ miles apart and you can drive 3+ hours between having to eat while charging for an hour. With every other EV, they have to add a charger every ~60 miles and EV drivers get to drive an hour, then sit around for 30 minutes. It’s pretty hard to space chargers every 60 miles on every route and few people will be willing to stop for 30 minutes every hour, so I don’t think long-distance charger routes are a viable business model until EVs get to 200 mile range at a bare minimum.

I agree with you that non-Tesla EVs need far more range but I think you’re very wrong that highway charging is not a viable business model. The Tesla Supercharger stations I’ve seen have have six or eight chargers so the the charger per mile density is actually pretty dense. By contrast evGO usually has only one fast charger even at their most popular charging stations. Even at 50 miles per charging station evGO would still have far less chargers on the highway than Tesla. ChargePoint is working on doing exactly that up and west coast, install DC fast chargers every 50 miles. Speaking from experience, have chargers every 50 miles would make a huge, huge difference as opposed to most long stretches of highway not having any chargers at all.

Dan, You’re saying that evGo should employ the Tesla model? You do realize that Tesla is giving electricity away for free because they are selling $85,000 cars, right? So evGo is supposed to do what exactly, start making and selling $85,000 cars so that they can give you electricity for free?

You also said that they should sell you electricity for less than you pay at home, so that they can get more business. Where do you think the electricity comes from? Hampsters on a wheel inside the charging station?

You know the part in The Wire where Prop Joe says “Buy for a dollar, sell for two?” If you’re not familiar, maybe you should watch The Wire. Not only will you enjoy a quality tv show, but you’ll get a good lesson in economics.

Speaking of which, even if evGo does go out of business, someone will buy up their assets, just like they did with Blink. Those chargers will be around, even if evGo isn’t.

It appears that you missed the whole point of my post. The post relates to location of chargers, not to charging cost. If you really think that my post states that evGO should charge less than it cost to home charge then you need to read the post again because I said nothing of the sort.

Car charging is, and always will be, a money loser. Tesla called it, and simply solved the problem themselves. We charged outside of the house occasionally when Blinks were still free, but it was almost always vanity charging, not because we actually needed a fill-up.

On my recent trip from Texas to Colorado and back several of the charging stations I used were free. There’s many reasons why a charging station might be free and many ways for the operator to make money on the free charger. The usual reasons are to attract costumers and to promote electric vehicles. Here’s a list of some of types of places I found free charging; casinos, hospitals, downtown parking garages, city cultural districts and event arenas. Of course all these places expected me to spend money near by, which I usually did. I don’t have fast charging capabilities on my car so these free L2 charges charged me as fast as any other charge I could get. Electric vehicle charging is still a new business type. With any business there is risk. It’s probably going to be a few years before these businesses get their business model down. None of us should be surprised when a few charging companies disappear but that’s in no way an indication that money can’t be made with electric vehicle charging using a good business model.

Interesting article and comments. I didn’t know NRG was forced into this by the government. The whole charging business is a tough nut to crack but I agree with Dan’s comment that opportunity charging is not the correct model. I think Tesla’s model is the best one.

In a sense it’s like they are just trying to prove it won’t work because they are being forced to do so. Kind of…….”see we told you this would not work. Our old central power plant model is the only good business model”. Much like the legacy auto manufacturers that are being forced to make electric cars. They deliberately put out a product that people won’t buy just to prove that it’s a bad business model and the only good model is the old one (Nissan being an exception IMO and GM somewhat).

In the end the legacy utility companies and the legacy auto makers will just die. They will stick to their old business model till the end. They will just go down with the ship.

The only companies that will make it are the companies dedicated to the new model like Tesla, Google, and (soon) Apple.

Unfortunate that their EV business is not doing well – In SoCal they have reliable and well-situated fast charging stations – particularly along the 405 and 10.

If eVgo (now Greenco?) goes belly up and removes their DCFC, guys with CCS are up the creek as eVgo are pretty much only available CCS.

I guess they can go back to gas cars for long distance. I hope my gas car still runs if that happens; I haven’t started the damn thing in months!

There not any CCS chargers in Texas and the CHAdeMO chargers are clustered in the cities where people home charge. So if evGO did go belly up I’m not sure many people would notice in Texas. Of course that’s the problem, few people really need or use the chargers evGO has installed.

Fewer people are willing to stomach their $10 fee to charge. That’s like paying $5 for a gallon of gas and having to wait 30mins. Not to mention you’ll have to hope that station is working and nobody else is there.

Comparing the cost of gasoline to the cost of charging is irrelavent on many levels not least which is you are comparing to electric vehicles that can get 200+ MPGe. The real cost comparison for electric vehicle charging is between home charging and public charging. There is price gouging in public charging but a lot public charging is still free including at evGO stations under the Nissan “No Charge to Charge” program. I think convience is the primary factor in where you charge and it’s hard to beat home charging for convience. I think price has little to do with the NRG charging station difficulties. If you need the charge you pay the price and hardly think twice about it. The problem is too few people NEED to charge at NRG charging stations.

EV getting 200+ MPGe? Which one, and how? Paying base rate ($0.19/kWh) and $2.70/gal, Tesla S pays equivalent of 45 MPG gas car with SparkEV not much more than 55 MPG gas car. Even solar is not free, and it’s about $0.08/kWh when amortized over its lifetime in my area.

eVgo DCFC rate is actually cheaper than charging at home at base rate in CA. With membership fee, it gets cheaper the more you use them.

But the problem with DCFC now is “no charge to charge” program. Leaf is especially bad due to its awful “slow charger”

My FFE is rated at 105 MPGe but achieved 200+ MPGe many times on my recent trip from Texas to Colorado and back. I had to extend the range as much as possible to make it between charging points. I tested my FFE before the the trip and determined that it used 163 Watts per mile at 40 mph. I did a lot of legs at 40 mph but I did not once have to call for a tow truck because I ran out of charge. I’m sure your SparkEV could get 200+ MPGe if you really needed it to. The rest of your post appears very subjective.

I could get 130 miles range at 25-30 mph without stopping with SparkEV, so that’d be 250+MPGe. But I’d hardly call that useful. Freeway at 55 mph is 5 mi/kWh, or 170 MPGe, but my out of pocket cost is still only 55 MPG.

Rest of the post subjective? How? What is subjective about the numbers I show? It looks like InsideEV stripped out the links to my blog explaining how the numbers were achieved.

***mod edit (staff)***
Just to update you on that, the system put all your comments into moderation because of the frequency you linked the same page/website – specifically when you hit 15 times over 5 days.

We had to go back and fish them all out, but removed ~1/3rd of the linkbacks in your comments to get you back under the filter requirements. We’d suggest perhaps holding it down to one link a day to your blog or it will probably keep happening.
***mod edit***

Comparing EV MPGe to ICE MPG only is only valid under very strict parameters, such as the cost of gas, the cost of electricity, the vehicle energy usage per mile. Someone might also want to include the social cost using different fuel types. Anytime you go outside these very strict parameter then the results, assuming they were correct to begin with, are no longer valid. Discussion on how to perform these kinds of calculations can be endless. For example, the cost of fueling an EV that gets to charge for free occasionally cannot be compared to an ICE car filling up with gas. I think the whole fueling cost comparison between EVs and ICEs is pointless, non productive and can be easily manipulated based on the authors point of view.

Affirmative… Plus one…

The various free charging programs for Leafs and i3s have overall be detrimental to DC fast charging in my opinion. It used to be that you could rely on DC fast charging to make trips from the SF Bay Area to Sacramento and other nearby areas, but now with these free charging programs, most of the DC fast chargers are in constant use by locals who are DC fast charging not to go a longer distance, but to save money over charging at home. I think the majority of people who can DC charge for free are not using it for daily local charging, but it only takes a small percentage of abusers to consume this rather limited resource. IMHO the right long term solution is neither to provide free charging nor to attempt to make chargers pay for themselves by charging a high premium over electrical costs. The cost to charge should be enough to cover the electricity plus the maintenance costs, making it cheaper than gasoline but expensive enough to discourage those who could charge at home. This means of course a different source of money needs to pay the capital costs to install the chargers in the… Read more »

Actually sounds like a success story to me. Sounds like you need more charging stations, not fewer cars with fast charging capabilities. That also means that dealers sold a lot of fast charging cars in your area with the fast charging subsidy associated with them. More subsidies means more money for more charging stations. It sounds like this problem will work itself out eventually. I’m pretty sure NRG wishes all the charging stations had your problem.

Merely having more charging stations won’t help if more cars come with free fast charging. The problem is especially bad with Leaf’s bad fast charging; it’s sometimes slower than L2 2kW!

eVgo DCFC rate is actually cheaper than charging at home at base rate in CA. With membership fee, it gets cheaper the more you use them.

There is no future in slow DC chargers under 100 kW. The existing CHAdeMO and CCS Combo 1 standards under 200 amps are dead on the vine. The EVSE’s cost too much for the utilization level and demand electricity costs to compete effectively with nighttime charging.

The “$150 million” quoted above refers to savings by NRG going forward, each year. The amount of VC to fund GreenCo is $125. Think funds are for all GreenCo divisions, not just eVgo.

“Mr. Crane said the enterprise will receive up to $125 million in additional support from NRG but thereafter will have to sink or swim on its own and manage its cash outlays like other startups.”
http://www.wsj.com/articles/nrg-energy-unveils-moves-to-reduce-debt-cut-costs-1442587204

Looking at GreenCo capital funding, there is a nice graph showing consistent funding through June 2016, there-after it decreases each month reaching zero by Dec 2016.

Note: the restructuring of eVgo may also impact the EZ-Charge (.com) No-Charge-To-Charge Program created by a partnership between NRG & Nissan that was stated to last through mid-2019.

Yes, sounds very much like hanging a liability out to dry

The only positive in all this is that it may hasten the demise of technologies (CHAdeMO and CCS) that are only holding back EV’s in the long run.

The current CCS Level 2 (SAE J1772 DC Level 2) standard is rated for 100 kW and is probably going to be upgraded to 150kW soon. A CCS Level 3 standard will probably come out soon based on 800 Volts and rated at 300 kW. The CCS L3 cars will probably be able to accept a CCS L2 and a CCS L1 charge (24 kW) just like a L2 car (SAE J1772 AC Level 2) car can accept a L1 charge. I don’t really know much about the CHAdeMO standard but I would suspect the standard to up upgradable like the CCS standard. I wouldn’t expect any of the charging standards to disappear any time soon unless the government steps in and requires all manufacturers to use a single standard, which is not very likely.