Public Charging Stations Being Hit With Big Demand Charges, What To Do?


Rocky Mountain Institute’s latest study, EVgo Fleet and Tariff Analysis, highlights the devastating effect that demand charges can have on DC fast charging business.

As it turns out, special charges based on the peak rate of electricity consumption in a month at certain time, are applied in addition to the cost of the electricity itself, and in some cases could exceed even 90% of total electricity costs overall, which make recharging much more expensive for the operator of the station, and ultimately the consumer.

EVgo and ABB deploys Nation’s First High-Power Electric Vehicle Fast Charging Station – 150 kW

For charging station owners, the high costs also strain the business models and profitability of the business, which leads to less infrastructure overall.

The Rocky Mountain Institute’s study is based on data from 230 EVgo charging stations (2016) located in California.

When chargers power outputs move from the 50 kW standard of today, to 150 kW or even 300 kW, the problem will get even bigger.

The problem was considered by the California Public Utilities Commission, and already two utilities – Southern California Edison and San Diego Gas & Electric have proposed new rates that would lower the demand charges for public EVSE operators specifically.

Hopefully, decisions like that will come into force making charging business more viable.

The full report is below, and while it doesn’t touch on energy storage solutions specifically (we imagine the report’s primary goal was to deal with/pressure grid power providers), the concept to use on-site battery storage to “peak shave” those high demand times also has a lot of merit that we are starting to see be utilized in some rare cases.

“Rocky Mountain Institute’s new study, EVgo Fleet and Tariff Analysis, examined every charging session in 2016 on all 230 of charging-infrastructure provider EVgo’s 50-kW DC fast-charging stations in California. The study showed that demand charges can be responsible for over 90 percent of a charging station’s electricity costs, depending on the tariff and the extent to which the charger is used (its utilization rate). Demand charges are especially challenging to new charging infrastructure that has not yet reached a sustainable utilization rate. This issue will be compounded by the deployment of next-generation fast-charging stations, which will feature higher-power DCFC (150kW or higher).

A sample monthly load profile is shown in Figure 1. It shows the energy sold per month (measured in kWh) and the monthly peak demand (measured in kW) for a DCFC located in Northern California. It demonstrates a large (up to 70 percent) variation in energy sales from month to month, and a relatively small (16 percent) variation in peak demand each month. This type of variation suggests a potentially unprofitable charging station, because the commercial electricity tariffs that these chargers are on will typically derive a significant portion of the bill from monthly demand charges (where the variation was small) while the revenue would primarily derive from the number of charging sessions and kWh consumed (where the variation was large).”

Figure 1: Monthly energy use and peak demand of an individual EVgo host site (Rocky Mountain Institute)

“This disconnect between revenues and costs will not lead to a healthy ecosystem of vehicles and charging infrastructure. We’ll need something better if we are to achieve the societal objective of vehicle electrification.

Rate design theory for public DCFC

EVs have only recently become a sufficiently significant type of load to warrant special tariffs, and so there is not yet an established practice for EV rate design, especially for public fast charging. However, in light of expected growth in EV ownership, unique charging attributes of EVs, and resulting effects on electricity demand, attention is now being paid to designing rates for EVs.

Tom Moloughney checks out ChargePoints new 400 kW charger hotness at CES in Las Vegas In January. A unit that is sure to take peak demand charges to another level in California and elsewhere around the world.

Traditional demand charges were designed for small-to-medium commercial customers and industrial customers, not public fast-chargers. Operators of these chargers have little control over when customers use them, and the chargers have widely varying utilization rates in widely varying locations and site types. In short, these charger networks look and behave nothing like a large commercial or industrial facility, but they are being billed as if each location is a separate commercial facility. Demand charges tend to shift system capacity costs onto customers with peaky demand profiles, and put an undue cost burden on those who may happen to have very brief and occasional demand spikes, like DCFC owners. To avoid such a cost-shift, system capacity costs should be recovered via energy sales, not separate demand-based charges.

For tariffs that apply to public DCFC, demand charges for distribution circuit and upstream costs should be deemphasized—or better, eliminated. If demand charges must be a feature of tariffs for EVs, then those charges should be time-varying and reflect actual system costs at a given time, in keeping with the principle of sending accurate price signals based on marginal costs. Customer-specific demand costs, such as the transformer and service drop, can be recovered via a fixed fee, but the circuit costs should not; those should be recovered via a time-of-use (ToU) rate for energy, to assure that sporadic-demand customers who can share capacity get the cost-saving benefits of that sharing.

Best practices

In order to promote a business environment conducive to public DCFC charging stations, electricity tariffs for such stations should have the following characteristics:

  • Time-varying volumetric rates for electricity, such as a ToU rate. Ideally, these volumetric charges would recover all, or nearly all, of the cost of providing energy and system capacity. The highest-cost periods of the ToU tariff should coincide with the periods of highest system demand (or congestion) to the maximum practical degree of granularity. An “adder” can be used to recover excessive costs for distribution capacity, but only costs in excess of the cost of meeting the same level of usage at a uniform demand rate, and ideally the adder would be designed in such a way that a customer could adjust demand to avoid incurring the charge.
  • Low fixed charges, which primarily reflect routine costs for things like maintenance and billing.
  • The opportunity to earn credit for providing grid services.
  • Rates that vary by location. For example, a utility could offer low rates for DCFC installed in overbuilt and underutilized areas of the grid, in order to increase the efficiency of existing infrastructure and build new EV charging infrastructure at low cost.
  • Limited or no demand charges. In most cases, demand charges should be unnecessary. Where demand charges are deemed to be necessary, it is essential that they be designed to recover only location-specific costs of connection to the grid, not upstream costs of distribution circuits, transmission, or generation.

Our analysis shows that reducing or eliminating demand charges for the commercial public DCFC market is consistent with good rate-design principles and helps to achieve the societal objective of widespread vehicle electrification. Recovering nearly all utility costs for generation, transmission, and distribution through volumetric rates is appropriate for tariffs that apply to public DCFC. Indeed, these tariffs need not even recover all costs that the system incurs to support these chargers. Some portion of those costs could be justifiably recovered from the general customer base, because public DCFC provide a public good in the form of reduced air pollution and other local economic benefits.

Public fast charging as a societal objective

We should recognize that creating a business opportunity for companies that provide public EV charging services is a societal objective, in the same sense that it has been a societal objective to provide drivers with access to gasoline refueling stations. These companies should be able to earn a reasonable profit by providing a valuable service and maintaining universally available charging equipment in serviceable condition. That is not currently the case.

To take an alternative approach to achieving this objective directly, we could design a tariff by working down from a cost that will be attractive to EV drivers, rather than by building up from the cost basis of the utilities. From that consumer cost target, one could deduct a reasonable profit margin for the charging companies, and then set the result as the cost ceiling for a tariff that applies to public DCFC owners. Whatever missing revenue there may be between the revenue potential of that tariff and what is deemed to be the actual cost of service could be recovered from the general customer base on a cost (not cost-plus) basis only, to reflect the fact that there are numerous EV-to-grid value streams that remain to be recognized in the tariffs, including the nebulous, yet real, value of enabling greater renewable energy penetration. As RMI elucidated in its 2016 report Electric Vehicles as Distributed Energy Resources, and as both San Diego Gas & Electric and Southern California Edison have acknowledged and piloted to various degrees, what we should be aiming for is a future in which EVSEs doing “smart charging” can supply a variety of services back to the grid, in addition to consuming energy from the grid.

Should the state of the art in EV rate design evolve and make it possible to quantify and compensate the various value streams in the EV-grid interaction more discretely, a more sophisticated approach to EV tariffs could be devised. But at present, given the great importance of the societal goals embodied in the hopes for much faster EV adoption, the emerging nature of the underlying EV and telematics technologies, and the difficulty of the existing tariff regime for DCFC owners, a tariff meeting the criteria we have identified here can strike an appropriate balance between the theory and the practice of EV rate design, while supporting established policy objectives and design principles.”

Hat tip to sven!

Category: Charging

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48 responses to "Public Charging Stations Being Hit With Big Demand Charges, What To Do?"
  1. Ocean Railroader says:

    I have two ideas to fix this. The first is EVgo should get several giant batteries and take power out when the grid goes negative due solar power.

    Also the power companies should have a two hour happy hour for electric car quick chargers to encourage people to plug in when the solar power starts flooding the grid.

    1. Zim says:

      Ah, that’s brilliant! I am sure they never thought of that. Goodness I hope they read your comment.

      1. Mick says:

        Zim, at least he attempts to add value through his opinions. You are just a waste of human footprint in an overpopulated world.

      2. Pushmi-Pullyu says:

        It’s called a “discussion”. Your attempt to shut it down is not only not helpful, it’s downright anti-social.

        Thankfully, nobody died and had you appointed you Internet Discussion Policeman.

        1. ¯\_(ツ)_/¯ sven says:

          Oh, good grief! If this ain’t the pot calling the kettle black, I don’t know what is.

    2. SJC says:

      They could put CAES under ground then peak shift.

  2. (⌐■_■) Trollnonymous says:

    Time for Tesla to put up large solar arrays at the SC’s with a boatload of battery storage.

    Go off the grid, then give the power companies the big fat….

  3. Nix says:

    Tesla figured out the answer to this way back in 2014, and installed a “400 kilowatt-hour battery pack at the Tejon Ranch supercharger”.

    They found this was the perfect solution for superchargers having an “incredibly peaky load”.

    Straubel has graphs somewhere on the net of how the battery packs completely stabilized grid demand. Too lazy to go find it now…

    The backup battery could be much smaller for those smaller charging stations, with much less peak demand than 6 superchargers running at 50-120 kW.

    1. ModernMarvelFan says:

      That is ultimately the only solution.

      But that 400kWh is barely enough to even support 10 cars each for about 30 mins charging. That is also one of the busiest location along I-5.

      Now, if EVs becomes much more widespread, this would have to be done at almost every busy interstate charging station which just made the cost of the station more expensive.

      Of course, the long term public charging business model is always questionable anyway.

      1. menorman says:

        I feel like installing a 400kWh battery pack is cheaper than digging several large holes in the ground for a set of gas and diesel tanks.

        1. Doggydogworld says:

          400 kWh at PowerPak prices is $100,000. And, as noted, that plus a bank of chargers will only service a handful of cars per hour.

          For similar money a tank and a couple pumps can service 100+ cars per hour.

      2. Pushmi-Pullyu says:

        “Now, if EVs becomes much more widespread, this would have to be done at almost every busy interstate charging station which just made the cost of the station more expensive.”

        …and that’s why it would be far more cost-effective to use battery storage as a centralized system for grid stabilization, rather than requiring every individual EV charging location to do it independently. In other words, the electric utilities should be installing their own grid storage systems to smooth out demand, not imposing ridiculously high demand charges on customers.

        I’m fairly certain that in the long run, that’s what’s going to happen. The cost/benefit analysis and the economics are going to push very strongly in that direction.

        The problem under discussion here is how to deal with what I hope will be only a short-term problem that hopefully will disappear within a few years.

      3. Someone out there says:

        The battery isn’t supposed to run the chargers by itself but just to provide a boost during early charging to avoid the peak draw. When charging tapers off the grid can handle it without the battery

        1. As in, Fire Trucks: the Pumper Truck usually has its own Tank as well!

          For DC QC, this article seems to look at the aggregate Monthly Numbers, but we see no info on the Moment to Moment, or Minute to Minute Comparisons. I believe that is a more usefull study, since a large but continuous load is not so much in demand charges, but an infrequent large load, over usual small loads, is, as I understand this, hit with Penalizing Spike Tickets, called ‘Demand Charges’, just like you get a ‘Speeding Ticket’ whem you are caught on the moment for speeding!

          On the other hand, if you are flowing along with hundreds of cars, all doing 15 over (the ‘Speed Limit), your odds of a speeding ticket are far less, but bump it up to 25 over, and move out to the fast lane, and you increase your odds of a ticket! Kick it up to 50 over, and you stick out like nobodies business, and if State Troopers (or Provincial Police), or City Cops are Aroud, you will get some update on the costs of Speeding very quickly!

          With the Grid though, they are always monitoring, every second, and every Wh, never mind just kWh’s!

          So DC QC operators need to learn how many seconds at each dispensing unit or site, is drawing a load above the average load, which provides them with some data on how much stored buffer they would need to cover those peak demand moments.

          People are always discussing here how quickly DC Fast Charging slows down on their own cars, so if such real time activity was logged by the DC QC unit, providers should be able to see their Peak Durations, versus their average Load during a Session, over a given Minute of the Day, and over each 15 Minute period of each day.

          For example, if in any given month, Fridays and Sundays have the biggest peaks over average, due to weekend travelers, those would be the periods most needing to be buffered.

          In worst case, users could be asked to do a video of each charging session, on their smart phones, and send it to them for analysis! Or send it to insideevs to do the analysis, identifying the charging units address, and vehicle using it. Then this site could aggregate it, and post an article for all to read!

    2. SparkEV says:

      Some will argue split water to make H, and throw away more than half the energy when converted back to electricity via fuel cell. If they’re giving electricity for free due to over-production and load need to be balanced, throwing it away in HFC application while still charging high peak rates for residential customers make perfect sense for some. *smh*

  4. Mikey says:

    Just power the EV chargers with a big diesel generator. Problem solved!


    1. Didier says:

      If fact it would not be so silly if high power charging was really *only* for long distance while 95% of the time charge is made at home. At least, it is not more stupid than PHEV. Of course such stations would not be in cities but between cities.

      Of course solar is also not bad 😉 but it implies batteries and solar panels so the at the end “demand charges” may be cheaper !

      1. Tom says:

        A slightly revised version would be to use a Bloom Box fuel cell and natural gas. I know that doesn’t hit the purest note but there are now already several hundred CNG and LNG stations at truck stops on interstates due to T Boone Pickens. That means there’s a gas line running there already. A good chunk of electricity comes from nat gas anyway. A single 200KW Bloom Box and a 1MWH Tesla Powerpack and you’re fine. The Bloom Box could tool along at a steady 200KW and the battery pack could buffer. So for instance let’s say the charging station has 150kw chargers and half a dozen plug ins. That means peak demand if they were all in use simultaneously would be 900kw. Sure that would quickly drain the batter pack and the 200kw Bloom Box wouldn’t fulfill that need but you won’t have 6 vehicles sitting there all the time in the same way no gas station has all pumps occupied very often. Any time there is more than one vehicle charging, the battery is losing charge. With 1 or zero vehicles there, the battery is filling up. It would naturally have little use overnight and you’d start each morning with a full battery pack. Frankly amp up the Bloom Box and battery and have the truck stop run off it too.

        1. That part: “Frankly amp up the Bloom Box and battery and have the truck stop run off it too.”, will probably be of use more so once these operators better learn when, and for how long, their peaks are, and if they hit in predictable cycles, like Weekends, when more people take longer trips.

    2. zzzzzzzzzz says:

      “Just power the EV chargers with a big diesel generator. Problem solved!”

      Well, Tesla does it sometimes. But it doesn’t look politically correct to unwashed masses of non-believers 😉 Forcing ratepayers to pay to upgrade grid and peaker plants to handle higher peak power would be much more convenient 😉

  5. Didier says:

    If operators charge such “demand charges” it may be for a good reason, ie it costs them.

    But the problem may disappear without doing anything when more people will use such high power DC stations since it will be used all the time and so the peak will be closer to the average.

    Anyway, having 100 kW (or more) charging quite more expensive than home 3 kW ou 7 kW charging makes sense and just means that owners must always charge at home when possible. At home or “at destination” has would say Tesla for 22 kW charging out of home. A car is most of the time parked, and electricity is everywhere, so do we really need 100 kW charging ? And even at 100 kW you must wait, so I would say it is better to have low power charger where you need to park anyway (3, 7 ou 22 kW), than a few 100 kW in stations where you wait. I definitely do not mean that high power charging stations are useless but just that it could be used only as last resort.

    1. Tom says:

      I think utilities (or at least ours) do not charge peak demand off your peak per se but rather the utility’s peak. They charge more during their peak time.

      I completely agree with your fast charger assessment. I think the over-focus on public high speed charging is misplaced. Soon charging rates will be fast enough that people will use the charger as a destination just to charge and if it is under 15 min then you’re going to see ‘gas station’ type businesses with these. In this scenario the interstate trucks stops I outlined in my previous post would be the right spot for these. 65% of adults own their own home. Of those who rent, a very large chunk (maybe not majority but a large chunk) also have access to an electrical outlet where their car is parked such as a garage. My opinion is that the right way to go with places such as workplace parking lots, malls, grocery stores, strip malls, etc it to put several plain old low cost 110/220 volt outlet posts like you’d see in a campground. If these were common you’d just pull into the parking lot, plug it in, go into the story and do your business and then leave. You might only pick up a few miles but if these were commonplace the next location you go to would also have one.

      Additionally with vehicles like the Bolt coming into the market, the need to charge away from home will drop dramatically. Only during a long trip would you need that service which leads me back to trucks stops.

      1. DJ says:

        What are you guys talking about?? Faster charging is a requirement for EVs to become fully adopted. I just drove 400 miles. 200 miles from my house, was there for an hour and then turned around and came home. Where exactly am I supposed to charge if I had an EV overnight in this scenario? How long are you expecting me to wait for it to be recharged??

        The only way EVs become fully adopted is for the convenience factor to be on par with gassers. Sure my day was a rare event but knowing that I have to do it now and then you better believe I wouldn’t get an EV if I had to park and recharge for 10 hrs during the trip. The convenience is really what PHEVs such a great option right now. 170+ mpg lifetime and no excessive waiting when I don’t want to or can’t.

        1. Didier says:

          The point is not that you did a long trip with no time at destination but how often you do it.

          Nobody said that high speed charging is useless just that it must be used as last resort, while some articles suggest that it is the new model to reach probably because it is what “we” do with petroleum cars, but petroleum cars cannot charge at home !

          If 400 miles in the day is rare and most of the time you can charge at home or at destination with 22 kW you can probably pay more when you drive 400 miles. And this “high” price will in some way garanti you no queue at the station because all the drivers who have the opportunity to avoid the station will do it.

          My EV car is very old (almost 20 years, a PSA 106) so long trips are out of question ; but my brother has a 41 kWh Zoe for every days and most week-ends, if he wants to drive more than 300 km in a day (or 600 km in a week-end) he rents a petrol car so for him if a very fast charging station was available on the trip he would be happy to pay even the price of one day rental.

          So of course having high speed charging points everywhere would be convenient, but the charging operators must win money so the price will be very high. Because of the “demand charge” or because of the batteries to avoid it, but also because a 100+ kW station costs a lot to buy, install, maintain, repair, etc.

        2. So in a 2 car family – 1 PHEV, & 1 BEV? Would that work better than just 2 ICE Vehicles? Particularly if the PHEV got 80 miles to 100 miles all electric range, before needing the gas engine?

          Sure, some were fine with the original Volt, with 35 miles AER, and still would be today, and so older used Volts still hold their price OK!

          Yet moving the option up to 80-100 miles takes a bigger chunk of the commuter croud off gas, and still gives options for trips easy.

          If only they had more than the Volt to choose from, since it is so small for big trips and bigger families!

          OK, the Pacifica Hybrid is comimg! But GM could get a PHEV or EREV Malibu going to capture some of that audience! It should be able to deliver 40-42 miles all electric with the same 18.4 kWh Volt Batteey Capacity!

      2. Pushmi-Pullyu says:

        “I think utilities (or at least ours) do not charge peak demand off your peak per se but rather the utility’s peak. They charge more during their peak time.”

        Electric utilities do impose “demand charges” when your building or installation suddenly starts drawing a lot more power than its average. It takes a few minutes to spin up those standby “peaker plants”; they can’t just push the rate at which electricity is supplied up and down by moving a giant rheostat!

        And that’s why electric utilities need to start installing grid backup systems, banks of batteries or some other power storage devices. That way, they will be able to instantly ramp up or down grid power to match demand, on a second-by-second basis. Such storage systems will help eliminate blackouts and short-term brownouts, too.

  6. gears says:

    I plugged in my electric car at my place of business and caused a spike 1kw above my GS-1 rate threshold with SCE and now have to pay 30% more roughly to power my business. I am now is GS-2 (medium manufacturing rate). It was an accident that my setting on my car was set too aggressively, but they don’t care.

    1. Bill Howland says:

      Sorry to hear about your plight GEARS but I bet you won’t be charging at work again anytime soon. I ran into a similiar scenario at the “DRIVE ELECTRIC” thing in Ithaca, NY last year, where, since I was desireous of at least showing how a car charges, that I plugged into a tatoo shop’s 110 volt convenience outlet, with the proprietor’s permission. To my horror, I didn’t think till later of the fact that this small shop STILL had a demand meter, and I owed him $15 for $0.45 of electricity I used, but wanted to cover his charges that I gladly proffered and paid so that he wouldn’t get super-upset when the monthly bill came. Next year I just wont plug my ELR in.

      I’ve been mentioning this real world issue of Demand Charges for the past 6 years on and off, and the basic lowest cost choice seems to be – “Subsidize the cost of the electricity so that we can have big Public Chargers”.

      Tesla of course, gets moderately large public chargers for the S’s and X’s, since they have an impressive Cash Flow system – in Musk’s own words, the SC cost is ‘Not Material’. That’s a nice place to be.

      The analysis missing of course, is the trade – off between fast charger expense, which SOMEONE HAS TO PAY FOR, whether its taxpayers in general or, the people who actually use the devices, and whether it is ultimately better to just forget the fast chargers period, and take vacations in the Prius Prime, VOLT, and other PHEVs where they rely on the existing “Ultracharger Network”, that is, gas stations.

      I’ve also suggested a variation of the above reader’s comment to have a Natural gas generator to run the fast charger to avoid the demand charges, provided a small natural gas (methane) line is nearby – something likely in except the most rural areas.

      A co-located generator is not THE AFRONT that it first seems, since it is merely moving the typical natural gas fired generator a bit closer to the car charging facility.

      The basic little problem will be having the ‘controls’ run off a small battery or existing tiny utility service, and then having the main power come from a generator which of course will need a start crank signal from the fast charger dispensory device.

    2. The worst part of all of this, is you had no live feedback for that referrence, so you were ‘Fling Blind!’

      If there were predictive analysis tools that you could access, that says: “Charging at X kWh? Are you sure? That will increase your X$ cost into the next level and cost you $2X! Proceed?EVAdjust?

      Then they would not get hit with sudden high or unplanned demand as much, and users could decide if Time or Cost should be the Priority!

      Imagine Flying a Plane without knowing your fuel level, consumption, or if you had unplanned headwinds! That is the way much if the world of EV Charging is on the Grid, particularly away from home charging events, on public chargers!

      1. Pushmi-Pullyu says:

        Yes, we definitely need to move into the 21st century by adopting “smart grid” tech. Unfortunately, governments at both the Federal and State level seem to be entirely disinterested in this sort of prudent investment in the future, at least in the USA. I fear we will have to watch as other countries race ahead in the overall tech level of their infrastructure. 🙁

  7. MikeG says:

    There are two options for how to apply demand charges for EVSE:
    1) Treat EVSE identical w.r.t. demand charges and let EVSE owners manage the problem through reduced charge rate, adjusted charge prices and/or prevent usage at certain TOD or when approaching next billing tier.
    2) Recognize there is a public benefit of fast-chargers and adjust how the demand charges are applied these customers. Are these charges reasonable given the intermittent demands of EVSE.

    1. Right: Post the info on a sign, stating that this charger may adjust charging rates to avoid demand charge excesses; but, to choose to accept such excess billing rates, go online and sign off on removing any limits: you will then be billed directly for excess charges! “Buyer Beware! These charges can be exorbitant!”

  8. darth says:

    Why not treat all th chargers as one entity? Then there is a demand charge, but it is spread across them all. Highly unlikely that people will hit all the chargers at the same time.

    For example, for 10 chargers if only 2 are used simultaneously the peak demand is 100kw, instead of 10 separate peaks of 50kw.

    1. GSP says:


      Your suggestion of aggregating all the DC fast chargers seems the most practical solution to me. It totally addresses utility generation costs. For transmission and distribution costs, perhaps it would be necessary to limit the geographic area over which the DC fast chargers could have demand aggregated.

      In contrast, the suggestions in the RMI report seem totally impractical and unlikely to be accepted by any utility company.


  9. Pushmi-Pullyu says:

    Let’s step back and look for a solution to the underlying problem, rather than focusing on just one symptom cause by that problem.

    The real problem is that the electrical grid, as it exists, is far too sensitive to short-term fluctuations in demand. The obvious solution is for the utilities to install sufficient grid storage capacity (using battery packs or other methods of storing power) to deal with such short-term spikes in demand. If the utility was equipped to handle those on an everyday, ongoing basis, then there would be no need for, or justification for, most demand charges.

    Fast charger companies shouldn’t have to deal with the problem by installing battery packs at every single EV fast charger to smooth out the demand. That would be a very wasteful use of batteries. It would be far more cost-effective to install battery packs where they can be directly used by the electric utility; perhaps there should be a storage bank near every electric substation?

    Seems to me the most practical near-term solution to this problem, the way to encourage a long-term solution, is for EV fast charging companies to partner with the local utility. Let the electricity provider deal with its own problems with spikes in demand, rather than force customers to pay through the nose.

    After all, don’t the electric utilities want new markets, and doesn’t EV charging represent a new market with great potential for fast growth? Electric utilities should encourage the growth of that market by figuring out how to eliminate most or all demand charges, not “kill the golden goose” by piling them on!

    1. David Cary says:

      We aren’t always talking short term demand issues. The utilities have to charge as if it were short term but there is a big issue between 5pm and 8pm in the summer here in NC. People come home and cook, run their a/c etc. Businesses (retail) still open. Much of the solar has reduced generation – although probably not the ones they build because of this.

      So when someone is road tripping and charging at 6 pm – it adds to that.

      I get demand charges. I would get a pretty big charge if I charged my cars during these time periods. I am absolutely sure that I am not causing a real problem but in the aggregate, EV charging could be.

      The problem with all of this is that I can avoid peaks – and so can many commercial customers – but fast charging is not something that lends well to waiting until 9 pm or when the sun is out. Utilities want EVs – they’ll will come up with an exemption that makes sense. But it is a tough problem.

      I love the concept of demand charges and I wish the entire residential load had them. We could stop building peaker NG plants for 10 years. We could get people used to controlling timing of electrical use so that when solar increases, we can optimally use it. EVs should charge at work from 12-2 – then we are all truly driving on sunshine.

      1. Pushmi-Pullyu says:

        What you’re talking about, David, is different price tiers based on time of use. That’s not at all the same as a demand charge. Sure, it’s absolutely justifiable for the utility to charge more on a per-kWh basis if you use electricity during a time of peak demand. That’s pure supply and demand; nothing wrong with raising the price when the overall market demand is higher.

        But no, a demand charge is essentially a “fine” the utility imposes because you, the individual customer, suddenly started drawing a lot more power than you usually do, and the utility has a hard time reacting quickly to that.

        As I said, the way to deal with that isn’t to figure out a way to deal with the fine; the way to deal with it is to eliminate the problem the utility has in reacting quickly to significant fluctuations in demand from the grid.

        Eliminate the underlying problem, and the need for the fine disappears.

        1. Bill Howland says:

          You quite obviously DO NOT UNDERSTAND how demand charges work in the continental US. They are either the:
          1). 15 minute Integrated Average
          2). 30 minute Integrated Average
          of the customer’s usage, and have been that way for at least 90 years.

          Short term flucuations are immaterial.

    2. Spider-Dan says:

      Short-term demand has been an issue for many years, which is exactly the reason peak pricing exists in the first place.

      I mean, look at California: if scheduled rolling blackouts are not enough motivation for someone (the state?) to fund massive battery packs at powerplants, why would EVs tip the scale? People care FAR more about having electricity (read: A/C) in their home than they ever will about DCFC, and yet this utility batterypack solution has never even been on the table.

      1. Pushmi-Pullyu says:

        I think we’re having a communication problem here, with using non-technical terms which have vague or multiple definitions.

        When I say “short term” demand, I’m talking about the few minutes it takes for a utility to spin up a standby power source (usually a natural-gas-fired power plant). I’m not talking about “short term” as meaning a few hours, as apparently you are.

        There are two different concerns here, and let us please not confuse them:

        1. Increase in overall daily demand due to increase in number of EVs charging. Increases in overall demand is something that utilities deal with on an everyday basis, and they plan well for them in terms of future growth. Adding EVs to an existing residential area is essentially no different, from the viewpoint of the utility, than building new houses in the area. In either case, they have to increase the daily supply of electricity available to the entire area in question.

        2. Temporary, unexpected or unscheduled surges in demand for electricity. This is what gives the engineers who have to “balance the grid” heartburn and ulcers. This is what can, if everything goes exactly wrong, cause a blackout. Utilities don’t like this at all, which is why they impose what seem like absurdly high or unfairly high demand charges. The problem here is the lack of ability by the utility to very quickly, on a second by second basis, react to local demand for grid power. As we move forward into the future, and hopefully toward a “smart grid”, this is a problem which should be greatly lessened, and hopefully will eventually disappear.

        Grid scale battery backups are not the only solution to problem #2; they’re just part of the solution. Another piece of the “smart grid” will be allowing the local utility to reduce or shut down demand at individual commercial or residential buildings. Heck, our house already has a thermostat controlling the central AC that will allow our local utility to temporarily change the thermostat setting by (as I recall) 2° F when they think it’s necessary. I expect that sort of thing to become commonplace. And that’s one way that the utility can balance supply and demand much quicker than the several minutes it takes to bring a standby natural-gas-fired power plant online.

        1. Bill Howland says:

          Why do you constantly comment on things you don’t remotely even begin to understand?

  10. Priusmaniac says:

    There should be peak rate competition between the suppliers, electronic limiters allowing business to avoid overshoot and sometimes local storage. It is those three solutions combined that must be used.

  11. DangerHV says:

    This has been a great discussion. It should be required reading by all the decision makers in the industry.
    Many solid and creative idea’s offered by the people who actually drive EV’s. It also shows how this EV community is wanting to do the right thing, and please all parties involved.
    Thanks to all!

  12. Ed Stein says:

    I wish some other companies had already figured out a successful business model to sell energy at fair rates.
    1. No monthly charges whether you use their service or not.
    2. No special cards, signup processes or membership tokens needed. Just a credit card.
    3. No chance someone will park long term in the charging spot.
    4. Other services available like air, vacuums, parts.
    5. You only pay for the energy you receive, not how long the car is connected to the cord. Temp and flowrates do not affect your final bill.
    6. Extremely little profit applied to energy charges. Profit comes from an attached convenience mart/restaurant.

    Oh wait. Gas stations already figured that out.

    I cringe at all this debate trying to figure out what already has been. Utlities need to allow kwh charges nationwide. Time-based charges are usueless in the cold north where charge rates can go from 45 kwh down to 8 kwh easily. Gas station chains that already offer chargers but through existing EV charge providers using these hopefully soon to be obsolete business practices need to go it in their own with EV charging. They have a better business model.

  13. Doggydogworld says:

    Peaky customers cost utilities more than non-peaky:

    1. They require more standby generating capacity (and/or energy storage).

    2. They require more local infrastructure (bigger substations and neighborhood transformers, fatter wires).

    Some ideas here, e.g. combining demand over all the chargers in a region, reduce the first cost but not the second.

    Fast charge stations can either pay their share of these costs or they can set up their system to be less peaky. Batteries eliminate peaks but cost a lot. So it’s a classic buy vs. build decision. Do you do your own smoothing or do you pay the utility to handle it?

    Of course there’s always a third way, the “RMI way”. Whine about how unfair the big, evil utilities are and lobby regulators to force other ratepayers to pay your costs.

  14. Spider-Dan says:

    This article is just another example of why EVs can never FULLY replace petroleum, and why FCVs must be successful in order for us to eliminate ICE cars.

    Most of the solutions here in the comments involve a lot of goodwill from private businesses willing to sacrifice profits for the common good. If DCFC is a charity project, it will never be sustainable.

    1. Bill Howland says:

      The biggest concern is how much do people want to pay for this fast charger facility?

      Someone has to pay for either:

      1). Demand charges of the unit(S) on a monthly basis – the point of this article.
      2). Providing sufficient batteries on-site, as well as inverting equipment to lower #1.

      If people want to pay for it, either through the credit card price, or indirectly through tax increases, or electric rate increases for everyone else, then it is ‘Sustainable’.

      If people don’t, then it is not.

      Of course, when politicians get into the act, their specialty is to give people largess and then convince them that someone ELSE will pay for it. Doesn’t matter to the politician whether someone else actually does, it just matters to him whether he can state things convincingly.

  15. DanDan the driving man says:

    After practicing hyper gliding and regenerative braking in a Toyota Prius for five years now doing the same in a 2017 Nissan Leaf it is really faster and cheaper just to regenerate your own electricity while driving problem solved Dandy of the