Impact of the new approved BC Hydro Fleet Electrification Rates

Impact of the new approved BC Hydro Fleet Electrification Rates

On March 26th, 2020, two new optional services were approved by the British Columbia Utilities Commission (BCUC) to support the electrification of fleet vehicles and vessels. It applies to services with a demand equal to or above 150 kW, which is any fleet of approximately 40+ electric vehicles. Three rates are now accessible to those fleet owners:

Large General Service – The “normal” rate for service with a demand equal or above 150 kW. A fixed energy charge and demand charge is applied.

Overnight Rate – No demand charge between 10pm and 6am. This rate is intended for fleet of vehicles operating during the day and charging in a depot.

Demand Transition Rate – A demand charge holiday period of 6 years. After 6 years, the rate transitions to the Large General Service.

The below summary compares the demand and energy charges for the three services. For the latest pricing, readers are invited to use the BC Hydro page. Additional costs are ignored in this table as those costs are not important for the discussion (e.g., power factor surcharge).

Large General ServiceOvernight RateDemand Transition
Demand Charge$12.22/kW$0/kW (10pm to 6am) $12.22/kW (6am to 10pm)$0/kW for the first 6 years then transitions to LGS
Energy Charge$0.06/kWh$0.0741/kWh$0.0924/kWh

Demand Charge – The problem of large fleet electrification

What is Demand Charge?

For readers not familiar with demand and energy charges; energy (expressed in kWh) is what it is stored in the battery and used by the electric vehicle to move, while demand (i.e. power, expressed in kW) is the speed at which the energy is delivered to the vehicle. An EV driver using a public charger usually pays for the energy ($/kWh) or time ($/min), however the owner of the charging station will pay for all the energy delivered and the peak demand reached over the month. This is a reason why Tesla, and others, have different rates depending on the power ($ 0.44/min above 60 kW and $ 0.22/min at or below 60 kW).

As an example: 3,000 electric vehicles use Electrify Canada charging stations in British Columbia over a one month period and these vehicle require an average energy of 30 kWh with a maximum demand 150 kW (considering 3 vehicles charging at the same time). The monthly energy cost for Electrify Canada under the Large General Service would be $5,400 (90,000 kWh @c$6/kWh) for the energy $1,833 (150 kW @$12.22/kW) for the demand.

In this example, if a Porsche Taycan uses the charging stations and performs a single charge at its 270 kW, the demand cost for the operator would increase by 80%. As an operator, offering such power to a few high end vehicles impacts the profitability of their service.

What are the technologies to mitigate demand?

Smart Charging – Depot charging

Smart Charging has been discussed in a previous post and is a technique that flatten the curve by distributing the charges overnight. This technique works very well for fleet of vehicles that are not highly utilised. Vehicles that can be fully charged in a couple of hours can be queued to limit the peak demand from the power grid.

The more utilised the vehicles become, the less smart charging provide financial benefits. If all vehicles require around 6 hours of charge, there is not much room to distribute the charging sessions. This situation is present for Transit buses having a large battery pack (250 kWh and more).

Battery Storage – In route charging

In route charging cannot reduce the charging power as the purpose is to charge as quickly as possible for the vehicle to be back in operation. The strategy to mitigate demand is then to store the energy locally when the charger is not in used. When a vehicle is charging, part of the power is supplied by the grid and the rest is provided by the battery, minimising the overall demand charge.

While demonstration projects of localised battery storage exist in many parts of the world, the economics of such system are not there yet, especially for high power chargers such as Translink deployed (400kW+). With decreasing battery price, it is likely the business case will be possible in the future.

How are the new services helping?

Per the example above, the demand charge rate significantly increases the operating cost of the charging infrastructure which makes the life cycle cost of an electric vehicles less competitive to regular fossil fuel vehicles. In order to support transport electrification, it was essential to rethink the tariff structure. In British Columbia, this was especially true with large fleet as demand charge for an installation of 150 kW and above is more than twice the cost per kW of lower power installation.

The two new services increase the energy cost and reduce or temporarily eliminate the demand cost. The peak demand is usually very brief for EV charging infrastructure, it has a significant impact on the operating cost. A simulation based on one of our datasets of a lowly utilised fleet indicates the benefits of the new services.

Not necessarily the end of Smart Charging

This dataset was very interesting because it is a perfect business case for the deployment of a Smart Charging solution because it can reduce the electricity cost by more than 40%. However, the overnight rate provides greater benefits.

When we develop a Smart Charging solution for our customer, we consider two aspects; the capital cost (infrastructure) and the operational cost. Smart Charging will still create benefits to minimise or delay the electrical infrastructure upgrade.

The new rate will likely increase the peak power seen by the utility. The problem is then shifted from the fleet operator to the utility who could investigate load control technique to mitigate the peak on their distribution system. An area Hoa Cleantech is very familiar with.

Finally, small fleet requiring service below 150 kW will still have the opportunity the reduce their demand charge by using smart charging services.

Battery storage will have to wait

As discussed above, business cases for local battery storage are not clear yet. As the Demand Transition Service is only valid for 6 years, some type of localised storage will be required in the future. In the meantime, the charging infrastructure deployment will be accelerated thanks to the new rates and helps develop concrete business cases for battery storage with actual data.

A real boost to transition to a carbon free mobility

This analysis shows that the great winner of the new rates are transit companies. Buses have high utilisation and high energy usage. Translink adopted two solutions for their electrification plan, a mixed of depot charging (overnight charging) and in route charging (to limit the size of the battery). The demand transition rates make energy cost for in route charging similar to a depot charging which should accelerate the electrification.

As a decarbonisation company specialised in electric vehicle charging infrastructure, we are delighted by the BCUC approval as operational cost is a significant piece of the puzzle to transition to carbon free operations. Our decarbonisation platform helps model what the operation would look like in terms of utilisation, costs, and carbon emissions to optimise the strategy to transition to carbon free operation.