Part 3: Saving Money by Rightsizing Fleet Electrification

At MGL we use a fleet-as-a-system approach to develop fleet electrification plans, which naturally right-sizes the entire system - reducing capital costs as well as the timeline to build charging infrastructure and deploy EVs. At the heart of this approach is daily energy analysis explored in the post Going Beyond Average Range with Electric Fleets and encompassed in system design discussed in Choosing Battery Sizes and Charger Power Ratings for Your Fleet’s Operations. This article extends those topics to highlight the positive impacts of a fleet-as-a-system approach and take the guesswork out of an optimized system design.

A Typical Approach 

Planning a fleet electrification project typically begins with questions such as: what type of electric vehicles are available, how much do they cost, and which chargers are compatible. These questions lead into the deep nuances about EV specs and charger power ratings, including investigating vehicle range and deciding on a charging strategy, all of which are necessary to answer in order to apply for financial incentives. But planning often hits a wall with the inevitable question: How much electrical capacity is needed and what will that cost?

If the charging strategy is to oversize chargers in order to mitigate the risk of vehicles not being sufficiently refueled overnight, with the expectation to manage high electricity load to reduce the cost of electricity through a charge management software, then the cost of the charging system and time frame to get it energized could very likely be 10x. This is due to very expensive high-power chargers (so called DC Fast), planned peak electricity load requiring a transformer upgrade at the facility, and the long lag times for utility grid capacity assessment and permitting. This is not a good situation for the first phase in fleet electrification which needs a quick launch deployment plan for gaining experience and comfort in the capabilities of EV to serve the fleet’s operational need. Compounding the problem of inflated upfront capital costs and extended time to installation, is the economic breakeven point which is moved out in time by many years. Breakeven remains important because the policy justification behind EVs is that operators will save money due to lower cost of fuel and maintenance, and society receives the air and climate benefits. So despite the robust incentives to address high-priced EVs and infrastructure, inflated capital costs at phase one does not achieve the mission.

To illustrate this double impact, consider the case of 10 slow level 2 chargers needing a 200kVA service or 10 level 3 fast chargers needing a 500kVA service. The slow chargers most likely do not require a transformer upgrade, but the fast chargers definitely do. The cost for 10 slow chargers might cost $50-100k whereas 10 fast chargers would cost $500k-$1M, plus the electric upgrades inside the facility. Net-net the difference in timeframe is 3 months or 3 years to get those EVs rolling, and $100,000 or $1,000,000. To overstate the case, the impact to that first EV launch project either appears to be on track, or far over budget and lost in time.

Now consider the next ten EVs, or the next hundred in the fleet, and you have an infrastructure capital profile that no organization wants to pursue, including the utility to which you requested over 1 MW of service! However, with a bit of proper planning and rightsizing the overall system and charging strategy, we can pull the electrification plan back in line and likely achieve the objective of the fleet operator to get chargers installed and EVs out on the road. 

Rather than over designing the charging system, running up the capital expense to an unaffordable amount, and chasing down peak loads and promised savings with managed charging software, pursue a rightsizing analysis and save money right up front, before the engineering design begins.

Proper Planning through Fleet-as-a-System

As discussed in the two previous posts -Going Beyond Average Range with Electric Fleets, and Choosing Battery Sizes and Charger Power Ratings for Your Fleet’s Operations- by understanding the daily energy requirements for the fleet, we can right size vehicle batteries to the operating environment, optimize the charging infrastructure, and ensure fleet energy consumption is met at the lowest capital cost. The power of a data driven systems approach to planning is in meeting operational reliability at the lowest overall capital cost, and completing the design/build phase of the project in a timely fashion relying on products available in the market today.

Putting a dollars and cents figure on one such example, take the school bus case of say 100 fleet vehicles. Total capital costs could easily touch 35M (without a new facility), but rightsizing could bring that cost down by 40% on the cost of charging infrastructure alone, and potentially 20% on the entire project. Who wouldn’t choose to save $7M in capital cost rather than chasing $7M in fuel savings over the next ten years? 

Addressing Electric Grid Capacity Constraints 

The addition of electric vehicles will inevitably add stress to the local electrical grid. The scenario you just read drops the peak electric load by 40-60%! That makes a big difference in the response you get from your utility since it means that the power the utility needs to have available is minimized. The difference in requesting 1MW of electric service or 500kW may make or break the initial phase of electrification. Better to push out the needed upgrade to a point in time when it’s absolutely necessary. 

Planning with phase-in in mind -what is needed in the next 3-5 years versus 5-10 years- focuses all parties on the immediate future while clarifying what is expected just over the horizon, buying time to consider options for the harder to electrify cases and accelerating the first deployment cycle. There is no reason to overcomplicate what is already a challenging first step. At MGL we think it’s prudent to consider a 15-year horizon and break that into 5yr phases for procurements, budgets and incentives, engineering design, and electrical upgrades. 

Having a clear plan for the near term to drive today’s activity, along with expected next phases to drive the right considerations, will save on capital costs today and buy time to consider options for solving grid capacity constraints. As the level of electricity demand increases in each phase at any given site from 500kW to 1MW to 2MW and beyond, the options and benefits of onsite energy assets can be considered. Alternative financing offerings will come forward in the market, utility service offerings with expand, and equipment costs will come down.

Don’t raid the bank today to fund everything you need in EV infrastructure ten years now; get rolling and allow the market to fill the gaps.

Chuck Ray is an energy and mobility expert with fifteen years in energy management and advanced mobility, serving as MGL’s fleet director. Chuck’s mantra: Load Profile Matters