In 2021, the $5B NEVI Formula (National Electric Vehicle Infrastructure Formula Program) was introduced by the Biden Administration. The program supports the creation of a national EV charging corridor. In short, it will fund 80% of site infrastructure costs for selected sites on every 50 miles of highway and within one mile from a highway. NEVI site requirements include having a minimum of 4x 150kW chargers, leading to 600kW of peak load at a site.
That 80% infrastructure cost reduction, which includes the hardware, operating software and installation, is an enormously significant value to customers but could cause financial exposure for overlooked operating costs in the form of utility demand charges and peak energy costs.
Financial Exposure for an NEVI Site
If four vehicles charge simultaneously at a NEVI site, at max capacity, and the local utility rate is $15/kW in a demand charge, then the cost will come to $9,000 (600kW x $15/kW) per month and $108K annually in demand charges.
Enter Sparkion: a Sparkion Energy Management System (EMS) can provide an NEVI site with a way to mitigate its demand charges by up to 70%. It’s important to note that protecting against a demand charge is essentially just protecting against the possibility of all four chargers being used simultaneously, during the exact same 15-minute interval reading.
What are demand charges?
Essentially, utility companies tariff sites based on the front-of-meter (utility-owned) infrastructure costs of those sites. It’s driven by the kWs being demanded by the site host in a maximum use case. The utility looks at the maximum meter reading (one 15-minute interval) of kW once per month, then multiplies that by a fixed rate.
The other major cost to factor into a NEVI business case is the cost of energy ($/kWh). The central challenge is that your clients will likely expect a fixed $/kWh (your revenue/kWh), but based on the time of day your wholesale $/kWh will fluctuate. The only way to keep a consistent margin, without having to increase rates on your customers, is to leverage Sparkion’s EMS solution.
Simply put, you’ll have a fixed cost of energy stored in your EMS, which charges off-peak each night. Then, during peak kWh cost periods, the EMS discharges, creating an arbitrage equation for your site. See the example below:
Time/Rate | Your Costs (Wholesale) | Your Revenue (Retail) | Profit | Session Profit |
|---|---|---|---|---|
Peak | $0.30/kWh | $0.40/kWh | $0.10/kWh | $5/customer |
Off-Peak | $0.10/kWh | $0.40/kWh | $0.30/kWH | $15/customer |
For a NEVI site, Sparkion typically recommends a 558kWh EMS, so depending on how many charges you expect during a peak period, the battery (i.e. off-peak kWh costs) can cover a large percentage of them.
Final Thoughts
As you’re exploring your NEVI use case, it’s important to understand your utility rates and whether you’re on a time-of-use (kWh) rate and/or a demand charge. Some sites have one or the other, and some sites have both. Traditionally, energy storage will demonstrate a strong business case whenever you have a demand charge >$6/kWh and any time of use energy rates.
Overall, adding energy storage will save NEVI sites anywhere between $4k-$10k+ per month, when combining the demand charge savings and energy costs savings. Contact Sparkion for more details, based on your unique site’s rate structure and potential savings, based on your location, traffic flow, and overall use case.
NEVI Demand Charge Savings Examples:
Demand Charge | Monthly Saving | Annual Saving | 10 Year Saving |
|---|---|---|---|
$ 8.00 | $ 2,400.00 | $ 28,800.00 | $ 288,000.00 |
$ 9.00 | $ 2,700.00 | $ 32,400.00 | $ 324,000.00 |
$ 10.00 | $ 3,000.00 | $ 36,000.00 | $ 360,000.00 |
$ 11.00 | $ 3,300.00 | $ 39,600.00 | $ 396,000.00 |
$ 12.00 | $ 3,600.00 | $ 43,200.00 | $ 432,000.00 |
$ 13.00 | $ 3,900.00 | $ 46,800.00 | $ 468,000.00 |
$ 14.00 | $ 4,200.00 | $ 50,400.00 | $ 504,000.00 |
$ 15.00 | $ 4,500.00 | $ 54,000.00 | $ 540,000.00 |
$ 16.00 | $ 4,800.00 | $ 57,600.00 | $ 576,000.00 |
$ 17.00 | $ 5,100.00 | $ 61,200.00 | $ 612,000.00 |
$ 18.00 | $ 5,400.00 | $ 64,800.00 | $ 648,000.00 |
$ 19.00 | $ 5,700.00 | $ 68,400.00 | $ 684,000.00 |
$ 20.00 | $ 6,000.00 | $ 72,000.00 | $ 720,000.00 |
$ 21.00 | $ 6,300.00 | $ 75,600.00 | $ 756,000.00 |
$ 22.00 | $ 6,600.00 | $ 79,200.00 | $ 792,000.00 |
$ 23.00 | $ 6,900.00 | $ 82,800.00 | $ 828,000.00 |
$ 24.00 | $ 7,200.00 | $ 86,400.00 | $ 864,000.00 |
$ 25.00 | $ 7,500.00 | $ 90,000.00 | $ 900,000.00 |
$ 26.00 | $ 7,800.00 | $ 93,600.00 | $ 936,000.00 |
$ 27.00 | $ 8,100.00 | $ 97,200.00 | $ 972,000.00 |
$ 28.00 | $ 8,400.00 | $ 100,800.00 | $ 1,008,000.00 |
$ 29.00 | $ 8,700.00 | $ 104,400.00 | $ 1,044,000.00 |
$ 30.00 | $ 9,000.00 | $ 108,000.00 | $ 1,080,000.00 |
$ 31.00 | $ 9,300.00 | $ 111,600.00 | $ 1,116,000.00 |
$ 32.00 | $ 9,600.00 | $ 115,200.00 | $ 1,152,000.00 |
$ 33.00 | $ 9,900.00 | $ 118,800.00 | $ 1,188,000.00 |
$ 34.00 | $ 10,200.00 | $ 122,400.00 | $ 1,224,000.00 |
$ 35.00 | $ 10,500.00 | $ 126,000.00 | $ 1,260,000.00 |
