The first bleeding-edge question that’s hard to avoid when it comes to electrifying a medium- or heavy-duty truck fleet is, “Who pays what?” The next one is, “What comes first?”
What if both questions had the same answer? That would make the whole electrification thing a lot simpler. And it could make it a whole lot cheaper, to boot.
The immortal Bud Abbott and Lou Costello patter routine “Who’s on First” adeptly manipulated words to make your head explode in laughter. To riff on that, a baseball analogy can make sober sense of a business conundrum. (Wait for it.)
Utility Infrastructure Upgrades
Experts who consult fleet executives on how best to switch some or all their vehicles to electric drive universally advise that the first step is to contact the electric utilities that serve the areas where the trucks are based and/or will operate.
That makes sense. You can’t charge and recharge battery-electric trucks if you don’t have enough juice flowing into your terminal, shop, or separate charging facilities. The first step is to be hooked to the grid with the proper kilowatt-hours (kWh) capacity to provide slow, rapid, or ultra-fast charging, as needed.
In some — if not many — cases, depending on grid capacities and distribution networks, this may require a significant infrastructure upgrade at the planned point of charging trucks.
That immensely ups the ante to convert. But allow me to return to baseball and present the utility play. Not unlike a double play, this move will put your team far ahead at no cost.
How this plays out will depend on what electric utilities decide to do about supporting grid updates to enable fleet charging. The utility play is laid out by a recent study that reveals a different approach to those daunting questions of who pays what and what comes first.
Cost of Infrastructure Upgrades
This new analysis, commissioned by the Environmental Defense Fund, finds that by covering the cost of infrastructure upgrades needed for fleet charging, electric utilities can increase their revenue without raising consumers’ electricity rates.
So, your electric rates won’t get hiked. Nice, but strictly a bonus. That’s because implementing this play also means that any fleet covered by such an arrangement would pay significantly less to convert their facilities to charge electric trucks.
“Reducing emissions from medium- and heavy-duty vehicles is essential for the U.S. to meet its climate goals and reduce deadly air pollution,” stated the report. “Large-scale electrification of these vehicles requires grid upgrades to support the added load from charging.”
And here’s the playmaker: EDF argued that the “cost of upgrading the electrical infrastructure required to make a commercial site ready for EV charging, called ‘make-ready,’ can account for up to 30% of the total cost of charging for fleets.”
A 30% savings? Who wouldn’t swing at that?
The report pointed out that “to date, most U.S. utilities and regulators have been wary of financing these grid upgrades for fear of needing to raise everyone’s electricity rates to pay for them.” EDF said this new study “debunks this myth.”
The report also advised that large national fleets are currently choosing to prioritize electric medium- and heavy-duty trucks where they don’t have to pay for grid upgrades.
Batter up: The analysis looked at Con Edison and National Grid, two New York State utilities that vary widely in grid costs, electricity demands, and region. The study found that if utilities cover the “make-ready” cost for private and municipal fleets, the investment will pay off for utilities yet have a “positive to neutral impact” on ratepayers.
“Investing in make-ready programs can benefit fleets, utilities and consumers,” said Pamela MacDougall, director of grid modernization at EDF. “Make-ready investments can help states achieve their climate goals and accelerate the transition to a zero-emission future.”