Author: David Funk

David Funk is the Director of Transportation Decarbonization where he oversees new product development and commercial expansion in clean transportation services.

What you need to know as an EV charging host site

Key takeaways: 

  • There is an opportunity for businesses looking to host (host site) EV infrastructure as charging sites are not keeping pace with EV adoption.  
  • Utilization growth is a journey.  Users need to become aware of your site, amenities are competitive, and reliability is essential.  
  • Demand charges are a big risk, especially with the current distribution of charging.

2022 saw a dramatic increase in the sale of Electric Vehicles (EVs) with a 65% year-over-year growth rate, selling 800,000 EVs compared to 480,000 in 2021(1).  However, according to the Alternative Fuels Data Center (afdc.gov), the installations of Direct Current Fast Charger Stations (DCFC) only grew 11% year-over-year to 6,750 from 6,100.  In this article, we will explore collected data from 3Degrees’ partners and how charging host sites can utilize these findings to implement in their own operations.

EV charging networks are rapidly partnering with a variety of host companies to install new DCFC charging stations across the country.  These stations can range in power and supply from 50kW to 350kW each, and individual charging times depend on numerous factors, including the power of the charger, the size of the EV battery, and the charging curve of the specific vehicle.  According to our own data across sites in 4 states, with more than 10,000 charging sessions, the average charging time is approximately 30 minutes and delivers 20kWh.  

While the EV industry sales grow at a pace that exceeds expert analysts, the business case for an individual DCFC site is still very uncertain and heavily reliant on incentives. 

Key findings that host sites should be aware of:

  • Growth rates for site visits increased dramatically after installation, with a 130% year-over-year growth spike from when the units were first installed.
  • Afternoon peak demand charges, kW-denominated costs based on the highest 15-minute interval, are a real risk to the business case. 
  • Scarcity is not a choice.  Eventually, sites will have to compete for charging visits and users will prioritize a higher number of chargers, reliability, and amenities.   

A great example of a mutually beneficial relationship between an EV charger network and a site host is that of  ChargeNet & Taco Bell.  In California, EV fast-charging station developer, ChargeNet, is installing solar, battery storage, and DCFC in many Taco Bell locations. The partnership supports both businesses, with ChargeNet benefiting from the installation of their DCFCs at an established brand with amenities such as food, restrooms, and a continuous stream of potential clientele, while TacoBell benefits by using the DCFC to draw EV customers that could convert to a sale.  According to our data, each charging site draws approximately 100 customers a month, however, it is unknown how many of those are supplemental customers. 

As illustrated above, peak charging times are typically between the hours of 12-6 PM, which is when electricity is expensive due to evening energy peaks. Demand charges are base fees an energy user pays for their highest 15-minute kW usage.  Host sites should expect to encounter the highest demand charges and work to incentivize charging off-peak to increase overall utilization. (2)  

Still, the biggest driver of charging is, quite obviously, the need to charge. Local charging demand will occur outside of travel corridors as EV adoption among drivers without access to home charging increases.  In these markets, time is less of a priority if the visits coincide with regular activities like work, shopping, or a quick lunch.  These charging stations are going to be the bedrock of an EV community, and since the average shopper spends between 60-70 hours a year at supermarkets(3), we see this as a huge business opportunity for this segment.  Great examples of existing DCFC at retail locations include Fred Meyers’ fueling stations in Oregon or 7-11’s 7Charge network in California, Colorado, Florida, and Texas.  These sites could be a natural location for weekly charging at slower speeds (50kW) and take market share away from home charging if the service is priced reasonably.

In conclusion, hosts who are considering adding  DCFC to their location should be aware that this business opportunity exists, but also understand that while utilization is currently growing, there are still several risks to consider prior to exploring any implementation.

Three questions to ask are: 

  1. Do I have a good site for EV charging? 
  2. How do I want to participate in this business?
  3. What incentives exist to de-risk this opportunity? 

While our data is not yet conclusive, the excitement around the opening of Tesla’s proprietary Supercharger network suggests that there is a first-mover advantage.  We speculate that sites that enter a market or region first will have significantly higher ramp rates, retain clientele, and effectively become the default choice compared to chargers that enter the market later.

How we help

Think you’ve got a good site for an EV charging network?  3Degrees can help! We understand that taking the first steps into EV charging can seem overwhelming, which is why we are proud to partner with EV networks and site hosts nationwide to help alleviate some of the complications. Working closely with our team of transportation and energy experts, we will help you understand the potential value, evaluate potential charging requirements and state and Federal incentives, and determine future next steps.

Contact us today to speak to learn more about getting started as an EV charging site host.

References:

  1. https://www.coxautoinc.com/market-insights/in-a-down-market-ev-sales-soar-to-new-record/
  2. https://www.sdge.com/businesses/pricing-plans/understanding-demand
  3. https://www.driveresearch.com/market-research-company-blog/grocery-store-statistics-where-when-how-much-people-grocery-shop/

EV fleet regulation updates, opportunities, and considerations from ACT Expo

Earlier this month, 3Degrees had the opportunity to join other transportation industry players at Advanced Clean Transportation (ACT) Expo, a growing sustainable mobility conference with no signs of slowing down. The transportation transformation is happening right before our eyes, and it’s never felt more real than it did at ACT. Over 10,000 attendees gathered to discuss all facets of sustainable mobility and the momentum was tangible. It was evermore apparent that the transition to electric does not just pertain to passenger vehicles (SUV, Sedans, etc.), but every type of mobility you can think of – both on- and off-road: yard tractors, forklifts, transport refrigeration units, marine – you name it. 

Big themes at the conference this year included the infrastructure availability challenge, new zero emissions vehicle (ZEV) policies like the Advanced Clean Fleets rule, hydrogen applications, utility and grid synchronicities, and public-private partnerships. In this blog, I hope to explore a few of these topics as well as share lessons learned from fleet transition discussions our team took part in. 

Keys to a robust fleet transition plan

With new technologies emerging constantly, organizations actively working to reduce transportation emissions should have robust transition plans in place with some built-in room for flexibility. At ACT, I noted a few strategies fleets were incorporating to stay flexible as they transition to decarbonized fleets.

Being proactive and forward thinking was a sentiment I heard repeatedly – in order to gain a competitive advantage, stay ahead of the compliance curve, and create a cushion of time for delays or unforeseen logistical hiccups. For example, Bonnie Nixon, Director of ESG and Sustainability at the Long Beach Container Terminal (LBCT) urged that “planning ahead is critical” and that fleets “need to look 3-5 years out.” Nixon also stressed the importance of identifying what is driving an organization’s desire to electrify and that a cost-benefit analysis can be helpful in understanding what is most viable, implementable and affordable. 

Leading by example, LBCT shared that the changes they made to their operations allowed them to take advantage of the Warehouse Actions and Investments to Reduce Emissions (WAIRE) program. The WAIRE program is a credit /deficit system related to truck traffic and aims to reduce warehouse emissions, specifically those related to transportation-related activities. LBCT has used this program to generate revenue and offset the cost of its transition. 

Two takeaways from this discussion were that there are hundreds of millions of dollars available in grants, incentives and loans to assist with fleet electrification, and when looking at operational costs, an organization should examine warehouse and fleet emissions simultaneously, not in silos. A successful fleet is one that plans properly for regulation impacts, leverages incentive programs, maximizes infrastructure utilization, and develops a multi-phase approach that builds its electrified fleet one piece at a time, knows its total cost of ownership (TCO) analysis process and has fleet replacement cycles in place.

Market Landscape 

There are many factors to consider when transitioning to an electric fleet. Like Ari Silkey, Amazon’s General Manager of North America Surface Transportation, said, “Navigating the vehicle availability and infrastructure confluence, balancing the utility requirements, and chasing after funding is a challenging dance to do.” There are an overwhelming number of options to choose from and pathways to take, but companies that focus on their fleet electrification now can avoid non-compliance penalties and exemplify leadership in the space.

I heard at ACT that there are currently over 550 incentive programs to take advantage of, including the numerous regional clean fuel standard (CFS) programs in North America, which can help ensure a positive TCO, amongst other things. Many of the incentive programs can be combined to finance fleet electrification, and multiple programs (including the CA LCFS) even extend subsidies for acquiring infrastructure. This concern of infrastructure availability was touched on in nearly every session I attended. I learned that 30 DC chargers need to open per day from now to 2026 just for California to meet its targets. John O’ Leary, President & CEO of Daimler Truck North America (DTNA), shared a formula for success in transportation decarbonization, which included:

  • Viable product solutions 
  • Total cost of ownership (TCO) parity 
  • Dependable charging infrastructure

He stressed that infrastructure must be ubiquitous or else the formula doesn’t work. Right now, charging infrastructure is missing and without it DTNA will miss their goals. Throughout ACT week, I picked up on a sense of frustration. “How can our nation’s fleets meet the desired reduction targets if they can’t charge domicile vehicles?” he asked the audience. During his keynote presentation, O’ Leary introduced GreenLane, a project built by DTNA, NextEra Energy Resources and BlackRock Alternatives, that hopes to develop public charging and refueling (EVs and HFCVs) infrastructure depots for medium-duty (MD) and heavy-duty (HD) fleets. 

Multi-Solution Sector

In attending sessions at ACT, I began to recognize that fleets are not exclusively picking one solution, but are using different technologies for various use cases. “It is not one size fits all here,” said ChargePoint President & CEO, Pascuale Romano. “There is a place for every fuel type.” For light-duty, EVs are the overarching solution, but for MD and HD fleets, there are many options to weigh — hydrogen fuel cell, CNG, RNG, or electric? Hydrogen has many uses for all applications, and is already being utilized in fleets, such as that owned by Amazon, who already has 70 locations using hydrogen with plans to scale this up. They also have CNG trucks, Rivian EVs and electric yard vehicles in use. Having multi-fuel and multi-make fleets are effective strategies to mitigate labor shortages, supply chain strains, and other causes of order delays. 

Kevin Schwalb, VP of Government Relations at Textile Rental Services Association of America (TRSA), said that TRSA has experienced major delays with the ZE trucks they’ve ordered. One purchase order example he mentioned was that 40 trucks could take over three years to arrive. He said that they manage their orders differently now, taking into account that something is likely to be delayed: “it’s whack a mole – totally different every week.” Building in room for those hurdles is a best practice.

As some of the first big electric truck projects are now underway, this issue of manufacturing delays came up in the Executive Infrastructure Roundtable and other sessions at the conference. Many voices stressed the need for production at scale, so the quantities of vehicle and infrastructure equipment supply meet the demand of fleets. Mark Esguerra, Director of Distribution Planning and Strategy at Southern California Edison, urged companies to prioritize permitting and licensing early in anticipation of slow progress on the utility side. I heard that it is vitally important to communicate objectives and deployment plans with your utility, and later engagement can cause delays. 

The Zero Emission Era

Adopted in California the Friday before ACT, the Advanced Clean Fleets (ACF) regulation was another major talking point at the conference. Working in conjunction with the previously-adopted Advanced Clean Truck regulation, the ACF aims to speed up the adoption of ZEV technologies in the MD and HD transportation space. The rule goes into effect on November 1 and calls for early reporting / compliance at the end of this year. Starting in 2024, fleets are required to purchase an increasing number of ZEVs. 

A pair of regulatory bookends, the Advanced Clean Truck and Fleet rules will affect any organization that touches transportation in the state of California. Over a dozen states have adopted the Advanced Clean Trucks rule, including Washington, which added ZEV sales requirements starting with model year 2025 and will require manufacturers of MD and HD trucks to produce an increasing number of ZEVs for sale in 2024. Many states are also expected to enact their own version of the ACF rule, with California’s program as the model. 

Transport Refrigeration Units (TRUs) were a popular topic at ACT this year as well, with a whole session devoted to it on the first day. The California Air Resources Board (CARB) approved amendments to the TRU regulation and requires reporting for all TRUs in operation at the end of 2023, with 15% of a TRU fleet needing to turn over to ZE technology each year from now until the end of 2029. To help finance this piece of the electrification puzzle, credit pathways exist for eTRUs in market-based incentive programs like the LCFS. With the adoption of many new ZEV mandates, having a sturdy regulatory strategy has become even more essential to the success of any organization’s effort to electrify. 

Closing Remarks

I heard at ACT that 2024 will be a year of transition for the transportation industry. Leaving the conference, I felt both a great deal of uncertainty around the ability for fleets to manage this transition in conjunction with OEMs, utilities, and financial partners as well as a renewed sense of hope, with the amount of viable solutions and brilliant minds working on this opportunity for a net zero transport sector.

3Degrees has a team of experts that can help your organization build a fleet transition plan that is strengthened by market-based incentive participation, solidified by regulation compliance, and respected by competitors. For more on how to set your fleet up for success, please get in touch

Innovation across the transportation sector: insight from Move 2022 and Maritime Shipping Forum

This past month took me across the country and back to listen to keynotes, engage in dialogue, and learn about the latest innovation in clean mobility across the transportation sector. My first stop was at a conference called Move 2022 in Austin, Texas, and the second was American Greentech and Decarbonizing Maritime Shipping Forum in Miami, Florida. 

An experienced global maritime leader in the areas of policy, government, and related law, Bud Darr is Executive Vice President, Maritime Policy and Government Affairs of MSC Group. He gave a keynote speech at the 2nd annual American Greentech and Decarbonizing Shipping Forum.

In walking the show floor and joining the conferences’ many breakout sessions, one thing became apparent—despite the mode of transportation, whether on land or at sea, companies across the sector are moving in the same direction—decarbonization—but are at different stages of technological and commercial maturity. Move 2022 featured presentations from large established companies, such as Ford and GM, while also providing a platform for start-ups to pitch new ideas, business models, and technologies. Billions of dollars have already been invested with trillions more to follow in an effort to electrify light duty transportation. Biofuels and renewable natural gas have been supplied to markets on the West Coast in growing quantities to incrementally decrease the amount of carbon emitted per vehicle mile traveled.

Move 2022 wasn’t the biggest transportation conference I’ve been to this year, but it did provide a sense of clarity, focus, and direction. The American Greentech and Decarbonizing Shipping Conference was a much smaller event, but similar talking points were shared throughout keynotes and presentations. Bud Darr, the Executive Vice President of Maritime Policy and Government Affairs for MSC Group, gave the keynote speech, which in summary stressed that “decarbonization is not an option.” According to Bud, the influence of regulation, customer-demand, and the realities of sea-level rise on their core markets have resulted in a significant change in perspective for many large companies like MSC, Caribbean, Disney and others in the last two years. 

Still, while the automotive industry is transitioning from strategic decisions to tactical ones, the maritime industry is facing huge doubts regarding which technology or technologies will reign supreme; hydrogen, ammonia, biofuels? The scale is also dramatically larger when considering many ocean going vessels are the size of skyscrapers and cost upwards of $200 million dollars each. Ship investors are having to make a pretty tough bet on whether any one of these fuels will be available across major and minor ports over the 30-year life of the asset.

Panelist Jill Stoneberg participating in a session titled “Decarbonizing the shipping industry – regulations, sustainability goals, and finance” at the American Greentech and Decarbonizing Shipping Forum.

A common thread throughout both conferences was a focus on incremental improvement. There is no magic bullet to address the climate crisis and there is no single technology that will result in overnight change. Instead, businesses like GO EVE and Armach Robotics will work to reduce carbon by decreasing the upfront cost of new EV charging equipment or increasing maritime fuel economy. These ideas, when scaled individually, can have a modest impact. But, these ideas, when coupled with innovation across the transportation sector, such as better ocean current forecasts, connected shipping routes, aerodynamic truck technology, and improved vehicle to grid capabilities can have a dramatic impact.

At 3Degrees, we are also working to incrementally add value to the broader ecosystem while building on the capabilities of different departments internally and partners externally. Moving towards a decarbonized future, we hope to fully expand across all segments of transportation, including maritime, to join efforts and generate an even larger impact. If you would like to learn more about our transportation decarbonization offerings, please get in touch today. 

Transportation: a key pillar for just transition. Takeaways from Forth ’22

At the end of June, professionals, community leaders, and other stakeholders gathered in Portland, Oregon for the annual Forth Roadmap conference to discuss the opportunities and challenges that lie ahead as we course our path toward deep transportation decarbonization. Session topics ranged from the practical to the political, with some conversations centering on the impacts of redlining and how highway construction continues to connect predominantly rich white suburbs to economic centers—driving an even wider wealth gap, and leaving communities of color isolated, divided, and burdened by pollution. Many fear this issue will remain unaddressed and exacerbated with the Supreme Court ruling in West Virginia vs. EPA. This recent decision which leaves environmental regulation in the hands of a divided congress likely means that these same overlooked and underrepresented communities will continue to bear the brunt of vehicular pollution and the current and future impacts of the climate crisis. Progress is not guaranteed.

As we face these difficult truths, optimism can be scarce but in regards to transportation, we face a historic opportunity to right some of our past wrongs. Electrified transportation has the potential to make our communities cleaner and quieter while also lowering the cost of transportation. We are starting to see leadership from the Federal government in setting standards, allocating infrastructure funds, and improving coordination between OEMs, utility companies, the Dept. of Energy and the Dept. of Transportation. We applaud the governmental leadership to align these efforts as it results in a more mature industry and consistent experience.

Attendees gather for the “Building an Equity Community of Practice” session as part of the Impact Track at the 2022 Forth Roadmap Conference. “We really need radical vision that spans across sectors and political frameworks. Let’s put dollars in the hands of communities,” said panelist Queen Shabazz, Coordinator of the Virginia Environmental Justice Collaborative.

Building an inclusive clean transportation future

Many conference panelists and speakers encouraged those responsible for facilitating the shift to electric to engage the community to fully understand the transportation needs of residents of every cultural and socioeconomic status. Our communities face wide-ranging challenges and the tunnel vision focus on electric vehicles insults what makes our communities unique. Our cities are too highly dependent on passenger cars and don’t prioritize human-powered transportation or bus rapid transit which serve a critical need of inner-city communities. Residents in rural areas encounter EV range anxiety, increased highway travel, longer electric outages, and a lack of suitable vehicles that make EVs difficult to integrate. The pleas from experts such as Erika Meyers, executive director at CharIN North America, are to take the time to understand the problems and to follow Avoid, Shift, Improve (ASI) principles to address them. After all, the most decarbonized mile is the one not driven and to be successful within a community, you must slow down so you can go fast.

Fresh from the ACTExpo from a few weeks ago, a conference with a focus on shiny new chrome trucks, and seamless technological solutions, powered by big and small companies ready to change the world, I found myself wanting more. I felt a real absence of a just transition-centered conversation at ACTExpo. I was looking toward businesses to lead the conversation, to question the conventional wisdom from automakers and EV charging companies, and to search for deeper value than just “Total Cost of Ownership.”

“We really need radical vision that spans across sectors and political frameworks. Let’s put dollars in the hands of communities,” said panelist Queen Shabazz, Coordinator of the Virginia Environmental Justice Collaborative. 

The 2022 Forth Roadmap Conference was held at the Oregon Convention Center in Portland.

As I consider these many complex challenges, I reflected on my own transition from working for a big energy company to 3Degrees, a mission-oriented B Corp. One of the primary reasons for making this shift was to work with passionate people and clients that are unsatisfied with doing the bare minimum—who question the status quo. My hope coming out of this conference is that I can learn from these experts and bring some of these questions to our clients that are looking to decarbonize. Through candid conversations and deep introspection, we can help our customers understand their role in their communities, engage local leaders and stakeholders, and choose to pursue solutions that strive to address multiple problems rather than just one. Importantly, it’s about building relationships that result in lasting change and continued progress.

The keynote speaker at Forth Roadmap was Reverend Lennox Yearwood Jr., president &CEO of Hip Hop Caucus, and he reiterated that racial and climate justice are inextricably linked with transportation. And as the famous quote goes, “In the middle of every difficulty lies opportunity”. Our opportunity lies with rethinking transportation, including EVs. The EV industry is new, but with progress being eroded at the highest levels of government, it is critical to steer our collective future on a path toward equity.

For support in exploring decarbonized transportation options like LCFS, EVs, hydrogen, or what grant opportunities exist, please reach out to me and our team here at 3Degrees 

From CNG to electrification: takeaways from ACT Expo ‘22

To understand the future of clean transportation, it’s wise to reflect on how far it’s come. I recently flew to Long Beach, California to attend the Advanced Clean Transportation (ACT) Expo. In its 12th-year of existence, ACT Expo is the largest advanced transportation technology and clean fleet event. Thinking back a decade ago, this event, and the entire transportation industry, looked quite a bit different than today.

In those days, Compressed Natural Gas (CNG) was prominently displayed as the technology that would allow businesses and municipalities to decrease their fuel expenses, pollution, and CO2 emissions.  At the same time, California’s Low Carbon Fuel Standard (LCFS) had just gone into effect as the first cap-and-trade program to attempt to decarbonize transportation fuel, and its prospects were still uncertain and Tesla had just started production on their Model S car—their first step into becoming the world’s most valuable automaker. 

10 years later, we can reflect on the gigantic technological leaps on display at the 2022 ACT Expo.  If there were any CNG displays, I couldn’t find them.  It was battery electric vehicles (EVs), from pick-ups to class 8 tractor trailers, standing squarely in the limelight.  As I looked across the showroom floor, with familiar (Peterbilt) and unfamiliar logos (OrangeEV) in attendance, I was met with a shiny chrome reality of how far technology has come in just a decade.

Drew Cullen, Penske Transportation Solutions, Carlos Maurer, Shell, and Mary Aufdemberg, Daimler Truck North America discussing the State of Sustainable Fleets

Conversations at the event focused on the unique implications of electrification and primarily consisted of the question, “How and when do I charge my new electric fleet?”  Utilities and EV charging companies roamed the expo floor offering hardware and software solutions to address this infrastructure limitation.

While it’s commonly accepted that the Total Cost of Ownership (TCO) is less for Light Duty EVs than their internal combustion peers, the heavy duty sector is not yet obviously electrifiable.  Vehicle prices are stubbornly high and scale is limited, however, there appears to be no shortage of companies shouldering the burden of electrifying the heaviest duty vehicles.  Companies like Sysco, UPS, and Pepsi should be applauded for their efforts to decarbonize this sector.  The good news is that despite supply chain challenges, there is plenty of low-hanging fruit that can leverage the limited vehicular supply to make electrification financially smart and sustainable.

We can also reflect on the successes of the past conferences and regulations.  The LCFS program, in concept but not name, has expanded into Oregon, Washington, and British Columbia.  There is also definitive proof that this regulation has resulted in decreased carbon emissions from transportation while also spawning new business opportunities.  In 2021, the CNG fleet in California was powered 98% by renewable natural gas, mostly captured from landfills and dairy manure!  Recently, bio-diesel repurposed from lower value feedstock became the fastest growing decarbonized fuel in the LCFS market.

As we look towards the future, hydrogen fuel is attempting to be the next big thing. And this fuel, if produced by renewables, provides decarbonized fuel solutions without impacts in range and charging time. The catch, however, remains the severe lack of fueling stations to serve any notable demand.  In my conversations with fleet owners, skepticism abounds when exploring their options in the hydrogen space.  In the next 10 years we might see this fuel carve out a niche around the most demanding vehicular use cases but my prediction is that the combination of battery costs declining, battery energy density improving, and a rapidly maturing EV fueling infrastructure will keep hydrogen out of the mainstream.

Other good news relates to new sources of funding given the recent bipartisan infrastructure bill.  The figures presented at the ACT Expo are close to $20 billion a year for the next 5 years.  The furthest developed projects are most likely to receive funding and my opinion is that developing these pilot projects early will be rewarded. 

For support in exploring decarbonized transportation options like LCFS, EVs, hydrogen, or what grant opportunities exist, please reach out to me and our team here at 3Degrees I look forward to next year’s ACTExpo and another opportunity to reflect!