21, rue d Artois, F-75008 PARIS C6-202 CIGRE 2012 http : //www.cigre.org Emerging Electric Vehicle Market & Business Models and Interoperability Standards Eric Khoo, James Gallagher ESB Ireland SUMMARY Electric Vehicles (EVs) present an opportunity to deliver energy efficiency and achieve emissions targets over fossil-fuel based transportation. Plug-in EVs integration with the electricity grid systems poses both threats and opportunities. This paper covers two separate (but connected) areas which are crucial to the uptake and rollout of electric vehicles - high-level market & business models and standardisation requirements on EV charging infrastructure. Based on the four market models as presented by Eurelectric [3], a market model describing market transactions is developed with the objective of achieving rapid and widespread availability of charging infrastructure. Key issues such as investment costs, integration with existing electricity market, ease of market entry for energy suppliers, grid system support capabilities and the need for government subventions are considered to derive the proposed market model. The model is based on a Distribution System Operator (DSO) driven model which is considered to be best placed to deliver a rapid, cohesive and widespread development of charging network during the early phases of EV development. The ecar project being implemented in Ireland is an example of this model. The other more market-driven models may be more appropriate when EV mass adoption is achieved.. This model recognises the critical function of governments and regulators in devising regulations and incentives for DSOs. It requires subvention in providing clear mechanisms on how the investment costs of charging network can be earned in the future. The model provides the options of integrating EV charging network as part of DSO regulated asset pool or the separate pooling of EV charging network. The latter will require cost recovery mechanisms that will not fully burden early EV adopters. The basic design of the proposed model would enable value-adding business models to be developed in the areas of energy retailing and the provision of EV grid services. Many grid services will require high level of standardisation in terms of market structure, charging equipment and communication technologies. It is argued that the proposed market model provides the necessary foundation for these services. Standardisation of charging systems is critical in achieving the interoperability objective. Various established and emerging standards are presented. It is shown that many of the plug-in EV grid services can be achieved using standards that are currently available and being rolled out across Europe. The case is made that existing standards are technically sufficient to achieve a wide scale adoption of EVs across Europe. KEYWORDS Electric Vehicle, Charging Infrastructure, Market Model, Standardisation, EV Interoperability Eric.Khoo@esbi.ie; James.Gallagher@esbi.ie
Introduction The potential of the Electric Vehicle (EV) to deliver energy security and environmental benefits is reflected by government initiatives across the world in recent years. Large investments are being made in the industry with the aim of jump starting the mass adoption of EVs. Electricity utilities are in the strategic position to enable the rapid development of the EV industry due to the need to supply fuel to EV in the form of electricity stored in rechargeable batteries. The position poses both threats and opportunities to the future development of EV, not least because the electricity industry faces its own developmental challenges such as the growing penetration of wind energy, rising energy costs and environmental emissions constraints. EVs could add significant load and unpredictability of load to the already stressed electrical grid. However, some argue that the advent of EV could deliver synergy with the electricity grid by optimising spare generation capacity, renewable generation and ancillary services. This paper focuses on the examination of the potential market and business models of charging infrastructure that could provide synergy to the grid. The various standards for EV charging infrastructure that will facilitate this are also discussed. Market Models This paper defines a market model as an arrangement or a common place where supply and demand meet for trading of a certain product. In the context of EV recharging, it refers to a market mechanism for which electricity is transferred from generation to the EVs and the flow of payments from the EV owner to the energy supplier. The mass adoption of EVs requires a market model that would facilitate the sale of electricity to EV drivers. The new model is different to the traditional means of electricity supply as it involves charging an EV when it is parked, hence storing the energy, and using it later for mobility. A key issue here is that there must be interoperability i.e. common platforms to enable the convenience of market transactions. In addition, a market model that adapts and causes the least impact on the existing electricity market structure is desirable from the perspective of cost and benefit. Eurelectric [3] outlines four infrastructure rollout models which focus on the rollout responsibilities of public charging stations and their integration with electricity retailers. These purist models provide a good benchmark of the potential industry structures but stop short of considering the economics of charging infrastructure and the operational interaction between stakeholders. The four models and their characteristics are summarised in Table 1. It is likely that the Integrated Infrastructure Model (IIM) is best placed to achieve rapid market development. The main reason is that the installation of charging infrastructure is the responsibility of the DSO. A DSO driven approach will allow rapid access to the distribution network and a wider coverage of geographical locations for the distribution of charging stations. The ecar project being implemented in Ireland is an example of the DSO model. A key characteristic of the ecar project is the high degree of standardisation and integration with the electricity market. The other models are unlikely to support wider geographical rollout due to the high capital costs and the uncertainty of long term business models concerning the provision of charging network. Key feature of market model Ownership of infrastructure DSO s role Support wider geographical rollout Integrated Infrastructure Model (IIM) DSO or government-led agency Ownership/lead role Separated Infrastructure Model (SIM) Owner separated from DSO Independent emobility Operator Model (IEOM) Bundled owner/operator/retail er Facilitate access to network Spot Operator Owner Model (SOOM) Parking spot owner/operator Facilitate access to Facilitate access to network network High Medium Low Low Degree of High Medium Medium Low 1
standardisation Infrastructure costs distribution Ease of market entry for energy suppliers Grid system support capability Costs spread across customer base Costs spread across customers by region Costs spread across customers within subscription pool High Medium Low Low High Low Low Low Tariffs certainty High Low Low Low Integration with electricity market systems High Medium Low Low Need for further government subvention if not meeting adoption target Low Medium High High Table 1: Benchmark Market Models for EV charging infrastructure roll-out [3] Costs spread across users on the spot The IIM is further developed to describe the transaction flows (energy and payment) in order to make the relationships between the agents clearer. Given the high capital costs of charging infrastructure in early phases, the model needs to consider options for including and excluding the EV charging network from the regulated sector of the electricity industry. The basic design of the proposed market model is represented in Figure 1. TSO DSO(s) DSO Control Signal Regulated Sector Deregulated Sector Option to exclude EV network from regulated assets Generation Use of System Charges Private Meter Wholesale Electricity Contract Electricity Wholesale Market Wholesale Electricity Settlement Smart Metering & Data Aggregation (SMDA) CP Payment & Management System (PMS) DSO Control Signal Private CP Option to include EV network as regulated assets Customer Account Interface Onboard Meter Public CP EV Owner Web 2.0 & Mobile Apps Wholesale Electricity Contract EV Tariffs Electricity Suppliers EV Energy Retail Contract 2
Legend Regulated Sector Independent Businesses Centralised Functions EV Related Functions Energy Flow Cash Flow Information Flow Regulation Boundary Figure 1: Basic design of the Proposed Market Model A key feature of the model is the centrally managed Payment & Management System (PMS). Energy flows from the generators, through the transmission and distribution network to the EVs via private or public chargepoints (CPs). Private CPs are metered via existing home meter or new smart meter whereas the public CPs are metered through the onboard meter. Both type of metering should be capable of communicating with the PMS in real-time or near real-time. PMS also acts as a portal for EV owners and electricity suppliers, allowing EV owners to manage their accounts and electricity suppliers to offer tariffs and marketing information. An open database means Web 2.0 applications and mobile apps could be developed by independent parties around the EV ICT environment. This will encourage innovations in new service models. The PMS then passes the metered data and associated information to the Smart Metering & Data Aggregation (SMDA) agent of the electricity market. SMDA exists as an entity or entities in most European electricity markets as the agent who handles the settlement of metered volumes and the electricity network access payments for generators and suppliers in the wholesale market. The communication module between the DSO and the CPs would enable grid ancillary services such as demand response to be provided by EV customers via Service Level Agreement (SLA), a customised contractual agreement. It must be noted that the model prescribed here needs to consider the existing electricity structure of an individual country. For example, countries with multiple DSOs may require an aggregating agent to handle the tasks associated with installing, operating and maintaining the CPs. The main issue with EV charging network is the recovery mechanism for its investment cost. The initial capital expenses depend on the charging level (maximum current), the sophistication of communication module and the existing electricity network capacity. All of the features that would maximise the benefits of EV charging to the grid tend to add significant costs. The current low penetration of EV means that any installed public charging network will be under utilised, causing the recovery of capital costs to be even more difficult. If the capital costs were to be incorporated into the charging cost, then customers will simply avoid public charging all together, leading to a complete non-recovery of investment. Even in the longer term, a mass utilisation of public charging network is uncertain due to the potential development of battery technology and competing technologies such as inductive charging and battery exchange [5]. The improvement in EV travel range on a single charge will reduce the need for public charging network. However, the uptake in EVs depends on the availability of public charging network. Consumer studies have shown that a comprehensive and visible public infrastructure is critical to EV adoption [2]. The above conflict is the reason why governments intervention in investment recovery is necessary. The mechanisms can be by way of direct subsidy, through a public entity or through the existing regulated asset return mechanism imposed on the DSO. All of these lead to the socialisation of charging infrastructure costs during the early phases. Business Models A definition of business model is provided here to distinguish business model from market model. By business model, we refer to the mechanism for which an organisation creates, delivers and captures value. EV charging is often viewed as an opportunity for the electricity sector to develop viable business models, not only in the sale of electricity but also in grid management and balancing benefits [6]. These potential services could be packaged into customers Service Level Agreements (SLA) 3
which define the type of two-way services that customers are receiving and providing. However, these opportunities depend on the market model that is in place. The proposed market model could enable business models to be developed around energy sale and ancillary services such as demand response, interruptible charging and frequency control. Uncontrolled mass charging of EVs could pose significant challenges to grid operation as charging during peak hours increases the peak further. This will lead to higher installed capacity and hence will increase electricity cost overall. Off-peak charging on the other hand, has the positive effect of utilising otherwise unused generating capacity. This is sometime referred to as valley filling and is a key objective of smart grid concept [1]. With higher penetration of wind energy in the electricity system, charging and storing the wind energy in EVs for later use creates significant benefits in terms of emissions and the optimisation of renewable energy. The rollout of smart meters enables customers demand profile to be reliably obtained which will allow electricity retailers to formulate tariff offerings with better cost accuracy. However, these benefits are highly dependent on customers behaviour. Without mass market experience, it is not fully understood to what extent charging behaviour can be altered by tariff incentives. The practical nature of EV charging must also be considered. For consumers to forego the opportunities to charge whenever possible, the tariffs will have to be high enough to compensate for the inconvenience and the real or perceived negative impact on the vehicle batteries. Nonetheless, with the proposed market model and the emergent standards of charging equipment, it is possible to enable grid ancillary services deals to be structured between the suppliers and customers or between grid operators and customers. The current emergent standards within vehicles and charging stations are capable of supporting uni-directional flow electricity i.e. from grid to vehicle. Ancillary services such as demand response will require control module to be linked to DSO control centre. Table 2 presents the type of charging and the associated SLA components that could be structured. It highlights the importance of the chosen technologies today to enable medium term business models. In the longer term, Vehicle to Grid (V2G) service could be enabled by bi-directional inverters and the associated controllers installed in the vehicles. In addition to demand response, the vehicles can act as group of generators during peak hours, replacing costly peaking generators in the system. However, it should be recognised that there are significant challenges associated with impact on battery life, system stability and customers acceptance. Home Charging Workplace Charging Public Charging Equipment Fixed meter smart meter EV charging equipped with remote control Fixed meter smart meter Option for separate EV meter if charging amount significant EV CP equipped with remote control EV CP equipped with electronic identification (at local site only) Onboard meter / virtual meter for each customer EV CP equipped with remote control EV CP equipped with electronic identification (centrally managed customer account details) Fast DC charging (50kW) Potential Components of Electricity Supplier-Customer SLA (Medium Term) On/off peak tariffs Time-of-Day tariffs Demand response service Interruptible service Wind load-following tariffs Demand response service Interruptible service Wind load-following tariffs Frequency control Time-of-Day Tariffs (the use of DC fast charge will incur premium charge due to the higher cost of equipment) Payment Options Pay per use Fixed fee Pay per use Fixed fee Pay per use Fixed fee Charge to home account Anonymous prepaid card Credit card spot payment Table 2: Type of EV charging categories and potential SLA components 4
Standardisation Key to the success of any chosen business model is the uptake of EVs on a wide scale. Currently, the lack of standardisation is seen as a huge barrier to wide scale adoption of EVs. The European Automobile Manufacturer s Association (ACEA) released a position paper with recommendations for the charging of electrical vehicles in September 2011 [7]. This paper stated three goals that would be achievable by their recommendations: (1) Consumers will find a unique EU-wide solution, at reduced cost and fulfilling all safety requirements; (2) Infrastructure providers are provided with a clear indication about future developments and investment planning; and (3) OEMs will be able to reduce costs and progress more quickly on the market uptake of electrically chargeable vehicles. These goals are highly desirable. However, the problems of interoperability are not easily solved. A recently released paper from the CENELEC Focus Group on European Electro Mobility [8] details the main standardisation issues related to connectors, smart charging, communication, batteries and EMC of EVs and charging stations. In the context of this paper, the most crucial areas in terms of the implementation of a business model are connectors and communication protocols (including smart charging). These aspects will be discussed here. Standardisation of the connectors will facilitate a wider adoption of EVs. There are emerging standards on connectors which are the de facto standards being adopted across Europe. In Ireland for example a charging infrastructure which is compatible with all EVs currently available is being installed across the country. The emergent standards are capable of supporting the proposed DSO model. The mechanisms by which the key features of the market models from Table 1 are achieved using this DSO model are detailed below. Owner/Operator - EV drivers are centrally issued with a Radio Frequency Identification (RFID) card by the Operator. Compatibility between these RFID cards and the charging stations can be ensured as the Operator controls and manages the systems. Standardised Infrastructure - Centralised procurement of a large number of charging stations over a wide geographical area eliminates interoperability risks. Only charging infrastructure that is compatible with the EVs available in the local market is purchased. This charging infrastructure is controlled by the Payment and Management System (PMS). The PMS is effectively a backend IT system that communicates and takes data from the charging stations. The PMS manages various aspects of a charging station such as usage, availability data, fault reporting etc. The operation and maintenance of the charging stations can also be managed via the PMS. Costs Distribution The proposed market model reduces the upfront risk for the Operator. The upfront costs of the infrastructure are not passed directly onto the early EV drivers, who have already paid a premium and taken on risk in adopting new technology. Ease of Market Entry - The installation of charging stations with sufficient metrology and communications capability facilitates an open multi energy retailer model. Grid Support An infrastructure centrally managed and controlled by a DSO lends itself very highly to grid support services compared with other more segmented approaches. Tariffs A transparent market structure will allow for price certainty for consumers due to the centralised portal of PMS where tariffs are clearly comparable. Integration to Existing Wholesale/Retail Markets The proposed model allows prepaid subscription which could reduce the barrier of entry for energy retailers. Connectors The issue of what plugs and connectors to use to charge an EV is one of the most fundamental but much debated parts of a charging system. Figure 2 shows the layout of the charging system for an electric vehicle. 5
Figure 2: EV charging systems [7] There are currently two proposals for the socket outlet and at least five for the vehicle inlet. The early supply of EVs into the European market are mainly equipped with vehicle inlet in compliance with standard SAE J1772 [9]. SAE International is an organisation of engineers and technical experts in the aerospace, automotive and commercial-vehicle industries. However, the EVs due to be on sale in Europe from 2012 onwards from European OEMs will have a different vehicle inlet. The EVs will contain an inlet that is described in the IEC 62196-2 standard [10]. In order to achieve faster charging, the Japanese automakers are utilising DC fast charging using the CHAdeMO Association Protocol [11] standard which was developed by TEPCO, Nissan, Mitsubishi, Toyota and Subaru. Some US and European OEMs will implement DC fast charging using different inlets to the existing and working CHAdeMO inlet [4]. US EV manufacturers are proposing an inlet called the Combo 1 inlet and the European EV manufacturers are proposing an inlet called the Combo 2 inlet. The Combo 1 inlet and Combo 2 inlet are effectively the inlets as described in SAE J1772 and IEC 62196-2 with additional pins for DC charging. According to ACEA, the European OEMs are committed to accepting one envelope solution for vehicle inlet once it is set by legislation or standard. Advantages of this is that there will be less confusion for the consumers as to where to plug in and less costs for the manufacturers/providers as only one inlet needs to be provided. ACEA stated that the proposed joint envelope profile facilitates the exchange of Combo 1/Combo 2 solutions and will lead to significant simplification of charging mechanisms for consumers, as well as cost reductions for the industry. CENELEC [8] stated that Europe should endeavour to define a combined solution for a unique vehicle inlet which is harmonised with the US market while seeking a satisfactory solution for CHAdeMO compliant vehicles that are on sale in Europe. Communication Protocols The communication protocols achieve the following functions: 1) Identification and authorisation of the user or EV by the charging station 2) Communication between EV and charging station a. For safety and charging rate determination b. For value added services 3) Communication between the charging station and PMS 1) Identification and Authorisation of User and EV RFID cards are the common way of identifying and authorising users at charging stations at present. Early suppliers of charging stations either installed high frequency (13.56MHz) or low frequency RFID readers (125kHz) in the charging stations depending on the manufacturer. This meant that users had to carry several RFID cards or tags to use the various charging stations. This issue has largely been eradicated now as suppliers have migrated towards high frequency IEC 14443 [12] RFID technology. Early charging infrastructure suppliers to the market also developed closed systems in an attempt to capture all the users themselves. Users would pay an annual subscription fee for the use of 6
that supplier s equipment. This closed approach was rejected by the industry and more open models are being rolled out in various jurisdictions. 2) Communication Between EV and Charging Station There are different functions for communication between the EV and charging station. Most fundamental is that the charging station has to recognise that an EV is connected and the charging station has to tell the EV what current is available to draw. This communication consists of a static 12V DC signal and a +/- 12V Pulse Width Modulation (PWM) signal with a variable duty cycle. There is a dedicated pilot line between the EV and the charging station for this communication. IEC 61851-1 [13] and SAE J1772 both define this communication. The CHAdeMO protocol defines a protocol using CANbus communication. Careful testing and validation programs carried out by the EV manufacturers alongside charging station suppliers have mostly eliminated initial interoperability issues of these protocols due to gaps in standards. Other communication protocols currently being proposed are G3-PLC and IEEE P1902.2 HomePlug Green PHY. ACEA have recommended IEEE P1902.2 HomePlug Green PHY using the Control Pilot line and Protection Earth connections. The main additional benefit of this communication protocol is that additional (and currently undefined) value added services can be included. These services would consist of additional information about the battery status and EV information being available to the charging station. However, there are alternative methods of communicating the battery status information to the charging stations directly from the EV such as GPRS. 3) Communication Between Charging Station and PMS The owners or operators of an EV charging network require a PMS in order to manage a network of charging stations. However, it is highly desirable from the charging station owners and operators point of view that a single PMS be able to manage charging stations from several equipment suppliers. Proposed solutions are being developed by market front-runners such as in the Netherlands, Ireland and Portugal. The communication protocol defines the important commands, transactions and communication channel between the charge point and the PMS. Charging stations suppliers are either supporting this protocol directly from their charging stations or by using a protocol adaptor from their own systems commands to the PMS. A network of charging stations supporting these commands will facilitate the implementation of the proposed market model. CONCLUSIONS This paper proposes that the DSO driven market model is best placed deliver a rapid, cohesive and widespread development of charging network during the early phases of EV development. However, the other more market-driven models may be more appropriate when EV mass adoption is achieved. The DSO driven model was presented as being most suitable for the rapid uptake of EVs based on the current economics of charging infrastructure and the vital role of DSO in accessing the electricity distribution network. Key issues such as investment costs, integration with existing electricity market, ease of market entry for energy suppliers, grid system support capabilities and the need for government subventions are considered to derive the proposed market model. In addition, potential business models were examined for their value-adding features in EV charging and grid services. The basic design of the proposed model would enable value-adding business models to be developed in the areas of energy retailing and the provision of EV grid services. Many grid services will require high levels of standardisation in terms of market structure, charging equipment and communication technology. It is argued that the proposed market model provides the necessary foundation for these services to be transacted. In addition charging technologies and their standardisation are critical in achieving the interoperability objective. The standards for EVs were discussed under the main issues of connectors and communication protocols. It was shown that this market model can be implemented using connector and communication protocol standards that are in place today. 7
BIBLIOGRAPHY [1] DeForest, N., Funk, J., Lorimer, A. and Ur, B. Impact of widespread Electric Vehicle adoption on the electrical utility business Threats and Opportunities, Berkeley: University of California Press; 2009.. [2] Deloitte, Gaining Traction - A customer view of electric vehicle mass adoption in the U.S. automotive market, 2010. [3] Eurelectric, Market Models for the rollout of EV public charging infrastructure, 2010. [4] Hiroyuki, A. Standardisation of DC fast charging and the implementation of infrastructure, Tokyo Electric Power Company, 2011. [5] Kley, F., Lerch, C. and Dallinger, D. New business models for electric cars A holistic approach, (Energy Policy, vol. 39, April 2010, pp. 3392-3403). [6] San Román, TG., Momber, I., Abbad, MR. and Miralles, AS. Regulatory framework and business models for charging plug-in electric vehicles: Infrastructure, agents, and commercial relationships, (Energy Policy, vol. 39, August 2010, pp. 6360-6375). [7] ACEA position and recommendations for the standardisation of the charging of electricallychargeable vehicles. [8] CENELEC Focus Group on European Electro Mobility, October 2011. [9] SAE J1772 - Electric Vehicle and Plug in Hybrid Electric Vehicle Conductive Charge Coupler. [10] IEC 62196-2 Plugs, socket-outlets, vehicle connectors and vehicle inlets Conductive charging of electric vehicles Part 2: Dimensional compatibility and interchangeability requirements for AC pin and contact-tube accessories. [11] CHAdeMO Association Protocol. [12] IEC 14443 Identification cards Contactless integrated circuit cards Proximity cards. [13] IEC 61851-1 Electric vehicle conductive charging system Part 1: General requirements. 8