V2G has huge potential to help balance the grid by leveraging the latent capacity of idle battery storage, but do the numbers stack up for Australian fleet owners?
EV Charging Station Economics
It stands to reason that in these early years of EV adoption EV charging station operators will run at a loss, with expensive charging hardware sitting idle for a chunk of the time.
Inspired by a recent share we saw on LinkedIn that referred to a McKinsey & Company report discussing the topic, we spun up a model in Gridcog to explore what drives profitability and how that varies between markets.
In our model we've created identical fictional charging stations in London, Amsterdam and Sydney. Each station operates 4 x 150kW fast chargers with an assumed utilisation of 15%, so that's 600kW of available charge The charger configuration and utilisation is identical to that referenced in McKinsey report.
The 15% utilisation has a diurnal shape that's informed by Gridcog's own dataset. See the Charger Utilisation chart.
The purpose of the model is to find the breakeven price, in p/kWh, at which the station owners would need to sell charging for in order to fully recover their costs for a year.
For energy supply costs, each station is exposed to the corresponding wholesale market and we're using pricing from the last 12 months in each case. So that's GB and Netherlands Day-Ahead markets for London and Amsterdam, and the NSW Spot market for Sydney.
For network tariffs we've selected the LV tariff that best matches the load profile: For London that's UK Power Networks LV Site Specific Band 4, for Amsterdam that's Liander's MS tariff and for Sydney that's Ausgrid's EA310.On the hardware side of things, we've used the numbers from McKinsey's article so capex depreciation of about £63k per year plus opex of £20k. These figures are the same for all sites.
The simulation was run in GBP using today's exchange rate for Euros and Australian Dollars where necessary.
🦘 Sydney came out on top as the cheapest place to operate a charging station, with a breakeven sell rate of 22.6p/kWh
⚖ In general total costs were very similar across the three cities despite the cost stack being really quite different
🇬🇧 London had the highest energy commodity costs but the lowest network tariff charges
Modelling EV charging in all it's forms is one of dozens of energy transition questions that the Gridcog software can help answer, so hit us up if you'd like to find out more 🚚