The electric vehicle revolution is well underway. According to Bloomberg NEF’s "Electric Vehicle Outlook 2019" report, United States-based EV sales will grow from 2 percent in 2019 to nearly 60 percent in 2040. And more electric cars were sold in the first half of 2018 than all of 2016. Unlike conventional vehicles that refuel only at gasoline stations, EVs charge at many locations, such as at home, at work or in public spaces. But what does EV growth mean for commercial building owners?

EVs come with environmental, health and economic benefits, however, they can also result in higher electricity costs for building owners if not properly managed. Our analysis, focused on office workplace charging, demonstrates that EVs could increase energy costs 45 to 89 percent if charging is not managed. With the right strategies in place — such as installing submetered or managed charging stations, and syncing charging stations with the building management system — building owners can take charge (so to speak) of their energy costs and continue to provide the desired amenity of charging stations while supporting the acceleration of EV adoption and decarbonization. This is a key part of the future of grid interactive buildings.

Demand charges dominate energy costs, and EVs can dominate demand charges

Commercial building energy bills consist of two charges: energy use in kWh and demand charges in kW. A daily building load profile presented in Figure 1 below helps to understand the difference between the two.

Energy use takes into account the total energy consumption used during a billing period, or the total area under the curve. Meanwhile, demand can vary from minute to minute and day to day. Demand charges are often based on a building’s maximum 15 or 30-minute usage within a given month and can influence more than 50 percent (PDF) of monthly utility costs.

 

Figure 2 breaks down the monthly utility bill of an energy efficient commercial building in Boulder, Colorado, in which demand charges dominate the utility costs. During some months, demand charges reach close to 80 percent of the bill. Although the energy efficiency measures kept the consumption down, the very short bursts of demand surges drove costs.

It is important to note that what sets EVs apart from most other electricity uses is their high demand loads and irregular charging schedule. For instance, the peak demand of an EV charger is equivalent to the peak demand of an entire house, and that load comes online whenever the EV is plugged in, presenting significant risks in energy costs. Because demand charges influence most utility costs, we analyzed how to reduce demand charges due to EV charging.

EV charging challenges

Often, charging stations in buildings are not separately metered due to lack of awareness and the need for a more complex installation. They are more likely tied into the building’s power supply so the building owner usually pays for the entire cost of the demand charges without passing them on to the actual driver. Thus, the costs to charge EVs and the value of having a full EV battery are not aligned to the same party.

Meanwhile, workplace charging often happens in the morning, coincident with building start-up. As more buildings electrify their heating energy use, this presents additional grid challenges because more loads are occurring simultaneously in the morning. Buildings also may be precooling for a particularly hot afternoon. These increased morning loads have the potential to shift the current evening system peak faced by many utilities, or even create a second peak. These sharp increases in peak demand can increase electricity generation, transmission and distribution infrastructure, which increases carbon and costs for all energy users.

Planning for EV growth

Across the United States, multiple cities and counties have been adopting building codes that require a certain amount of EV charging infrastructure ranging from EV-capable (conduit but no circuit/outlet) to EVSE-installed (fully installed and operational charging station). Standard building code organizations, such as the International Building Code (IBC) and the International Energy Conservation Code (IECC), also have EV requirements. These requirements apply an EV percentage to the total number of parking spaces and span from 2 percent penetration up to 90 percent. For instance, the city of Boulder, Colorado, follows the IBC 2017 version which states that 10 percent of parking spaces for commercial buildings must be EV-capable. Building owners should be prepared to get ahead of this curve to prevent runaway utility bills.

EV load and demand charges

Analyzing a typical building load profile of a 100,000 square foot building in Denver, we determined that 56 or more EVs charging during standard office/commuter time patterns would exceed the building peak demand and thereby control demand charges. Because EV charging is coincident with the building peak (which consists of heating, cooling, lighting, plug loads, etc.), the new building demand, or total demand, increases by 44 percent to 454 kW, costing an additional $4,600 per year.

Extrapolating, we determined the maximum number of EVs that would keep building loads under peak demand for various building sizes. Knowing this number can help building owners take advantage of simple strategies to prevent additional charges.

Strategies to manage EV loads

We propose three key strategies to avoid the increase in the building demand curve and building demand charges:

1. Submetering: At the very least, building owners should submeter the EV charging stations separately, to know how much the EVs use and how much the charging costs. This information can be shared with EV drivers. Monitoring the EVs can allow for the energy use and costs to be more transparent, thus creating an environmental and financial win-win situation for the goal of energy efficiency.
2. Managed charging: Managed charging — the ability to allow a utility or third-party to remotely control vehicle charging by turning it up, down or even off to better correspond to the needs of the grid — can shift the timing of electricity use to minimize demand as well as use cheaper pricing schemes resulting in a lower, "flatter," more flexible energy load profile. Building owners should manage their charging by installing smart chargers that can modulate when EVs charge based on grid signals, carbon signals or cost signals, or on a defined schedule based on utility rate structures. Smart chargers could be preprogrammed or ideally receive a signal from the grid enabling them to prevent coincident charging. Managed charging can help distribute charging over a longer period reducing peak demand. Not only will demand charges decrease for building owners but the charging load profile can flex to times of low carbon or low grid congestion.
   
3. Syncing charging stations with building management systems: Charging stations should sync with the building management system to manage building coincident peak demand (so EVs are not charging when the building cooling is at its peak). This would require dynamic communication between a building and the EV charging stations. This communication can weave together the charging load profile based on the building load profile to lower the overall peak demand. For example, the EVs should charge when solar is generating. The dynamic communication is an important factor as it can be used to not only reduce demand charges for building owners, but also can optimize energy use for grid services, occupant needs and preferences, and carbon and cost reductions in a continuous and integrated way.

The increase in the number of electric vehicles is exciting and necessary for a clean energy future. But we must grow EV use in a way that does not put added stress on our grid and added costs on our building owners. Fortunately, with some simple strategies, we can manage our building loads while keeping our clean EVs charged.