I received the letter below from Jamie Austin, the Director of the Transportation Policy Branch MTO. The original letter is here, I have made the text available below and I have added links to the programs Mr Austin discusses.  I am very grateful to Mr Austin for taking the time to respond and I think he is offering some insights into how the Province will address the issues we see with the EV programs.  As a community we still have a lot of work to do to address some of the policy gaps.

Our review is here, I suggest you read it first if you have not seen it before.

Dear Mr. Eglin,

Thank you for your email to the Honourable Steven Del Duca, Minister of Transportation dated October 5, 2017 and your emails regarding your review of Ontario electric vehicle programs. I appreciate your interest and enthusiasm for electric vehicles, and assure you that we share your ambitions for the electrification of transportation in Ontario. As a follow up to our brief discussion on these matters at the ITS World Congress in Montreal, I am happy to respond to you in greater detail on behalf of the Ministry of Transportation.

Electric Vehicle Incentive Program (EVIP) and Electric Vehicle Charging Incentive  Program (EVCIP)

I appreciate your positive feedback of EVIP and EVCIP, and acknowledge that there have been unfortunate delays in processing applications for these programs. While I am happy to report that demand for these programs has significantly increased over the last year, this led to a backlog in processing applications and making payments to program recipients. The Ministry of Transportation has recently committed new resources to the management of these programs in order to address both the current backlog and ongoing increased demand, and I’m pleased to say that this issue should be mitigated in the near future.

Electric Vehicle Chargers Ontario (EVCO)

EVCO was an application-based program that received an overwhelming response of over 200 applications. Applicants identified what they felt were good locations for the deployment of EV chargers. Because program recipients are responsible for the ongoing maintenance and operation of the chargers it is important that they themselves choose the locations, giving due consideration to the business plans under which they operate. Through the evaluation process, cost efficiency, appropriateness of the site and the number of stations per site were carefully considered, with a focus on the greatest possible connectivity of the network from among the eligible applications received.

As you have noted, there are a number of chargers that are planned under the EVCO program that are not presently listed on our website/program map. For a number of reasons, such as site conditions or host business decisions, some sites originally planned under the EVCO program have been determined to be unsuitable. In these cases wherever possible, EVCO program recipients have been proposing replacement sites to the government for consideration. These sites are added in to the EVCO map as they are approved for inclusion in the program. Where alternative locations cannot be found, projects will be modified to a smaller number of chargers/locations and the government will recover a portion of the funding that was allocated. The program is currently tracking towards the installation of nearly 300 level 2 chargers and over 200 level 3 chargers at approximately 250 locations across the province, and is currently two-thirds complete.

I note you have also observed some customer service issues with EVCO recipients. We do expect that EVCO recipients, and particularly operators of level 3 chargers, operate a 24/7 toll-free customer assistance number so that drivers can report outages and malfunctions, obtain assistance with point-of-sale and customer authentication, or to request assistance operating the charger. We are working with EVCO recipients to ensure they are meeting these expectations and we believe the issues that you have observed will improve over time.

Moving forward, we will be working to implement actions in the Climate Change Action Plan (CCAP), such as the rapid deployment of charging in government facilities, workplaces, multi-unit residential buildings, downtowns and town centres. CCAP includes up to $80 million over four years, for the continued deployment of EV charging infrastructure. We will be launching the first programming with these additional funds in the near future. As part of our program planning, we are monitoring the use of EVCO charging stations to better understand remaining service gaps. As we move towards our future plans, we will be sure to keep your suggestions in mind and welcome any additional suggestions that you may have.

I should also acknowledge the investments that the federal government is making in charging in Ontario, including projects under the Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (EVAFIDI) and the Energy Innovation Program (EIP). We are also working closely with Natural Resources Canada to identify other opportunities for investment in Ontario.

Reduced Output Fast Chargers

Your observation about some level 3 chargers having reduced output in your review and your email addressed to Minister Del Duca is correct, as is your assessment about the root cause – that 50 kW is the threshold after which higher demand fees are incurred. This is in part associated with local distribution company (LDC) policies across the province, many of which will not permit secondary electrical services to a property for safety considerations. Accordingly, some EVCO recipients have reduced the total output of fast chargers to between 30 and 40 kW. Under a program like EVCO, the only alternative would be significantly fewer chargers or to have level 2 chargers installed. We understand your concerns about this matter and are currently determining the best approach to ensure that this information is communicated to the public transparently.

Cost of Charging

Recognizing that EVCO program recipients are responsible for all operating and maintenance costs of the chargers installed as part of their projects, the province did not specify the rate that would be charged by public charging stations. Fees are set by the owner/operator of the charger, and you will find a variety of fees across the province ranging from free to $17/hour, depending on the charging speed and other factors (i.e. parking included, etc.). We are monitoring the pricing for EV charging in Ontario at both EVCO and non EVCO chargers and reserve the right to intervene where the province determines fees at EVCO chargers are unreasonable.

With regard to kWh pricing for EV charging, there are additional regulatory considerations which fall under the authority of Measurement Canada, specifically under the Weights and Measures Act. The province of Ontario has had an open dialogue with the federal government on this through work related to the upcoming national Zero-Emission Vehicle (ZEV) Strategy, and we are monitoring the federal government for any regulatory changes or developments. Chargers installed as part of the EVCO program were required to have the capability to charge by kWh, so if and when these federal rules are changed EVCO recipients will have the flexibility to use kWh pricing if they choose.

EV Supply Management

Ontario has not opted to proceed with establishing a ZEV mandate, such as the approach taken in Quebec, as Ontario believes that a collaborative approach with a province-wide sales target that represents a collective goal will be the most effective approach. Through the Electric and Hydrogen Vehicle Advancement Partnership (EHVAP), the province is working closely with automakers, unions and other interested stakeholders to ensure that there is an adequate supply of EVs available in Ontario to meet demand over the next few years. We are also monitoring EV policies from other jurisdictions, including Quebec, with a particular interest on any potential impacts in Ontario.

In closing, I would like to thank you again for your feedback on Ontario’s electric vehicle programs. We are continually looking for opportunities to improve and adapt our programming to meet a fast evolving sector. I believe that we share the same enthusiasm for electric vehicles and optimism for the potential they offer to reduce greenhouse gas emissions, improve air quality, and lower transportation costs for all Ontarians. Thank you for your commitment to the electrification of transportation in Ontario.

Sincerely,

Jamie Austin Director

1. Darryl Soshycki, Manager, Sustainable and Innovative Transportation Office, Ministry of Transportation

What if I told you that from now on, in order to fill up your gas tank you had to pay $5 to put the nozzle in, and then pay per minute to get some random flow of gas. You have no control over how fast or slowly the gas comes out of the nozzle, but when your time is up, if your tank is not full yet, you will have to put in another $5 to get more minutes of flow, and repeat until full. Sounds crazy, right?! Well, this is exactly what we have at the worst of the EV chargers. Over the summer we carefully logged our travels in our new e-Golf, and discovered that road-tripping costs at least as much in an EV as it does in a fossil. In fact, gas costs could actually be cheaper, depending on the chargers you use, and the time savings per fill-up are substantial.

How can that be true, you ask? Everyone knows it only costs a few dollars to plug into a public charger, where it costs $40 or $50 whenever you go to the gas pumps. Well, if you are like me, and amps and kilowatts are a foreign language, it’s easy to be fooled into a false sense of economy.

There is no standardization in the current charging infrastructure, so sometimes you can charge your car for free, sometimes you are quoted an hourly rate, sometimes a fixed fee, and sometimes a combination, such as a connection fee and a per minute rate. Is that confusing enough? It gets worse, because even if you could do the math to compare those rates, the big unknown is how much power the individual charger will put out (this is the technical part about amps – refer to Matthew’s recent post “Ontario’s EV Program, a User’s Review” if you want a full explanation of that).

For our e-Golf’s efficiency rating of 17.4KWh/100kms, it takes over an hour, and costs more than double the price of gas to get enough KWh’s to drive 100kms! But I needed an app to do that calculation. If only charging was sold by the kWh – then all I would need to do is replace litres with kWh’s in the typical fuel efficiency equation of  “L/100kms” to make my comparison.

We did a calculation comparing the different charging networks encountered on our trips, and this is what we found when we compared apples to apples. Putting everything into the same units, the cost to travel 100 kilometres, and comparing that to the cost of the gas required to cover the same distance in an ICE vehicle, the costs are all over the place from free right up to “Ouch”.  Because of the wild west nature of EV charging, without careful planning and some inside knowledge  EV charging can cost way more per kilometre than gas!  And to add insult to injury, it takes a lot more time to fill up at a charger than at a gas pump.

To be clear, if you mainly charge at home, the amount added to your electricity bill is definitely way less than the cost of gas. And if you only take a few road trips a year, this is probably not really going to worry you that much. But for anyone who does not have access to a home charger, such as out-of-town travellers, and local condo and apartment dwellers, who must rely on public chargers, the economics of charging an EV are way out of line.

The Electric Vehicle Chargers Ontario (EVCO) program that is providing funds for Level 3 chargers across the province, failed to provide clear specifications for the output, so many of these are way more expensive than gas. The City of Ottawa’s proposed EV Charger Policy risks falling into the same category if it follows the same path. This is counter-productive to all their other programs aimed at promoting EV’s as a more environmentally sustainable mode of transportation. Never mind range anxiety, who would buy an EV if they knew that charging it while on the road might cost two or three times as much as gas, and add two or three hours to the trip?

It’s easy to see how consumers could misunderstand the cost of public charging, and I am afraid that the policy makers are no more clear on the concept than the rest of us. They need to identify their target markets, and provide reasonably priced charging options for each market segment in order to make EV ownership viable for all. The way things stand, city dwellers who do not have access to their own home charger, and tourists or long-distance travellers, both face a serious disincentive to EV ownership. And that is the untold story of EV public charging in Ontario. Who knew?

A few days ago, Canadian newspapers published an interesting, but slightly misguided article on the issues of moving gas stations to charging stations. You can read it here.

The summary of this article is that the transition from gas to electricity for inter-city travel is too hard and too expensive. The article missed the fact that the transition is going to take years and that there are other factors at play that make the conversion of a highway service stations a potential money spinner.

Timing: Even if Canada stopped buying fossil/ICE cars today and switched over to 100% battery electric vehicles, it would take 10 years or more to replace the current cars on the road. We buy just under 2 million cars per year and there are about 22 million cars on the road. Many cars now last 15-20 years so the time for total replacement will be much longer. Given current projections my guess is that it will take 20 years or more for the transition to run its course.

Electrical supply changes: In 2016 the US generated about 65% of its electricity from natural gas (33.8%) and coal (30.4%) plus a small amount of oil and other non-renewables, 19.7% came from nuclear and 14.9 percent from renewables, Hydro (6.5%) wind (5.6%), biomass (1.5%), solar (0.9%) geothermal (0.4%).

US solar and wind capacity will continue to grow, even in the current political environment.  As renewables grow, the issue becomes matching sunny and windy days to electrical demand. Storing electrical power for use later enables the power grid to make much better use of solar and wind reducing the use of fossil fuel. Tesla’s Powerwall is designed for a single home, but local, regional and grid energy storage systems are being deployed now.

As the installed base of renewables rises, grid storage becomes more and more attractive and important. By storing power in the grid or at the edge of the grid, renewable energy can be captured when excess is available and delivered back to customers when demand exceeds supply. If we are to move to 100% renewables, this will require a lot of power storage. Homes will have power walls and EVs connected to act as storage, neighbourhoods will have local storage and there will be lots of grid storage whether it is battery or other techologies.

How does this impact gas station conversion? Urban areas will not require as much public charging capacity as most EVs will be charged at home or work. Existing models of deploying Level 2 and 3 chargers will be extended, supermarkets, shopping centres, hotels and other destinations with parking will continue to deploy charges because they want to attract customers. Local gas stations will slowly disappear and are unlikely to be replaced directly.  As home EV charging has about the same impact as running central air-conditioning, the impact on the grid will be small and will be off-set by home solar and battery systems.

Along highways away from urban centres the story is very different; there is a real need for significant infrastructure to support long distance EV travel. A typical gas station delivers of the order of 200,000km of range per day to the vehicles it services. This is a huge amount of energy and is highly variable. On a holiday Friday evening, some gas stations deliver much more gas than the average day.

The move from gas to electric does not need a one for one replacement of capacity as behaviour and patterns change as we move from fueling to charging. Rather than leaving on a trip in your fossil car with whatever gas you happen to have in the tank, your EV will be fully charged before you leave home. Your car will have a range of 4-500km before you need to charge. This may serve to limit the number of times we need to stop as Ottawa-Toronto would not need a charging stop and Montreal-Toronto would only need one quick stop.

What does a highway service station of 2025 or 2030 look like?  The obvious change is that all the parking spots have high power EV chargers. A visit to the service station is just pull up, plug in and go find the coffee and the washroom. With a new generation of EVs charging at 150kW, 200km range added takes only a few minutes and you are on your way.  As there is no holding a fuel nozzle in the rain to fuel up, more time is available to relax and take a break from driving.

So this all seems great but how do we get there? The obvious answer is slowly, there is a huge investment required to make this all work but there is a less obvious way this can all work and be economic. The one key technology is local battery storage to smooth demand on the grid. Tesla is already deploying battery storage and solar at their Supercharger locations with the long term goal of disconnecting Superchargers from the grid completely.

The scale required to support a highway service area in a world where most vehicles are EVs brings us back to grid storage. By building large scale energy storage at service stations to allow them to deal with holiday weekends without overloading the local grid service stations have a huge and potentially profitable asset they can use as grid energy storage.  Grid storage works by charging when electricity supply exceeds demand when prices are low or even negative and then selling that power back to the grid when prices are high.  This technology reduces the need to have lots of backup generating capacity in the grid.

Because we all tend to hit the road on the holidays, there will be a huge difference between the typical usage of the chargers and the peak usage.  This means that the energy storage can be used by the grid most of the time, providing a significant revenue opportunity.

This model has the possibility to move service stations to an entirely sustainable future, both economically and environmentally. As service stations are largely rural, colocation of solar and wind farms is also attractive.

For highway service areas, the transition from selling gas to becoming a key part of the electricity supply system will not be easy, but it is achievable and potential profitable.