Slide 1. Introduction.
The class develops the importance of the electric tariff in reducing electric vehicle costs, and the implications for fleet management.
Slide 2. Choosing the right electricity tariff.
It is imprudent to say that moving around in an electric car is cheaper than moving around in an internal combustion car. This depends on many factors, from the model of car to the price of fuel and, of course, electricity, but it is generally true. It can be demonstrated with numbers.
The energy consultancy Cornwall Insight has done a study to shed a little more light on this question, and its conclusion is clear: in the worst case, owners of an electric car pay £630 a year, about 740 euros at the exchange rate, while owners of a gasoline car spend £1,432 a year on fuel, the equivalent of about 1,685 euros.
- Choosing the right electricity tariff, when to charge and where to charge is key to reducing costs.
That's around £945 in savings on average, but Cornwall Insight says you can save even more by making the right use of electricity tariffs. To make these calculations, Cornwall Insight has taken into account an annual mileage of 7,000 miles, that is 11,265 kilometers, but the consulting firm points out that the savings can be greater with a higher mileage of at least 10,000 miles that is 16,000 kilometers per year; in the latter case, using an electric car can save just over 2,000 euros per year.
The study was carried out with an electric vehicle efficiency of 3 miles/kilowatt hours, that is 4.8 kilometers/Kilowatt-hour, a consumption of 20.83 kilowatt-hours per 100 kilometers, which is the consumption of an SUV or electric car.
And with an internal combustion engine vehicle efficiency of 30 miles per gallon, that is 12.69 kilometers per liter, a consumption of 7.87 liters per 100 kilometers, which is the consumption of a mid-range passenger car.
The most economical recharging is the one that takes place at our facilities, outside the highest peak demand, which is the off-peak rate during the night.
This is followed by recharging at our facilities at the normal rate, during the day.
Charging at public or third-party charging points is more expensive than charging at our facilities, for any type of charging speed, but less expensive than charging a vehicle with an internal combustion engine.
The faster the recharge at public or third-party recharging points, the more expensive it is.
Ultra-fast charging at public or third-party charging points is even more expensive than an internal combustion engine vehicle.
Importantly, Cornwall Insight says that 82% of EV drivers are not taking advantage of the most cost-effective tariffs, so if tariffs are chosen well, recharging can be cheaper.
This is something that can be applied to recharging at public charging points, and to recharging at our facilities because there are a multitude of tariffs in both cases, not only between different operators, but also within the same operator.
In most companies there are different electricity tariffs for our installations. For example, the Spanish electricity company Iberdrola offers its customers four electricity plans with different prices for the energy consumed and for the power. For example, with its so-called Stable Plan, the kWh is paid at 0.138 euros at any time and any day of the week, while, with its Smart Savings Plan, the kWh is paid at 0.191 euros at peak hours and 0.095 euros at flat hours. This means that charging an electric car at our facilities can be much cheaper depending on the chosen tariff and the time of day.
For example in Spain, the time discrimination for electricity tariffs has three bands: peak, flat and valley. Peak hours are those with the highest energy demand, generally from 10:00 to 14:00 and from 18:00 to 22:00 on weekdays. Flat hours are those of intermediate demand, usually from 9:00 to 10:00, from 14:00 to 18:00 and from 22:00 to 00:00 on weekdays. Off-peak hours are those of lower demand, generally from 00:00 to 8:00 on weekdays, and all day on weekends and holidays.
There are electricity tariffs that vary according to these bands and with which the kWh is cheaper during off-peak hours. Other tariffs do not take into account time discrimination and charge the kWh at the same price every day and at all hours.
Depending on your needs, an electric car user who often charges on site can save a lot of money per year by choosing the right tariff. For a fleet that can charge daily at night, it is most cost-effective to choose a tariff that charges much cheaper per kWh during off-peak hours. There are also specific tariffs designed to save when charging an electric car.
"EV-specific tariffs, which reward fleets for charging overnight when electricity demand is low, can dramatically reduce electric vehicle costs. However, they are not right for everyone," says Cornwall Insight, although it warns that not everyone is interested in having these tariffs: “Some special electric vehicle plans come with higher maximum rates and lock-in contracts, which means fleets need to be mindful of how and when they use electricity more broadly.”
If we go back to making numbers, it is clear that recharging at public points is much more expensive than doing it in our facilities and that it is also important to choose the right tariffs.
We can again take as an example the electric company Iberdrola; in its public charging network, this company has different rates and charges the kWh at 0.25 euros in its charging points limited to a maximum power of 22 kW, while one that charges at a maximum of 120 kW charges the kWh at 0.6 euros.
Thus, fully charging a car with a 50 kWh battery capacity at the first charger would cost 12.5 euros, while charging at the 120 kW point would cost 30 euros. We are only talking about cost, not the time needed at one and the other.
- Fleet management implications.
- Location of the fleet recharging points.
The cheapest recharging cost is at our facilities, and the most expensive is at public or third-party recharging points, and also if we use fast recharging the cost goes up.
The electric vehicles of the fleet must be recharged in our facilities to ensure the use of the vehicles, it is not recommended to recharge in third party recharging points, public etc. because they may not be in service, or occupied, and therefore we would have serious problems to use our vehicles to provide the service.
In public or third party recharging points we do not have control of cybersecurity, and therefore we are running a risk of suffering a cyber-attack, so it is not recommended to use them.
In our facilities we have control of vehicle recharging, and we control which workers use the chargers.
For these reasons it is recommended to have the recharging points in our facilities.
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- Choice of electricity tariff.
A reduction in electric vehicle recharging costs can be achieved by making the right choice of electricity company and electricity tariff.
In companies where the fleet is the main asset such as transport, logistics, cab, or carsharing companies, the main energy consumption of the company is the fleet, and the company's electricity tariff has to be set to obtain the lowest recharging cost.
In companies where the fleet is not the main asset, and it is used for employee or commercial mobility, the energy consumption of the fleet is not the main consumption of the company, and in the establishment of the electricity tariff it has less influence.
It should be taken into account that the electrification of the fleet is incipient in many companies, and they have a few electric vehicles, which will have very little influence on the choice of the company's electricity tariff, but in the coming years they will be fully electrified, and will be the main reason for the establishment of the electricity tariff.
It is recommended to negotiate directly with an electric company our tariff for at least one year of duration, and to request an offer from at least 3 different electric companies. It may happen that there are only a few electricity companies that can supply us with electricity because the electricity market is an oligopoly, as is the case in Spain.
We have to negotiate for all the energy of our company, both electric vehicles and the facilities and offices to have the greatest bargaining power and get the cheapest kilowatt hour. In addition, a percentage discount can be obtained for the total annual consumption.
The ideal in a fleet is to recharge at night as slowly as possible to have the most economical rate and recharge, but in some fleets this is not possible.
It is necessary to negotiate the rate by time of day, having the cheapest rate when our electric vehicles recharge.
We have to make an estimate of the total consumption of the fleet and of the facilities and offices, and calculate an estimate of the total cost of energy of the company for different tariffs.
As fleet managers our goal is to obtain the most economical recharging cost, so that the cost of vehicle ownership is the lowest possible, but it is not always possible.
We can have a very cheap rate during the night to recharge electric vehicles, but during office and facility hours a more expensive rate than we had before, and the total company energy cost increases.
It is necessary to take into consideration if the electricity tariff has a permanence contract, because during all this period we will have the same tariff or we will not be able to change the electricity company, unless we pay a compensation to the electricity company for the change. It is possible to include in the permanence agreement a number of changes in the electricity tariff without penalty.
It should be taken into consideration that the choice of the company's electricity tariff is not normally made by the fleet manager, and is usually established by the operations director, or the financial director, or the general manager, but the fleet manager has to give his opinion as to what is the best tariff for the fleet.
When you do not negotiate directly with the electric company to reach an agreement, or you do not reach an agreement, you have to know the tariffs of at least 3 electric companies and choose the one that best suits your company. There are companies that have established rates for electric vehicles, which are usually at night.
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- Energy generated with renewable energies.
The main reason for the change to an electric fleet is to achieve zero net emissions, not to pollute in the generation of energy, and in the use of the vehicle.
For the whole cycle to have zero net emissions, the energy consumed by electric vehicles must be generated by renewable energies such as solar, wind, hydro, geothermal, tidal or wave energy.
It is necessary to choose the electric company that supplies all the energy coming from renewable energies, and to include in the agreement penalties for each kilowatt hour that does not come from renewable energies.
Normally the electric companies themselves provide information on how the energy is generated.
There are utilities that generate all of their electricity from renewables but there are other utilities that have a mix of electricity generation using, for example, renewables, natural gas, coal or nuclear power.
Slide 3. Thank you for your attention.
The class has developed the importance of the electricity tariff in reducing electric vehicle costs, and the implications for fleet management, see you soon.
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