Shana Patadia, Head of Business Development at Synop, the leading energy management provider for commercial fleets
Global giants like McDonald's, DHL, Sysco, and Einride have made waves in the transportation sector by incorporating commercial electric vehicles (EVs) into their fleets this year. While these moves align with sustainability goals and the push for cleaner energy, they introduce new challenges, particularly in developing the necessary infrastructure for charging these vehicles. Unlike traditional gas and diesel fleets, EVs require investment and planning to establish access to charging, adding complexity in terms of cost, time, and engineering.
Many fleets are eager to transition from traditional fuels to electric vehicles to meet their sustainability goals, ESG missions, and comply with government regulations. However, they often face constraints such as initial capital needed for a large transition, access to power, and suitable real estate. For those looking to accelerate the transition and reduce initial capital expenditure, the sharing economy offers innovative solutions to these challenges.
The sharing economy has a proven track record of disruption, as seen with Airbnb's asset-sharing approach, which transformed the hospitality industry and was subsequently applied to transportation through companies like Uber. Today, startups like Revel are integrating passenger EVs into the sharing economy, demonstrating the potential for similar innovations in the commercial sector.
Considering the extensive infrastructure needed to support the commercial EV transition, could a software-supported sharing economy help sustainably accelerate adoption? Leveraging shared resources to overcome the financial and logistical barriers that fleets face might offer a viable path forward.
A “shared” approach to infrastructure lowers barriers to entry
There are a growing number of companies applying the principles of the sharing economy to the world of commercial EVs. One example is Forum Mobility, which offers a subscription model for charging stations and EV trucks. This service lowers or eliminates the initial investment for fleets looking to speed up their EV transition, especially in a state like California which is home to both the world’s first ban on diesel truck sales and one of the most concentrated logistics centers in the world. This business model allows the cost to shift from upfront capital expenditures for the fleet, to operating expenses.
Beyond lowering barriers to entry, a shared approach will also lower the number of interconnection agreements in the queue. Because large charging stations quickly multiply the required energy load in any one location, utility companies have to make investments of their own like new transmission lines, which take ten years to build on average. At the same time, US utilities are contending with high-polluting baseload generation such as coal-powered energy sources being taken offline faster than renewables are coming online – an additional complexity for the grid to balance.
Instead of several independent depots being built by fleets, all requesting power, the shared approach would mean a fraction of the depots needing power and able to meet the needs of a range of fleets with complementary route schedules. Going back to the Forum Mobility example, their Port of Long Beach project is being designed to charge over 200 trucks a day at full capacity, which is far more trucks and kWs than most fleet operators are currently working with. All of this also means that the same infrastructure is able to get much higher utilization, inherently lowering the $/kWh installed.
Concentrating more power to one location can be mutually beneficial to both fleet operators and utilities when it comes to cost savings and faster deployments.
Larger depots can incorporate DERs, relieving the grid
In order to avoid the aforementioned interconnection wait times, small, privately-owned chargers for passenger vehicles have incorporated lithium-ion battery banks to make fast charging possible without a higher-voltage connection. Similarly, large, shared charging depots will want (and need) more control and independence from the grid. The best method to achieve this is to incorporate battery storage and renewables like solar, which in turn can relieve an already strained grid.
This would consequently serve as a win-win for local utilities who are already facing a backlog of nearly 12,000 projects, 95% of which are for solar, storage or wind interconnections. According to the Lawrence Berkeley National Laboratory, 1,570 GW of generator capacity and 1,030 GW of storage capacity are waiting in the queue. In short, utilities have enough on their plates as it is, so consolidating projects can lend a proverbial hand.
A recent example of a commercial charging depot leapfrogging interconnection wait times can be found in the Denker Avenue Depot launched by Prologis. According to the warehousing giant, they were given up to a two-year wait for the project from the utility. To speed up this timeline, they developed a microgrid that incorporates alternative fuel generators and an 18-megawatt-hour battery bank.
Though the dependence on natural gas may make this example “imperfect,” the net gains of hundreds of EVs being on the road in place of 100s of ICE vehicles is promising. It also serves as a strong illustration of how the sharing economy can serve as a stepping stone to a more sustainable future as greater efforts are made to strengthen the grid and incorporate renewables.
Large-scale energy storage can have significant V2G impact
In a recent analysis, consulting firm Rystad Energy reported that data centers and electric vehicles in the US will represent 290 terawatt hours of annual electricity demand by the end of the decade — or in other words, enough electricity to power Turkey for a year. What this analysis lacks, however, is nuance around the different ways in which data centers and electric vehicles use power. For example, EV load can often be shifted to match grid needs and both charging infrastructure and vehicles are increasingly being designed for bidirectional energy flows, or vehicle-to-grid (V2G).
Thus far, V2G has largely been an experiment, but summer’s heat waves have been an excellent study in its future potential, especially in the case of school buses due to the large amount of downtime built into their schedules. In collaboration with utilities and fleet operators across the country, in June 2024, Synop helped deliver just over 15 MWh of energy back to the grid during peak demand hours. Across a couple summers, that is over 55 MWh sent back to the grid from school bus batteries, without any disruption to the school buses main function.
Implementing this technology, however, is complex, costly, and comes with systemic challenges, including the lack of regulations and standardization. Aside from utilities making investments in the technology that makes V2G possible, many questions remain - how do we gain more insight into the real grid needs and better align with that? How should energy be priced? How can these signals best be sent and utilized?
Large scale depots could play a key role in helping discover the answers to those questions. The tremendous amount of energy made available through the combination of several commercial EVs and on-site battery storage could make V2G impactful on an unprecedented scale. It would also be far easier to manage if coming through a centralized site rather than multiple, small-scale connections. Considering the many threats extreme weather alone makes to the stability of the grid, a powerful, localized center of support could be life-saving.
As the EV industry continues to grow, it will increasingly find itself sandwiched between significant energy needs, outdated or overtaxed utility infrastructure and power generation, and incentives and mandates pushing progress. Incorporating more sharing-based solutions may be the win-win solution for fleets and utilities to address critical infrastructure and cost barriers. It can also offer more efficient and resilient means to strengthen the grid. Though the path will not be without its challenges, the ethos of collaboration that is central to the sharing economy will be key in forging toward a more sustainable future.
