Apr 24, 2024
Business
10 min read

How can CPOs make their business more profitable?

In the rapidly evolving landscape of electric vehicle (EV) charging, Charge Point Operators (CPOs) face the critical challenge of managing costs associated with building and operating charging infrastructure. The most common financial risks stem from costly grid upgrades and ever-increasing performance prices during operation. Both grid upgrades and peak performance price payments significantly surpass the investment in a load management solution.

For destination CPOs, failure to adopt a strategic approach to managing these costs increases pressure from competitors. The risks to CPOs are tangible, as the entire industry competes for profitable operation of expanding EV charger fleets. Until recently, the issue was less pressing, with charging stations often idle due to faster construction than EV sales. However, as EV drivers replace petrol car owners, demand for both en-route and destination charging hubs is escalating. This places greater strain on the charging infrastructure, causing grid operators to raise prices for grid connections and demand charges, exacerbating issues for CPOs.

Without dynamic load management, energy demand peaks can substantially inflate expenses, endangering financial viability. Furthermore, mismanagement of solar energy—specifically, feeding it back into the grid rather than directing it towards EV chargers or storing it in a stationary battery—can lead to significant financial losses. These pitfalls can be easily circumvented with the right software solution.

As EV charging matures, these points underscore the pivotal importance of intelligent load management in mitigating costs associated with building and operating charging sites, safeguarding the business case for CPOs today and in the years to come.

Our Load & Energy management platform, HARMON-E, offers many useful features that enable CPOs to:

  • Avoid overloading at the grid connection point or any on-site substation.
  • Maximize their utilization of locally available, inexpensive renewable energy.
  • Ensure that peak charging demand does not result in unwanted increases in performance-based grid fees.
  • Integrate stationary batteries with charging stations to buffer power demand.
  • Aggregate their portfolio of hubs to participate in the flexibility market.

Navigating the grid connection challenge

A common concern for destination CPOs is grid capacity, which often becomes a bottleneck due to the increasing demands of fast chargers and a growing number of standard charging stations. Traditionally, enhancing grid capacity through upgrades is a costly and time-consuming process. CPOs must cover expenses for new transformers, civil works, and cabling, and frequently experience delays while waiting for grid operator action on requested upgrades. While in some cases, grid upgrades may be necessary (e.g., where high power demand and usage justify the expense), we advocate for the adoption of an intelligent energy management solution as a cost-effective alternative to maximize output from existing grid connections.

Embracing Load Management for cost efficiency

Our intelligent load management system, HARMON-E, is designed to optimally distribute energy across charging EVs, maximizing the efficiency of existing infrastructure. Load management can optimize either for cost or available power. By allowing the CPO to set a maximum charge limit for the site, they can control costs associated with the performance price of that limit. Especially for destination CPOs, where EVs often have longer parking times, there's an opportunity to charge vehicles at low power. Continuous allocation of power in the best possible way is enabled by HARMON-E, which redistributes power from one charger to another when a vehicle is full or not using its full allocated capacity, ensuring efficient use of resources.

Using local solar energy

Some locations allow CPOs to utilize locally generated solar energy, providing a cost-effective charging solution. Integrating solar energy enables CPOs to bypass performance-based grid fees and taxes. Solar energy currently stands as the most economical option available, offering significant savings to CPOs when used for charging EVs.

As HARMON-E serves as the data center for CPOs' charging operations, the system matches produced solar energy with energy charged into vehicles. Companies can thereby demonstrate their commitment to operating climate-friendly mobility. This opportunity is one we can assist CPOs in seizing, thanks to our advanced load and energy management platform.

Leveraging flexible tariffs for optimised charging

With the ongoing advancement of flexible tariffs across European electricity markets, energy management presents an additional value pool to tap into. An added layer of sophistication in HARMON-E is its integration with flexible tariffs, a feature particularly promising for destination CPOs. This capability allows CPOs to automate charging responses to price fluctuations during EV parking periods, optimizing charging schedules to take advantage of lower electricity rates.

However, the paramount consideration in this strategy is ensuring that vehicles are charged according to owners' needs. The primary objective remains meeting drivers' requirements, ensuring each vehicle is charged to the desired level when necessary. Optimization is employed within this framework to enhance site cost efficiency.

This approach not only maximizes economic benefits for CPOs by reducing electricity costs but also supports grid stability by distributing demand more evenly across available capacity.

Leveraging Battery Energy Storage Solutions (BESS)

For sites with limited grid capacity and high demand from EV drivers, integrating a BESS might be the best solution. HARMON-E offers the easiest integration of completely vendor-agnostic BESS with any charging hardware. Adding a BESS is often a great alternative, as it allows leveraging on-site renewable energy generation and flexible tariffs without impacting user needs. HARMON-E optimizes the BESS charging cycle to minimize energy costs and reduce strain on the grid through advanced peak shaving features.

Expanding revenue with flexibility markets

As CPOs expand their network, new opportunities arise in energy markets that need to be explored. HARMON-E enables the aggregation of charging stations into large controllable asset clusters, creating new revenue streams for CPOs. Simple optimizations, such as responding to flexible electricity prices with a large fleet of chargers, can significantly impact a CPO's bottom line. More sophisticated solutions involve bringing the aggregated fleet of chargers into reserve markets or frequency response schemes traditionally occupied by a few large consumers and producers. This aggregation approach, also known as a "Virtual Power Plant," introduces CPOs to new market opportunities that enhance profitability and play a crucial role in supporting the energy transition by improving grid stability and efficiency.

The path forward

As the EV market continues its growth trajectory, and the grid, across Europe, struggles to keep pace, the demand for efficient, cost-effective charging solutions becomes increasingly critical. FLEXECHARGE stands at the forefront of this evolution, offering CPOs the tools and insights needed to minimize costs, enhance operational efficiency, and secure profitability. By leveraging smart energy management strategies of HARMON-E, CPOs can confidently address today's challenges and pave the way for a sustainable and prosperous future in EV charging.

At FLEXECHARGE, we are dedicated to empowering CPOs to overcome the challenges of cost and efficiency in the EV charging market. Through our innovative solutions and commitment to sustainability, we are helping to shape a more efficient, profitable future for EV infrastructure.

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