EVs Need to Pay Their Fair Share: A Proper Road Use Fee for Electric Vehicles

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Electric vehicles (EVs) need to pay their fair share of road construction and maintenance costs. But by targeting EV owners with inequitable and inefficient fees, state legislatures continue to miss the opportunity to solve the challenge of responsibly funding highways.

In the United States, highway construction and maintenance are primarily funded through taxes on gasoline and diesel fuel, known commonly as the “gas tax.” But current taxation revenues do not meet needed funding levels in many states. In response, more than 30 states have sought to make up for the shortfall by imposing large registration fees for electric vehicles. But there aren’t enough EVs to bridge the gap, and larger fees risk stifling electric vehicle adoption.

A better solution, outlined in this policy brief, would be to create a structured fee system so that EV owners pay a fee proportional to their vehicle’s impact on the roads. Such a system would avoid unnecessary administrative processes and ensure that EV owners pay their fair share for highway maintenance, but not stifle the continued adoption of electric vehicles.

In the Electrification Push, Familiar Tools Get Repurposed

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Stephen King wrote, “Sooner or later, everything old is new again.” Many “new” regulatory approaches to encourage building electrification are actually just new applications of tried-and-true methods policymakers have been using for years. Take, for example, clean heat standards, which some states (e.g., Colorado and Vermont) are considering or have implemented. A clean heat standard requires heating fuel companies to gradually increase the amount of clean energy they use to provide heat to customers. This is analogous to a renewable portfolio standard for electric companies, which has been widely used by states for many years to drive adoption of clean electricity generation technologies. Building Modernization Legislative Toolkit

Other policy approaches to building electrification similarly draw on experience and expertise that regulators have honed over the years. For example, regulators have been overseeing and directing utility plans and programs for investments in energy efficiency for many years, which can inform similar plans and programs for building electrification.

Some may require revisiting or revising existing policy and regulatory approaches to enable the new opportunities presented by building electrification. Others will require regulators to expand existing efforts — for example, to focus benefits and harm reduction on low-income and overburdened communities.

Our building modernization toolkit provides examples and options for decision-makers that include ways states can electrify buildings through public utility commissions and utilities.

  1. Directing utilities to file plans for electrifying buildings with their public utility commission. This engages utilities and their expertise in electrification activities and enlists the regulators in making sure utilities are acting as intended.
  2. Removing existing barriers in state policy. For example, state policy may forbid fuel-switching, which is a direct barrier to electrification. Removing this provision and other barriers can help level the playing field for electric technologies and promote electrification without requiring utilities to take other actions.
  3. Focusing electrification and other efforts on low-income and overburdened communities, particularly those with the highest energy burden. This can be a highly effective way to combat energy inequality and ensure that the hardest-to-electrify customers are prioritized.
  4. Setting fuel-neutral emissions reduction standards (e.g., clean heat standards) for delivered heating providers. This builds on state experience with renewable energy standards for electricity and engages fossil fuel companies in the creation of solutions for the heating sector.

All these approaches are being pursued by states in various forms. We expect this trend of involving utilities and regulators in building electrification to continue as more states recognize the cost, emissions and health benefits of transitioning away from direct combustion of fossil fuel in buildings. For example, it seems likely that interest in clean heat standards will continue to grow and that utilities will be interested in ways they can make investments to support electrification. States with carbon goals will begin looking to reduced fossil fuel use for meaningful greenhouse gas emissions reductions, and health concerns may drive even greater interest in electric technologies. Policymakers can help their states get ahead and start proactively planning for cost-effective building electrification.

Flex and the city: Cities need dynamic pricing for public charging

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City dwellers without their own parking space, small business owners such as taxi drivers and a growing number of car-sharing users rely on the public charging network to access electric driving. The affordability of electric vehicles (EVs), compared to the fossil-fuelled cars they replace, in part, relies on not only upfront cost but also lower running costs.

The recent fossil gas crisis has led to high energy prices that make fixed-price electricity contracts expensive and affect those running costs. This should get those who procure, operate and use public charging infrastructure thinking: Which charging models help reduce fossil fuel dependence in transport and energy, and make public charging more affordable?

Currently, most public charging prices are flat rates. Users pay the same price whether they charge during the evening peak or overnight. Tariffs are high to cover peak prices within the energy supply contract. Yet they do not help reduce peak electricity demand, nor are the lower costs of charging off-peak passed on to EV drivers.

Smart charging is a solution that reduces costs for EV drivers, provides assurance for future EV users and supports the electricity system in the transition to renewable energy sources. It also, importantly, maintains or even improves the profitability of charge point operators. We need to extend the benefits of smart charging to users of public charging networks, as high prices turn otherwise interested drivers away from EVs.

Where current public charging tariffs fall short

Electricity prices on wholesale markets fluctuate: there are clear differences between days and within each day. In 2022, these differences increased six-fold compared to 2020, meaning that there is even more money to be saved if drivers can take advantage of price fluctuations.

EV charging flexibility can enable a reduction in energy demand at peak times. This not only lowers the price for individual drivers, but it also decreases costs for all power system users as it reduces the need for peak power plants that run on expensive fossil fuels.

EV drivers with their own home charging port can keep their bills under control by shifting sessions to cheaper periods, for example, through a time-varying or dynamic pricing contract with their supplier.

A dynamic tariff reflects wholesale prices in retail tariffs, for example with hourly prices communicated a day in advance. Homeowners can also save by investing in rooftop solar for their charging needs.

What can be done to offer EV drivers who rely on public charging points equal opportunities?

Removing obstacles to smart public charging

The UK government and energy regulator Ofgem recognise the importance of extending the benefits of smart charging for users and the energy system and included public charging in their joint 2023 Smart Charging Action Plan.

This requires changes to the status quo, however, in the UK and across Europe. Currently, customers and the electromobility service providers offering charging subscriptions have little choice but to accept the energy prices set by the charge point operator (CPO). Unfortunately, charging subscription prices usually reflect the most expensive CPO rates—so even if cities keep prices stable in their concession to operate the charging infrastructure, EV drivers often still pay more because of rising prices in other places.

Giving users the tools to save

CPOs and electromobility service providers could help EV drivers lower their bills by enabling user-centric smart charging services. As the name indicates, these services place consumer needs first, including enabling access to the lowest possible rate within the driver’s desired charging period.

Automation can help with the lower charging speeds typical for on-street charging when parked. For fast charging, an activity where people typically stay nearby their vehicle while the charging is happening, time-varying pricing—as offered by a growing number of operators—could affect when drivers show up at the station.

EV drivers can see the prices a day in advance, allowing them to plan and benefit from lower off-peak charging rates.

Delivering additional benefits at the local level

Cities can also look for ways to maximise local benefits. One way to do so is by connecting EV charging to locally produced clean energy from citizen-owned renewable energy communities.

The same smart charging technology that is based on dynamic prices from wholesale markets can also match EV charging sessions with wind and solar energy. In some countries, renewable energy communities even benefit from reduced network tariffs as they help use local networks more efficiently.

Provided discounts are genuinely reflective of the value added, this allows the expansion of renewable energy generation and the charging network to go hand-in-hand while ensuring predictable and affordable prices. Combined with car-sharing, EV charging within a renewable energy community offers the benefits of both generating renewable electricity and promoting the use of electric cars to city dwellers.

This solution can further reduce private car ownership by making sharing an attractive option.

Dynamic public charging extends smart savings beyond the driveway

A wide range of available smart charging services have demonstrated that the perceived complexity of dynamic prices can be handled in a user-friendly way, such as with retail rates that offer off-peak extra points. Consumers will benefit from a broad diversity of offerings, as not all will have the same preferences and needs. They might want to try out different options to find their perfect match. It is important that consumers feel confident in offering and benefiting from the flexibility that EV charging can provide.

Facilitating dynamic pricing is an important step forward that can benefit the entire energy ecosystem, minimising the costs of the transition. Everyone benefits from energy system cost savings achieved through EV charging responding to dynamic price signals. The local planning process offers the perfect opportunity for authorities and grid operators to reflect the value of smart charging in their vision for a decarbonised energy system.

Governments and regulators can give EV drivers with and without off-street parking the same opportunities to participate in and benefit directly from smart charging. It is a sustainable way to bring smart charging rewards to all EV users.

A version of this article originally appeared on Foresight Climate & Energy.

Building Modernization Legislative Toolkit

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New technologies are rapidly changing the way we use energy in our homes and businesses. But in many U.S. states, the legal and regulatory status quo includes barriers to adopting these technologies. This toolkit, the work of RAP and various expert partners, is a free resource for legislators and policymakers who want to address these barriers in their states. It covers seven topic areas where reforms will be key to clearing the way for building modernization:

  • Access to decision-making
  • Weatherization and home retrofit
  • Funding and finance
  • Codes and performance standards
  • Electrification
  • Gas
  • Workforce development

For each of these topics, the toolkit includes policy background, resources and, most importantly, detailed exploration of legislative options states can pursue, drawing on examples from across the country. Proactive policy action can ensure that buildings are modernized in a way that produces health, environmental and economic benefits for everyone.

Building for the future: How can cities prepare for transportation electrification?

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For cities, the fast growth of electric vehicles (EVs) is a challenge and an opportunity. In the process of becoming cleaner and smarter, cities face a two-fold challenge: First, they are promoting a shift towards more sustainable modes of transport and electrifying the vehicles that cannot be avoided or shifted. Second, they must also ensure local electricity grids can serve the needs of electrified transport. Meeting these challenges requires thorough planning to decarbonise both the energy and transport systems concurrently while minimising costs and maximising benefits for society overall. To complicate matters, high energy prices have increased the need to manage additional demand well and reduce costs by integrating EVs smartly into local power grids.

With this in mind, cities network Eurocities and energy transition experts Regulatory Assistance Project (RAP) reviewed promising practices from early movers and frontrunners in local planning for rolling out e-mobility and drew lessons that can be tailored to regional circumstances and challenges. Some examples are based on innovative initiatives from partners of the EU-funded research project USER-CHI. Building on three key lessons, we discuss policy opportunities for cities to take up a stronger role in defining the electromobility ecosystem and to receive support in urban e-mobility planning, both on the national and European levels.

Three key lessons for cities when planning for e-mobility

Lesson 1: Think big and smart!

Planning for electrified transport requires close collaboration between planners involved in the energy, power system, infrastructure and transportation sectors. Holistic planning for electrified transport requires cities to identify the charging and infrastructure types that will best serve sustainable transport goals. Dublin, Ireland, for instance, analysed the demand for charging electric cars, vans, taxis and two-wheelers, and explored use cases such as residential, en-route and destination charging. The analysis was based on an extensive geospatial mapping process, examining charging needs and use cases by area in the greater Dublin region. The needs were assessed in line with the authorities’ overall aim to reduce car use in the city centre. In addition, the city adapted its internal procedures to put plans into practice.

Holistic planning for electrified transport requires cities to identify charging and infrastructure types that best serve sustainable transport goals.

Thinking big and smart also means developing a planning approach based on quantitative and qualitative assessment of future demands. The German city of Berlin’s authorities conducted an extensive study ‘Elektromobilität Berlin 2025+’ that identified charging infrastructure needs based on projections from inbound and outbound traffic patterns and parking needs for different user groups such as inhabitants, visitors and commuters. The planners were then able to identify the projected charging point needs by 2040 for each scenario, including the different use cases. Working from the existing political and planning regulatory framework, they could also determine the most effective process for rolling out this charging infrastructure.

Findings suggest that in almost all use cases, the number of charging points required can be significantly reduced by increasing their individual use rate. Based on this finding, the planners developed a dual approach developing normal and fast charging hubs to serve all uses. Installing fast charging hubs on publicly accessible but privately owned grounds, such as petrol stations and shopping centres, helped to avoid adding more car parks and to reduce the need for infrastructure on public grounds, typically on streets.

Lesson 2: Plan for both EVs and the power grid at the same time

With the ambitious goal of fully electrifying transport by 2030, Stockholm, Sweden, has been developing and testing planning tools to optimally integrate EVs into the grid. A public dynamic map for planning public charging points, called the BABLE Platform, allows third parties such as service providers and installers to choose their locations of interest, providing planning security for investors and citizens. To help create a market for related EV charging services, the city has chosen a tender model: It awards five-year operation contracts to service providers based on pre-defined criteria. To better capture inhabitants’ charging needs and plan for them, the city also created residents’ councils. These councils, which focus on EV charging for residents of multi-family buildings, facilitated 1,000 applications for charging units. Finally, Stockholm’s planners have sought to make EV charging smart.

It’s critical that planners in all cities have access to planning tools for building EV charging infrastructure.

A modelling study of the potential local network confirmed that time-of-use tariffs with cheaper overnight rates, for example, effectively encourage users to charge at times that are cheaper for them and beneficial for the grid. It also recommends a charging station booking system to foster efficient utilisation and offers data to help avoid overinvestment in infrastructure. An ongoing pilot is exploring how the speed of public charging can be adjusted to allow users to take advantage of the savings from smart charging.

It is critical that planners in all cities have access to planning tools for building EV charging infrastructure. As part of the USER-CHI project, VMZ is developing an open access planning tool called CLICK for siting new electric vehicle supply equipment. CLICK is an easy-to-use online tool that uses a question-and-answer format to facilitate top-down location planning of charging infrastructure in cities. The tool matches users’ needs, charging preferences and habits with existing charging technologies and types. To generate these insights, the tool takes into account detailed data — including inhabitants, number of cars and existing share of electric vehicles — along with existing grid capacity and the areas and technologies to be covered. Based on these inputs, it provides planners with recommendations for the number of charging points and proposed locations, charging technologies and connectors, and indicates the required power grid capacity. This tool will soon be tested in Barcelona, Spain; Berlin, Germany; Budapest, Hungary; Rome, Italy; and Turku, Finland.

Lesson 3: Collaborate and optimise

Successful planning for e-mobility requires collaboration at all levels. In an effort to work directly with citizens and encourage them to switch to e-mobility, Italy’s capital Rome invited inhabitants to indicate their preferred location for charging points within predefined zones. To date, more than 1,150 users have already used the platform and over half are considering switching to an EV. From the municipality’s perspective, the portal is a key tool for identifying the optimal location for on-street charging points.

Successful planning for e-mobility requires collaboration at all levels.

Cooperation between the different levels of local governance also accelerates charging infrastructure deployment by allocating responsibilities to different actors. With the objective of phasing out fossil-fuelled vehicles by 2030, the Netherlands established the National Charging Infrastructure Agenda to overcome the challenge of installing a sufficient number of charging points to meet the country’s ambitions. The goal is to ensure that infrastructure is not a barrier to the electrification of transport by engaging with local and regional authorities, network operators, national ministries and independent technical experts. Public and private stakeholders collaborate to determine goals, actions and agreements for deploying infrastructure. This leads to improved coordination in building out infrastructure while ensuring broad multi-stakeholder buy-in.

Conclusions and recommendations

Visionary thinking, joint planning and broad collaboration are three key strategies for municipalities to meet the electrification challenge. As the numbers of EVs in cities increase, small and medium-sized cities in particular can learn from best practices across Europe and enhance planning for e-mobility rollout. The lessons learned by many cities confirm that the uptake of electric vehicles will require sufficient charging infrastructure and, equally important, convenient and equitable access. While successful regulatory incentives such as zero-emission zones encourage the uptake and use of electric vehicles and the phase-out of polluting diesel vehicles, stronger policy support is needed to help cities plan and manage smooth and efficient electrification of transport. On both the European and national level policy opportunities are opening:

On the European level, the new Alternative Fuels Infrastructure Regulation can ensure local authorities are able to fully participate in determining the governance, rollout strategies and specifications of charging infrastructure. Existing guidelines for local authorities, such as the ones developed by the EU Commission’s Sustainable Transport Forum, are an important source of information, but need to be made more easily accessible to local authorities.

National frameworks can be developed with the aim of encouraging cities to better integrate electrification strategies in their Sustainable Urban Mobility Plans, in harmony with other local plans, such as Sustainable Energy and Climate Action Plans. The French Mobility Orientation Law is a good example of empowerment of local authorities in this field, by allowing for the possibility that local powers set up EV charging plans.

Planning zero-emission mobility in cities is a task that many local authorities are increasingly finding part of their remit. It is therefore important to help them develop effective local strategies, new skills and expertise for their cities. The benefits offered by the transition towards more sustainable urban mobility will guarantee that both policymakers and citizens contribute to making this transition a success.

A version of this article originally appeared in Green Mobility.

Photo: Ernest Ojeh on Unsplash

How to prepare our grids for electric trucks

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In mid-February, the EU Commission is due to publish a law proposal essential to the energy transition, the next CO2 standards for heavy-duty vehicles (HDVs)The proposal is expected to accelerate the emissions reduction of fossil-fueled trucks and, in parallel, incentivise sales of battery electric trucks.

While it’s widely recognised that electrifying freight kilometres is key to cutting the EU’s transport emissions, some stakeholders raised doubts about whether power grids will be able to manage the charging of electric trucks.

The short answer is yes, but accelerated grid connections and smart charging will be key to integrating these new EVs into our power grids and keeping costs in check.

“Smart” or “managed” charging means charging EV batteries, for instance, those of electric truck fleets at a rest stop or depot, when costs for electricity are lowest, i.e. renewables are available and there’s spare capacity on the grid. That way, smart charging reduces carbon emissions and the need for costly upgrades of the power grid. 

Ambitious CO2 targets are key

Setting an ambitious target for zero-emission trucks in the upcoming proposal is crucial to accelerate urgently needed reductions of freight emissions.

Trucks — ranging from urban delivery trucks to long-haul tractor-trailers — represent less than 2% of Europe’s vehicles but cause around 25% of emissions from road transport, and freight volumes are growing. 

While current e-truck numbers are still low in Europe, they will grow significantly through 2030, according to announcements by governments and truckmakers.

Recent research shows that by 2035, most electric trucks across short, regional and long-haul segments will likely be competitive to Diesel trucks in cost, but also range, payload and driving times. Energy regulators and grid operators need to anticipate these growing e-truck numbers and proactively plan for trucks’ grid use. 

Plan for it now

To optimally integrate electric trucks into power grids, governments need to start planning now. This includes matching the needs of hauliers in terms of charging demand and locations, with the grid’s current and planned hosting capacity, e.g. as outlined in national grid investment plans.

The energy demand for battery-electric trucks in Germany is estimated at 13 TWh in 2030, or the equivalent of about 1% of the country’s total electricity produced. This does not necessarily imply increasing peak demand by the same amount. Some investments in grid reinforcements will be needed, but how much will fundamentally depend on how truck charging is optimised.

The analysis available so far suggests that additional peak demand from electric truck charging can be reduced by 50-80% if charging is optimised, depending on use cases and favourable regulatory conditions, e.g. the availability of time-of-use tariffs.  

The majority of electric trucks needed for urban and regional use can charge at the depot, where smart charging overnight or mid-day (e.g. to absorb wind or solar energy) provides great potential to save costs.

Long-haul trucks, operating long-distance trips across the EU, will rely more on public charging. Their mandatory resting time of at least nine hours offers plenty of flexibility to exploit readily available grid capacity as well as cheaper energy.

Smart charging, based on time-of-use tariffs, helps truck operators automatically adjust their charging to constantly changing cost of electricity. It is also possible to optimise for shorter charging periods, for example during their minimum 45-minute mandatory break at highway truck rest areas.

A growing range of smart charging services is already available for passenger EVs across Europe offering tariffs and software that helps fleet owners to optimise charging to their schedule.

Energy market reforms just opened for consultation, offer an important opportunity to advance the availability of time-of-use pricing of energy and networks, and the build-out of a market for smart charging services.

Key arbiters in preparing the power grids are Europe’s transmission and distribution grid operators who have a tremendous opportunity in e-mobility to optimise grid efficiency.  

Make truck charging a priority

EU decision makers can help truck operators transition to electric by quickly finalising two more legislations that will help deploy the charging infrastructure in the next decade.

The Alternative Fuels Infrastructure Regulation, currently in final negotiations, will support Member States in building the necessary public charging framework for trucks along Europe’s highways.

The Energy Performance of Buildings Directive (also in negotiations) sets requirements to upgrade new and existing buildings with EV charging infrastructure and shouldn’t miss the opportunity to advance upgrades at logistics depots, too.

The EU won’t be able to reach its climate goals without drastically cutting freight emissions. Direct electrification via battery trucks is now the widely recognised way forward, offering the most energy-efficient option to decarbonise road transport.

But if charging is not planned for proactively, and managed smartly, the additional electricity demand will lead to higher costs for consumers, the power system, and the environment.

It may also eventually slow down the clean energy transition, or pave the way to more inefficient alternatives such as hydrogen.

Accelerating EV sales is not enough — we now need to ensure EV’s efficient integration into our power system, and use the existing infrastructure more efficiently before expanding it, through smart planning and charging.

The original version of this article appeared in Euractiv.