Plug-in electric vehicles could be a major challenge or a major resource, according to the utilities plotting ways to turn EV charging stations into smart, grid-responsive resources. But the first steps toward making EV charging an asset may come not from fancy vehicle-to-grid (V2G) policies and programs, but from the demand charges that penalize utility customers for spikes in their electricity consumption.

EV chargers are one new electric load that can potentially create big new spikes in demand, which is putting pressure on EV charging station hosts to do something about their impact on the grid. And behind-the-meter batteries could be a useful solution to that problem.

That's what ChargePoint and Green Charge Networks say, at least. The two startups announced Tuesday that they’re teaming up, with ChargePoint offering its EV charging station network customers a quick solution to demand charges via Green Charge’s energy storage systems.

The two have already been running in tandem for months in Redwood City, Calif., where they’ve backed up five EV chargers, including two DC-powered fast chargers, with batteries that have helped reduce the city’s demand charges to the tune of about $7,000 per year, said Green Charge CEO Vic Shao.

Below is a screenshot from Green Charge's system, showing how one of its GreenStation units backing a charging station at Redwood City's public library capped what otherwise would have been demand-charge-inducing spikes in grid consumption with the use of injected battery power. 

Companies like Green Charge, Stem, Coda Energy and the dynamic duo of Tesla and SolarCity have been installing lithium-ion battery systems in buildings for similar demand charge management purposes, with California and New York as key markets.

But as EV ownership rises, and more cities and businesses look to install charging gear to support them, plug-in EV parking lots may become the next logical extension of the business model.

“We’re looking at many other locations, particularly in California, where demand charges are high,” said Rich Quattrini, ChargePoint’s senior director of business development. “Because we don’t own the stations in most cases, we’re recommending Green Charge Networks to help offset the operational costs wherever demand charges are high.”

DC charging stations, which can pump up to 50 kilowatts at a time to fill up an EV’s battery in about 30 minutes, are particularly problematic from a demand-charge perspective, he noted. Whereas a parking lot full of 240-volt Level 2 chargers tends to see enough cars plugging in and unplugging over a day to yield a fairly predictable and steady load, a single DC charger will see an unpredictable number of EVs roll in for quick charge-ups over the course of a day, leading to a far “spikier” profile, he said.

Green Charge’s first Department of Energy-backed pilot projects in New York City included several EV charging systems at rental car agencies, which gave the startup a chance to learn how to manage these unpredictable spikes, Shao noted. It’s already backing up NRG Energy’s eVgo charging stations in California, including several schools and 7-Eleven store sites.

“EV chargers add volatility and unpredictability to a building,” he said. “These are all conditions that Green Charge loves, because they’re the exact conditions our system was built to tackle.”

These are the same kinds of spikes and surges in electricity demand that make utilities concerned about EVs, by the way. At a local level, several EVs plugged in at once could overload local transformers and grid circuits. DC charging stations, which often require upgrades to electric infrastructure, may be a bit more predictable on this front than the lower-level chargers being installed in garages by new EV owners.

On a system-wide level, EV charging could cause significant shifts in customer consumption patterns that require changes in utility planning to manage. Utilities in EV-rich states like California are striving to get residential customers to at least inform them when they’ve bought a new EV, and hopefully sign them up for special EV tariffs that encourage charging at off-peak hours to reduce the strain they could end up placing on the grid.

At the same time, utilities are looking at EVs as a major source of new electricity sales revenue, as well as a grid management resource. California’s three big investor-owned utilities are seeking regulator permission to spend hundreds of millions of dollars on EV charging infrastructure deployments, with an eye on making sure that the charging gear in question can respond to grid needs.

DC chargers may be the primary target for battery backup, but lower-level chargers can also make use of energy storage. Last year, Panasonic partnered with Powertree Services to combine batteries, solar panels and EV chargers at multi-unit residential buildings in San Francisco. People who live in apartments and condos may want EV charging in their garage, but building owners have to pay the electric bills, including the potential jumps in demand charges that could come with the significant new loads they represent.

ChargePoint is also doing EV chargers for multi-family buildings, providing a service agreement that combines equipment and installation costs and customer service via its mobile apps for EV drivers. It hasn’t yet tapped Green Charge for any of those projects, but should demand-charge concerns come up in the course of rolling them out, “We might have a solution for it,” Quattrini said.

ChargePoint finances EV charging system and installation costs for commercial customers through a partnership with Key Equipment Finance, helping to ease the upfront costs for companies or businesses wanting to support EV drivers. Those leases don’t include covering the cost of electricity, he noted.

But Green Charge’s financing partnership with K Road DG does offer no-money-down installation of its GreenStation systems, which it then pays off through a shared savings agreement with customers. Because Green Charge manages both EV chargers and the buildings they’re connected to, the task of injecting battery power to mitigate demand spikes “becomes a little bit more complex,” he said. “That’s where we rely on Green Charge’s expertise to evaluate that, and bring the deal home.”

It’s unclear just where batteries could serve a crucial role in enabling EV chargers to fulfill these utility-facing tasks, versus those where more simple charging schedules or emergency shutoff controls would do the trick. “A lot of factors are involved” in assessing which sites are right for battery backup, Quattrini said. “One is the utilization rate of the station, and that’s going to vary over time.”

But it’s possible that batteries installed to meet customer demand charge goals could eventually find uses for utility needs. “We believe as EVs gain traction going forward that energy storage is a very necessary component of the infrastructure,” Shao said. “I think that commercial and industrial customers really need to have a solution -- not just chargers, not just energy storage, but a comprehensive solution, to meet all their needs.” 

Watch GTM's Rewired for an overview of how electric vehicles could provide both challenges and opportunities for utilities.