Companies who want to electrify their vehicle fleets in the UK are faced with key decisions around charging infrastructure. Aside from the capital expense of acquiring electric vehicles, understanding the costs and requirements around grid connections and electricity supply is crucial. We will look at fixed and variable expenses fleet operators can expect when installing EV charging points, and look at whether network upgrades may be needed to support fleet electrification. We’ll consider connection charges and how to assess your options for managing increased electrical demand.
What are the Fixed Costs for EV Fleet Charging?
Estimate for fleet of 10 vehicles
Chargers and installation
£25,000 for 10 7kW chargers and installation*
Total fixed costs: £30,000 - £75,000
Network capacity upgrade and ground works
£5,000 - £50,000 depending on existing site capacity
~£10,000 / year with opportunities for off-peak charging
Total variable costs: £15,000 / year
Potential penalties for breaching network capacity
~£3,000 / year, or being cut off and compromising business revenue
Maintenance including comms and software
~£2,000 / year
Total costs in the first year: £45,000 - £90,000
* This fleet would use around 20kWh or approx 60 miles during the day, charging for 3-4 hours overnight. It is assumed the installation of the chargers is straightforward.
When installing electric vehicle charging infrastructure for your commercial fleet, there are a number of fixed, upfront costs to consider:
Charger Costs – To determine the number and power level of chargers needed at your site, you’ll need to assess both current and future charging needs of your fleet. Factors like the size of vehicles, shift schedules, dwell times, and whether charging occurs mostly overnight versus daytime will impact costs. More vehicles and fast daytime charging requires more high-powered chargers, while slower overnight charging allows for cheaper charger options.
Network Capacity Upgrades – If your site’s overall electricity demand increases significantly due to EV charging, you may need to pay your Distribution Network Operator (DNO) for a capacity upgrade. This depends on where in the network you are connected (what voltage level) and whether your local network has capacity available. If it does, then according to DNO UKPN, most domestic and small businesses pay up to £9,000 + VAT1. This will of course increase if your site requires a higher capacity upgrade, as this number is for quite small demands. Trials are underway in Oxford for ‘trading’ of this capacity with others in your local network, but this is still at an early stage2.
Without available capacity to cover your upgrade, a lengthy reinforcement with major construction work will likely be needed – although recent changes in regulations mean some of this cost may be covered by your DNO3, it does not cover cables and ground works at your own site. Also, the waiting times are high and could delay your electrification plans considerably. For instance, if your site requires significant ground works and an upgrade, your bill could run into hundreds of thousands of pounds.
Dynamic Load Management (DLM) can help avoid costly capacity upgrades or long wait times for network reinforcements. Gridicity’s DLM tool calculates your site’s available capacity in real-time. The EV charging is then automatically adjusted to match the spare capacity. This prevents your overall electricity demand from exceeding agreed limits. With DLM, EVs can charge flexibly according to actual site conditions while avoiding costly infrastructure upgrades and saving up to 40% on your bill (for the 10 EV example fleet given, this is a £5,200 saving).
What are the Variable Costs for EV Fleet Charging?
In addition to fixed, upfront expenses, there are ongoing variable costs to consider when installing EV charging infrastructure for a commercial fleet:
Energy Bills – Electricity costs to power the chargers will depend on utilisation, charging times and your electricity tariff. Charging during overnight off-peak hours on cheaper tariffs can significantly reduce energy costs compared to daytime charging by around 20%.
Gridicity’s optimisation software can automatically schedule your EV fleet’s charging to the cheapest times, lowering your energy bill by around 20%.
Potential Penalties – If charging increases your overall electricity demand above your agreed capacity limit, breach penalties from your distribution operator may apply and can cost up to three times the cost of the energy you’re paying for at those times4. The likelihood of penalties depends on your site’s demand profile and charging loads. Alternatively, your supply may well be cut off if you go over your limit, and so it is critical that you put measures in place to avoid this.
Dynamic load management (DLM) can help avoid penalties by automatically adjusting charger power based on building demand to stay within capacity limits.
Maintenance and communication – Ongoing maintenance contracts and costs for the charging hardware, software and communications systems will also factor into operating budgets. This includes an internet connection for each charger (unless access to the local network can be provided). Regular maintenance is key for reliability.
Gridicity CEO, Alicia Blatiak’s Take:
When it comes to electrifying your fleet, some costs like charger hardware are fixed based on your needs. But there are opportunities to optimise and save on ongoing costs. For companies committed to a site lacking capacity, network upgrades may be required. But operating costs can still be lowered through smart charging, overnight rates, and dynamic load balancing. Going electric takes thorough planning, but doesn’t have to be a financial burden in the longer run.
- We’re planning a future post to cover this in more detail, to break down Ofgem’s report: https://www.ofgem.gov.uk/sites/default/files/2022-05/Access%20SCR%20-%20Final%20Decision.pdf