EV Carbon Offsets Strengthening Business Case Fundamentals for - PowerPoint PPT Presentation

EV Carbon Offsets Strengthening Business Case Fundamentals for Electric Vehicle Service Equipment August 7, 2018

Speakers Connecticut Green Bank: Laura Fidao, Finance Matt Macunas, Legal & Marketing Guest speaker: ▪ Sue Hall, founder and CEO of Climate Neutral Business Network – Pioneering carbon strategies with Fortune 50 companies

US EV sales rising despite low gas prices Source: Atlas Public Policy analysis of data from hybridcars.com & U.S. Energy Information Administration (2018) 3

More Infrastructure Needed EVs and Chargers “Ketchup” With Each Other 4

CT and US Charging Infrastructure CT presently: U.S. 2025 target under Paris Agreement: ▪ 315 charging stations with ▪ 14 million new EVs 703 charging outlets ▪ ~ 6,000 EVs registered ▪ > 330,000 public charging outlets ▪ $4.7 billion - EV charging infrastructure price tag ▪ $2.3 billion - funding gap Source: Center for American Progress US near-term: • 1 million EVs by 2019 • Currently 18,245 stations and 49,502 outlets US growth targets: • 6.6x charger outlets • Source: Alternative Fuels Data Center (July 30, 2018) 14x EVs 5

Voluntary Carbon Credits for EV Chargers Partner organizations seeking to open access to carbon capital markets for EV charging systems, to strengthen their business case fundamentals and accelerate deployment ▪ Methodology in approval process, with potential for new revenue stream for EV charging site hosts ▪ Measures kWh dispensed during charging sessions ▪ Credits based on GHG emissions savings from fuel- switching, factoring in the electricity supply mix feeding the EV charger 6

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Carbon Return-on-Capital Return on capital for first single EVSE installation: DCFC 50kW ($85K) @ $3-10/ton @ CA LCFC $25-100/ton 3 charges / day 0.5 - 2% 4 - 18% 2 – 6% 15 – 60% 10 charges / day Level 2 ($8.5K) @ $3-10/ton @ CA LCFC $25-100/ton 1.4 – 4.7% 12 – 47% 1 charge / day Return on capital for installation of 4 EVSE units : DCFC 50kW ($43K) @ $3-10/ton @ CA LCFC $25-100/ton 3 – 11% 29 – 113% 10 charges / day Level 2 ($3K) @ $3-10/ton @ CA LCFC $25-100/ton 3 – 10% 25 – 100% 1 charge / day CARBON RETURN-ON-CAPITAL DROPS STRAIGHT TO BOTTOM LINE 10

Carbon Return-on-Capital for Higher-Power Systems Return on capital for first single EVSE installation: DCFC 50kW ($85K) @ $5-10/ton @ CA LCFC $50-100/ton 3 – 6% 10 charges / day 29 - 58% DCFC 150kW ($150K) @ $5-10/ton @ CA LCFC $50-100/ton 4.2 – 8.4% 42 – 84% 10 charges / day DCFC 320kW ($235K) @ $5-10/ton @ CA LCFC $50-100/ton 5.6 – 11.3% 56 – 113% 10 charges / day 11

Reducing Market Barriers for Stakeholders DCFC 50kW Level 2 Carbon Contribution (10 charges / (1 charge / Result (at $5/ton) day) day) Comparable to OEM Rebate of $7k / $0.5k 36% 121% OEM rebate contributions Profit margins Equipment $35k / $2.5k 7% 24% on equipment Covers open Landlord parking $2.5k 100% 24% parking lot costs Covers barrier Rental fee $240 / year $104 $25 to adoption 12

EVCCC’s Progress: EV Webinar: Creating New Value for Charging Station Owners Key Carbon Capitalization Steps Project Credit Verification/Sales Stage 2: Almost complete Pilot project credits Pilot Project verified Development Expansion to new project credits Methodology Development/Approval Stage 3: Underway Stage 1: Completed Formal methodology Methodology written and White Paper Completed accredited Outline core logic Pilot projects Carbon Business for EV Charging designed in parallel Case methodology to ensure alignment Stakeholder Carbon Business Case: reviews proved salience of carbon capital to 2018 …. 2018/2019 accelerate EV charging investment

EV Webinar: Creating New Value Additionality Testing: Options for Charging Station Owners Project Test Emerging Performance Market Market: Top 15% Barriers 5% MS Basis Market barriers Positive List (look up) Performance benchmark to be exceeded Common practice Nesting national/state Applicable Any project All project instances Only top 15% performing project instances When Now Now When perf benchmarks are added to meth later + Post 5% MS Thru region 5% MS e.g. for when MS > 5% MS Projects will use 5% MS test until region penetration exceeds … Then Project Testing w market barrier assessment … unless a performance test is later added to the methodology

Environmental Attribute Issues Avoiding Double-Counting ▪ Methodology avoids double-counting in several ways: - Existing programs like RGGI do not include transportation sectors where our reductions arise - Credit given not for electricity but fuel switching. - Methodology uses e-GRID (or local utility emission rates) which cannot double count any region’s RPS/retired REC claims - If there’s dedicated onsite renewables, EV charger must demonstrate that RECs have not been claimed from renewable generation component. 15

Optimizing with Compliance Markets: WA State’s Solution to EV Webinar: Creating New Value for Charging Station Owners use Set-Aside Reserve To Issue In-State EV Charging Credits Cap and Trade … . … with set aside reserve Fossil Fuel Importers EV Charging: Gain Allowances Compliance Credits Issued More EV’s charged … EV Fewer FF Miles Driven Vehicles  EV charging results in fewer fossil fuel miles driven  Generating allowances for fossil fuel importers  How optimize these financial carbon incentives? For low carbon and  But still securing compliance credits for EV chargers by using set aside reserve effective electric transportation future?

Next Steps: Your Help Requested ▪ We seek early participants in this new market - owners and purchasers ▪ CT Green Bank plans to administer a program to aggregate carbon offsets from EV chargers within CT. – Owner allows for data access to Green Bank, or assigns environmental rights – Green Bank obtains 3 rd party verification and approval of charging session data for the portfolio of chargers – Arrive at agreements for revenue split over the course of the crediting period • Green Bank receives administrative fee for warehousing, selling to the market, and incurring costs for 3 rd party verification ▪ Seeking CT participants who have (or plan to have) EV charging on-site* – Municipalities *Exploratory conversations. – Businesses No early commitments needed. – Institutions – Charging platform providers Contact: Matt.Macunas@CTGreenBank.com (860) 257-2889 Laura.Fidao@CTGreenBank.com (860) 263-0125 17

Questions? “VCS’s approval of this carbon offset methodology provides another arrow in the quiver to reduce greenhouse gas emissions and confront climate change. Increasing private investment in EV infrastructure by valuing emission reductions will help increase consumer demand for EVs by providing them with easy access to cheaper and cleaner fuel while reducing range anxiety. ” - Bryan Garcia, President and CEO of the Connecticut Green Bank. 18