The money is enough, more flexibility is needed

Romanian authorities initiated an ambitious plan to support the development of the infrastructure needed for electric vehicles. An essential step in breaking the vicious circle blocking the development of this sector: there are far too few electric vehicles as we don’t have the infrastructure needed, and we cannot invest in this infrastructure lacking more electric vehicles… We learnt more about new perspectives in this industry from Mihai Marcolţ – CTO E-Motion Electric (Romanian manufacturer of electric vehicle charging stations), Daniel Vlad – executive director of TMC Electric Mobility (consultants in electromobility both for public institutions, as well as for private actors) and Alexandru Teodorescu – executive director of Renovatio Group (developer of the first public network for charging electric vehicles).

There has been a while since the launch of the funding guide for the electric vehicle charging infrastructure development program. How well designed does this guide seem now?

Alexandru Teodorescu: The launch of the funding guide is a good thing and a step forward towards the development of the infrastructure needed by electric vehicle users. But, like in any new field, and in particular in the case of government programmes, funding guides always leave room for improvement. We appreciate, however, that AFM has proven to be very open in drafting the guide, accepting comments and suggestions from potential beneficiaries.

Mihai Marcolţ: We and other companies operating in the charging infrastructure area singled out issues which will make the guide difficult to implement and will therefore trigger poor results when drawing a line at the end of the period for submission of projects. Unfortunately, not all comments were taken into account, as the guide was due to be launched somewhat hastily. This rush could be due to the fact that 2017 was the year when an infringement procedure could have been initiated on account of failing to take measures for the implementation of EU Directive no. 94/2014.

Most beneficiaries who wanted to apply for funding so far (editor’s note: beginning of November) had problems in meeting certain requirements or in obtaining certain documents included on the list for the application file to be deemed complete. We are talking about all categories of beneficiaries, not only business entities.

Daniel Vlad: Given that the guide was launched in a rush (under pressure), they failed to take into account several aspects. One of the most important is the removal of funding for charging equipment with two AC terminals that are specifically used on the public domain (in practice they are funded just like one-terminal stations). Besides this:

• a limit of 50,000 inhabitants per city was imposed (eligibility criterion);
• confusing conditions (for companies) were introduced; for example, who would rather develop their own network in locations not owned by them?
• there is an eligibility criterion for fast charging equipment (they should be <22 kW DC), although there are less powerful equipment available on the market;
• there is also a requirement for the funded equipment to be smart (with Internet connectivity and OCPP1.5 communication protocol at the least) in order to be truly accessible in a public network, to be visible on a public map, to allow reservations and different payment modalities.

Are the amounts provided sufficient to give a decisive impetus to this market?

Mihai Marcolţ: The amounts provided are sufficient to install quality equipment, using the technology and standards of 2016, with an operational life of more than five years.

Daniel Vlad: For the level of the market in Romania, where there are nearly 100 vehicles that are 100% electric, and for the first funding session, I believe that the funds allocated for 2016 are sufficient. We cannot talk about a decisive impetus, because the infrastructure is supposed to allow the charging of electric vehicles… which we kind of lack!

On the optimistic side, I believe we will find it difficult to spend more than one third of the funds provided.

Alexandru Teodorescu: The funds made available in this programme should complement the investments in the public and private sector and should not represent the determining factor in market development. I believe that the budget allocated is substantial and hope therefore that electric mobility becomes increasingly popular.

What kind of issues do you expect to face in implementing this infrastructure development project?

Mihai Marcolţ: The issues are not technical, but only legal, given the documents and limitations mentioned in the guide. The funds allocated are sufficient for this funding session, but as it is nearly impossible to file an application that is 100% eligible, we will see that only 25% of the budget will be spent. Which is quite small, especially when this figure becomes an assessment criterion of the funding programme. I don’t want to be misunderstood! The figures I mentioned do not reflect the lack of interest on the part of beneficiaries, but only the fact that the guide is quite difficult to implement. Perhaps the unspent funds will be carried forward to the following submission deadline!

Alexandru Teodorescu: In general, we are optimistic. We hope that the authorities in charge include the feedback received from potential beneficiaries of the programme so as to prevent major issues in the process of assessing the eligibility of a beneficiary/project and in the process of final settlement.

Daniel Vlad: We do not expect major issues to occur. The procurement and installation of such equipment on a beneficiary’s property is not very difficult. On the other hand, we are reserved about projects involving the installation of fast charging equipment – based on the power demand/availability ratio and lacking an impact study on the local power supply network.

Also, we do not know how the settlement will work between AFM and the beneficiaries.

We saw office buildings and supermarket chains already involved in the installation of charging stations. When do you expect municipalities to join in? How about major fuel distributors?

Mihai Marcolţ: Indeed, there are green office buildings and hypermarket chains with an eco-friendly approach, which is a good thing. Unfortunately, according to the guide, office buildings are not eligible for funding, other than under certain conditions that can only be met by less than 1% of all buildings.

Municipalities will only join in as beneficiaries of these funding schemes, and from what we’ve seen so far they find the guidelines difficult to implement.

Fuel stations are eligible, but very few expressed interest so far and it is not the guide that makes them take the action or not.

Daniel Vlad: The trend is to start small scale pilot projects and then, based on the results of the assessment, to expand or postpone projects. The same approach is valid for municipalities and for large fuel distributors. The latter already have such projects on their to do list and only wait for the best time to implement them. I believe the first to move will set the tone on the market. But there are chains of smaller fuel stations who already installed AC charging stations.

Alexandru Teodorescu: The main issue of the municipalities is the availability of parking places. If in the case of office buildings or commercial premises there are clear rules on the use of parking places, when it comes to the public domain, this usage is not regulated. First, we must see that, once the charging points are installed on the public domain (by municipalities or by private companies), these points are also accessible to users. In this respect, we need to adjust the existing legislation to include the category of eco (electric/hybrid) vehicles.

Technology takes huge steps from one year to the other in the field of electric vehicles. What type of equipment should we install (subsidize from public money) to make sure we are developing a useful infrastructure in the medium and long term?

Mihai Marcolţ: Technology advances fast in this field, but the type of stations included in the funding guide are sufficient for a long time from now on, given their employed performance/technology.

Alexandru Teodorescu: As new generations of electric vehicles are put to market, new charging stations become available, which allow increasingly shorter charging times. If in the case of alternative current charging stations a decision was made to put a 22kW limit on them, in the case of fast charging stations (direct current), the new generation equipment allows charging powers ranging from 150 kW to 350 kW. The programme for he promotion of electric vehicle infrastructure has no limitations for this purpose, and allows the installation of the newest technology available.

Daniel Vlad: I think we should separate the topic. On the one hand, we have the alternative current charging stations (with urban applications), where the standard tends to be 22 kW. 22 kW is a power allowing between one hour and 4-5 hours for full charging, depending on the vehicle type and the size of the battery mounted thereon. Looking at various statistics in Western or Nordic countries, it is very rare that a person driving an electric car has an almost empty battery. On average, the stopping time is between 30 and 60 minutes depending on the nature of the location (supermarket, restaurant, mall, public parking, etc.) and grows to several hours in office buildings, hotels, hostels, spas, etc. In conclusion, I believe that this type of equipment (which should be smart) is the standard for the following 5-7 years in Romania, even though manufacturers tend to increase battery power to ensure greater autonomy.

On the other hand, we have the AC fast charging stations, where the standard is now 22 kW for small applications and 50 kW for other applications, ensuring 80% charging in less than 30 minutes for off-city applications, in high traffic areas or for extremely mobile car fleets. For these cases, the fast charging solutions tend to go towards 150 kW starting in 2017. Basically, they go along the car manufacturers, who announce batteries that can charge at a rate of 70 kWh. One example is KIA SOUL (a model already on the market) and VW, announcing cars able to charge at a rate of 100 kWh.

Finally, let’s not forget the charging infrastructure for electric buses, generating powers of up to 250 kW per equipment.

Generally, public subsidies are aimed at the most vulnerable segments of the population (youth, elderly, unemployed, etc.), with low incomes. In the case of the Rabla Plus programme, we are talking about support for people buying cars in the range of tens of thousands Euro. Do you believe this is a sustainable and efficient approach for our society?

Mihai Marcolţ: There are various subsidies, some of which are linked to new technologies, applied to reduce CO2 emissions and improve the environment. These are decisions with a medium and long term impact, but which need to be applied early, from an early stage of the technology, when prices of that product are higher, as the research and development costs have not yet been set off. In a few years, when prices drop and technology grows, we may no longer need subsidies, but we are not there yet. I believe that a little care to the way the subsidies are granted (and changing some details in the funding guidelines), either for the purchase of electric vehicles or for the installation of charging infrastructure, will lead to higher performance of these programs and to results that will be visible in the street in a few years from now. At European level we can see countless examples of countries that acted in a similar manner, with great results.

Alexandru Teodorescu: Any program that helps to reduce pollution and improve living conditions in large urban areas should be supported from as many sources as possible. Rabla Plus is just one of them. In other European countries, in addition to subsidies on the purchase of new purely electric or hybrid vehicles, other tax exemptions are also available. Given the total number of vehicles registered in one year, the budgetary impact of tax exemptions on electric vehicles would be insignificant. In the end, we are talking about our health and about the health of future generations.

Renovatio undertook to develop a charging stations infrastructure even lacking a subsidies program and given the relatively low number of electric vehicles. We decided to invest in the future without hope for an immediate benefit, understanding that this is a business that needs time.

Daniel Vlad: I think we have no choice. Currently, with an autonomy allowing mostly urban mobility, the electric vehicle is seen by below-average earners rather as the second car in the household and therefore it is not an option.

Basically, only companies and high income earners can afford to purchase an electric car. With time, accessibility will likely increase.

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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued in December 2016.

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