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Agora Analysis: Promote Infrastructure with a Focus on Fast Charging

In less than 25 years, the passenger car fleet in Germany is expected to be largely battery-electric. To achieve this, the expansion of the charging infrastructure must be conceived with the goal in mind, says the think tank. And it provides specific recommendations for an optimal charging infrastructure. Focus areas: Public fast charging, initial subsidies, later user financing, including via car tolls. But: Charging infrastructure is not everything, regulation is equally important.

Charging on the assembly line: The think tank Agora recommends that policymakers focus on public fast charging at high-frequency locations such as supermarkets or shopping centers. | Photo: EV Box
Charging on the assembly line: The think tank Agora recommends that policymakers focus on public fast charging at high-frequency locations such as supermarkets or shopping centers. | Photo: EV Box
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Johannes Reichel

The Berlin Think Tank has presented an analysis with recommendations on how the charging infrastructure needs to be expanded to achieve the targeted electrification of transport. The results showed that the greatest potential comes from promoting fast and high-performance charging, for example at retail locations. "Charging like fueling" aptly describes the basic principle of charging in publicly accessible spaces, according to the think tank's analysts. The priority on fast charging and competition should also be included in the upcoming further development of the Master Plan for Charging Infrastructure, they recommended.

Furthermore, Agora-Verkehrswende's chief Christian Hochfeld simultaneously called on politicians to integrate the necessary measures into the proposed immediate climate protection program. The plans formulated in the coalition agreement are not compatible with the climate goals in transport. Even though the sheer numerical target - 15 million electric cars by 2030 - is ambitious, the design of the path remains unclear. The charging infrastructure, while central, is not the only factor, Hochfeld said.

"Only if we align and fundamentally reform taxes, fees, and levies for vehicles and propulsion energies with climate protection, and tighten the CO2 fleet limits before 2030, can we ensure that the necessary boom in electric cars does not come to an abrupt end. The best charging infrastructure cannot change that," Hochfeld appealed in a webinar.

Looking only at the current registration numbers of electric cars, it would seem that we are on the right track. In December 2021, the share of purely electric cars and plug-in hybrids in new registrations was a good 35 percent. Given this momentum, it is only too understandable that the circle of those who warn that the expansion of the charging infrastructure - especially public charging infrastructure - cannot keep up and will hinder further market development is getting larger and louder, Hochfeld continues to explain.

Not just the charging infrastructure drives the e-boom

In his opinion, the breathtaking momentum of the last two years is due to a combination of the tightening of European CO2 fleet limits and the purchase incentives for company and privately used electric cars. However, by the middle of this decade, no further impetus will come from EU regulation, and the permanent subsidization of electric cars will rightly be regularly scrutinized in times of pandemic-induced tight budgets, Hochfeld warned.

"The charging infrastructure is not yet a decisive bottleneck for electromobility in Germany, but in the next few years, a massive and rapid expansion is required, especially in publicly accessible spaces," argue the study authors.

On the funding side, the Agora experts believe that in the near future, the expansion of publicly accessible charging infrastructure should be state-supported, even though the system should be user-financed in the medium and long term, as Hochfeld outlined. With the present study, they seek to answer the question of which funding and financing instruments the federal government can already use today to set priorities to support the rapid and widespread expansion of publicly accessible charging infrastructure.

  1. The expansion of publicly accessible charging infrastructure should be goal-oriented: In the long term, the charging infrastructure must be suitable to support an all-electric passenger car fleet. By 2045 at the latest, the passenger car fleet in Germany will be largely fully electric. By 2030, 15 million pure electric cars will need to be charged. The necessary target system should guide today's expansion of the charging infrastructure to realize it comprehensively and economically efficiently and to avoid misinvestments. This requires an adjustment of the conditions for government support, so that it focuses more on the quality of the infrastructure rather than just the number of charging stations.
  2. With high market shares of electric cars, the expansion and operation of publicly accessible charging infrastructure can be financed by users: until then, there is a need for government support. Part of the costs for operators can already be covered today through revenues from the greenhouse gas reduction quota derived from the national implementation of the EU Renewable Energy Directive (RED II). For the remaining financing needs, tax funds are required for the time being. In the design of medium-term user financing, potentially with the help of a (passenger car) toll, the goal should be to phase out government subsidies for publicly accessible charging infrastructure.
  3. The promotion of publicly accessible charging infrastructure should focus on fast chargers at everyday locations: This promises rapid basic coverage (no-regret approach). Publicly accessible fast charging points (from 50 kW) and high-performance charging points (from 150 kW) at retail locations – for instance, in parking lots at supermarkets, hardware stores, shopping centers, or cinemas – are likely comfortable for users and economically viable in the short term. For example, the 50 kW DC charging infrastructure has comparable costs to slower 11 kW AC charging infrastructure due to higher utilization. This approach is scalable for high shares of electric vehicles and has a wide coverage. The funding model should be supplemented with incentives that promote market competition and consumer choice. This includes, in particular, a competitive bonus for non-dominant providers, convenient ad-hoc charging, and the introduction of access options for other charging electricity providers at ad-hoc charging prices.
  4. In addition, tenders in combination with price regulation on highways make sense. In this model, government support is provided through tenders. The premium (in cents per kWh charged) results from the difference between a specified price cap and the actual costs above it according to the bid. This has the advantage of incentivizing high utilization through per kWh support and supporting the lowest bids. Future adjustments to the price cap should occur based on rules or indices. The challenge lies in achieving comprehensive coverage with forward-looking demand planning while avoiding over-financing if this funding instrument is used beyond highways.
  5. The design of government funding instruments in larger cities is a particular challenge. Municipalities need more capacities and support in developing long-term plans for the expansion of charging infrastructure. Especially in urban areas, publicly accessible charging is crucial since less private charging infrastructure is available. For the integrated, cross-departmental planning of charging infrastructure, there is also the challenge of high competition for scarce public spaces. In any case, additional personnel capacities are needed in municipal administrations. Guidelines for the efficient long-term expansion of publicly accessible charging infrastructure, as well as tailored funding instruments, should be developed as quickly as possible in collaboration with municipalities based on good practice examples.
Translated automatically from German.
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