Why is public high power EV charging so much more expensive than charging at home?

The background first.  We measure electrical energy in kilowatt-hours (kWh).  A battery has a storage capacity measured in kWh.  In a typical EV the battery is about 60-70 kWh.  The big difference for the driver between using a public fast charger, and recharging at home, is the speed at which those kilowatt-hours can be delivered into the car.

A standard household powerpoint can deliver about 2.4kWh per hour.  The typical EV driver uses less than 10kWh per day in their car, so a powerpoint at home in the garage will likely meet their needs if the driver is topping up several times a week while the car is in the driveway or garage – but a full recharge will take more than a day.

A typical home EV charger can deliver about 7kWh per hour, which reduces the ‘full recharge’ time to about 10 hours – perfect for people who do lots of driving and want the ability to fully recharge overnight, or who want to get all their charging done while the sun is shining on their solar panels.

A 150kW fast charger can deliver energy at a rate of 150kWh per hour – assuming the car can take it!  This drops the ‘time to charge up to 80%’ down to under 30 minutes in many cars.  Fast chargers are the right choice halfway through a long drive, when the driver is not ready to stop for the night.  They’re also a popular choice for drivers without easy access to charging at home.

When it comes to cost, the natural comparison point for most drivers is charging at home, so we’ll start there.

The typical cost of grid supplied electricity to homes in Australia, once all the bits of the bill are factored in, is about 25-30c/kWh.  This varies quite a bit over time, and from state to state.  The AEMC does a great job of unpacking this in a lot of detail.

On most retail plans (putting offers like Amber’s with wholesale pass-through to one side) the cheapest electricity at home comes from self-consuming solar, which means missing out on a feed-in tariff worth about 5c/kWh.

The second cheapest electricity comes from off-peak prices on the better designed Time-of-Use (ToU) tariff products aimed at EV drivers.  There’s plenty of those that offer 10c/kWh or less in the middle of the night in most of the country.

It’s pretty natural for EV drivers to exclude the bits of the bill associated with daily supply charge to their house when they think about what it costs to charge the car.  After all, they’re paying that anyway, because they need an electrical supply to the home.

For a driver willing to set their preferred charging time to avoid peak time, and in a part of the country that has reasonable retail competition, it’s incremental electricity usage at about 10c/kWh that’s the price they see.  Regional QLD, WA, and NT have a little way to go in this regard, because in the absence of a competitive retail market, the retail offers in those places aren’t quite there yet.

So the drivers compare 10c/kWh at home to 60c/kWh or more at fast chargers, and ask…. Why so much more?

Always on

The first part is that the public fast charger is always available – so the ‘everything included’ bill from the energy retailer to the charge point operator (CPO) looks more like 25-30c/kWh, not 10c/kWh for ‘just the energy part, delivered off peak’.

If it’s a relatively lightly used fast charging site, the cost may be higher, especially if the tariff structure the energy network provides the retailer includes demand or capacity components.

This tariff structure bit is the reason that the EVC has advocated for a long time that low utilisation EV charging sites (<160MWh per year) need to be able to access tariff structures that don’t have peak demand charges in them.  Most of the country is on board with this; South Australia and Queensland are not.

So, the CPO starts with a base cost of something like 25-30c/kWh for energy supplied to them, and then they need to cover a bunch of other costs.  Some of these are upfront capital expenditure, or ‘Capex’:

  • Buy the fast chargers and the upstream electrical equipment for the site.
  • Install and commission the chargers and associated electrical equipment, including any network connection or upgrade costs.
  • Undertake civil works (concrete, bollards, signage, painting, etc)

In many cases state and federal governments are supporting the Capex with grant money, but not to a level anywhere near 100%.

More bays, higher costs

A single 50kW charger is relatively low cost to deploy (<$100k Capex if network augmentation can be avoided), but a multi-bay ultrafast charger deployment that will provide highly available charging and a minimum of driver queuing costs hundreds of thousands of dollars in CAPEX at least.   The non-government funded portion needs to be recovered over time.

Once the site is built, the CPOs have ongoing operational expenditure (OPEX):

  • Paying the staff employed by the CPO business
  • Running the backend software and payment services
  • Resourcing a call centre for drivers with problems
  • Costs of leasing the land on which the chargers are deployed
  • Undertaking maintenance (both planned/preventive and reactive/responsive)
  • Dealing with vegetation growth and vandalism at the site as and when it occurs.

Government grants in Australia do not generally cover the OPEX costs – the expectation is that these will be recovered by passing them on to the drivers using the service.

And, finally: the CPOs aren’t charities, they’re trying to make money from the provision of a service to their customers.  So, whatever their total costs end up being, a margin goes on top, just like it does for any other business.

It’s not surprising that these Capex, Opex, and profit elements can add 30c/kWh or more paid by the driver, on top of the 25-30c/kWh retail price paid by the CPO for the energy.

As we push towards more reliable charging infrastructure, the costs associated with better maintenance (both planned and reactive) will probably drive the cost to the drivers up a bit more.  This has already happened in other countries.

Lots of detail analysis work has been done in this space by many people… but for the typical driver whose weekend reading doesn’t include ARENA lessons learned reports and corporate cost stacks, I have a really easy analogy:

'The breakfast analogy'

Weekend family breakfast at my place is a dozen scrambled eggs, half a loaf of toasted bread, and a pot of stovetop coffee.  Cost of that lot is about $10.  Sometimes we’ll do pancakes instead – again, about $10 once the kids have gone overboard with the Nutella.

If my wife and I take the kids to a café for breakfast, I won’t have to cook or clean up… but I’m also not going to get much change from $80.  It’s a very different service, and one we mainly use when on holidays.

It’s cheaper for us to eat at home, because while the farmers are getting paid the same either way for producing the stuff we’re eating, at home we’re not covering the costs of building and running a café able to deliver a service at a busy time.

Same goes for charging electric cars… the difference with a petrol car, of course, is that the $10 ‘at-home’ option doesn’t exist.  With a petrol car, it’s the ‘$80 café breakfast’ every time, for every driver.

For about three quarters of the Australian population, the ‘$10 option’ for EV drivers to charge at home already exists – because most of us live in houses with driveways or garages.  Even if there’s only one parking space, multiple electric cars can share it, because they don’t need to plug in every day.

The next question is one of fairness – what about the (roughly) one quarter of the population that doesn’t enjoy this option?

In apartment complexes, there’s usually allocated off street parking, but not always easy access to electricity for EV charging in the allocated car park.

The apartment charging challenge

That’s going to create a need for electrical work in lots of apartment complexes.  NSW state government is leading the way supporting that, with online guidance material and a grant program.  Many players in industry are doing this work, and more will tool up to do it as the transition occurs.

There’s also about 7% of the population of Australia who live in dwellings without off-street parking – think terrace houses in inner Melbourne and Sydney.

We’ve some work to do to make sure that those people will be able to access reliable EV charging that meets their needs, at acceptable prices – kerbside infrastructure such as EV chargers attached to power poles will complement the fast charging networks in that setting.

With around 180,000 EVs on the road today, we’re about 1% of the way through the transition of the on-road fleet of vehicles to electric.  There’s a lot of stuff to build as we tackle the next 99%!

Ross De Rango
Head of Energy and Infrastructure, Electric Vehicle Council
February 25, 2024
Trending Post
No items found.
SwitchedOn Australia Podcast
Mike Casey
How New Zealand reached an electrification tipping point
Found this useful?
Share it!

Related posts.

Subscribe to the SwitchedOn weekly newsletter!