Volkswagen will use Tesla Powerpacks in some of its charging stations

Electrify America, the charging network established by the VW diesel settlement, has announced plans to install battery storage units manufactured by Tesla at some of its DC fast charging stations. The network will deploy Tesla Powerpack systems consisting of “a 210 kW battery system with roughly 350 kWh of capacity” at over 100 charging stations. The systems will use a modular design, allowing EA to increase capacity later if needed.

Above: Tesla Powerpacks will be at some of VW's 'Electrify America' charging stations (Image: InsideEVs)

Why does an EV charging station need on-site energy storage? Because of demand charges, which are extra fees that utilities charge commercial customers when they draw large amounts of power. Demand charges are based on the highest power level a customer draws from the utility during a set period of time, and they can be extremely high. So costly are demand charges that, according to Tom Moloughney (writing in InsideEVs), they make it nearly impossible for DC fast charging stations to break even, much less make a profit. Moloughney owns a 24 kW DC fast charging station, and finds that demand charges push his cost of energy from 12 cents per kWh to well over $1.00 per kWh.

Using battery storage to shave peak energy consumption can help station operators reduce or eliminate these charges, by setting the rate at which the batteries recharge from the grid at a level low enough that it doesn’t incur a demand charge.

Above: Tesla's Powerpacks (Image: Charged)

There are two ironic situations here, as both Moloughney and Electrek’s Fred Lambert noted. First, Tesla has been exploring the idea of adding storage to its Supercharger sites for years, but has yet to do so on a large scale. The company says it expects the next-gen Supercharger V3 to have “significantly lower operational and capital expenditures.” Is energy storage one of the ways Tesla hopes to lower operational costs?

The second irony is that Volkswagen, Electrify America’s parent company, is developing its own charging and energy storage technology. Of course, Tesla has a commercially proven product ready to deploy, and Electrify America may have decided that it can’t afford to wait until VW has a solution ready.

Above: A close-up look at the Electrify America charger (Image: Electrek)

“Our stations are offering some of the most technologically advanced charging that is available,” said Electrify America CEO Giovanni Palazzo. “With our chargers offering high power levels, it makes sense for us to use batteries at our most high-demand stations for peak shaving to operate more efficiently. Tesla’s Powerpack system is a natural fit given their global expertise in both battery storage development and EV charging.”

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Written by: Charles Morris; This article was originally published in Charged; Sources: Electrek, InsideEVs