The EV charging market

With carmakers themselves predicting the end of petrol engines, EV numbers are expected to boom, but how will owners charge all these vehicles? Michael Cottrell runs through the options.

Electric vehicles (EVs) are gaining market momentum. Volvo has stated that all new models will be electric or hybrid from 2019. The Tesla model 3 will be priced at $35,000 (£27,000) in an effort to break into the mass market. In the UK and France, policymakers are taking notice and have announced a policy to remove diesel-powered vehicles from the roads by 2040.

Consumers, too, are increasingly attracted to EVs. Alternative fuel vehicles (mainly EVs) accounted for 4.2 per cent of new registrations at the start of 2017. This growth is set to accelerate as manufacturers respond to government policy and EV prices reach parity with combustion engine vehicles.

The race is now on to provide the infrastructure to support the charging of EVs. There are currently 13,782 charging points in the UK. These have been established by a large number of small-scale players whose operating models have often been designed to access funding either from grants or vehicle manufacturers. For example, Charge­master has created tailored customer solutions as well as partnering arrangements with vehicle manufacturers such as BMW and KIA, as well as offering solutions to businesses and local councils.

Royal Dutch Shell is preparing to open the first “no-petrol” service station in London, although the project is still in its infancy. This futuristic forecourt is expected to offer motorists biofuels, electric vehicle charge points and hydrogen cell refuelling instead of traditional petrol and diesel pumps. Meanwhile, the buildings are due to be powered by renewable energy from solar panels on the forecourt roof. Shell also has plans to install high speed EV charging at a subset of its 400 existing UK service stations.

Innovation in charging is aimed to improve efficiency. For example, dynamic wireless charging technology is being developed to allow vehicles to charge “on the fly” by connecting wirelessly to mobile energy disseminators (MEDs) in the form of roaming converted buses. Using inter-vehicle communications (IVCs) and state-of-the-art energy transfer technology, this allows vehicles’ travel time to extend without stopping to charge by connecting them to the nearest MED.

Energy retailers are increasingly entering into EV charging, offering end-to-end solutions that include power supply and in future, time-of-use products and the optimisation of EV charging. Ovo has created a two-year fixed tariff for EV charging, including 100 per cent green energy supply and two years of free Polar Plus membership. Moreover, Ovo has signed a supply agreement with Chargemaster and acquired a number of companies along the EV value chain, including ChargedEV (a supplier of charge points), Indra Renewable Technologies (an EV component supplier) and Vcharge (a tech company focused on load management and storage).

This move appears to signal a longer-term ambition to integrate EVs into a wider “virtual power plant” solution, allowing Ovo to maximise value across generation, supply, storage, provision of ancillary grid services and, potentially, through market arbitrage (earning margin from buying and selling power into the system, exploiting dynamic market price differences).

How to win in EV charging

What is uncertain is how the owners of EVs will choose to charge them. Preferred charging methods are likely to vary by location. For example, an owner with a garage or driveway may choose to trickle charge overnight. In contrast, an owner living in a major city and parking on the street may require dispersed charge points or choose to stop at a charging station similar to the petrol stations we are accustomed to today. Charging on the fly may further change the picture.

This uncertainty means that those who play in this space must ensure their business and operating models are flexible enough to adapt to the preferred charging methods as they emerge. When many methods are likely to prove viable as EVs reach scale in the UK, suppliers should avoid making big bets on a specific method. Hedging investment in physical infrastructure by securing supply contracts with existing owners looks like a sensible move for energy retailers. For pure play infrastructure providers, partnership models will help to protect against specific modes of charging becoming obsolete.




Author: Michael Cottrell, engagement manager, Oliver Wyman,
Channel: Operations & Assets , Policy & Regulation
Tags: Solar , Electricity Retail , Finance and Investment , Government and NGOs , Customer Management

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