As electric vehicle (EV) uptake around the UK continues to grow, the need to expand the charging network is becoming increasingly key. This has been highlighted by a number of organisations and bodies, including the House of Lords’ Science and Technology Select Committee, which this week criticised the pace of the expansion of the charging network.
While there is clearly a large opportunity, who will be the big players in the space? Companies like Tesla, InstaVolt and Ecotricity have been quick to establish themselves, although the latter's Electric Highway was recently sold to GRIDSERVE, but as demand increases oil and gas majors will take on an increasingly important role said Eric Denivelle, EMEA e-mobility business director at Gilbarco Veeder-Root during a recent call.
The retail and commercial fuelling solutions and services company is seeing two types of chargepoint operators (CPOs), the first of these being the car manufacturers who are entering the space to boost their vehicle sales by being able to provide a fuller package.
Then there are the utilities, with Denivelle explaining: “They want to make sure that by having a network of chargers they will be the only ones selling electricity to that network, and this is very often at premium rates, especially when it is on the go charging.”
The question now therefore is are those two types of CPO in it for the long run, he continued. Gilbarco Veeder-Root believes it’s unlikely, as car manufacturers are not adapted to manage a network while utilities may favour joint ventures in the future.
Instead, Denivelle argued that the petroleum retailers, with their established infrastructure and experience in delivering fuel across a network will be the “true retailers” for EV charging. These are likely to transition to become mobility service providers, allowing them to continue to serve their fleet customers and maximise the potential of their existing networks.
Already, the likes of Shell, Engie and BP have entered the EV charging space, both through acquisitions and expansion. EV charging company BP Pulse for example opened the UK's first rapid EV charging hub for fleets in June, while Shell acquired on-street charging firm ubitricity earlier this, following on from its acquisition of NewMotion in 2017.
Previously, fuel retailers simply hosted chargers on their sites, signing agreements with CPOs who would then manage the EV chargers. But the problem with this said Denivelle, is that those CPOs are then also managing the customers, providing little visibility and smaller benefits for the fuel retailer.
This is particularly key, as simply selling the electricity from the installed chargepoints is not enough of a positive business case, he continued. While this is starting to change in markets like Norway where EV uptake is higher, at the moment in the UK, the value case for many CPOs lies in the market around the process.
As such, network operators have signed partnerships with cafes and supermarkets, bringing shared value through ensuring a refueling point is a destination of interest. EV charging network InstaVolt has signed partnerships with Costa Coffee, KFC and McDonalds for example.
Such an approach can help manage the upfront cost of chargepoint installation and network expansion whilst the market grows. One key cost that remains a concern is grid connection, in particular in places like London where the grid is already constrained.
“In some cases, people have told me that to add one megawatt of power on a certain location, you need to pay £1 million. And that is just to increase the grid, you still don't have your EV charging equipment at that point,” said Denivelle.
This has pushed some to build out EV charger capacity early, to ensure market share before the grid becomes still more constrained, and to put in multiple chargepoints to maximise the infrastructure there.
But in order for O&G retailers to truly step into the space, they will have to adapt their operations to offer something interesting enough to attract people to their sites to charge. They will have to compete with cinemas and shopping centres as locations to refuel, with a culture shift around refueling needed throughout the industry finished Denivelle.