Ongoing fears over EV charging utilisation rates have thrust multiple revenue streams towards the top of infrastructure operator needs for financing.
That was a key takeaway from a panel discussion on financing EV charging infrastructure at the Everything EV Live London conference this week.
The risk associated with EV chargers due to there being a chance the infrastructure is under-utilised and therefore unable to turn a substantial enough profit – or any profit – is one of the challenges to securing funding, Jim Totty, managing partner at Earth Capital said.
“There is still a risk profile that doesn’t quite fit with mainstream infrastructure markets and the particular risk is the utilisation risk, but that will be solved. It has to be solved if we are to see the rollout we all are hoping for over the next ten years,” he said.
The panelists agreed that revenue stacking, for instance as suggested by Abundance’s investments manager Ainsley Barker, through rapid charging hubs that feature a more typical forecourt experience with shops and cafes to produce extra revenue, could be a way of soothing investors’ utilisation fears.
Other options for additional revenue could also include battery storage and flexibility services.
Cyan Finance’s Jonny Page said that a number of early stage charge point operators approaching Cyan are trying to “imitate” the large operators with long histories such as BP Chargemaster. However, “if you try and set that company up today, you’re going to have a bad time,” he said.
“It’s important you’re finding other sources of revenue aside from just purely selling kilowatts,” Page noted, adding that pension funds and insurance companies are looking to invest “at a very early stage” in destination charging.
“They’re certainly perceiving it as a lower risk opportunity”, he added.
This echoes thoughts from Everything EV’s last event in April, where it was concluded that revenue security is the most challenge element of securing EV infrastructure investment.
However, Totty also stressed the role of government funding, pointing to the offshore wind sector, which he said was “de-risked” by government through the creation of the Green Investment Bank.
“Whether it’s UK government or institutions like the European Investment Bank, that government capital can be really, really catalytic in terms of proving out projects.”
