The market for electric vehicles (EVs) has not yet taken off, but this could be about to change. The ratification of the Paris Agreement means that many countries now need to reduce their emissions and in the UK we also need to reduce our reliance on fossil fuels, particularly in the transport sector, to meet our Climate Change Act 2008 targets.
EVs could be a solution. Assuming the electricity they consume comes from low-carbon sources, they emit much less carbon than conventional fuels and more EVs means a greater demand for low-carbon energy. But so far the take-up has been low. Between July and September 2016, 11,030 new ultra-low emission vehicles were registered, an increase of 47% on the previous year but still only 1% of all new UK vehicle registrations.
One of the main reasons for this low uptake is ‘range anxiety’. Even though 95% of trips in Great Britain are less than 25 miles, consumers want the reassurance that they will be able to recharge their vehicle on longer journeys. To overcome range anxiety, there needs to be a comprehensive network of chargepoints not only in the UK (which has the largest network of rapid chargers in Europe) but across Europe. The major motor manufacturers have recognised this and in November BMW, Daimler, Ford and Volkswagen Group signed a memorandum of understanding to set up a DC charging network of around 400 sites in Europe, starting in 2017.
The UK now has a network of over 11,000 public chargepoints for EVs but these have been set up with minimal regulation, resulting in many different chargepoint operators and schemes. Some, such as Polar Plus (the largest with over 5,000 chargepoints), require monthly subscription and membership, others are pay-as-you-go or even free.
There are also different types of chargepoint, defined by how much power they can produce and therefore at what speed they can charge an EV. Slow chargepoints (up to 3KW) are the most common and are used for home and workplace charging. They take six to eight hours to charge. Most commercial and many public on-street chargepoints are fast (7-22KW) taking three to four hours to charge. Then there are rapid chargepoints, such as Ecotricity’s Electric Highway network, which are up to 50KW and can deliver an 80% charge in 30 minutes. That is not even mentioning the Tesla network of 120-135KW superchargers or the new European ultra-fast chargers coming out this year. Massive improvements in battery technology, allowing lower prices, faster charging and longer range will drive EV uptake.
The expected boom in EV purchases, improved tech and charge times is a real business opportunity.
The government recently consulted on what measures could go into the forthcoming Modern Transport Bill to deal with the rollout of an EV charging infrastructure that would make life easier for the customer. These include requiring public chargepoint operators to publish open source data on the location of chargepoints and live availability and also to ensure consumers can use them without the need for multiple memberships. Pricing information should be ‘easily, consistently or comparatively available’, although the government stops short of regulating prices.
There will also be the power to require a minimum level of provision of chargepoints at motorway service areas and large fuel retailers. The consultation asked whether there were any other strategic sites where it might be appropriate to require provision of EV chargepoints, such as train stations, bus stations, public car parks, retail/leisure developments, hospitals and educational establishments – and who should provide the fuel at such sites.
Taken together, the expected boom in EV purchases, improved technology and charge times is a real opportunity for businesses to invest in providing chargepoints on their premises. Some are already doing this with government help through the Plugged-in Places programme, which offers match-funding to consortia of businesses and public sector partners to install EV charging points across the UK. There are grants available from the Office for Low Emission Vehicles (OLEV) to workplaces, local authorities (for residential on-street charging) and for installing EV chargepoints at railway stations and on government and public sector property.
Although there are no grants for installing chargepoints elsewhere, there is commercial potential for any business with a car park in a strategic location to install a chargepoint and either charge customers for using it or even offer free charging as a way of enticing customers to park outside a store or retail development. In the future, we will see hotels, cinemas, shopping centres, restaurant chains, car parks and colleges offering EV charging; no longer will we need a network of petrol stations to refuel, but we will be able to top up our EV wherever we park.
Finally let us not forget the potential for energy companies to gain from increased EV uptake. Ecotricity is leading the way with its Electric Highway that allows free use of Ecotricity’s network of rapid chargers in return for buying home energy from Ecotricity. Eon already operates around 2,500 charging points in Denmark and is setting up charging networks in Britain and Sweden. With the development of smart networks and time-of-use tariffs, plus improved battery technology, the EV can have a place in balancing the increasingly volatile electricity network as our sources of – and demand for – power changes.
Paul Hirst is head of transport while Anna Sweeney is a professional support lawyer in the infrastructure, projects and energy team at Addleshaw Goddard.