Analysis
18 Mar 19

€465 million fund reveals future of profitable EV charging networks

Recharging hubs, fast chargers, reserved parking bays… the investment decisions of a new £400 million (€465.5 million) fund will provide fleets with a valuable insight into the future of public electric vehicle recharging networks.

Zouk Capital is in final negotiations with the UK Government to manage the Charging Infrastructure Investment Fund (CIIF), which will have £200m (€232m) from the private sector, matched by £200m from the Government to invest in creating a reliable, open access, public EV charging network powered by clean energy, said Colin Campbell, partner, Zouk Capital.

CIIF will invest in companies and platforms that are vital for a successful recharging network, and unlike other Government grants to stimulate the EV market, the fund has a responsibility to make a profit for its public and private investors. It also aims to act as a catalyst to attract more capital investment into Britain’s recharging infrastructure.

Rapid charger experience

Zouk has extensive experience in this sector, having set up a company called InstaVolt, which runs a network of 200-plus rapid chargers. InstaVolt chargers accept standard debit and credit cards, which makes them accessible to all drivers.

“InstaVolt chargers are very easy to use, rapid and in good locations, and that’s why they have proved so popular,” said Campbell (pictured below). “Customers don’t necessarily want to have to download an app, pay a subscription fee and then go and find a specific network’s charger. It’s much easier if you can see a charger is free, drive up, and tap-and-go with their credit card. Consumers want options and some want it to be as easy as filling up at petrol pumps.”

In the future, he added, technology will make the recharging process even simpler as EV chargers instantly ‘recognise’ a car as soon as it drives into the bay and automatically invoice the driver, without any need for cards or payment at the charging station.

A few of the InstaVolt chargers are on petrol station forecourts, but with a typical recharge time of 40 minutes to an hour at 50kw in order to achieve a meaningful range, the company has also sought locations where drivers will be happy to stop for longer than they would at a standard filling station, such as retail centres, gyms, coffee shops and leisure attractions. InstaVolt has chargers capable of 125kw, which it is now rolling out for the next generation of EVs that will be capable of taking a charge at this speed. It is all about matching the site specific use case or ‘dwell time’ with the customer’s requirement in relation to the speed of charge.

The financial models behind the new charging network will vary, depending on the commercial interest of the landlords, said Campbell. Some will seek direct commercial opportunities from the chargers, while others might offer charging facilities as part of a marketing programme, a sort of ‘charging as a service’, he said.

“A supermarket, for example, might want to attract customers so it will give them free charging.”

New EV charging hubs

As EV numbers increase rapidly, Campbell forecasts the development of EV recharging hubs, with between 50 and 100 chargers, and the opportunity for fleets to reserve parking bays in order to minimise downtime while their vehicles recharge.

“We will start to see electric vehicle hubs with their own shops and coffee shops, and chargers dedicated, for example, to delivery vehicles, so when companies know what routes they are driving they can drop in to recharge with a guaranteed space available,” said Campbell.

There’s also the prospect of ‘hot desking’ with chargers, so that a fleet might open its EV recharging facilities to the public during the day, and then recharge its own vehicles overnight, or vice-versa.

EVs demand fleet management skills

Such developments will, however, place high demands on fleet management skills, with fleet managers obliged to monitor precisely the levels of charge in their vehicles’ batteries, and schedule routes and recharging times accordingly.

If the demand side of EV charging is poised for rapid growth as fleets and private motorists gravitate towards zero emission vehicles, the supply side still faces considerable obstacles.

The development of EV charging hubs makes logical sense, but finding sites and obtaining planning permission mean the roll out of a comprehensive public recharging network in the UK is at least three to four years away, said Campbell.

Smart charging and the grid

Moreover, the need to upgrade the local electricity grid will add to the challenge. Few sites, streets or office blocks have surplus electric capacity, and the impact of several vehicles recharging simultaneously will place a demand on the grid that it cannot currently satisfy. The answer lies in active load management, said Campbell.

“So if you install 30 chargers at a location, with active load management you could, perhaps, charge when the office’s air conditioning isn’t on, or monitor the state of charge in batteries and work out how you prioritise the charge across your fleet, knowing when the vehicles are going back out again,” he said.

“Otherwise you are looking to upgrade the grid. For all of our InstaVolt sites we have taken a long term lease and put in a dedicated power supply, so we don’t depend on the host.”

These are issues that fleets will be looking to CIIF to solve if the UK is to switch away from internal combustion engines and towards electric power.

EV numbers to grow 1000 times

“The number of EVs on the roads in the UK is a market that has to grow about 1000 times over the next 30 years, so we are nowhere near saturation point in terms of recharging infrastructure. There is a lot to be done; the infrastructure should be built ahead of EVs and a lack of EV charging infrastructure is one of the main issues holding EVs back. However, I think it’s actually a lack of vehicles from the OEMs which is more important. Manufacturers have a lot of back orders – if they were making EVs they would be selling them very quickly at the moment. We are huge believers in the future of EVs and the more people drive them the more they will see the advantages of them and won’t go back.”

 

Authored by: Jonathan Manning
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