The personal transportation landscape is changing rapidly, particularly with regards to the car market, dominated as it now is by the ongoing, and rapid, transition from conventionally fuelled vehicles to alternatively fuelled vehicles, particularly EVs. This, along with firm international and European targets on decarbonisation, has forced the government to act in order to drive the transition forward.
The result is the recently published Automated & Electric Vehicles Bill, which passed its second reading on 23 October 2017 and is currently being considered by a Public Bill Committee.
The Bill requires large fuel retailers, such as motorway service stations and large forecourt operators, to install fast chargers. However, this has provoked some concern among operators with regard to the cost of installation, with consultancy firm Rapleys citing possible costs exceeding £250 million with just one installed charger costing at least £60,000.
Seizing the opportunity, charging firm InstaVolt has come to the rescue, offering to install rapid chargers on large forecourts for free, utilising its experience with local authorities, national gym chains and forecourt operators and a business model in which the company installs the chargers for free, buys the electricity from the network and then sells it to the driver at an enhanced unit rate. At 35p per kilowatt hour (p/kWh), it is over 10p cheaper than Shell, which is currently quoting a cost of 49p/kWh at its ten pilot charging points.
“Rapid chargers are obviously quite expensive pieces of equipment and the other big variable you’ve got is the DNO connection cost,” says InstaVolt CEO Tim Payne. “In some locations the network will be completely loaded up and running to its capacity. This means that putting an extra load on the network means that the DNO is going to have to do a lot of upgrade work, which means extra costs, thus making the connection really expensive. In other locations, they’ll have available capacity on the network, so effectively all you’re paying for is connection to the network; relatively speaking quite cheap.
“However, until you actually put in an application for connection you don’t really know exactly how much that connection is going to cost. Thus, in some areas the DNO connections are reasonably priced while in other locations the cost is prohibitive.”
According to the company, InstaVolt’s business model in this environment gives them several advantages over other charging concerns, Tim explains:
“First, we’re really well capitalised, so we’ve got the balance sheet to actually go and build this network.
These chargers are expensive, so we’re deploying a lot of capital into the ground. The balance sheet to be able to physically do this is key. We’re using a [US] company called Chargepoint for the technology we’re installing. Their 50kW chargers are unique in the fact that they have plug-in power modules, to increase the charge capacity as you go forward – anything up to 400 kilowatts. So, as vehicle technology changes and battery technology changes, you can deliver ever- increasing charge capacities therefore reducing charge times. We can upgrade our chargers without ending up with redundant assets and having to strip out the infrastructure.”
In comparison, Ecotricity’s Electric Highway has been operating for a few years and the technology is beginning to age. However, this is an industry that moves fast and so while InstaVolt can upgrade their chargers, the Ecotricity chargers are fixed 50 kilowatts.
Ecotricity also levy a minimum £3 connection fee, whereas InstaVolt operates a ‘pay-as-you-go’ system in which anyone can pay for their charge by credit or debit card. This gives the company a real advantage in an environment where most of the current charging outlets operate slow AC chargers, ranging from 3 to 7 kilowatts. Furthermore, most charging outlets require drivers to sign up to a particular scheme or club whereby they must have a particular RFID card in order to use the charger.
There have been additional concerns that the Bill is unclear in its definition of’large fuel retailers’. However, Tim thinks there is a particular reason for this in that although the government seeks to open up the charging landscape for use by anyone, which is InstaVolt’s motivation also, it also wants to see how the industry reacts to the opportunity. InstaVolt’s business model fits snugly into this environment, and it is one that puts them ahead of the competition.
‘They’re basically talking about motorway service areas and large forecourt operators,” adds Tim, ‘This is all about people being able to use the chargers, refuel relatively quickly, over 10-30 minutes, and with that in mind we’ve been able to go to the independent forecourt operators, not too different from where the government bill is. We’re looking at forecourt operators and motorway services. That’s our primary objective.”
The company is also looking at a range of secondary locations, where much of its experience has been thus far, such as local authorities, retail chains and national gym chains. Places where people don’t linger for too long, as people need to move on so the charging space becomes available. It has identified an opportunity whereby it can profit from the new landscape being created by the government, as well as helping drive it along, enabling the transition from conventional petrol and diesel vehicles to EVs.
Tim points out that this transition is still in its early stages, so the commercial landscape hasn’t really settled yet. As more EVs come to market and more rapid chargers become available, the competitive landscape will force a reduction in charging prices as the sector moves forward.
“Since we wrote the original business plan, from 2016 to now, this landscape has moved massively,” he comments. “This is right in the mainstream now. It is a once-in-a-generation event, akin to the change from horse and cart to the combustion engine. That’s the landscape we’re operating in now and while its in the public domain. I’m not quite sure the public have quite grasped just how quickly this is going to happen.”