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The relevance of electromobility for public utility companies
There is a new business in town. It is growing steadily and gaining momentum. Multi-billion dollar companies invest heavily. This year you will see sophisticated end user products.
Yes, I am talking about electric vehicles, the necessary charging infrastructure and business models relevant for public utility companies.
By looking at the active players in eMobility you will see instantly a few players standing out against the rest – it is the big utility companies I am talking about. This is not only a German phenomenon; you can see this in a lot of countries. So, why is this and what are the implications for smaller utility companies?
The issue of grid stability
Energy is a very elusive product. Utilities have over-supply when few consumers need it, e.g. at night, and they are running short in supply when the majority of the potential consumers need it, e.g. at noon or at 5-7 pm when the majority of the workforce returns home. The growing number of renewable energy installations is adding unpredictability to this system. There is no control of time and amount of energy created by sun and wind!
The upcoming rising number of electric vehicles will add an immense challenge to the system. After returning home many cars will be plugged in for recharging. This has a tremendous impact on the grid – if it isn’t controlled in smart grid environments. The concept of smart grids is part of thorough discussion in several groups (e.g. http://smartgrid.ieee.org/nist-smartgrid-framework).
eMobility – part of the solution
Growing numbers of electric vehicles (and their batteries) not only represent a challenge but are at the same time part of the solution for this challenge. Each battery represents a potential energy storage system. Energy could be consumed when there is a surplus of energy in the grid and it could be transferred back to the grid in times of energy shortage. A lot of battery blocks connected to the grid can significantly improve the overall grid performance. Therefore it is in the interest of electric utilities to have a lot of electric vehicles connected to their grid to participate in load balancing.
Of course there is a lot of additional technology to come and a lot of investment to be made in energy grids – but the race for customers i.e. batteries has already begun!
Utilities are investing heavily to support the acceptance of EV driving. The big utilities invest in charging spots and offer complete electromobility packages. Customers can lease electric vehicles – an energy flat included. Several variations of these offerings are out there. Utilities also heavily invest in charging infrastructure. The investment today is expected to pay off manifold in the future.
There are 4 aspects why this investment seems to be a good one:
- The widespread use of EVs (and their batteries) is the starting point for a smart grid and hence there already is a tangible shift of investment from stabilizing the old grid systems to new smart systems – and this will be an accelerating trend.
- Supporting EVs attracts new customers with a willingness to pay good prices for green energy
- A good portion of the energy consumed in regular households will be needed for mobility in the near future
- Last but not least: Supporting EVs cultivates the green image of a company
So the big utilities have been investing heavily for years. What are the implications for public utility companies and smaller utilities?
Hindrances and opportunities
The reasons why public utility companies have been reluctant so far are easily comprehensible.
“There are only a few electric cars in the market. Demand is low”.
This is about to change.
“The range of electric cars is so limited; they will never want to get beyond our supply area”.
This is about to change.
“A lot of money is needed to invest in infrastructure. I cannot do this on my own”.
There are solutions to this!
Technical advancement in batteries resulting in increased driving ranges and lower costs will have an essential impact on the acceptance of electric mobility. More and more people will be willing to buy such cars. And they are very likely to ask their local energy supplier to provide the emobility package needed, consisting of energy, special tariffs, and the infrastructure for charging, etc. In my eyes it is a must to prepare for creating special packages for these customers. It is also a must to provide the relevant infrastructure. The only question might be: How much longer can we wait?
But it´s as easy as this: The one who provides the infrastructure, energy, and tariffs will win these customers. This is what the big utility companies are already practicing. For small utilities, I suggest to jump on the bandwagon and strongly investigate how to invest in eMobility infrastructure to retain their customers.
eMoblity as a Service
The Bosch eMobility Starter Package is a service for public utility companies to use right-away. As it is a web-based solution it has several advantages for this clientele. Initial invest is low, as there is no need for own hardware infrastructure or software development teams. Only a web browser and some charging stations are required in this Software-as-a-Service scenario. The calculation is very simple – there are fixed prices for a certain number of charging stations and drivers.
The costs are not a real issue any more, especially not for smaller utility companies.
An eMobility Market Place will soon become reality
The eMobility Starter Package is open for everyone. Each public utility company can become part of the so called eMobility Market Place. Every new member adds its charging stations to the system. This will soon move single and local charging infrastructure towards a nationwide charging infrastructure with a very high coverage. And to clarify this point: Public utility companies are only investing in their own territories. By combining these investments and making it available to EV drivers, the eMobility Market Place multiplies the effect of the single utility investments. EV drivers are then able to use charging infrastructure in different regions from different operators.
Stay in touch with your customers more closely
The system allows to have branded web portals. Every investor in this infrastructure may address his customers with a branded web portal. Each end user will always be aware of the company that enables him to use this charging infrastructure. This is a perfect means to increase customer loyalty – and improve your green image.
Drivers of electric vehicles will soon be able to drive their electric car beyond the boundaries of their local energy provider´s territory and use the charging stations operated by adjacent providers and beyond. As soon as these utility companies are part of the eMobility Market Place, the driver will be able to charge her car, using the identification she got from her home energy provider. Roaming as part of the eMobility solution like in telecoms will make this possible. This means: The local public utility companies can be enablers for a nationwide charging and billing infrastructure and hence provide the basis for smart grid infrastructures, attracting new customers, take their share of the energy sold to electric mobility and improve their green image.
Prerequisite for this is an open eMobility infrastructure that allows everyone to be part of this eMobility Market Place. Bosch´s eMobility Starter Package is such an offer: open for everyone, easy to implement at affordable costs. It seriously lowers the barriers to enter this market and hence puts everyone – big as well as smaller utilities – in a position to compete on eye level.
Personally, I see no hindrance why one should not invest in eMobility infrastructure. Also, I see no reason to wait. But: I see a lot of opportunities and a clear path to follow!
What is your thought on the eMobility development path I depict in this post?