Making the most of EV charging investment opportunities · • Birmingham • Southampton Clean Air...

Making the most of EV charging

investment opportunities

16 January 2019

2© Ricardo-AEA Ltd Ricardo Energy & Environment in Confidence

Introduction

• Meet the presenters

• How to ask a question

Opportunities in electrification

• Context – Government targets and policy

• Charging Infrastructure investments – market outlook

Novel concepts for charging infrastructure and smart grids

• Introduction to the Smart Hubs project

• Innovations & Challenges

Some Legal Issues to Consider

• Things to think about with CIIF

• Properly conducted/focussed due diligence

Panel Discussion

Today’s agenda


Today’s presenters

Simon TerryRicardo Energy & Environment

Principal Consultant

Energy Infrastructure

Expert on UK electricity

networks and smart grids

[email protected]

Denis NaberezhnykhRicardo Energy & Environment

Technical Director

Sustainable Transport

Expert on vehicle technologies

and charging infrastructure

[email protected]

Contact us for any questions after the webinar

Ross FairleyBurges Salmon LLP

Partner

[email protected]

mailto:[email protected]



How to ask questions?

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What to consider when making investment into

EV charging infrastructure?

Denis Naberezhnykh

Ricardo Energy & Environment

[email protected]


City and localNational

Introduction

Context – Government targets and policy

• Leeds

• Nottingham

• Derby

• Birmingham

• Southampton

Clean Air Zones (CAZ)

• Heathrow Airport Ultra-Low

Emission Zone (ULEZ) in 2025

Emission Controlled Sites

• Brighton and Hove

• Bristol

• London ULEZ in 2019

• Oxford – World’s first ZEZ

• Norwich

• Manchester

• Glasgow

• Edinburgh

Other Controlled Emission

Zones (Includes planned)

• 24 Local Authorities in Defra’s new Air Quality Plan exceeding NO2 emission levels

• Over 700 Air Quality Management Areas (AQMAs) across the UK

• No restriction on implementing a CAZ

Future Controlled Emission Zones


• Charging Infrastructure Funding Schemes

– Home

– Workplace

– On-street domestic

• Ultra Low Emission Taxi Schemes

• Low Emission Bus Scheme

• Other, air quality-related schemes (e.g. Early

Measures Fund, Clean Air Fund, etc...)

• CIIF

– Up to £400million (50% government) fund to

support deployment of charging infrastructure

– Expected to close “Early 2019”

• July 2018 - Autonomous and Electric Vehicles Act

become law

• Large fuel retailers to provide public charging

• Public charger operators to provide transparent data

and ad-hoc access to all users

• Charging points sold or installed in the UK to be smart

– Domestic EV chargers (funded by the government)

to be smart from July 2019

FinancialLegislative

Introduction

Support for charging infrastructure


0

20

40

60

80

100

120

140

160

180

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

20

24

202

5

202

6

202

7

202

8

202

9

203

0

g/k

m C

O2

Pure ICE Efficiency

limit for Pass Cars

Market outlook

European and other regulations require automotive OEMs to shift to

zero emission vehicles

Normalised CO2 targets

Source: ICCT (International Council on Clean Transportation), Ricardo analysis

US Pass Car

China Pass Car

EU Pass Car

Likely Future

Trajectories

7069

<60

92

8981

Targeting ~5%

of all new

vehicles sales

to be plug-in

Increasing degrees of

electrification to recover

and re-use energy


Ricardo analysis: Over half of the

car models and a third of van

models responsible for the majority

of sales will have electric variants

by 2025

18

% 25

% 31

%

32

%

54

%

36

%

0%

10%

20%

30%

40%

50%

60%

Cars Vans Cars Vans Cars Vans

2018 2020 2025

% o

f M

ajo

r M

an

uf.

M

od

els

Generic models accounting for >90% sales

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

FCEV = hydrogen fuel cell electric vehicle

Electrified will include hybrids

Model 3

enters volume

production

Plan joint EV

platforms

First full EV

Targets 1M

sales of

electrified

vehicles

Plans 15-25%

of sales to be

electric

20 new all-

electric and

FCEV models

To launch

first

electrified

products

on Efficient

Modular

Platform

(EMP)

All models

to be

electrified25% vehicles

will be electric

All vehicles

will be hybrid

13 new

electrified

models

To have 7

PHEV and 4

BEV models

on EMP

Expects 50%

of models to

be electric

Expects 15-

25% of models

to be electrified

Plans 30 new

EVs accounting

for up to 25%

of sales

Expects

2/3rds of

models to be

electrified

Plans to sell

1M electric

vehicles per

annum

Market outlook

OEMs state they are committed to electrified and electric vehicle

introduction; the number of models available is increasing rapidly

Announced

plans to

produce up to

15 million

electric cars

over the next

few years.

Expects 27

electric

models in

production by

2022

All models will

be electrified

40% of global

models will be

electrified


Demand for EV charging

Charging infrastructure is available to support different recharging

behaviours and business models

Source: Ricardo analysis


High end super cars and

luxury car drivers, future

HGVs and some

commercial vehicles

350kW+ (DC)

Taxis, car sharing,

commercial fleets, private

users on longer journeys

50-150kW (DC)

All users at work and public

top-up charging

11-22kW (AC)3-7kW (AC)

Market outlook

Matching appropriate infrastructure to cars,

locations and users is important

All users at home and

work

CA

RS

LO

CA

TIO

NS

US

ER

S

Suitable for all cars

Overnight charging at

home and work

Off-street and on-street

Limited (requires a

3-phase charger)

Likely most of future EVs

Public convenience/

destination charging

(after short/local journeys)

Most EVs 50kW

New models are going

above, Likely 100kW+

for future EVs

Rapid (super) charging

for en-Route, destination

and depot charging

Only cars designed to

use 800V No indication

that this is a focus for

OEMs

Dedicated ultra rapid

charging hubs

(mostly on the highway)


• ~60K domestic chargers

• 93% of EV owners have

off-street parking – likely

to continue to at least

2025

• 200K PiVs (~60K BEVs)

• BEVs likely to increase in

future years but unlikely to

exceed 50% of PiV fleet by

2025

• ~3 PiVs per 1000 population

(large variability regionally)

Market outlook

Charging Infrastructure – current state of the market

0

50000

100000

150000

200000

250000

0

10000

20000

30000

40000

50000

60000

70000

Num

ber

of

cars

Year

Total UK PiV registrations

PHEV BEV Cumulative• ~19K public chargers

• >4K rapid chargers)

• ~1:10 (public charger : EV

ratio)

Organisation Region Ideal public charger to EV

ratio

European Council EU 1:10

NDRC China 1:8 – 1:15

IEA Electric Vehicle Initiative Worldwide 1:8 - 1:15

EPRI United States 1:7 – 1:14

NREL United States 1:24

CEC/NREL United States 1:27

Sources: SMMT data, Hall & Lutsey, 2017)


Market outlook

Charging Infrastructure – likely market conditions to 2025

To make return on

investment from EV

charging infrastructure –

need clear understanding

of target EV users and how

charging provision fits into

the broader charging eco-

system

• ICCT report (2017) found statistical correlation

between number of charging points and EV take

up – CAUTION! Not a causal link

• Charger to EV ratios vary from 1:8 to 1:27

• Evidence from Norway suggests that EVs are

mostly charged at home (94-95%)

– Partly at work

– Rarely elsewhere (10% said they use public

charging on a weekly basis)

– Public rapid chargers were mostly used by

private drivers, sparingly and for irregular trips

<10% use on weekly basis

• Not all is applicable to the UK


Ultra rapid charging

Opportunities

Premium service

Risks

Very high costs, no demand

Mitigation

Carefully selected locations for premium charging,

integration with energy systems

Rapid charging

Opportunities

Higher value, captive market

Risks

High costs, very low utilisation

Mitigation

Commercial vehicles and fleets, carefully selected

public locations, integration with energy systems

Public charging

Opportunities

Growing market, high visibility

Risks

Low utilisation levels, uncertain revenue streams

Mitigation

Carefully targeted placement, partnerships

Domestic and workplace charging

Opportunities

Biggest and most certain market

Risks

Low margins and competition from some OEMs

Mitigation

Bundling with other services

Conclusions

Understanding of risks and opportunities around investment into EV

charging is key to making the most of your investment


Novel concepts for charging

infrastructure and smart grids

Simon Terry

Ricardo Energy & Environment

[email protected]


What is the project about?

Introduction to the Smart Hubs project

What are the benefits?

The solution will enable optimised

energy use across the Smart Hub,

minimising energy costs and offering

grid balancing services (such as

frequency response).

Who are the intended

customers?

Smart Hubs are aimed at car park

owners/operators with Distributed

Generation and/or EV charging

requirements that would require

re-enforcement to connect to the grid.

Smart

Hub

Solar

Car Port

Battery

energy

storage

EV

charging

(V2G)

Grid tied

convertor


The Smart Hub consortium consists of:

Project Background

Leading the project, delivering the solar car ports, site management and V2G charging interface

Providing the power electronics convertors

Delivering the Battery Energy Storage system and Energy Management system

Managing the lab demonstration

Examining the revenue potential from grid services; and

Providing project management and business case modelling


The project is currently considering potential

sites for demonstration including:

Demonstration sites

• Park and Rides

• Supermarkets

• Private Car Parks

• Hospitals

• Transport hubs

• Leisure Centres

The trial installations are being

selected to illustrate a range of

potential applications, including

different sizes and charging

demand profiles


Smart Hub owners benefit from the ability to

provide EV charging whilst

• Reducing energy costs

• Increasing revenue from grid services

• Avoiding network reinforcement costs

• Enabling operation of an EV fleet with capacity for

multiple rapid chargers

Users benefit from

• Increased access to charging facilities, including medium,

fast and rapid charging

• Reduced charging and parking tariffs

• Maximising the use of renewable energy in their vehicles

The electricity system benefits by

• Minimising demand at peak times

• Availability of balancing services

• Potential assistance with network constraints

Benefits


• Technical challenges associated with

the requirement for bi-directional DC

power flows

• Uncertainty of rapid charging

standards (CHAdeMO and CCS)

• Ensuring a viable business case

– Price of final product

– Potential revenue streams

Challenges



Ross Fairley

Burges Salmon LLP

[email protected]


Burges Salmon and Transport Technology and Intelligent Mobility

ROAD

Solar PV

Data /

Cyber

Mobility as a

service

AVIATION

JV’s /

Partnering

TRANSPORT

Health and

Safety

Private wire

RAIL

Infrastructure

Asset financing

leasing

Freight

Infront / behind

meter battery

storage

Networks

V2G

INTELLIGENT

MOBILITY

Energy

supply

Corporate

PPAs

Wind

Co location

Environment

PORTS /

MARINE

Hydrogen

ESCOs

IP / IT

Biofuels

Telematics

Grants

Green

certificates

Bus

Procurement

EVs /

CAVS

ENERGY

GAS

ENERGY

SERVICES

Policy /

regulatoryRENEWABLES

WASTE

NUCLEAR

STORAGE


• It is Government money going in - what conditions

flow from that?

• What will the CIIF invest in (what are the

parameters)?

• This will be money on a commercial basis so due

diligence will be important

• What will be the minimum ticket size? (linked to the

ability to spend the fund)

• How much demand will there be?

• What will appeal to the CIIF- income streams

• Businesses will want a streamlined approach to DD /

negotiation and investment

Things to think about with CIIF


As an aid to help focus minds post investment

Investor

To check the proposition.

To understand how inevitable risks are managed.

To ensure the value is correct

Properly conducted/focussed due diligence

Business

To demonstrate your worth ahead of others.

To bring focus to key risk areas and to show how you have managed them.

To mitigate Seller business risk


• Land rights – lease / licence / security

• Ownership of the equipment / risk passing /buy out ability

• Operation, maintenance / interface risk / restrictions / co-location considerations

• Grants and the conditions attached to them

• Change in law

• Frameworks

• Consortia and understanding who does what and what risks that poses between the parties and the customer

Some legal areas of particular focus


www.burges-salmon.com

This presentation gives general information only and is not intended to be an exhaustive statement

of the law. Although we have taken care over the information, you should not rely on it as legal

advice. We do not accept any liability to anyone who does rely on its content.

© Burges Salmon 2018


How to ask questions?Everyone’s microphone is muted

Questions can be submitted at any time and will be answered at the end.

Attendee

control panel

Successful CRC Compliance webinar

Welcome to the CRC Compliance Webinar

If your panel is

minimised,

click the orange

button to expand it.

Type your

question here


Today’s presenters

Simon TerryRicardo Energy & Environment

Principal Consultant

Energy Infrastructure

Expert on UK electricity

networks and smart grids

[email protected]

Denis NaberezhnykhRicardo Energy & Environment

Technical Director

Sustainable Transport

Expert on vehicle technologies

and charging infrastructure

[email protected]

Contact us for any questions after the webinar

Ross FairleyBurges Salmon LLP

Partner

[email protected]



Making the most of EV charging investment opportunities · • Birmingham • Southampton Clean Air...

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