How active are utilities in EV charging currently?
The global shift towards electrification is not just disrupting the transportation industry – it is profoundly transforming the energy market as well. As a result, utilities are facing new pressure to meet the additional energy demands posed by the e-mobility.
However, utility companies are well positioned to take full advantage of this transformation of two of the world’s biggest sectors; namely, transportation and energy. Through their understanding of EV drivers as energy consumers, plus their ability to lead and control the energy market, they can bridge the gap between the two industries.
Over the last few years, several utilities have made massive investments in the e-mobility industry, from electrifying their fleets to investing in EV charging start-ups. This proves that they are tapping into this new market to diversify their portfolio and boost their offerings in areas such as EV charging, vehicle-to-grid (V2G) technology and energy storage.
How is this likely to change in the next decade?
A study by Accenture found that e-mobility could represent a US$700 billion market by 2040 in the United States alone. To capture that value, utilities not yet involved will need to quickly adapt their business model while coping with the growing energy demand.
Energy management and V2G are the next major trends in the EV charging industry, with utilities eyeing the technology as an opportunity to balance the grid. It also offers them the opportunity to reduce operating costs while gaining more understanding of the energy storage possibilities presented by EVs.
Utilities also need to think about integrating EVs within their day-to-day operations through the electrification of their fleets. In Europe, Centrica is an excellent example of a utility stepping into the e-mobility industry by expanding its services portfolio and integrating charging services within its EV fleet.
Driivz insight: what is needed for exponential growth?
Boston Consulting Group estimates that the rise of EVs could create $3 billion to $10 billion of new value for the average utility. To capture that value, utilities should focus their attention on four key areas:
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Make smart investments to enhance grid infrastructure
While public charging requires more initial investment, it has the potential to offer higher margins than home-charging in the long run. Utilities should deploy charging networks with distributed energy resources to stabilize the grid. The use of charging behavior data will also be critical in determining the highest value locations and ensuring the best return on investment for utilities.
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Invest in software for their EV charging networks
The future of the e-mobility will mainly be digital and analytics-based. Utilities will have to ensure that they have the best possible system in place to enable smart charging and V2G capabilities. The right software will also allow them to combine driver behavior data with grid data to optimize their assets and reduce stretch on the grid.
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Create e-mobility tariffs and offer incentives to their customers
As a mean to manage demand response, utilities can offer EV-specific rates to their consumers to encourage better energy use, either via preferential tariffs for overnight charging, refunds or credits. Utility companies can also look into providing a fixed monthly price to their customers that will encompass a variety of products or services.
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E-mobility related services
Utilities’ success in the e-mobility industry will largely depend on their ability to orchestrate services spanning the driver’s entire journey, from charging network installation and maintenance to reporting and value-added services that ensure a seamless EV experience.
Utilities will have to rely on cross-functional collaboration with a crafted network of partners along their value chain to ensure that their offering is competitive, reliable and future-proof.
