With consumer interest in electric vehicles (EVs) rising and environmental policy generating active government support for EVs now is the time for utilities to take a leadership role in their adoption.
Utilities need to invest in the emerging EV market not only for operational purposes but to establish a strategic position. By developing the EV infrastructure and offering innovative charging models, utilities can encourage the take-up of electric vehicles. By embracing green technology, they have the opportunity to build consumer trust and position themselves as utilities of the future.
However with the opportunity comes uncertainty. EV infrastructure is not only difficult and expensive to implement, but it is also evolving rapidly. Careful judgment is required to foresee how this innovative form of transport might develop.
Utilities need a long-term strategy that will maximise their potential gains from investment in EV infrastructure and in new business models.
PA Consulting Group’s work to analyse investment scenarios on behalf of a California utility and our research on US utilities and major suppliers of EV infrastructure has identified three key challenges that utilities must address:
Shaping a strategy around consumer behaviour
Utilities need to forge a long-term business strategy and prepare the grid for clustered demand. PA’s research shows that those with the best understanding of consumer behaviour will make the most effective infrastructure investments. The customer behaviour data that utilities already serve gives them an important advantage is this respect. In particular, utilities need to understand how many EVs will be on the road in their service territory, where public charging stations should be located and when EVs are likely to be charged.
Building a flexible infrastructure
Just as combustion engine vehicles have evolved, EVs will change and improve every year – utilities must develop an infrastructure that can adapt to these changes. The infrastructure will need to support multiple models of EVs on the road, including EVs from different service areas or, in the case of Europe, different countries. To leverage growth in the EV market, utilities must be able to support consumer choices and should factor these into their decision making.
Developing a commercial charging model
Any commercial charging model must work both for the utilities and their customers. Utilities must establish whether a time-of-use, flat-rate or fee-based charging model (or a combination of these) best meets the needs of the early adopters. The model must also be flexible enough to accommodate different types of consumers as they come on board. In order to be truly green and help drive down CO2 emissions, utilities will need to devise commercial incentives to encourage consumers to charge their EV at times when utilities can harness their renewable energy resources.
To find out how PA can help you prepare for the coming of electric vehicles, please contact us now.