Oil companies, like utilities, are facing a changing market and need to adapt to secure and grow their business into the future with the move away from fossil fuels to a zero-carbon clean energy world.
One obvious opportunity for these companies with their extensive national networks of fueling stations is to offer electric vehicle (EV) charging and hydrogen refueling.
With auto manufacturers and private operators putting out networks there is a different degree of competition to which the oil companies are used to, and so far this option hasn’t greatly attracted them.
But that is now starting to change. And it may well expedite the important electrification of the transport sector with the uptake of these alternatively powered vehicles.
Electric vehicle charging
In a recent speech at Imperial College, London, John Abbott, Downstream Director at Royal Dutch Shell, pointed to a current problem with EV charging infrastructure.
“The charging facilities are not quite there yet. We sent some staff out in an electric car in London the other day on a mission to recharge it. They failed. Every post they found was either out of order, needed a different plug to the one they had or was already in use.
“That’s not the sort of experience that is going to attract customers,” he said, commenting on the role of CharIN – a growing alliance of vehicle manufacturers and other industry participants to develop a global standard for charging systems.
Abbott indicated that Shell was starting to roll out charging points to fuel station forecourts in the Netherlands and the UK, with 10 due in the latter country by the end of the year.
He also mentioned that the company is working on a smart charging system to prevent localised power shortages when several vehicles are plugged in at the same time.
“It involves smart, connected, charging posts that communicate with the grid, that know when there is enough electricity in the system and when there isn’t, and can choose when to charge,” he said.
The system has already undergone two-year trials in London, Hamburg and San Diego, he added.
“It will not only help the grid but, by taking electricity at times of excess supply, will save customers money.”
On the hydrogen front, Abbott said that Shell is also building hydrogen filling pumps and partnering with car manufacturers and gas suppliers.
In the H2 Mobility initiative in Germany, in an alliance with companies including Air Liquide, Daimler, Linde, OMV and Total, a nationwide network of hydrogen filling stations is being developed – just as Daimler is close to launching its first hydrogen fuel cell vehicle.
Earlier this year Shell opened its first hydrogen retail site in the UK in partnership with electrolysis experts ITM, and is opening two more this year.
The company is working with Toyota in California to expand the state’s hydrogen refuelling network and is also looking at Japan and China.
In partnership with BMW’s Designworks, a new hydrogen pump has been created.
“(It is) a thing of beauty for customers to use,” commented Abbott.
With the transport sector accounting for more than one quarter of the world’s total energy use and one fifth of global energy-related CO2 emissions, its electrification is crucial if emission reduction targets are to be met.
A recent report from European electricity association Eurelectric points out that electrifying the transport sector, along with that of the heating/cooling sectors, “will provide a viable response to the challenge of decarbonising the European economy and will allow for maximum value to be realised from the electricity system.”
According to the report, the European Commission has acknowledged that currently 94% of transport in Europe is dependent on oil. In order achieve at least 80% decarbonisation across the EU by 2050 will most likely require the decarbonisation of the road transport sector of around 95% by 2050.
Specific recommendations for the sector include the implementation of strict vehicle emission standards and targets for the take up of zero emission vehicles, ensuring that sufficient charging infrastructure is in place for EVs, and tapping into the potential of smart charging, with DSOs receiving appropriate incentives to procure and use such localised system management options.