Bridging old and new systems - Is blockchain the right enabler for EV charging?

Data integration and management expert DigitalRoute presents four business models for electric vehicle charging but not all need a blockchain backbone.
Published: Wed 28 Mar 2018

Finding business cases for new technologies such as blockchain and electric vehicle (EV) charging is becoming a key focus for utilities.

To support adopting these technologies, however, utility companies must be more flexible and innovative with their business processes.

In an Engerati webinar, ‘Blockchain for EV charging: How data platforms make it happen’, we discussed how utilities can prepare for the impending widespread EV market by building new services into existing environments.

Jonas Wallenius, Product Manager Innovation at DigitalRoute, commented: “We all know that the EV charging market is new and fragmented - you have competing standards for charging plugs across the world, some cars can only charge at certain stations. This is completely normal when a new market is born.”

Based on his expertise, he identifies four main business models that will emerge in the market.

Business models for EV charging

1] Asset-heavy

Much like a gas station, Wallenius describes the first model as centralised and asset heavy, where the charging provider owns all of the assets.

He explains: “As the asset-heavy service provider, you have one single mobile application that you provide to the EV owners, and you need to have a data platform that allows you to integrate both the charging posts and assets, payments mechanisms, enterprise back-end systems and cryptocurrencies.”

In this particular scenario, the centralised system negates the need for blockchain, unless the operator wants to enable peer-to-peer payments which don’t use traditional banking infrastructures.

Wallenius believes that this setting will likely be most applicable for the incumbent energy retailer, due to the similarity to current distributed energy resource business models.

2] Asset-heavy consortiums

In this scenario, a consortium is formed of several asset-heavy players, where the charging infrastructure is still owned by the utility, but multiple companies work together to provide the service to the end-user.

The payment argument for blockchain here, says Wallenius, is largely the same as in the previous case - it can provide alternative payment mechanisms. He notes, however, that it could also be used to have a common audit trail and a common application programming interface (API) in between the consortium companies. This latter case would be better served by a consortium blockchain than a public one.

“The need for a data integration platform in this scenario may be even more important,” he continues, “where you may have scenarios like roaming.”

3] Asset-light, centralised

In this environment, the service provider would not own the assets, but instead sit in between the car owners and charging post owners, which become a more heterogeneous group in this fragmented situation.

Wallenius continues: “You become something more like AirBnB or an Uber model where you work as an aggregator to connect people with a common need.

“The charging post owners in this case could be big, asset-heavy companies that want you to drive usage, or could be smaller users - municipalities, or perhaps even individual condominiums installing charging posts in their basements or parking lots.”

In this business model, the role of the central provider changes. For instance, the APIs would need to manage different processes, such as charging post registration and validation.

Wallenius believes this is where blockchain’s strengths outside of banking infrastructures can be truly optimised.

EV Charging Post + Blockchain Asset-light

Does your infrastructure need blockchain? Perhaps not, says Jonas Wallenius, Product Manager Innovation at DigitalRoute, but it can’t survive without a strong data platform.

Moving blockchain beyond payment

“In this use case I think it would be even more worthwhile to investigate using blockchain as an alternative payment channel, mostly because for the smaller charging post owners - even the homeowner - how will they be able to receive payments easily, in a globally consistent way?”

Blockchain can also provide “an ecosystem audit between the different asset holders” in this situation, creating a public document and greater trust that data will not be manipulated.

4] Asset-light, centralised to decentralized

If you take this scenario one step further, you can remove the central application creator. Instead, Wallenius describes this player as “the spider in the web that ties together different APIs and mobile app providers to help car owners to locate charging posts”.

In this model, the use case for blockchain goes well beyond payment, and perhaps beyond anything we can achieve as of yet with the technology. Wallenius explains: “The intermediary in this scenario might actually be managed more and more on a public blockchain. I don’t think that even Ethereum is ready for this today, but the time to prepare for its future capacities is now.”

”Wallenius further highlighted the need of choosing technology that enables a good EV charging user experience for car owners, and outlined how the choice of identification methods, and fiat and cryptocurrency payment methods, enable different user experiences. Choices should consider conditions across different geographies, in particular the maturity of banking infrastructure.”

Jonas Wallenius, Product Manager Innovation at DigitalRoute describes the necessity and use case for data platforms in EV charging

The importance of data integration and management platforms

Regardless of the business model, the common need of all EV charging infrastructures is a strong data integration and management platform, according to Jonas Wejdin, Head of Business Development, Utilities at DigitalRoute.

“In order to really transform your service, you need to avoid being caught by everyday problems,” he explains.

“Many service providers today do have a lot of data-driven complexity. A lot of that comes from fairly stiff back-end systems that need to be massaged into supporting new types of services.”

To learn more about the business cases for blockchain and data integration and management  platforms in EV charging infrastructures, watch our Engerati webinar “Blockchain for EV charging: How data platforms make it happen” on-demand.