Why utilities should build the future of e-mobility

With electric vehicles revolutionising the energy market, what is the role that utilities can play in the transformation?
Published: Mon 13 Aug 2018

Electric vehicles (EVs) are soon to become part of utilities’ reality.

As such, updating business models to accommodate innovative technologies is no longer a choice, but a necessity for the industry.

Some utilities are already hard at work to incorporate fast-evolving EV technologies into their services and to ensure they can meet customer demands on that front. In the inaugural Engerati Meet on EVs this June, we heard from utilities across Europe that are putting thought into practice and integrating EVs into their business models in unique ways.

In one presentation, Portuguese electricity operator EDP demonstrated how it is positioning itself in the future of e-mobility. "EVs will become a reality and increasingly relevant in the future, and they require utilities to strategically position themselves from early on to access this opportunity,” says Gonçalo Castelo Branco. Head of Smart Mobility at EDP.

“EV sales will increase significantly, and what is significant for utilities is that 81% of customers would prefer buying charging services from their energy provider. So utilities are well positioned to face the challenges that are arising and to be one of the main players within the e-mobility ecosystem."

Branco comments that there is a familiarity with the services offered that probably makes it easier for utilities to deliver to their base of clients, such as EV rate plans, home and office charging and public charging. “These are typically segments of the e-mobility ecosystem that are appointed to utilities, but we believe that the digital layer that is making its way into the industry can enable new products and services, such as smart charging, load management and vehicle-to-grid. These are new business models and the utility has to be ready to address them.”

Gonçalo Castelo Branco. Head of Smart Mobility at EDP, talks through the smart EV solutions that EDP seeks to offer to their customers to participate in the future of e-mobility.

A transforming market

The market is continuously transformed by the increasing digitisation of the energy sector, and it is changing the way that the simplest operations are performed in the industry. For example, customers now interact with their utilities mainly via digital services and energy and data management are increasingly moving into the online space. “Digital is now the new normal,” says Castelo Branco.

"Digitalisation represents an opportunity but also a challenge, because it significantly lowers barriers to entry for new players in the sector. For example, players such as incumbent utilities and start-ups can easily come and dispute the market. They are carving out their space in the rapidly changing market.

“Both incumbents and newcomers understand the need to occupy these offer spaces. In addition, data-driven companies such as Google and Apple are going into testing autonomous vehicles, testing the commercialisation and intermediaries space. We see asset-driven companies such as automakers that understand the need to get involved in the value chain to be closer to services, and we see that power energy base players, such as utilities, also understand the need to participate in this and that move to asset-like businesses and services closer to the clients."

EDP seeks to offer base EV services to customers, such as home and office charging, EV rate plans, and a platform dubbed EDP re:dy, which is a system that allows the consumer to manage the energy consumption in their house and EV in a mobile phone app. It also allows them to manage their home solar panels.

“Going forward, EDP plans to develop a central and reference position in the smart mobility ecosystem through the development of simple, electrical and service solutions both to B2B and B2C segments. In terms of charging, there are different kinds of clients that demand charging, such as clients that park their EVs in their own home, and we are working on a solution to implement charging in condominium parking spaces.

“We also want to develop a solution for company fleets and shared mobility providers, develop our own dedicated EDP charging network and participate in public charging."

Peter Allan, Managing Partner at Accilium, presents their vision of the role of utilities in the future of e-mobility.

EVs to provide services to the grid

Another important element to the introduction of EVs into the energy market is to unlock the different possibilities that they can offer in terms of grid services.

Peter Allan, Managing Partner at Austrian consultancy platform Accilium, in a separate presentation approached the importance of enabling widespread EV adoption and how utilities can take full advantage of it when it comes to offering grid services.

Accilium studied the possibilities implied in battery storage, for instance - “we looked at what we could do with the most expensive component in the EV, which is the battery. We came up with two potential use cases, alternative use and second use,” says Allan.

“Alternative use harnesses the EV battery by providing services such as demand response and portfolio optimisation. With second-life batteries, we explored the residual value of EV batteries once their useful life in EVs was over.”

These use cases ended up bringing tangible financial benefits for the EV owner, “with a net annual benefit of anywhere between 200 and 600 euros per vehicle for the German market."

"But in order for these concepts to be feasible, we also had to change the underlying business model. We envisioned a future where utilities and automakers offered more holistic mobility solutions to customers, where utilities take ownership of the batteries and harness their capacity and power to deliver good services earn back their investment over the lifetime of the vehicle. This was our vision back in 2014."

Allan adds that Accilium’s vision of a utility model revolution around EVs has since evolved accordingly, and they now believe that utilities must invest in service platforms. "In our updated vision, service platforms are the future economic models in a digital economy, and they will replace the previous model in every industry where information plays a vital role.

“Managing the synthesis of information, such as energy and power demands, individual driving behaviours, personal preferences and so on, is key to unlock the monetisation potentials of demand services in the grid.”