Going Electric: the impact of electric vehicles on energy and transport infrastructure

A five-year forecast looking at the impact of electric vehicles on energy and transport infrastructure and the associated challenges and opportunities. We sum up key themes from our Highways UK panel.

04 December 2017
Electric car vehicle charging point

At Highways UK, Ross Fairley, partner and head of energy at Burges Salmon chaired a panel discussion on the impact of electric vehicles (EVs) on energy and transport infrastructure.

Below, we discuss some of the themes that emerged from the session, along with predictions for electric vehicles and transport infrastructure over the next 5, 10 and 20 years.

The panellists were Daniel Saunders, Investment Director, Octopus Investments; Richard Ward-Jones, Senior Business Development Manager, Amey; Mark Kemp, Director of Growth, Strategy and Highways, Buckinghamshire County Council and Ed Barratt, Legal Director at Burges Salmon.

Do you believe the predicted growth in EVs is going to happen?

The unanimous answer from the panel was yes – EVs are going to happen; it's simply a question of how and how quickly.

The intention to ban the sale of petrol and diesel engined-vehicles in the UK from 2040 announced by government is expected to shift the market towards EVs. Other factors include the advent of low emission zones in response to the Air Quality Directive and a shift in public demand towards cleaner, greener transport.

The panel highlighted the importance of clear leadership from government to avoid delays and an inefficient or uneven take-up of EVs. It was also noted that in the short to medium term we are likely to see a mix of technologies – EV, gas, hydrogen, hybrids, cleaner diesel - re-shaping the market according to the cost benefit they provide and how well each satisfies different user needs.

What will come first – infrastructure or vehicles?

Infrastructure and vehicles have to evolve together. In order for the public to switch to EVs, they need to have access to viable infrastructure.

User experience is vital. EVs need to be easy to use and stress free in terms of the physical interface. Experience from Uber and other app-based success stories also suggests the digital user experience – ease of use in locating charging stations and making payment - will be of central importance. How the overall cost of EVs (including any subsidy support) compares with the costs of other powertrain technologies will be crucial, as will legislative changes and the scope and impact of measures to address air quality issues.

As demand for EVs grows, the infrastructure will have to evolve to keep pace. A key point from the panel was the need to avoid a patchwork of EV networks across the UK where you can only use the one that matches your vehicle. The Automotive and Electric Vehicles Bill provides mechanisms for government to shape the roll-out of infrastructure and common standards.

Conversations around transport infrastructure for EVs often centre on charging points. The panellists expanded beyond this to consider both power supplies and the financial structures that will sit behind EVs. For example, if a commercial operator has 50 – 100 vehicles charging at the same time, the network behind that has to be fully reinforced so that it doesn’t knock out the whole power supply. Finding appropriate clean generation solutions, balancing the grid and upgrading network infrastructure will be vital.

In terms of financial models, the panel agreed that clarity over policy and standards from government is important to continue to drive investment. Investors need to see that the level of risk matches the level of reward and government has a big role to play in terms of providing investors with sufficient confidence that investment in technology will pay off within ascertainable timescales.

What are the challenges?

One of the main challenges for EVs will be the energy implications. The success of EVs will depend on support from energy suppliers, energy companies and the distribution network operators.

In a separate presentation at Highways UK, Dr Phil Coker suggested that there is sufficient capacity in the network, provided charging takes place at the right time (in the early hours). This led to discussion about how customers could charge when they want, while respecting the limitations of the grid.

Part of the solution will lie in battery storage. It’s important to remember that EVs themselves are a form of battery storage. There are opportunities for smart charging and vehicle to grid, where the vehicle puts the electricity back into the grid at peak demand times.

Government and the private sector need to work together to define appropriate solutions, drawing together investment, technology, financing and standards into viable packages for different use cases. This includes enabling fleet operators to take advantage of technology, funding and business models to leverage their existing energy and transport infrastructure, including at depots.

What are the opportunities for the private sector?

EVs present huge opportunities for the private sector, both in terms of investment and product innovation. This includes opportunities in the financing, design, planning, build, operation and maintenance of EV infrastructure.

Beyond that, there is the opportunity to build on innovation in battery storage and the chemicals industry to create new solutions and products. For example, there is an opportunity to find a cheaper and easier way to recycle lithium.

As the use of EVs grows, the way we use vehicles will change. One idea discussed by the panel was whether vehicle ownership will decrease, with shared ownership and vehicle on demand schemes becoming the norm supported by innovation in leasing and the business models to make vehicles available to users.

There may also be users who will value retaining a fleet and a range of solutions need to be available in the market to provide flexibility and support the growth potential of EVs.

Where will we be in 5, 10 or even 20 years’ time?

The panel were asked to sum up by giving their predictions for the future of EVs.

Daniel Saunders: By 2030 we are going to start seeing autonomous vehicles, there will be less need for ownership so there will actually be less pressure on the infrastructure. Technology is not the issue - it is a legislation piece.

Mark Kemp: Agreed with Dan on ownership - vehicles as a service is the way we will be going. We will choose vehicles on a periodic basis and a notification to let us know how much we’ve paid.

Richard Ward-Jones: Connected journeys are the way forward and we will see a tipping point in terms of mass adoption soon. Within the next five years there will be a million EVs on the road.

Edward Barratt: In five years’ time we will have more electric charging points and a better network. It will still be patchy but we will have a clearer road map of how to get to a full low carbon transport solution.

Ross Fairley wrapped up the discussion by thanking the panellists and underlining the scale of the opportunities in the EV space.

If you are looking at opportunities in Electric Vehicles or other low carbon transport solutions Ross Fairley or Ed Barratt who would be delighted to explore any of the themes discussed by the panel.

Meet the panellists

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Daniel Saunders, Investment Director, Octopus Investments Dan is an Investment Director with Octopus Investments and leads their Transport as-a Service (TaaS) offering. TaaS provides vehicle fleet operators with a turnkey clean transport solution by enabling both infrastructure and vehicles to be utilised on a pay-as you use basis. Octopus is a UK private alternative investment manager, managing £7.2 billion of assets and largest non-utility owner of onshore renewable generation assets in the UK.
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Mark Kemp, ADEPT, Director of Growth, Strategy and Highways, Buckinghamshire County Council Mark is a Director at Buckinghamshire County Council with responsibility for a partnership arrangement that delivers highways services, and for growth and strategy. He is also: a member of the Association of Directors of Environment Economy Planning and Transport (ADEPT), Chair of the UK Network Management Board, a member of the UK Roads Liaison Group, Chair of the MSF3 Steering Group (MHA) and committee member of CIHT South East Region. Mark is a Chartered Engineer, FCIHT and MICE and has worked in the highways industry for over 25 years.
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Richard Ward-Jones, Senior Business Development Manager, Amey Richard is a senior business development manager in Amey’s Consulting and Rail business unit, responsible for the strategic growth and diversification of Amey Consulting across highways, rail and aviation. With a technical background in highways Intelligent Transport Systems (ITS) and an interest in innovative and disruptive technologies, Richard chairs Amey’s Smart Mobility working group and is closely involved in several smart mobility schemes. Richard also sits on the CIHT West Midlands Committee.
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Edward Barratt, Legal Director, Burges Salmon Ed is a legal director in the Projects department at Burges Salmon. He has particular expertise in the Transport sector, advising on asset financing, fleet procurement, connected and autonomous vehicles, electric vehicles and other aspects of public transport. He is a member of the firm’s Rail and Transport Technology and Intelligent Mobility sector groups. Edward has significant experience in the Energy sector where he has advised on a wide range of transactions for private and public sector clients.

Key contact

Ross Fairley

Ross Fairley Partner

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