Reading Accenture: Plug-in Electric Vehicle Pilots

ev plugAccenture’s Energy Group released a report on the 17th about the challenges of plug-in electric vehicle pilots around the world. Jeff St John at Gigaom took a look at the issues around the cost of the battery and concluded that, “cutting the cost of the battery out of the cost of owning an electric vehicle could be a key way to push electric vehicles into the mass market.” I am going to focus on the charging network issues in this post.

The report identified three key challenges:

  • Cost: The business case for investing in public charging infrastructure is weak due to high costs and initial consumer preferences for home charging. Pilots reveal a risk that consumers may not use public charging spots at rates required to recover costs, which range from approximately $5,000 per charging station to $50,000 for units capable of fast charging a car in approximately 30 minutes.
  • Control: Infrequent charging by consumers will limit the ability to control the impact of charging on power flows. Pilots show that PEVs meet the driving requirements of typical city users who may therefore not plug in their cars daily. This increases the unpredictability of charging and reduces control. Plugging in vehicles whenever parked will help grid management, easing the strain on the grid.
  • Scale: While most electrification technologies work in isolation, there are too few electric vehicles in pilot areas to robustly test the technologies and their integration with each other. Grid impact will thus need to continue to be closely monitored as the market develops.
Melissa Stark - Accenture: Clean Energy London

Melissa Stark - Accenture: Clean Energy London

“Plug-in EVs have extensive implications for business models because they require changes in consumer behavior and can increase strain on the grid,” said Melissa Stark of Accenture. “It will be critical to improve understanding of consumer preferences and to change consumer behavior through creative incentives if utilities and service providers are to manage the impact on the grid.”

The consumer is the most important factor in determining which business models will succeed,” said Stark. “The capabilities needed to deliver these models will be the same across the world, but the players that choose to develop them will vary. This means that standardization of technologies is urgently needed to support the varied involvement of service providers. And greater efforts will be required to improve understanding of consumer preferences.”

The report is the latest effort in a long study by Accenture around the future of energy.  Accenture developed a view of the energy market as a continuum between power generation and end usage, first seen in the 2009 report, Betting on Science: Disruptive Technologies in Transport Fuels (PDF)

Electrification value chain

Accenture: Electrification value chain

In the most recent report, Changing the Game: Plug-in Electric Vehicle Pilots (PDF), Accenture also maps the continuum broken down by functional areas for the EV charging market.

PEV related activities

Accenture: PEV related activities

Being more on the software side of the equation I focused on the three areas Accenture sees in this category:

  • Network software – will enable utilities to measure and manage grid demand through recognition of the number of PEVs on the network. This software will facilitate network planning and management, helping to determine where reinforcement is needed.
  • Charging software – manages communication between the PEV and the grid. It communicates with the PEVs, establishing state of charge and when the PEV needs to be fully charged. This data is cross-referenced with the state of the grid to manage PEV demand with the rest of the demand on the network (thus minimizing network strain, particularly at peak times). This is called managed or controlled charging. The software will further have roaming capability to be able to match consumption with billing and is normally integrated in the PEV.
  • Customer-facing software – customer interface maximizes the customer experience by providing necessary and useful information regarding the consumer’s PEV and the supporting infrastructure. The interface is located either on the PEV itself or on a portable device and details the vehicle state of charge, as well as the location of EVSE.

Accenture concludes that the software applications development effort will be critical to the successful integration of these new capabilities, enabling communication across the value chain.

The report attempts to forecast the roles and responsibilities of each of the players in the EV charging market.

EV Charging roles

Accenture: EV Charging roles and responsibilities

The report looks at six pilot programs around the world and generally concludes that both public and private charging networks are too costly and too complicated to see mass adoption any time soon. However, any time soon has to also be seen in the light of the first of seven general findings from the Understanding the Future Energy System (PDF) report:

Change is coming quicker than expected
Significant changes will continue to impact the energy system across all sectors and industries and stimulate transformational change. The majority of major changes will begin to occur from 2020 onward, with the years 2010–2020 a period of transition in which we will see the foundations of the future energy system laid. Major developments are expected to occur sooner than predicted by conventional energy commentators, even when the most aggressive scenarios are taken into account.”

From the early lessons learned:

  • By and large, the technology to support electrification of transport works.
  • Grid impact needs to be closely monitored as PEVs scale.
  • While there may be differences by geography, consumers are likely to prefer home charging.

The report identifies three emerging business models: Public infrastructure, Private infrastructure and the end to end model.

EV charging: emerging business models

Accenture: EV charging - emerging business models

While there are many challenges ahead for wide spread adoption of electric vehicles, there is little doubt that it is an evolutionary direction we will be forced to take. The opening sentences from the charging report frame the immediacy of the situation: “Transport accounts for close to 60 percent of global oil consumption and an estimated 30 percent of global carbon emissions.1 With oil demand projected to grow by 1 percent per year on average from now to 2030—reaching 105.2 million barrels per day in 2030—and the transport sector being the main driver of this growth (accounting for 97 percent2), the industry is facing mounting pressure to find alternative fuel options and limit the carbon impact of growth.”

A final note, in the spirit of betting on science, here is a very novel approach to vehicle charging, charging through surface induction.

On further study, surface induction (my hack term) is also referred to as piezoelectricity. From the blog Inhabitat: “Californian Assemblyman Mike Gatto has proposed a new bill that would see the implementation of piezoelectric technology in the Golden State’s roads using systems that are already in use in Italy and Israel. The technology could produce as much as 44 megawatts of electricity per year from one single-lane, one-kilometer stretch of roadway — enough to power 30,800 homes for a year.”

Additional Accenture reading and sources:

About Daniel Davenport

Daniel is a digital media executive with internet and broadcast experience. Daniel is currently the executive strategy director at THINK Interactive.

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