BP plugs into EV rev­o­lu­tion with Charge­mas­ter deal

The Daily Telegraph - Business - - Business Comment - Andy Critchlow is head of en­ergy news for EMEA at S&P Global Platts

BP has opened its cheque­book to buy the UK’s big­gest elec­tric ve­hi­cle (EV) recharg­ing op­er­a­tor. With a ban on the sale of new diesel and petrol cars due to come into force by 2040, it looks like a smart move by an oil major keen to future-proof its lu­cra­tive re­tail busi­ness.

But it also raises im­por­tant ques­tions about the abil­ity of the county’s power net­works to cope with surges in de­mand from elec­tri­fied per­sonal trans­port.

Will Bri­tain’s “wooden pole” elec­tric­ity dis­tri­bu­tion net­work in­stalled dur­ing the last cen­tury be able to cope with a full-scale EV rev­o­lu­tion on our roads, and if so will enough power be avail­able with­out caus­ing black­out-in­duc­ing de­mand surges when ev­ery­one plugs in their EV at the same time af­ter mak­ing the school run?

By 2040, BP ex­pects there to be 12 mil­lion EVs dodg­ing pot­holes on Bri­tain’s over­stretched and over­crowded roads, up from a mere 135,000 reg­is­tered plug-in cars in 2017. If these num­bers are cor­rect then the com­pany’s in­vest­ment in Charge­mas­ter looks shrewd.

Not only does Charge­mas­ter run more than 6,500 EV plug-in points across the coun­try, it also sells charg­ing equip­ment for homes and busi­nesses, which is where the prob­lems could arise.

Un­like ser­vice sta­tions, which can be plugged di­rectly into the more ro­bust high-volt­age grid, home charg­ers de­pend on the sup­ply of elec­tric­ity through a web of rick­ety poles and low-volt­age ca­bles.

This net­work al­ready strug­gles to cope when all the coun­try’s ket­tles are turned on dur­ing peak hours, like when it’s half-time at the World Cup and Eng­land are play­ing.

The kind of EV rev­o­lu­tion that BP en­vis­ages may cause prob­lems with­out bil­lions of pounds of in­vest­ment chan­nelled into boost­ing the elec­tric­ity net­work, or rad­i­cally over­haul­ing the struc­ture of the do­mes­tic mar­ket.

Ac­cord­ing to re­search from My Elec­tric Av­enue – a project sup­ported by power and gas watch­dog Ofgem – about a third of the lo­cal elec­tric­ity net­work in the UK will re­quire in­vest­ment when be­tween 40pc and 70pc of cus­tomers have an EV parked out­side their home.

Adding to the prob­lem, since 2007 and the credit crunch, UK elec­tric­ity de­mand has been in de­cline. Bri­tain con­sumed 331 ter­awatt hours of trans­mis­sion grid-de­liv­ered power in 2008.

Last year that fig­ure had dropped by a fifth to 265 ter­awatt hours. Load on net­works has also eased due to ad­vances in tech­nol­ogy – like low­volt­age light bulbs, white goods and smart me­ter­ing. Al­though this has de­ferred in­vest­ment in net­works, the EV rev­o­lu­tion could be about to de­liver a size­able – and very ex­pen­sive – shock to dis­trib­u­tors and po­ten­tially con­sumers.

The prob­lem is al­ready slow­ing the take up of EVs by busi­nesses. De­liv­ery com­pany UPS had to fall back on a bat­tery stor­age sys­tem be­cause the net­work in the Lon­don Bor­ough of Cam­den couldn’t cope with its plan to in­tro­duce a fleet of 170 EV de­liv­ery vans to the cap­i­tal.

The so­lu­tion to the prob­lem has come from a bat­tery en­ergy stor­age sys­tem, which al­lows the com­pany to take the bur­den off the creak­ing lo­cal net­work and in­crease the num­ber of 7.5 ton EV lor­ries it op­er­ates from 65 to 170.

Mil­lions of homes across the coun­try will also re­quire rewiring to ac­com­mo­date fast charg­ers. Any­thing quicker than at least sev­eral hours to fully recharge a top-of-therange EV with a 90 kilo­watt-hour bat­tery is likely to be more than most res­i­den­tial net­works can han­dle.

In sim­ple terms, plug­ging in an EV dou­bles a house­hold’s load on the net­work. How to per­suade driv­ers not to plug in and charge dur­ing the teatime peak is al­ready giv­ing dis­trib­u­tors sleep­less nights.

“At BP we be­lieve that fast and con­ve­nient charg­ing is crit­i­cal to support the suc­cess­ful adop­tion of elec­tric ve­hi­cles,” said Tu­fan Ergin­bil­gic, chief ex­ec­u­tive, BP Down­stream. Of course, new tech­nol­ogy will play a big role in re­duc­ing the risks of en­tire streets in our cities go­ing dark when ev­ery­one plugs in their EVs si­mul­ta­ne­ously.

Smart charg­ing could pro­vide a so­lu­tion. The sys­tem works by ad­just­ing charg­ing times to the most com­pet­i­tive elec­tric­ity prices avail­able, help­ing to fine tune net­work de­mand. Do­mes­tic bat­tery stor­age is an­other area of­fer­ing flex­i­bil­ity, al­low­ing house­holds to top up an EV from own-so­lar en­ergy stored through the day.

For BP the major in­vest­ment into EV charg­ing makes sense de­spite the risks of over­bur­dened power net­works. At the dawn of the mod­ern mo­tor car, BP’s fore­bear An­glo-Per­sian Oil Com­pany drilled the Mid­dle East’s first oil wells.

To­day, world oil de­mand may be set to breach 100 mil­lion bar­rels per day for the first time in his­tory but petroleum’s future has never looked so un­cer­tain.

Higher prices, cli­mate change and re­duc­ing air pol­lu­tion are all en­cour­ag­ing gov­ern­ments to heav­ily sub­sidise the elec­tri­fi­ca­tion of ve­hi­cle trans­port. By 2040,

300 mil­lion EVs may be on the world’s roads, com­pared to fewer than 3 mil­lion to­day.

In­vest­ing in this rev­o­lu­tion makes sense de­spite Bri­tain’s frag­ile elec­tri­cal in­fra­struc­ture.

‘New tech will play a big role in re­duc­ing the risks of en­tire streets in our cities go­ing dark when ev­ery­one charges EVs’

ANDY CRITCHLOW

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