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Electric cars could be the vehicles for a channel coup
Electric cars could have a more profound effect than simply just helping drivers get from A to B argues Nick Booth
Cars are unwittingly great vehicles for social change. Some say the car was a major catalyst for female emancipation.
By the same token the electric vehicle could help transform our national grid and put our readers on the right side of an historical power struggle with the energy companies and the utilities.
Here’s the challenging bad news first. Britain is hopelessly behind in the adoption of electric vehicles (EVs) according to the EV Readiness Index 2019 research from LeasePlan.
In the index the Norwegians have scored 4.5 to our 0.27 - the score being a measure of charging plugs per 1,000 inhabitants. Their government gives them tax breaks that make electric cars cheaper than combustion engines.
When it inevitably does there will be a massive surge in demand for electric cars. That’ll create a huge exploitable mass of car buyers with newly created levels of gullibility. As they say in the IT business, where there’s mystery there’s margin.
Ragi Singh, the head of the EV Sector team corporate partner at legal practice Gowling, says there are huge opportunities for car makers, software developers, battery designers, chargers, component makers, battery recyclers, power brokers and every level of the supply chain on which the local economy will survive.
Gowling deals with the issues faced by the OEMS (or car makers) power and network providers.
The good news for the IT industry is that an EV is less like a car and more like a glorified laptop on wheels. Its engine has 30 moving parts, whereas a combustion engine has 3000. This means that EVs are less likely to go wrong, so running costs are lower. It also means IT service providers are well placed to take over the car market and all the support issues that go with it. The cloud has transformed many sectors. The automative sector could be next. IT is about to rip the car makers a new Aas - as a service, I mean, of course.
The vehicles themselves are mostly battery, which creates leasing contracts for EVs when the depreciation of the asset is difficult to quantify accurately.
Once the leasing issues are sorted, that will create a boom in service opportunities for the IT channel.
The importance of batteries means that there will be considerable value in supporting and maintaining them, says James Kerney, head of insights at Pod Point, one of the companies building the charging infrastructure. Since batteries are so valuable, this is an asset that could outlast the car, which means there will be an aftermarket in reselling them, maintaining them and rebuilding. Getting into this market will be relatively easy for IT service providers and engineers.
The logistics of refuelling electric cars is where companies like Pod Point and Chargemaster have a critical role. Meanwhile there is a training opportunity. Car drivers need to make an important behavioural change in their refuelling habits. While drivers of combustion engines tend to be binge refuellers, the EV driver will need re-charge a little at a time and often.
But if they plug their car in for charging every night when they get home from work, this will add to the peak time overload on the national grid. Pod Point’s analysis says there is already a surge in home car charging between six and eight in the evening. When every car is electric then the national grid will fail keep up.
Chargemaster and PodPoint’s algorithms and IoT expertise must tackle this problem.
Meanwhile power companies, such as Vertiv, are catering to demand for a more intelligent distribution of power across the UK. Together with energy software specialist Upside Energy it is creating a service that allows companies to sell unused energy to the UK electricity grid.
By extending battery storage beyond its typical use, resellers can create value by helping companies save on their energy bill, according to Brent Owens, EMEA Channel Programs Director, Vertiv.
“It’s hard for channel partners to gauge the real opportunity out there,” says Owen. In response Vertiv has tried to quantify the opportunities and identified 100 use cases and four key archetypes around which products and services can be developed. “The channel is instrumental in helping to deliver and integrate many of those edge technologies to meet specific customer requirements,” says Owen.
Vertiv has allied itself to software company Upside Energy, whose algorithms can provide demand response and orchestrate over 100,000 devices or systems running in parallel. The platform software monitors the UPS of Vertiv’s UK customers - who are giving the chance to opt in.
As more businesses buy UPSs as emergency battery backup, the new distributed energy model could be a way for the channel to make money. Meanwhile rival power manager Schneider Electric is creating EV charging systems, microgrids and advanced energy storage.
More liquidity is being created for the energy market. Octopus Energy has launched two services - Agile and Go tariffs - to give people flexible energy pricing. The Agile tariff, launched in February, offers consumers the chance to buy power in half-hourly bundles, where the price varies to reflect the movement of wholesale costs. So if wholesale prices are down, that saving is now being passed on to the customer. What a novel idea! The market must be liberalising if this sort of thing is going on. Energy companies are not philanthropists, so there must be some price pressure being exerted by the new liquidity of assets being created by technology.
The plunge pricing system pays customers to use electricity when demand is low or supply is high.
The Octopus Go tariff offers four hours of cheap electricity each night. Which gives EV owners the window to charge their cars. This is provided through a partnership with MyEnergi’s smart Zappi charger to allow EV drivers to automatically charge their car at the cheapest time.
We’ve seen the IT services become concentrated around the data centre.The conference rooms at Equinix’s LDN data centres in Slough are where all the most crucial AI and Fintech decisions are being made.
Now data centres will be the hosts to another group of movers and shakers - the power distribution companies and those who add value to the grid by smartening it up and improving the liquidity of the supply. The EV could be the catalyst to another power shift.