March | 2022
As the transport sector moves toward a greener future, electric vehicles (EVs) will play a crucial role in this energy transition. Over 1,000 cities and local governments joined the 鈥楥ities Race to Zero鈥� to raise climate action and limit the global temperature rise to 1.50C. And around 41 cities, 34 countries and 11 major automakers agreed to work toward selling only globally by 2040 and no later than 2035 in leading markets.
Falling battery prices and continued government incentives on EVs can help drive EV demand. But a lack of EV charging infrastructure impedes EV adoption and can negatively impact de-carbonization initiatives. The answer lies in transforming the current fueling infrastructure to accommodate EV charging.
The move from fossil fuels to electric vehicles poses a great disruption to the business model of oil and gas companies. Key stakeholders involved in the adoption of EV infrastructure include EV users, infrastructure manufacturers, regulators, utilities and charging station operators.听 听听
The transition to serve the needs of an EV consumer will involve many different stakeholders and will affect the downstream supply chain including supply and logistics, retail capabilities and, more importantly, consumer behavior. The pertinent question is, how will the oil refining industry, which built its infrastructure on hydrocarbon-based fuels, use that infrastructure for EVs? A radical shift in business models is the path forward. The pace of adoption can be accelerated by energy companies adopting one of several models to operationalize EV charging.
There are several models that oil and gas companies could adopt that would meet the growing demand for EV vehicle charging.
In the franchise model, an energy company provides charge point locations and third parties provide eMobility Services and charge point operations. This model provides a low entry barrier to the EV market but may not enable a company to reinforce its brand as an EV provider. However, the model can be used to start EV operations and then allow a company to scale up as capacity allows.
In the second model, an energy company can let other eMobility Service Provider (eMSP) clients use its chargers and provide roaming services via a hub or P2P contracts. In this model, the company can operate charge points or use third-party charge point locations. This model may be specifically effective for existing company-owned or dealer-operated (CODO) sites. A typical target segment for this model is B2B customers.
One model is an energy company providing eMobility services as a white-label eMSP solution. As a charge point operator, they will own or operate charge point locations either directly or through third parties. The third-party locations can be municipality-owned, from retail locations or existing energy company gas stations.
In this model, the energy company can offer roaming services to its EV customers on third-party chargers, such as through a peer-to-peer (P2P) business arrangement. This model can be used by B2C customers who want to charge their electric vehicles and by B2B customers such as electric fleet owners and operators, for charging fleet vehicles.
Large energy companies whose operations are spread across different geographies may need to use different charge point providers across different countries. Using one single eMSP solution or its white-label eMSP solution across geographies to maintain its brand value can be challenging but could be the appropriate choice.
The main challenge is efficient monetization of charge points by ensuring a high utilization factor, establishing a mechanism for smart pricing and facilitating reliability and uptime of chargers. A system for monitoring charge points would help enable these requirements.
Given the different stakeholders involved, the solution needs to effectively address stakeholders鈥� priorities. Several key design considerations address all stakeholder needs and provides a future-proofed charge point monitoring system (CPMS):
A predictive asset maintenance strategy using remote diagnostics, safety checks, monitoring for remote self-healing and maintenance is a critical aspect to keep operation costs low. Large energy companies operating across countries or geographies will need a central 鈥楴etwork Operations Center鈥� to maintain geographically dispersed charge points from a central hub. This could be accomplished with the help of industrial IoT.
Adopting an EV charging landscape with different stakeholders involved in the ecosystem will be a complex journey. An energy company needs a strong foundation to permit any model to charge. The solution should enable quick deployment of charging infrastructure. It should bind multiple stakeholders together into one EV ecosystem with seamless integration of EV infrastructure and IT systems, that support the end-to-end business process.
EV capabilities will evolve significantly, both organically and inorganically. A well-designed CPMS should have the capability to expand and manage disparate devices with predictive maintenance and automated operations to be consistent and efficient. This will yield business benefits in device availability, reduced operational costs and will lay the groundwork for further growth.
About the Author
Ashish Khangar
Senior Consulting Manager, 91快活林 Ltd.
Ashish is Senior Consulting Manager with experience in diverse industry sectors 鈥� downstream energy, retail, manufacturing and consumer. He is passionate about the disruptive impact of digital and leverages strategy and advisory experience to navigate digital and IT transformation journeys and design operating models to unlock new business value. His focus areas include leveraging digital solutions in navigating the oil majors to alternate energy and non-oil operations revenue growth such as electric vehicle charging, retail store operations, customer interactions, digital payments and decarbonizing the oil and gas industry.
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