In January 2020 New Power Report posed some key questions for 2030. In this article Janet Wood considers the first of those questions: will there be any petrol stations in 2030?
Could this be the ultimate future for non-electric vehicles? “The reality is that none of the normal fuel retailers is prepared to provide special fuels for a sector of the motoring public which at best represents perhaps one tenth of one per cent of the number of vehicles on the roads of Britain, and to make this type of fuel available from most of the retail outlets in the country… commercially, the scenario of special fuels for historic vehicles at any meaningful level of availability is a non-starter.”
That comment from the Federation of British Historic Vehicle Clubs refers to leaded petrol and other fuels now confined to the historic vehicle sector. At present, the electric vehicle sector is closer to historic vehicle numbers than it is to mass-market rollout – but it is growing fast. Battery EVs had a 3.3% share of the new car market in 2019, up from 1.1% the previous year. Eventually, fuel retailers will have to consider how they want to make the transition.
It is early days but the business for fuel retailers is already changing. EG Group is one of the largest operators, with thousands of sites across Europe, North America and Australia. Even in 2018, it was targeting a change in profit mix. At the start of 2019 the company generated 50% of gross margin from non-fuel sales – coffee, groceries etc. But it wanted the fuel share to fall dramatically, targeting 75% of profit from takeaway food and retail instead.
That is a transition that is already under way across the industry, according to Brian Madderson, chair of the Petrol Retailers Association (PRA). He says of his members (who represent 5,500 forecourts, 70% of the UK total) that up to 70% have a branded retailer on site that is “equally if not more important” to the trader than the fuel sales. And he adds: “We have cases today where 80% of the business’s profit comes from the shop and only 20% from fuel.”
Robert Onion, founder of consultancy Circle Brands, examined the future of forecourts. He notes that “fuel is the destination”. Although customers are looking more at ‘food to go’ and onsite coffee shops, so that “in some areas the shop can have more footfall than the forecourt”, Madderson says most often the fuel is the primary reason for coming to the site.
Onion sees an increasing overlap between petrol stations and coffee shops, where customers plan for charging times of half an hour or more and expect to use that period to eat or drink and catch up on emails. Circle produced an artist’s impression of a new forecourt layout with a focus on the convenience aspects of the installation that shifts the hub of the station to the front and relocates fuelling to the rear.
But Madderson points out that dwelling space for vehicles is in shorter supply than for drivers, and forecourt operators will always want customers to move away from a charger as soon as possible. “We’d like to have the fastest charging possible,” Madderson says.
What does this evolution mean for vehicle charging and networks? Existing forecourts may be the sites where ultra-fast charging is required – but that may not always be the case. In some areas forecourts may have a mixture with extremely fast chargers and some that allow for a dwell time of a half hour or more. That is more likely to apply where space is more readily available outside town centres.
Fuel sales are falling but Madderson says that for most existing forecourts the fuel tanks and dispensers are modern but largely paid-off, so “a low level of business activity still makes it worthwhile”. Is it worthwhile yet to install charging points?
One forecourt operator has 280 sites without a single charge point. Another has plans for chargers on all its sites
Madderson says most forecourt operators are following the association’s advice to wait and see: “They should take care before committing to long term investment that is hard to change in the next five years,” he says, as the situation is very unclear. New chargers being developed and there are revisions under way to safety regulations that specify, for example, how close chargers can be to areas where there may be fuel vapour in the air.
Madderson acknowledges that the response to the PRA’S advice has been mixed. One forecourt operator has 280 sites without a single charge point. Another has plans for chargers on all its sites – but that runs into a key problem for those forecourts that want to install chargers: the availability of network capacity, Madderson says making that connection can be a “very complex and expensive”.
What does this mean for the electricity industry? The PRA’s advice and natural caution among forecourt operators means a fast rollout on these sites may be unlikely. But there may be a tipping point, as has been observed in other sectors, where falling equipment costs and predictable regulations mean third party investors enter the market and underwrite a mass rollout of standardised solutions – a step that has been observed, for example, in PV and storage (separately and together).
Power is all around us
The fuelled model for vehicles has given us a fast and easy way of filling up but electric charging has some very different fundamentals.
The fact is that there is ready availability of power more or less everywhere. That is a prompt for different types of charging behaviour. As well as evolving downwards from the fast-charging, centralised, petrol station model, charging may evolve upwards from experience of electric bikes and scooters, mobility scooters and even mobile phones. That’s about topping up.
There is ready availability of power more or less everywhere. That is a prompt for different types of charging behaviour
Forecourts are only a small part of the charging story. Another way of looking at the rollout asks not where the electrical grid can accommodate fast chargers but where customers have parked their cars for a period of time that lends itself to charging a vehicle.
For venues, that is an opportunity and deals with the UK’s large brands could see charger numbers step up very quickly. For example, chargepoint supplier Engenie signed a deal with Marston’s pubs last year to supply 400 chargers across the chain’s sites. This is not super-fast charging. Marston’s specifically does not want those cars to charge too rapidly. At 20-30 minutes, the charge is timed to allow users to stop off and – it is hoped – have some food and drink.
Similarly, Instavolt has installed scores of chargers near Ballantyne’s gyms and more next to other leisure centres and retail parks, as well as at business parks. All these are sites where consumers are likely to be spending an hour or two, and an ultra-fast charge and swift departure is positively discouraged.
Such public chargers are expanding: there were 10,664 publicly available charging sites by 20 January, according to figures from charger website Zap Map, and since each may host more than one device with more than one connection, this allows for 29,800 connections, compared with 8,400 petrol stations. Zap Map is adding connections at a rate of more than 300 a month, according to the site’s ticker.
But longer charging periods do mean fewer cars can be accommodated, whereas the petrol stations may have 10 or 20 pumps that can each fill a tank within a few minutes.
Again, what is the message is for the electricity industry? These big brands expect action, and DNOs will find they are demanding customers.
Chargepoint providers and their partners are unlikely to accept the type of issues that Madderson highlights in finding a network connection. They will be seeking simple and proactive information about where charging points can be connected and while they may accept variations at the moment, fundamentally they will want standard terms from every distribution network operator (DNO). And while they may not be looking to connect the fastest chargers, it is very likely that sites such as retail parks will see more than one host seek to install charge points and DNOs should be prepared for clustering.
Who takes charge?
Speaking at the launch of a new All-Party Parliamentary Group on Net Zero, National Grid’s head of public affairs, Rhian Kelly, compared the gas and electricity network owner to the energy industry’s ‘motorways’. She spoke about ‘range anxiety’ for electric vehicle drivers and said there was “a role for an organisation like National Grid to think about how to provide strategic charging across the country”.
In mobility, there is just as much opportunity for a ‘distributed, decentralised, digitalised’ industry as there is in power
But while that may be an attractive model for a company used to owning and operating the energy system’s ‘motorways’, National Grid should be prepared to face competition. Top-down solutions are always attractive to major companies and politicians, and the Electric Vehicle Task Force called for co-ordination.
In mobility, there is just as much opportunity for a ‘distributed, decentralised, digitalised’ industry as there is in power. A few examples suggest that industry is growing up to compete with a central model.
Ad hoc charging Airport parking company Purple Parking now offers an EV option. Here the driver can leave their car for valet parking and charging, so that it is fully charged when they return. From the provider and electricity system point of view this is a flexible option as the user may not return for days. So far it is available at just one airport – Birmingham.
The sharing economy Slow vehicle chargers can, of course, be installed at domestic properties. The sharing economy has responded to the availability of these assets. Bed and breakfast properties already list an EV charge point, alongside wi-fi and good coffee, as a key attraction of the property. So do some ‘rent my drive’ apps that offer short term parking.
Balancing behind the meter Hackney Council has installed five chargers at its town hall that will be used ‘behind the meter’ to modulate its energy demand. At the moment they will be used by just five electric vehicles but already the council plans, with the help of Moixa, to use them to help shift loads in the council offices out of peak price times. They will also help take the strain when events at the town hall risk exceeding That has not required grid reinforcement because the balancing is carried out behind the meter.
New devices Technology providers will respond to new opportunities, as anyone who has seen electricity sockets with integral charging for electronic devices can attest. We have seen one offering of new street lighting with a choice of modules that can slot in an EV charging point, a wi-fi hotspot or parking meter, according to the council needs at the time. That also raises the possibility that chargers could be grouped, and moved from time to time, to grasp opportunities to provide grid flexibility.
Will these all require charging from ‘empty to full’? Some drivers are happy to run their fuel supply down and into the red zone, some top up frequently and for some it is a directed activity in response to offers that mean they are temporarily or permanently loyal to one supplier. Will they treat their vehicles in the same way? Or are drivers equally likely to carry over behaviour from their mobile phone habits with frequent top-ups wherever they are? Research so far suggests both, and it is not clear whether users’ behaviour will remain the same when there is a charging landscape that is both more mixed and more available.
The key takeaway for the electricity industry is that the wide availability of electricity is an enabler. The petrol station model is not going to disappear by 2030 – especially as we have further to go to find low-carbon transport solutions for bigger vehicles. But they will have a much smaller part of a much busier charging landscape. The electricity industry had better take lessons from other rollouts – PV, smartphones, the sharing economy and be ready for the unexpected – anywhere and everywhere.
First published in the February 2020 issue of New Power Report