Europe’s EV infrastructure checklist

The foundations for the large-scale rollout of EV charging infrastructure in Europe must consider funding, standardization and interoperability, writes Hans ten Berge

Europe is at a turning point when it comes to its EV charging infrastructure

Credit: Schneider Electric

Electro-mobility is an essential part of the solution to Europe’s transport and energy challenges including the objectives of reducing carbon and other greenhouse gas emissions.

It is a key solution to limit air pollution and noise in cities. Furthermore, it can help to improve energy security by significantly reducing Europe’s consumption of fossil fuels.

One of the main challenges that Europe faces today is how to shift from fossil fuel mobility to electric mobility. If Europe wants to build the foundations for large-scale electro-mobility deployment, it needs to take into consideration three main pillars: funding, standardization and interoperability as a basis for new services, as well as the deployment of charging infrastructure.

However, Europe is at a turning point when it comes to its electric vehicle charging infrastructure. The limited availability of charging infrastructure, including a lack of adequate business and financing models, is considered to be one of the biggest obstacles to the widespread adoption of electric vehicles by customers.

Currently, electric vehicles (EVs) and charging infrastructures are a chicken-egg dilemma. Will people buy electric vehicles if they can’t charge them, and conversely, will companies build infrastructure if they don’t see EVs picking up?

So what are the opportunities and deployment models at hand when it comes to the rollout of EV charging infrastructure in Europe?

Three pillars

Funding

Funding for EVs and charging infrastructure is a necessary first step for the deployment of electro-mobility. Temporary financial and non-financial support from public authorities, governments and various related funds are needed in order to reduce the economic risks for customers and companies who buy EVs.

Such support could take the form of an investment subsidy funding or a fiscal concession. National governments, as well as the EV industry, should also strive to improve customer awareness regarding the need to change their mobility behaviour into one that is more sustainable, and to remove barriers for new entrants. Funding for charging infrastructure is also important when it comes to public procurement. An example of that would be sustainable transport in fleets and municipalities. For instance, Germany is currently starting a programme which will fund up to 60 per cent of investment and installation costs for smart and interoperable chargers with public access between 2017 and 2020. The public tender will start in 2017 and companies and municipalities are eligible to apply for funding.

Standardization and interoperability

The promotion of common open standards, data interoperability and efficient data exchange is the second pillar in the development of electro-mobility. Energy and electro-mobility service providers, in cooperation with the EV industry, are expected to promote standards and common models in order to pave the way to behavioural change. Energy and electro-mobility service providers should also put in place a wide range of business cases that could launch new services and possibilities around the EV industry. These services would be provided as a supplement to the electro-mobility solution, when buying a vehicle, or when contracting with them subsequently for the purchase of energy.

In the future, parking lots could be equipped with EV charging stations

Credit: xx

Deployment of charging infrastructure

Finally, the third pillar is the deployment of EV infrastructure. Across Europe, we need to recognize that the limited availability of infrastructure is considered to be one of the biggest obstacles to the widespread adoption of EVs by customers, many of whom still suffer from range anxiety. When considering the total number of EVs and chargers, in countries featuring higher EV figures, the numbers of available chargers are still relatively sparse. For example, in Belgium there are around 9000 EVs and only 1500 charging stations.

Policy framework

With the adoption of the Alternative Fuels Infrastructure Directive in 2014, European policymakers have taken important steps to foster the market development of alternative fuels and their infrastructure. Member States are obliged to put forward their national implementation plans by November 2016.

The directive states that the establishment and operation of recharging points for EVs should be developed as a competitive market with open access to all parties interested in rolling out, operating recharging infrastructures or offering charging services for customers.

At the moment, due to low deployment of EVs, low charging point manufacturing scale and relatively high deployment costs, charging stations on public, private and semi-public domains can only be operated profitably with public and private support. For this reason, funding programmes – as mentioned above – are still important for the continued increase in EV deployment.

The provision of EV charging infrastructure is foremost a market activity. Therefore, a first option to achieve the rollout of public charging infrastructure is through public tenders, which bridge the investment gap and allow market forces to compete for the provision of the service. Normally, the municipality organizes a tender in which all investors can participate and an annual fee, for example, may be defined through this tendering process. Organizing the provision of charging infrastructure as a market activity is an efficient option, as it ensures a competitive environment. However, several countries have chosen a different model, which can coexist with the previous one, whereby distribution system operators (DSOs) are given the responsibility of owning and technically (i.e., not commercially) operating the infrastructure as an extension of their regulated role. This is the case in Austria, Luxembourg, Ireland and Slovenia (only on highways in the latter).

DC fast charger

Credit: ABB

This option has been chosen either because, in those Member States, there was not competition in the area of charging infrastructure provision, or because the national regulator decided to give this role to the DSO. Where DSOs are responsible for owning and/or technically operating charging infrastructure, public stations would become part of the electricity distribution assets.

The recovery of the costs incurred by DSOs can be organized either via inclusion in the regulatory asset base or via public resources. The latter option is preferable in order to share the burden of the costs of decarbonizing the transport sector equally within society, rather than allocating it exclusively to electricity consumers.

Allocating costs to electricity consumers could lead to increased retail bills, and thus hamper the electrification of transport and other sectors.

As long as ownership and/or technical operation is under the DSO’s control, the energy regulator will be responsible for setting cost efficiency criteria that are similar to those used in other pieces of grid infrastructure. In the specific case of charging infrastructure, the regulator may determine the number of charging points.

In order to have a competitive market, Member States which have decided to roll out the charging infrastructure with the help of DSOs should ensure that regular market tests are conducted, allowing parties to participate in a market which has reached a certain level of maturity. When the market is mature, an exit for DSOs must be established. In such cases, the recovery of costs by DSOs must be ensured.

When it comes to DSO involvement, there are two possible approaches. In the first scenario, DSOs can be in charge of developing EV charging infrastructure and metering, contracting out the commercial and technical operation of the assets to a market player. This is the case in Austria, Luxembourg and Slovenia (only on highways). In the second scenario, the DSO can be in charge of developing the EV charging infrastructure and metering, but also technically operates these assets. A third party, meaning the commercial operator, provides billing services. This is the case in Ireland, for example.

In any case, public charging infrastructure should follow the EU mandates for standardization and technology developments, ensuring that all the needs of EV users are met in a timely manner. The infrastructure should therefore be installed following customers’ needs and the progressive deployment of EVs. Charging points should also be located in the “right place” and should embed adequate technology, hence avoiding stranded investments.

Regulatory action

In order to underpin the deployment of EV charging infrastructure, regulatory action needs to achieve a delicate balancing act. Regulators should get involved and make decisions in countries where, after a prolonged period, there has not been spontaneous market development and investment in EV charging infrastructure. In such cases, regulators could give the responsibility to DSOs to develop charging stations in the initial stages. When the market grows, market parties will compete to build the infrastructure and provide the services.

Regulatory interventions should always be for the benefit of customers and should lay the foundations for the functioning of the market. Where DSOs deploy the infrastructure of EV charging stations, there should be a clear exit strategy.

Electric mobility is in the spotlight and high on the political agenda. There are good reasons for this: electricity is produced domestically across Europe and, thanks to the increasing shares of renewables, it is gradually more carbon neutral.

Another great advantage of EVs compared to other alternative transport solutions is that the majority of infrastructure, i.e., the electricity grid, is already in place. Only the final infrastructural elements, i.e., the charging stations, remain to be rolled out.

Nonetheless, regulatory action and new business ideas are essential for Europe to build the foundations for large-scale electro-mobility deployment.

Hans ten Berge is Secretary-General of EURELECTRIC. www.eurelectric.org

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