Insight Conversation: Ian Johnston, Engenie

Engenie is a London-based electric vehicle charging infrastructure company partnering with commercial landlords across the UK to grow the country’s public charging network. CEO Ian Johnston spoke to S&P Global Platts about the current landscape of EV public charging networks in the UK, the importance of making charging infrastructure customer friendly, and how EVs will support the transition to renewable energy.

How much charging capacity has Engenie installed to date and how would you describe the current state of UK public charging infrastructure networks?

As of today, Engenie has 110 hubs installed across the UK, with each hub comprising between one and six chargers. That means we've got 156 chargers live today, which equates to about 10 MW installed charging capacity, and we’re working with commercial landlords to secure additional space to grow that to 210 chargers as the market picks up.

Typically we install rapid or ultra-rapid charging and the type of charger at the hub is all dependent on the dwell time off the site.

50 KW rapid chargers will give you about an 80% charge in 30-40 minutes and you would expect to find these in places like shopping centres and restaurants, and 150 KW ultra-rapid chargers can give you a charge in 10 to 20 minutes and you’d expect to find this infrastructure at petrol stations where the dwell time is shorter.

How you’ll see the public charging network develop is in bursts of activity as the UK’s major landlords role out infrastructure across their portfolios. For us, the key to achieving mass rollout of charging infrastructure is to partner with these multi-site landlords.

For instance, we’ve partnered with the Marston’s pub chain and have now built on 100 of their sites across the UK. We've also got a deal with Cardiff City Council which enables 12 installations from one project. So you might see contracts with 30, 50, 200 sites being rolled out and then things will slow again.

So the key to mass rollout of EV charging will be when the UK’s major landlords, who are fully aware this EV revolution is going to happen, deploy their charging strategy. The may choose to do something internally, or work with a fully funded partner like Engenie, who will pay for the installation and the operation as well as taking on the financial risk while sharing the profits with the landlord.

The issue is that the payback for projects in the rapid and ultra-rapid category is between five and ten years so landlords need a longer lease term to recoup the investment.

You can only really work with landlords who have a longer term on their property leases to make this happen, otherwise it’s difficult to make a rapid charging infrastructure model work.

These landlords are often huge, very well-funded institutions and for them, the decision is whether to do this themselves or whether to work with a funded partner. That's where I think the time is being taken at the moment. The problem is, this isn't just a normal procurement decision since the hardest part isn’t the install, it’s running the network, running the call centres and maintaining the chargers.

So I feel as if the major UK landowners today are in that decision-making process. And once they've made that decision, that's when you will see a mass deployment of infrastructure across the UK.

Ian Johnston, CEO, Engenie

How do you ensure that customers have reliable access to charging infrastructure?

I think two years ago it would have been fair to say that there were lots of accessibility issues on public charging networks. The market is a different place today, full of very professional and professionally-funded businesses who see that the battleground for who will be a winner and loser is in the mind-set of the customer. For us to be successful, it's absolutely essential that we offer the easiest customer experience.

From day one, Engenie has offered contactless payment and we believe anybody should be able to see if a charger is available. So you have to open up and share your dynamic data with people like Zap Map [a UK-wide map of electric vehicle charging points] so customers can see chargers online. Secondly, it’s important that anyone can access your network without the huge frustration of having to download an app or register for an account.

Last year, the UK government put out a policy whereby all new rapid chargers should offer ad hoc payment. We’ve gone a step further. We think every charger should have a contactless payment device that anyone can use.

Of course, high-frequency users want subscriptions and the ability to have an account with you. While there are benefits to that, I think the market has changed because companies like Engenie, who want to make things simpler, have come to market and established themselves as the major networks.

It's essential to have an open access network that anyone can use. There are still businesses out there that aren’t particularly customer friendly but ultimately, the landlords will learn the importance of making life easy for the customer because customers will drive to the sites that are easiest to use. On the same point, if your chargers aren’t online, if they're not available or technically operational, the customers won’t come back to you.

Are there places, communities and demographics where you see more demand for EV charging infrastructure?

Chargers are used best when the type of charger is suited to the dwell time of the site. So the deal we've done with Marston’s, where the average dwell time is around 40-45 minutes, there's been a great reaction from the public in terms of using rapid chargers.

We have a lot of customers tell us they use these sites for dinner or lunch meetings and they’ll charge their vehicle then.

In terms of geography, it correlates to places that have a high adoption of EVs– so predominantly the southeast. But more specifically where there is less on-street parking. For instance, in areas where there’s a lot of apartments with professional people that don't have access to private parking.

In fact, we know that lots of those who use one of our busiest hubs live in apartments nearby and they're driving a lot for work, e.g. taxi drivers and company car drivers traveling nationwide, then when they return home they use their local charging hub.

How do you ensure the electricity you provide is from renewable sources? How do you balance the intermittent supply of renewables with on-demand, rapid EV charging?

I think it would be madness for us to charge people's vehicles with electricity that doesn't come from renewable sources, so we are procuring electricity only from those who have the strictest policies in terms of buying renewable energy. Our current partnership is with Octopus Energy, huge players in the renewable energy space.

In time, I think we will get to a point where we will be able to offer differential pricing based on the energy mix during different demand periods of the day. During a quieter demand period, we could work with the energy supplier to offer a much cheaper charging cost.

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If you look at the Octopus Energy Agile tariff, with customers being paid to charge their cars overnight, there's no reason why that can't be delivered on the public charging networks.

However, at the moment we're at such an early stage of the market and we're seeing a level of usage per day where that isn't really feasible but the right time to introduce differential pricing is something we and other technology companies have discussed.

The key right now in transitioning to driving EVs is to make it as simple as possible for drivers. I think at the moment, these kind of developments, whilst they offer financial advantages, might only serve to make it even more complicated.

So I think having the clearest payment processes and technologies is the key thing in 2020 at least.

With the electricity storage capacity EVs provide, how important a role do you see EVs playing in supporting the uptake of renewable energy sources?

I don't think there will be many people that would be happy running an EV that isn’t powered by renewable energy. Therefore, what happens is when people make the switch to an EV, they will naturally switch to a green tariff otherwise it's counterproductive, especially when many people switch to EVs for sustainability reasons.

You'll see people changing their energy procurement decisions as they buy EVs, which is a massive opportunity for energy providers as they need to come up with the best green EV tariffs. So I think EVs will play a massive role in moving people onto renewable tariffs.

In terms of the role of EVs as mobile energy storage, there's a number of high-profile vehicle to grid trials going on. There's no doubt it's technically possible but there are big hurdles that need to be overcome for this to become commonplace.

For instance, if the OEMs are going to be guaranteeing battery life on your vehicle, then there are going to be some rules around what you can and can't do with the battery. Or they may say, “Yes, you’re allowed to do it but we’d like to own that.”

So it may be that your EV becomes the platform on which the trade happens and that's going to be quite an interesting tussle between the OEMs and the energy companies, to see who is given the license to handle the transaction where a customer, who has a battery full of electricity, sells the electricity to the grid.

Ultimately, there'll be a competition for who owns the wallet in the vehicle. I think there will be quite a tussle. And there have been quite a few different approaches to it in the market.

Technically, vehicle-to-grid charging is possible and there's exciting trials taking place this year but there’s a fair bit of the journey to go yet in terms of seeing how that turns out.

How do you see the future of the EV charging infrastructure industry playing out and who do you see as being the major players?

Despite COVID, there is no doubt 2020 is going to be a huge year for EVs being delivered to the UK. I think in the second half of 2020 and into 2021 we’ll see a huge influx of EVs into the UK.

That means that in 2023, there will be a huge used car market for EVs. Today, the average person doesn’t buy a new car, they’ll buy a used car and we’ll see mass adoption of EVs when the average person goes to buy a vehicle and alongside petrol and diesel cars they see well priced, high spec, fun-to-drive EVs. That’s when we’ll hit a stage of real mass adoption, around the second half of 2023 when a real used car market develops.

In terms of charging industry players, we've got two of the world's biggest industries, the car industry and the energy industry, being turned on their head by this energy transition and they're colliding.

There’s players like BP, who bought Chargemaster UK, now making the transition to clean energy. Then there’s companies like Volkswagen who are now involved in providing charging solutions as well. So these industries are just going to kind of collide and merge. Today Volkswagen is still your vehicle provider but they might end up being your energy provider as well. When you buy your car, you might not only buy your insurance from them, but you might buy, say, three years charging from them as well.

The companies that move quick enough to survive and are making decisions today, like Tesla and Volkswagen, are going to bleed into other industries. Then you've got the disruptors like Octopus Energy [a UK-based utility] who have created nimble business models and are going to take huge shares of the utility space, and maybe even move into the charging domain as well, as people shift to EVs and are looking for clean tariffs. So you're going to see this this huge collision of these two industries and I think we'll see the traditional big players playing very different roles to those they’ve historically played.