“If You Build It, They Will Come” - Utilities Hold the Key for Unlocking Electric Vehicle Adoption
PA Consulting Group says developing the EV infrastructure and offering innovative charging can encourage the adoption of electric vehicles
New York, November 1, 2011 – With consumer interest in electric vehicles (EVs) rising and environmental policy generating active government support for EVs, now is the time for utilities to take a leadership role in the adoption of EVs, says Arun Mani, energy and electric vehicles expert at PA Consulting Group. And by embracing green technology with EVs, utilities have the opportunity to build consumer trust and position themselves as utilities of the future.
Utilities need to invest in the emerging EV market not only for operational purposes but to establish a strategic position. “By developing the EV infrastructure and customer processes, and offering innovative charging models,” Mani says, “utilities can encourage the adoption of electric vehicles.”
To be leaders in this endeavor, utilities need a strategy that will position them as the “utility of the future” by leveraging their customer relationship and developing innovative business models. Careful judgment is required to establish vision of this innovative form of transport’s development. EV’s are evolving rapidly and, because infrastructure can be difficult and costly to implement, long-term strategies put into action now are essential to effect positive market positioning.
Three Key Long-Term Strategies for Utilities
PA Consulting’s work to analyze investment scenarios on behalf of public and investor-owned utilities as well as research on US utilities and major suppliers of EV infrastructure has identified three key long-term strategies for utilities:
1. Build a reliable and flexible infrastructure
Just as combustion engine vehicles have evolved, EVs will likely change and improve every year – so utilities must develop an infrastructure that can adapt to these changes and provide reliability for customers, advises Mani. The infrastructure will need to support multiple models of EVs on the road, including EVs from different service areas or, in the case of Europe, different countries. To leverage growth in the EV market, utilities must be able to support consumer choices and should factor these options into their decision making.
2. Develop a commercial charging model
Any commercial charging model must work both for the utilities and their customers, says Mani. Utilities must determine whether time-of-use, flat-rate or fee-based charging model (or a combination of these) best meets the needs of the early adopters. The charging model needs to accommodate different types of consumers as they come on board. And in order to help drive down CO2 emissions and be truly green, utilities will need to devise commercial incentives to encourage consumers to charge their EV at times of day/night when utilities can harness their renewable energy resources.
3. Shape a strategy around consumer behavior
PA Consulting’s research shows that those utilities with the best understanding of consumer behavior will make the most effective investments in preparing the grid for clustered demand. In particular, utilities need to understand: a) how many EVs will be on the road in their service territories, b) where, if any, public charging stations should be located, and c) when EVs are likely to be charged.
Building infrastructure for EVs with the flexibility to adapt to change and to ensure reliable power for customers will create an environment for consumers to purchase EVs. And by also offering innovative charging models, utilities will have both green and reliable solutions to meet our 21st century transport needs.
“In the case of electric vehicles, 'if you build it, they will come,'” says Mani.
Arun Mani is an energy and electric vehicles expert at PA Consulting Group. He is member of PA Consulting’s management group and an expert on business strategy and investment decisions. He specializes in assisting clients with complex “big bet” capital decisions regarding electric vehicles, new generation development, and large infrastructure decisions. Over the past 17 years, Arun has advised utilities, regulatory bodies, investment banks, and law firms regarding the risks and uncertainties associated with the technology, regulatory, financing, development or construction, and operations risks and uncertainties facing each decision.
About PA Consulting Group
PA Consulting Group is a leading management and IT consulting and technology firm. Independent and employee-owned, PA Consulting operates globally in more than 30 countries and transforms the performance of major organizations in both private and public sectors. From initial idea generation and strategy development through to detailed implementation, PA Consulting delivers significant and tangible results. PA Consulting has outstanding technology development capability; a unique breadth of skills from strategy to performance improvement, HR to IT; and strong expertise in communications, defense, energy, financial services, government and public services, healthcare and manufacturing. For more information about PA Consulting Group, please visit www.paconsulting.com.
###
Carrie Gray
PA Consulting Group
+1 212-973-5954
carrie.gray@paconsulting.com
PA Consulting Group
The Chrysler Building
405 Lexington Avenue, 45th Floor
New York, NY 10174
www.paconsulting.com
Tags: