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Could the public sector provide the EV boom the industry’s waiting for?

Could the public sector provide the EV boom the industry’s waiting for?

A group of 30 cities in the United States are grouping together to procure electric vehicles for their municipal fleets. The deal is said to involve 114,000 cars, with a value of up to US$10 billion, which would be split amongst them. This is a mind boggling deal but offers an insight into a strategy that would also work in the UK.

It is now accepted that EVs have passed the point where their future is being questioned. The government has made clear that this is its primary solution to emissions and air quality problems from transport. At last, it appears as though the volume required for EVs to become mainstream is achievable. As such, many people are now buying EVs, with 90,000 on the road already in the UK.

But for local authorities, they have a number of wider advantages. Firstly, many authorities have now abandoned essential car users allowances, believing them to be outdated and unaffordable. This has caused unrest amongst staff. Secondly, the value of the casual car users allowances (which are still paid out) has been reduced; however, the total value of such allowances per annum is still many millions of pounds across the entirety of local government. Finally, many areas – particularly major cities – are concerned about air quality issues and are contemplating introducing emissions zones, taking the lead of the GLA in London.

For all of these reasons, introducing more EVs to the day to day work of local government is attractive. They can save money in a difficult financial climate, help lead by example to encourage others to switch to EVs and improve air quality, all in one go.

But the benefits of EVs go much further than that. Electric cars are now being seen as mobile battery assets that can be used to provide power to the local authority itself, as well as time shifting to sell power to the grid for premium rates at peak hours.

The intriguing element of all this will be exactly how the local authority can balance all of these competing demands.

Firstly, if the proposal is to have a fleet of EVs for staff to use on journeys (instead of their own cars), they have to be available for that primary purpose. This means being charged up every morning for such use. For a team that works 9am – 5pm, such as planning officers, this means that the vehicles are charged by 8am. They are then used by each officer in the team during the day to make the necessary journeys.

As batteries get better, ranges get longer. The new Nissan Leaf will now travel more than 100 miles on a single charge. This means that many of the cars that are used during the day for office purposes will still have residual charge when parked up at 5pm.

If vehicle to grid (V2G) charging is available, then the cars can be plugged in to the chargers and the remaining charge collated to provide a single discharge to the grid of the sum total of the total power available. This could be under a contract from the capacity market or one of the National Grid contracts.

Once peak hours are over, the cars can then be charged up again, using off peak power in the middle of the night at low cost. This means that they will be available once again for 8am the next morning.

The really clever part of this strategy is that the cars are still undertaking their primary role in full, which could itself justify a business case to purchase the vehicles. The energy trading element is therefore ‘icing on the cake’ that provides another level of income from the same asset.

All of this adds up to a great financial return at an acceptable risk.

However, the key issue is the price of the cars. This is where the collaboration comes in. If the core cities in the UK, the ten biggest conurbations – all with big budgets and high numbers of staff – all procured a large fleet of EVs together, they could achieve a massive discount on the cars. This would enhance still further the available gain from such a proposal.

If a Nissan Leaf is used as a hypothetical example, a new model is being launched next year and so Nissan will be finding it harder to shift the current models as this year progresses. An order of 500 + cars would be significant. If the cars could be purchased for £10,000 each – with the new 30kWh battery – a fleet of 100 cars in a local authority would be the equivalent of a 3MW battery. On a commercial basis, a single 3MW battery system might cost up to £3 million, but the cars – together providing the same level of capacity – are now only £1 million. Obviously the chargers have to be factored in as well, but it is the ‘three uses in one’ approach that provides the highest benefits.

For years the public sector has missed the chance to punch its weight in its procurement of goods by way of collaboration. A better reason to do so now is hard to imagine.