Last week Shell confirmed its eagerly anticipated venture into the electric vehicle charging sphere. Shell Recharge has launched at an initial three forecourts, with a further seven to be completed by the year’s end.
But as celebrated as Shell’s announcement was, the devil was in the detail. Many reports overlooked a crucial detail in the news; that, after the expiration of an introductory price of 25p/kWh, Shell will be charging a whopping 49p/kWh to charge at their stations.
That price is not only significantly more expensive than Shell’s competitors on the market today, but could present a hammer blow to one of the key consumer benefits of going electric.
Taking the 30kWh version of the Nissan Leaf as an example, to fully charge its battery at a Shell Recharge station until the discount expires on 31 July 2018 will cost a consumer roughly £7.50. That’s cheaper than the cost of a full charge at Ecotricity’s Electric Highway, which comes in at around £8.10.
However once the new price comes in from August next year, consumers would be left with a bill of around £14.70 to fully charge their vehicle from a Shell-owned station.
Due to their separate network, charging requirements and membership model, comparisons with Tesla EVs are perhaps a little stretched, however the results do not lend Shell any further favours. Tesla previously allowed consumers to charge up to a certain limit of electricity for free – a benefit factored into the cost of the vehicle – however new owners are charged a flat rate of 20p/kWh. This means consumers will be able to charge the entry-level, 50kWh Model 3 for around £12.50, less than you’d be able to charge a Nissan Leaf for at a Shell garage.
Price comparisons between EV charging networks do not prove much at this moment in time, however. Electric Highway charges have continued to climb as Ecotricity has struggled to make the venture sustainable, readily admitting the firm has lost money hand over fist. Tesla too was quick to stress that it would never profit from the sale of electricity through its EV network. There are also not insignificant investments to recover.
But the prices Shell is prepared to charge from next year threaten one of the key drivers behind EV adoption. At 49p/kWh, the average 30kWh Nissan Leaf will produce a fuel economy of around 13 pence per mile. In comparison, this year’s conventional Nissan Micra can deliver a fuel economy of around 8.8 pence per mile and there are thousands of conventional vehicles on the market with better fuel economies than EVs using Shell Recharge.
Clean Energy News put these figures to Shell, who insisted that Recharge was a service specifically designed to “top-up” electric vehicles, rather than offer full-charges. The company said it envisioned that the majority of charging would be done at people’s homes – where electricity is obviously far cheaper – and that its service would predominantly be used by people on the go.
The analogy given to CEN by Shell was of the (hugely lucrative) takeaway coffee market. Yes, you can brew your own mug at home for pennies, but that hasn’t stopped millions of consumers parting ways with a few quid for a luxury latte.
And perhaps Shell is right. So far the majority of EV charging has been conducted at home and if that’s going to continue to be the case, then Shell Recharge will only ever be regarded as a service to be used in an emergency. Shell has also of course purchased NewMotion, a Dutch home EV charger manufacturer, to claim its stake in the residential charging market.
But it defies the direction of travel for EV charging. Most charging is currently done at home because reliable charging units are few and far between, and as EVs themselves mature more rapid chargers – requiring more power than UK homes can accommodate for – will be required. It is for this reason that National Grid has surmised that the future of EV charging could lie within EV forecourts backed up by large substations, probably sharing locations with facilities like shopping centres or supermarkets. This would, of course, tie in with current consumer behaviour that sees people refuel at petrol stations.
Shell’s adoption of EV charging bays is not to be sniffed at. Any transition from fossil fuels to a cleaner, greener economy is to be welcomed and the UK is not exactly in a position to be picky over decarbonisation within the transport sector. Shell confirmed to CEN that it would be powering its EV chargers with renewable electricity “wherever possible” which, although far from the kind of guarantee Ecotricity and Chargemaster offers, is pleasing to hear.
But you can’t help but feel that, at 49p/kWh, Shell is missing a trick. That kind of pricing band offers no incentive to charge on the go and will keep people charging at home. There is also the danger that consumers are dissuaded from going electric by the visibility of Shell’s pricing plan.
It’s not too late. Shell Recharge will be priced at the significantly more competitive 25p/kWh until 31 July 2018 and while the increase is still planned for, a spokesperson inferred it wasn’t exactly set in stone. If uptake at 25p and 49p/kWh were sufficiently different, Shell might just be forced into a rethink.