The Exchanges

Q So that sounds like you're implying it's sort of easier to extract the full value for managed charging in a, in a vertically integrated market like, like investor-owned utilities are mostly in the, in the US versus in Europe. Do you think that's true?

A So, yeah, I, I do actually. I think, I think it is an advantage because what you do is you create clear line of sight all the way through to the value that's created. So if you are running a managed charging program, say in New York, we work with Con Edison. In New York's service territory, we can create value for the distribution company. We can also create value for consumers in New York as well. And, and the value can, and then we can also, also provide services to the, to the system operator too. And the value is all aggregating all the way through, and there's clear line of sight to that value from, from one particular player. Um, that is the big, that is the big pro, I suppose, of a, of an integrated system. Perhaps the pro of an, uh, of an unbundled system, like, um, like the European markets, is you can get very consumer-focused propositions, uh, arising, because the retailers really, really care about having a relationship with, um, People like you or I with their energy. And that can create some really interesting, uh, propositions and really consumer focused energy companies. And I think it's no coincidence that companies like Ovo and Octopus and energy retailers like that have emerged in the UK market from a very, uh, competitive space that is really now focusing heavily on, uh, end consumers.

AI assessment note: “So, yeah, I, I do actually. I think, I think it is an advantage”

Q Let's talk about EV charging on both sides of the Atlantic, uh, and you have visibility into both, which is what I'm excited to talk to you about. Let's start high level. What have you seen in terms of patterns of both EV adoption, and I guess in particular, charging patterns in Europe versus North America?

A Yeah, yeah. Awesome. Let, let's dig in. So across Europe and North America, the interesting thing about both markets is they're, they're roughly, roughly the same size, roughly, roughly, in terms of populations, in terms of numbers of vehicles on the road, in terms of numbers of utilities as well, actually. Um, so there's about, in Europe, Europe has traditionally been slightly ahead in terms of battery electric vehicle rollouts. So there's about eight, eight million vehicles I mean, plug-in vehicles in, in the European market right now, and over 50% now are battery electric. And in the US, um, it's around four and a half million, and, and again, over 50% now are battery electric. So across both those markets, we're seeing this shift towards fully battery electric vehicles, and away from this, uh, concept of plug-in hybrid vehicles, so that's one, one big shift. Um, in terms of electric vehicle charging, There are, there's a lot of charging happening at home. That is, that is the dominant, the dominant place where people charge. That is common to both, uh, both markets. Um, the utilities themselves that are plugging in and powering the energy, um, roughly the market is about a 150 utilities that serve around a 100,000 residential customers. So again, roughly similar, uh, sizes, uh, in both of those markets. Some of the key differences though, um, in terms of charging, uh, infra…

AI assessment note: “Some of the key differences though, um, in terms of charging, uh, infrastructure”

Q it the same pattern? You see the same sort of hours of the day of unmanaged charging that you see in North America, or does that vary? Like, I could imagine, this is probably country specific, right, but I could imagine in Spain, right, where you have a siesta and later evenings, like, things look a little bit different. I'm curious how much you see the unmanaged charging patterns vary.

A Yeah, it's a, it's a fascinating question. It's one that, Obviously, the utilities on the other side of the equation worry about an awful lot. Like, what is the load profile that's gonna occur on their grid, uh, from electric vehicles? Um, one of the things that we've learned across millions of charging sessions across all of these different countries is, uh, humans are incredibly, uh, predictable in terms of their behavior. And actually, the point at which you plug in across the globe is pretty similar. Whether you are in Texas or Spain or the UK or California, you basically, that we see a massive spike Around people plugging in around the early evening. So between six to eight p.m. in the evening is when people plug in. And then unplugged times are even more correlated. They're around, like, seven to eight, eight a.m. in the morning. And it's, there's just these two big spikes that, that occur when, when most home charging users come home and plug in on the system. And that is incredibly, uh, predictable and correlated across the globe. It does, yeah, vary by the odd hour, depending on, like, the cultural differences between Uh, various, uh, parts of the globe, but essentially it is incredibly predictable and correlated.

AI assessment note: “the point at which you plug in across the globe is pretty similar”

Q is, that's all very much dependent on market structure, and, you know, who can do what. So this is where I know there are some differences between North America and Europe, or at least parts of North America and parts of Europe. So to talk through how you think about what are the archetypes of market structures, and then how do we think about managed charging in those different archetypes?

A Yeah, so one of the opportunities and challenges of something like managed charging, or indeed any DERs providing VPP services, is they can create value all the way along the value chain. So from distribution to transmission to retail and wholesale markets. And therefore, the regulatory structure really, really does matter. So in the European markets, um, typically the markets are unbundled. And what unbundled means is that the Retail and generation assets are unbundled from the network and system operation. And so the network companies, um, in the European market, say in the UK market, they operate the network, and they run the network, and they ensure that it's incredibly reliable, but they do not interface with consumers. And in fact, told not to interface with consumers. Uh, the retailers interface with consumers, and they craft and create wonderful products that then delight those consumers that then interface with the energy. Um, in the, and that's pretty universal across, um, most European markets. That's the unbundled way. That's what's happened since the liberalized energy markets, which the UK has really led the, uh, led the charge on. Um, in, in the US, um, obviously there's integrate, most of the utilities in the US are vertically integrated. And so they're integrated utilities, which means that distribution, transmission, system operation is often all stacked toget…

AI assessment note: “in the European markets, typically the markets are unbundled... in the US, vertically integrated”

Q Yeah, that's a good point. Yeah, I didn't mean exclusively, like, programs run by utility. What I, I guess maybe I'll put this a different way. Like, what do you think of as the prototype of a way to get managed charging done in a vertically integrated utility territory versus in an unbundled market?

A Yeah, so I think the prototypes can be similar, but say, let's talk, let's talk in a vertically integrated market first. The way to, the way that typically, uh, programs are run is that a, a program is set up that can ride on top of a set of rates. So the program could include a, uh, a time of use rate, or it might not include a time of use rate. So to give a tangible example of a program, the Smart Charge New York in Uh, Con Edison service territory. What that incentivizes customers to do is it charge, incentivizes customers to charge during off-peak, uh, windows. If you charge during an off-peak window, you get a rebate back on your, on your energy bill. And so that is a, that is a carrot that is provided by the utility for you doing something, uh, that the utility wants, which is you managing charging for the utility. Um, That actually looks quite similar to some of the propositions that are being rolled out in competitive markets. Uh, the propositions that are being rolled out in competitive markets like the UK are tariffs which have now become known as what's called type of use tariffs. So a type of use tariff is a tariff that applies to a specific, uh, device within your home, like an electric vehicle. And it then incentivizes the electric vehicle owner to charge at certain points in time. And it Is differentiated from the rest of your energy bill, and it then gives you a…

AI assessment note: “let's talk in a vertically integrated market first. The way to, the way that typically”

Q least in urban parts of Europe, than there is in North America. The counterpoint I can imagine to that is that early adopters of electric vehicles are basically all homeowners who can charge at home. So is that kind of what we see going on? And it's just that even if it's a more urbanized population, the ones who are buying electric vehicles so far Have access to home charging?

A Well, yeah, I mean, it's fascinating, and you can, you can sort of try to make generalizations, but I think personas exist in both markets, where you get this typical persona of a customer who does, who has access to off-street parking. Uh, when they get their electric vehicle, they install a home charger in, on their driveway, and then for the majority of their time, uh, they charge using that off-street parking. I was chatting to an Uber driver who was taking me to the airport the other day, and he just bought an M, an MG in the UK market. He'd done 11,000 miles over the last two months, and I was like, oh gosh, how do you charge? And he said to me, well, I do a hundred percent of my charging at home, and I just come home and plug in after my shift every single day. He's got enough miles in, in the car to be able to charge up during the day and do everything that he needs to do, and then he charges a hundred percent of the time at home. So there's, we see in both the North American and in the European markets, this, uh, this persona that exists that does a lot of their charging, uh, At home. I think in parallel to that persona, there's often like, well, I need to have like, 20% of my time. I might need to do these long road trips, whether it be across the US or up and down the UK or to, uh, uh, from the UK to say, uh, France to take the kids, uh, kids on their family holiday.…

AI assessment note: “we see in both the North American and in the European markets, this, uh, this persona”

Q category in one market versus the other? And I guess, relatedly, like, from a How much more visibility does it give you if you're the grid operator or, you know, like, you're guaranteed to be able to get the charging in the off-peak hours if you control it. Um, how much less guaranteed are you? Like, what's the compliance rate, I guess, if it's just a carrot that you're providing?

A Yeah, so I think, I mean, we think about this in terms of a level, I think what you've just described is, like, levels of, like, smart charging. And we've walked around this, but there's, like, A first level, which is unmanaged, which is really bad for the grid. We just get load happening at peak times, and that, that is, that is going to be really, really bad for the grid. Some estimates say that that's going to be, like, an increase of peak load by, like, 50%. The next level is, like, maybe you provide a time of use rate, and obviously, in markets like California, we've provided time of use rates. The big con to that is, what you get is, you get this massive secondary peak. You get what's called a timer peak. So you get this massive peak that comes on at 11 p.m., because Surprise, surprise, everybody sets their vehicle to come on at about 11 p.m. when the time of use rate kicks in. The next level is like this, what we've just described, which is like a, a passive incentive, which is you, you provide some level of incentive, and then you let people manage, uh, the charging, and they sort of come to it. Um, and then on top of that, you can then actively manage the charging. The beauty of actively managing the charging is you can then, you can then reduce that, the, the secondary time of peak doesn't have to happen, because you can individually manage every single electric vehic…

AI assessment note: “The big con to that is, what you get is, you get this massive secondary peak.”

Q I guess my question is, do we, how much do we know at this point about like the, uh, Price elasticity of compliance from consumers. Is it that if you offered, um, if you offered 20 dollars a month versus 15 dollars a month of benefit, is that going to move the needle for consumers, or is it very much more like a binary, either they will or they won't?

A Yeah, so I think, I mean, we are still learning about exactly what the price elasticity is. I think, I would say that, yeah, What we know for sure is that it varies depending on the point at which you're trying to convince that consumer to get involved in something. So if you're, if you convince some, if, if when you buy that first electric vehicle charger, and you're charging up using managed charging from day one, and you don't know any different, the amount of incentive that you have to give is less than if you then are, have already had somebody charging using a different system, and then you have to go to them and say, hey, There's this new fancy system that you can use that's called managed charging, and it will benefit you like this. Um, so I think that is definitely something we know that varies, right? The point at which you get involved in those conversations really, really matters, which is why we feel like if you can solve the problem for the consumer at the point at which they have the problem, i.e. the point at which they're, they're buying that electric vehicle, that's, that's the best time to engage because the customer's just wide open to, like, Well, I've got a problem. Help me solve this. Oh, great. I can get paid to charge my electric vehicle. That's amazing. Right. I'll, I'll do that. I'll opt in. I'll do it every single day. And I never knew that I shouldn…

AI assessment note: “we are still learning about exactly what the price elasticity is.”

Q the battery that's in the vehicle to discharge either into the grid or into the home or whatever it might be. How much of that in terms of all that, you know, you see all these managed charging programs and approaches popping up all over the world pretty quickly. Like, Are many of them already contemplating some version of V to G, or is that mostly just a future scenario?

A I, um, yeah, I can get, I can share some, uh, thoughts and opinions on, on this. I think, firstly, maybe dialing back to, like, what we've been talking about a lot is, like, the consumer experience. I think if you think about the consumer experience for something like, uh, V to X, or vehicle to home, or vehicle to grid, whatever it may be, I actually think it's actually very similar to V One G. You come home, you plug in your electric vehicle, and then you unplug when you need to use your electric vehicle. It's just that during that period while you're plugged in, you might discharge the electric vehicle and help support the grid, or you might discharge the electric vehicle and help support your home. So I think the consumer experience is very, very similar to V-One-G. I think then you get to the specific use cases about where it will roll out. I am super excited about the potential for this to happen as a, as an energy geek. I mean, it's absolutely fascinating to think that you could get, like, five X the capacity Uh, from V-one G to V-two G on the grid. That is just, it's a phenomenal amount of capacity that you could have under management in virtual power plants across the globe. I, we see some real interesting use cases that are emerging straight away. Like, I think vehicle to home to provide resiliency in North America is a thing. I was struck by, I mean, I've done some, u…

AI assessment note: “we see some real interesting use cases that are emerging straight away.”

Q carrot, the type, but like high level, what do you typically see as compliance? If it's not fully managed charging, if the utility is not controlling the battery, um, and you just say either here's the time of use rate, or let me, I'll give you a rebate on your bill if you charge at these hours. How many, what portion of the population is going to comply with that?

A Yeah, so that, that's a great question, because that's obviously really, really important within this. I mean, it, again, coming back to personas, it really depends. Some people actively, you know, as soon as they've been set, told that they're going on a time of use rate, will respond to it. However, what we see in California with some of our partners that we're working with, what they've done is they've rolled out time of use rates, and they've sort of forced that on consumers. And so, and some of those consumers have not changed their behavior at all. And so they are now being charged punitive rates for charging their electric vehicle, um, but they haven't shifted their behavior, which is what, um, which is what we all want, right? We want behavior to shift, and us to actually manage electric vehicle charging for the times that are good for the grid and good for society. And so I think people are different, and so some consumers adapt to this and take to the next, next best thing, and we'll, we'll opt into a, a new proposition, uh, that's, that's raised to them, and some consumers will just We'll just do nothing, because energy is quite complicated, and actually the mind space to think about those things, it's, it's, it's just too much.

AI assessment note: “it really depends. Some people actively... respond to it. However... some... have not changed”

Q Is there anywhere that you think of as, as doing it the best, right? Either it's a utility in a vertically integrated market, or it's some retailer who figured out some innovative program in a unbundled market, but like, who do you look at as the scion of success here?

A Yeah, so I think, um, we always go back to like, when you first Get involved in, um, in the electric vehicle market. So as an individual, you, I think when you buy that electric vehicle, you get very excited about the purchase. The purchase is super exciting, right? In my opinion, the, the product is better, fundamentally better than an internal combustion engine vehicle. It's obviously got, it's usually got loads of technology inside it. Um, and so the best point to enroll a customer on a program is the point at which they're purchasing an electric vehicle. Because I think at that stage, they have this huge problem, right? Which is, okay, this vehicle's really cool, it's fast, it's quiet, it's got loads of tech, but I need to figure out how to charge it. And they don't actually know how to charge that electric vehicle at that point in time. And if you say to them, yeah, you can charge using this cheap, uh, uh, cheap rate with this program, it manages your electric vehicle charging every single day, and in the future, that'll be V to X and other things added onto it. And you get fully charged for the time you need it, and all you have to do is come home and plug in, and it takes five seconds. And you get feedback via a, via the utility on how much your energy is costing you, regular intervals. That's actually, that's actually helping the consumer to solve a fundamental problem …

AI assessment note: “the gold standard is to get the electric vehicle owner doing the right thing”