Examination of Witnesses

Automated and Electric Vehicles Bill – in a Public Bill Committee at 2:00 pm on 31st October 2017.

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Marcus Stewart, Robert Evans and Suleman Alli gave evidence.

Q We will continue our session by hearing oral evidence from National Grid, the UK Electric Vehicle Supply Equipment Association and UK Power Networks. Will you please introduce yourselves and say where you are from?

Robert Evans:

I am Robert Evans. I am chief executive officer of Cenex and chair of the UK Electric Vehicle Supply Equipment Association.

Suleman Alli:

Good afternoon. My name is Suleman Alli. I am director of strategy for UK Power Networks. We distribute electricity to 8.2 million homes and businesses in the east of England, London and the south-east.

Marcus Stewart:

Hello. My name is Marcus Stewart. I am head of energy insights for National Grid. We are responsible for the balancing of the electricity and gas networks, and for managing all the energy across the UK.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

Q On charging infrastructure, we have just heard evidence from the Petrol Retailers Association, which is very worried about being mandated to have charging points on the forecourts of its members. What is your prediction of what would happen if we did not mandate them to do that? If it was not required by law physically to invest and have them on their forecourts, would they bother?

Marcus Stewart:

At the moment, the majority of people who own electric vehicles charge them at home, but there is a limit to how many houses have off-street parking. About 43% of properties do not have access to off-street parking, therefore other forms of charging facilities need to be available. They could be a mixture of charging types at destinations, workplaces, supermarkets, and so on.

From the evidence that we have gathered when we have talked to and interviewed people, key locations on the motorway and strategic network are seen as key enablers for the roll-out of electric vehicles and will help to remove some of the concerns around range anxiety which is seen as one of the main barriers to the take-up of electric vehicles at the moment. Charging and plus charging in particular at key locations across the country will facilitate the roll-out. If you do not have that, it is likely that the roll-out will be slower.

Suleman Alli:

I support that. I would say that there is going to be a paradigm shift. It is a bit like when we used to get water from a well and we now get it from a tap in our home. In the same way, I do not think that petrol forecourts will be the only place where we will recharge our vehicles in the future. In our engagement with the marketplace, we are seeing major supermarkets looking at how they can offer fast charging to be a key differentiator for their customers. We are seeing hotels considering the same and local authorities looking to explore how on-street charging can be part of the solution. Based on the engagement we have done, I believe that it will be a much more diversified charging environment: it will not just be petrol forecourts.

Robert Evans:

We have members who are very interested to install charge points at these locations. They see them as locations where there will be high utilisation rate and a good economic case for those charge points to be used. We are also talking here about an insurance policy—it is not a mandating per se. If the market does not deliver, the Act gives Government the ability to step in. It is not by definition a mandating until you pass additional legislation.

The members are very interested in installing in these locations, but they are other people’s land. Part of the issue here is the ability to encourage landowners to install charge points at their locations. In some cases it is a fuel supplier, in other cases it is one of the three main companies that operate motorway service areas. You have to recognise that there is a desire to install in those locations, but you cannot put your asset on someone else’s land.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Q I am delighted to hear what you say and absolutely agree with you. If the problem of range anxiety is addressed or partially addressed by fast charging at service stations and so on, we are still left with—I think you said—40% of homes that do not have off-street car parking. Have you done any assessment of the kinds of costs involved for the distribution network operators if over the period between now and 2040 there was a roll-out of universal charge points on the street in towns and cities—probably not all areas—where there is lawful parking?

Sitting suspended for a Division in the House.

On resuming—

We are now quorate. Sir Oliver Letwin asked a question, which you of course have remembered exactly, and you may now answer it.

Robert Evans:

I think your question related to the aspect of there not being so many people with off-road parking, so how do you make provision available for them? Certainly in this city, in London, that is an issue. It is also an issue in many cities across the UK. The availability of charging infrastructure in supermarkets, shopping areas in market towns and leisure facilities is certainly helpful, but obviously if you do not have home parking you are at a disadvantage compared with other motorists. So it is partially self-selecting, in a way, but certainly in London and other locations if you have a certain amount of public infrastructure it will help those people who want to buy an EV to have one.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Q Have you looked at the cost associated for a DNO in London, say?

Robert Evans:

From our perspective, no, we have not. We know that UK Power Networks have done extensive study work in their projects, and we know from dialogue with Western Power Distribution that they have also looked at the same. Some of the councils here in London—for example, Hammersmith has a scheme that is looking to leverage the street lighting—

Will you speak up a bit, please?

Robert Evans:

Sorry. Hammersmith has a scheme that is looking to leverage the street lighting in order to provide charging for residents on the street. Part of that is largely around civil works and some of it is around the electrical works. The DNOs will be able to advise in these cases whether the low-voltage network needs reinforcing, but otherwise it is predominantly a matter of civils and equipment. Members are developing charge points, and have charge points, that can charge from street lighting, albeit that the power supply to that lighting is limited.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Q Has UKPN done an analysis?

Suleman Alli:

Yes. It is very difficult to give you a definitive answer on the exact cost. The reason why it is so difficult to do that is that in order to come up with a cost, you have to understand the impact that it is going to have on the network. To understand the impact on the network, you have to understand when people are likely to charge, where they are likely to charge, the amount they are going to charge and the type of charger they are going to use. There are multiple permutations of that.

The only approach that we thought was appropriate to consider was to look at scenarios. Our peak demand across our three networks is around 15 GW. We think that up to 2030, when we might have between 1.2 million and 2 million vehicles, their peak demand could be between 2 GW and 5 GW—so between 10% and 30%. If you think of our track record over the last five years, we have connected 5 GW of distributed generation on our grid. That is equivalent to one and a half Hinkley Point Cs, without much fuss or bother. We have until about 2030 to work out how we are going to do this. My view would be that we are not complacent, but we are confident that we are going to come up with some solutions.

We think the Bill as it is currently presented provides us with a lot of help. In order for us to understand the impact, you need the visibility and the smart charging functionality. If you have the smart charging functionality combined with smart tariffs, you can start actually to deliver the infrastructure at lowest cost. I am sorry that I do not have an exact number for you. Anyway, if I did give you a number, it would 100% be wrong—but we are doing a lot of modelling and work to understand what the permutations are.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Q Have you looked at the other side of the coin—the peak locked-in capacity of the cars that are attached at a given time of day, say in the mornings or evenings, that could be used as a sort of battery resource?

Suleman Alli:

That is a really exciting area of development at the moment. We are looking at it. As part of the Innovate UK funding, we are going to be supporting five EV trials, one of which is including a vehicle to be trialled with Nissan.

If you look at where distributed generation is connected in the UK today, it has mainly been at grid scale. A lot of our research on storage has been focused on grid-scale storage. We commissioned the largest battery in the UK at the time, 6 MW or 10 MWh, and we are very clear that storage can help peak shaving for the distribution networks at grid scale. We think that same concept can be applied to vehicles, but the trials need to take place for us to understand it fully. That is happening at the moment.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Q When do you anticipate results from those trials?

Suleman Alli:

I believe within the next 12 to 24 months. We are looking abroad as well at other countries to see how we can generate learnings from those trials. Certainly, in the next 24 months we will start to see concrete evidence that we could present.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q I wanted to bring up two or three things. The first is that you presumably agree with the changes we made from the first Bill, which was the forerunner of this Bill—the Bill that did not make the cut before the election. You will remember that what we have done this time is clarify the definition of automated vehicles, as a result of previous scrutiny. We have tightened that definition. How important do you think that is in providing confidence to the industry in respect of further developments?

Robert Evans:

Automated vehicles are not strictly my area of operation, so I find that that is something that I cannot strictly answer.

Marcus Stewart:

In some of the work that we have done when we have projected forward and looked at various energy scenarios, we see automated vehicles as having an impact on total energy usage. More automated vehicles, and clarity around the question, will allow different business models to come forward. Car sharing is more likely as part of that, and that will reduce the overall demand on the energy system, but we believe that it is still quite a long way out—maybe 2030-plus—before we start seeing any significant impact from that.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q In terms of electric vehicles, I take it that the availability of a robust charging infrastructure is critical to the further take-up of those vehicles. I know there are other barriers to entry—market price, reliable battery technology and so on—but presumably in your view the charging infrastructure is an important part of encouraging more people to buy electric.

Robert Evans:

Yes, absolutely. This is part of a process that the Government have played a key role in seeding—the introduction of charging in key locations and providing support to Plugged-in Places and now to the Go Ultra Low cities and others, to create exemplar projects and to encourage the roll-out of infrastructure. Making that infrastructure visible is a key part of reassuring people that owning an electric vehicle is a good thing. Being able to have a home charger, with support from the Government, that meets very high technical standards is also really important, so that people are not charging their electric vehicle from an extension cable or similar on a three-pin plug, which we would not advise.

The Government have played a very important part in dialogue with industry about the process of seeding. Now we are in a situation where we have more than 100,000 electric vehicles on the road, and the car industry is committing to introduce the vehicles, and so the roll-out of infrastructure is occurring largely with market forces, in the sense that businesses and locations are realising that they need to have charging as part of their offer. If it is a tourist destination, it wants to have electric vehicle drivers come to its location rather than another one, and so on.

We have good momentum, but it is still really important that where there is workplace charging, for example, we get conversion of people who work at that location because they see that there is charging that they could use, they start to think and then they buy electric vehicles. We thoroughly commend the Government’s workplace scheme, because we can see the catalytic effect that it is having.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q Finally, we heard a lot earlier about the development of skills. The point was made across the Committee that we need a co-ordinated process by which we encourage the further development of relevant skills as the technology moves on. What is your thinking about that? Clearly, the industry is doing a lot of work on skills, but how can we more effectively accelerate the acquisition of the necessary skills so that we are not left in a situation where this technology can be serviced at only a very limited number of places?

Robert Evans:

Skills is one of those challenging areas where we have a plethora of schemes. I was told that there are currently about 220 different skills initiatives for the motor industry. The challenge is not necessarily to create another skills initiative, but to work out how best to blend the relevant content into existing initiatives. Certainly on the garage side of the motor industry, greater skills or a spreading of skills for mechanics and engineers in terms of them being familiar with and able to operate on electric vehicles would be helpful. There is a general skills shortage in the motor industry, and that is something that training and development at a local level can assist.

Photo of Iain Stewart Iain Stewart Conservative, Milton Keynes South

Following up on the question asked by my right hon. Friend the Member for West Dorset, I have a question about the capacity of the grid to cope with the expected increase in demand, and in particular the timing of that demand. While researching for the Second Reading debate, I came across an Atkins report that draws on findings from the Energy Technology Institute that peak demand is likely to be in the early evenings—particularly Sunday evenings—and that that could increase demand on the grid by 10 GW, or 20%, at the time when it is least able to cope. Is that a finding that you recogniseQ ?

Marcus Stewart:

One of the key things that affects the impact on the grid is people charging their cars. Smart charging is absolutely key to mitigating that. I will give you some examples from the work that we have published. We published our “Future Energy Scenarios” report in July. In a high-growth scenario that aligns with the Government’s target to ban sales of diesel and petrol engines in 2040, we would expect to see around 9 million electric vehicles in 2030. That would add something like 17% to peak demand, which occurs on a Monday or Tuesday evening in the winter, if there was not smart charging. If there was smart charging and people responded to that through time of use tariffs or other incentives, that could be reduced to around 6%. How people charge and how they are incentivised to do it has a real impact.

At the moment, the technology exists—the charging posts that have been put in have that technology—and we support the measures in the Bill to ensure that all charging points have that capability, which would make a significant difference to how easily electric vehicles are accommodated by the network nationally and locally. Smart charging is absolutely key, and we support the approach in the Bill.

Photo of Iain Stewart Iain Stewart Conservative, Milton Keynes South

Q Are you content, given the content of the Bill, that the industry will come up with those incentives itself, or will there be a requirement for further guidance or direction?

Marcus Stewart:

I believe that the industry, in terms of energy suppliers, will offer smart tariffs. We have already seen that; OVO has published a proposed smart tariff that will actually support vehicle-to-grid when that becomes available. The market is likely to respond. There are also changes in the electricity market around billing for half-hourly meter reconciliation, which will drive the supplier to optimise their portfolio and to offer similar types of tariff. The mechanisms are there to make that happen. At the moment there are only 100,000 to 120,000 electric vehicles, so there is a very small impact, but when we get to millions of cars, we need to have that smart charging capability. People in the market are seeing that opportunity already and want to participate in that. Having the framework and rules that facilitate that and mandate the technology and infrastructure will go a long way to facilitating that.

Robert Evans:

I would just like to add that on the one hand I am very reassured by my colleague’s contribution, which recognises that this is a market opportunity and that we have members who are very keen to provide the charging technology and the market mechanisms that would allow a motorist to make their electric energy—their battery—available, so that they do not charge at night, but they can provide power back to the grid when it is needed and manage those smart services.

We are concerned about mandating a specific technology. There is a context around the Bill that says it will mandate a certain technology or approach. We would like to see a recognition of the need to create a market rather than have a situation where, for example, a DNO can effectively turn off charging for somebody because they feel that that is necessary under certain conditions without involving the motorist or without market mechanisms coming in in the first place. We are particularly keen that this paves the way for a market-based approach. We welcome variable tariffs and vehicle-to-grid technology and we see the storage of electric vehicles as exactly what you need in an energy system with a high element of intermittency, as we add more and more renewables. The storage element is going to be a lot more valuable and there need to be market mechanisms to unlock that, rather than a mandated approach that is purely a situation where someone can turn off as they choose to, without the motorist or business—

Thank you very much. Alan Brown.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Infrastructure and Energy)

On the smart grid that we are aspiring to, the panel has already alluded to the fact that they think smart charging will come by market, but there is a lot more that the Government need to think about in the wider energy mix, because there is also decarbonisation of heat and further decarbonisation of electricity. There is the future scenario of an influx of electric vehicles, but a whole lot else is going on in the energy mix as well. The point is to make sure that is all captured to get the smart grid we needQ .

Marcus Stewart:

We see smart charging for electric vehicles as a key starting point for that. You can get smart technology in your home today—smart thermostats, for example. Commercial premises have smart air conditioning and smart lighting that help to balance their load and can provide services back to the grid today. An electric car will be the biggest asset in the home that uses energy, unless you convert to heat as well, and that will have a big impact on the system. Making that smart at the start is the right thing to do.

Suleman Alli:

It is a bit like the concept of offset mortgages in the financial services sector, where you pay your salary into an account and that offsets against the mortgage interest you pay. We are starting to see a new business model emerge where people say, “We can give you price certainty or reduced energy bills if you plug your vehicle in and allow us to provide services to the wider network operators or the system operators.”

I think the market will innovate and start to provide those services. We are already seeing that in the internet market, for example. Some of the trials we are doing will look exactly at that area. It is intuitive for us to think that if you have an electric vehicle you are going to go home and plug it in straightaway. The research that we have undertaken shows there is a diversity. When you have a large population of EVs, not everybody goes home and charges at the same time. In fact, we have seen about 30% of the impact materialise—of the capacity of charge that has been installed. There is an element of diversity that we incorporate into our planning that is based on evidence from the trials we have undertaken.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Infrastructure and Energy)

Q Can I ask one more question about the model scenarios? You are modelling how many vehicles might be coming in, among other things. Is that based on mass volume modelling, or does it look at existing restrictions in the network and at where the uptake might be? Clearly, uptake depends on the roll-out of the charging system and some local authorities in some areas are much more at the forefront of that than others. That potentially impacts their work as well.

Marcus Stewart:

I could talk about how we would do that. The primary reason to do it is to understand what network capacity expansions and reinforcements are needed on a national level. We will have different assumptions for different locations, where we have evidence. For example, there may be clustering in cities that we will make assumptions around. I imagine that the DNOs will look at similar things for their networks as well. We look at it on a spatial basis; it is not just a single-number basis.

Suleman Alli:

What we are looking to do, particularly with electric vehicles, because there is a lot of data available out there, is try to apply much more advanced analytic techniques. For example, how can we marry up Land Registry data, which gives an indication of people who might have driveways, together with Acorn data about people who might be more able to buy an electric vehicle, together with data on charge points, in order to get a better and more granular view of our network? That is what we are doing at the moment to improve our planning.

Suleman Alli:

Absolutely. I do not think we can ever say we are done.

Thank you. We have a lengthening list, so let us have one question and one answer.

Photo of Stephen Kerr Stephen Kerr Conservative, Stirling

Q Are there global standards within the industry for the connections between the cars and the charging equipment? Is there a global standard for the charging equipment? Should there be a universal way of connecting, so that you do not travel somewhere and find you cannot plug your car in? Should there be a railways gauge Act for electric cars, so that we get that uniformity?

Robert Evans:

There are standards. There has been a difference between a Japanese product coming to a Japanese standard versus a European product coming to a European standard. Charge points typically have several connectors to accommodate different vehicles. That has been the simple solution.

Photo of Stephen Kerr Stephen Kerr Conservative, Stirling

Q Should there eventually be one?

Robert Evans:

I do not know that we in the UK can necessarily say that this is the charger that is required for the global motor industry to produce. In the past, the Office for Low Emission Vehicles has set grant funding regimes that encourage particular types of charger because they are better for safety and for the motorists’ general use. That is to be commended.

Photo of Stephen Kerr Stephen Kerr Conservative, Stirling

Q You do not see legislation playing a part in this?

Robert Evans:

At this stage I would say that was not necessary.

Photo of Scott Mann Scott Mann Conservative, North Cornwall

A couple of my questions have already been answeredQ . One was on the car-to-grid technology and the other one was on peak capacity. I want to ask the National Grid this: does your grid mirror some of the main arterial roads that run through the country? How effectively could you put your grid capacity into locations? I am firmly of the view that we should not necessarily assume that we want all the charging points to be in current service stations—there might be opportunities outside the existing ones—so how easy will it be for you to deliver that with your current grid locations?

Marcus Stewart:

The high voltage network does mirror parts of the motorway network, but not all of it. There will be locations where there is a clear opportunity to build a connection for high voltage to supply charging, and there will be other locations where it is just not that simple. It has to be looked at on a case-by-case basis. Some of the options around that are maybe connecting at a lower voltage tier but using onsite storage, so you are not taking too much stress from the grid in one go. You are managing exactly the same as a petrol station does today, where it fills up a tank of petrol under the ground and feeds it to the cars as they need it.

We have talked to different developers and people who are looking at those kinds of options, and we describe it as a sort of mosaic of different charging routes out there. One of them could be high voltage input, with 350 kV of charging, backed up with a megawatt-scale battery to minimise the connection to the grid and that impact.

Photo of Scott Mann Scott Mann Conservative, North Cornwall

Q I have one small supplementary question, if I may. Do you see yourselves as being an end-to-end provider or do you see other companies coming in to fill that middle gap?

Marcus Stewart:

From a national grid point of view, my role is to balance the network and ensure that the energy is balanced. We have a transmission owner part that would own the high voltage network, and certainly the element up to a connection. Anything beyond the connection is available for third party competition. Any service provider could put that in. A deregulated version of the National Grid or another third party could put that in. Our primary role is the reinforcement element upstream to support that.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q On the back of that, between you there is immense expertise in managing complex systems—I have read your CVs. On the issue of grid management, earlier today we heard a call for some kind of co-ordinated approach on where charge points were located to ensure their spread, and to ensure that there were no areas that would become black holes where there were not enough charging points. Presumably, any such co-ordinated plan would need to be married to the supply of electricity via the grid. The Bill does not yet do this. It is a first step down this road, and it simply increases the number of charging points. Do you see the sense of putting together a co-ordinated national strategy that ties together the provision of the charging points with the provision of the power?

Marcus Stewart:

I think it would have some merits. I am not sure whether it needs to be mandated or not.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q I was not necessarily suggesting that it ought to be mandated; I was simply arguing that it might be facilitated. There could be a co-ordinated approach that might facilitate—this is the word that was used earlier—both the provision of charging points and the other considerations.

Marcus Stewart:

It certainly makes sense to look at where there is good capability on the local or national network, and to consider that in respect of good accessibility for people; for them to be able to come in, connect and charge up their cars. I would expect those to be offering the early take-up points. Effectively there would be a least cost route to getting fast charging points delivered, in particular. A number of parties would have to come together and look at those opportunities: the National Grid, local network operators, charge point owners, service station owners and people like that. That would make sense.

Photo of Matt Western Matt Western Labour, Warwick and Leamington

Q I was interested in what you were saying about the workplace uptake, the conversion and how it switches people. Do you think we are doing enough—with all the housing developments and the local plans being put in place across the country—either to mandate or to encourage a rapid and widespread adoption of electric vehicles?

Robert Evans:

The answer is no. We are not doing enough.

Robert Evans:

Two different things. One is that the size of the power cables running into new developments is typically capped by the developer or by processes, so it is not built to add further capacity at later dates. That is what charging would require, so that is one part of the equation. The second part would involve effectively putting wiring in new homes in such a way as to ensure that a charge point could easily be added. We have repeatedly asked about this but been told that even putting a smoke alarm in some houses is too much for some developers. Any additional input in that area would be very welcome.

Photo of Matt Rodda Matt Rodda Labour, Reading East

AirQ quality is a huge issue, particularly in many urban areas and some other parts of the country. What do you believe could be done to increase the roll-out and take-up of electric vehicles in urban areas to help tackle the problem of air quality?

Suleman Alli:

From our market, first we need to engage with people to talk about range anxiety. It is down to motor manufacturers to produce vehicles with a longer range. The second thing is availability of charging infrastructure. We have certainly seen an increase in activity from both TfL and local authorities in wanting to understand that more effectively, and we have done a lot of engagement with local authorities to demystify the process and explain what the costs are likely to be. The third thing is just the up-front cost—the capital cost—of buying a vehicle. There is no silver bullet; we would need to do a range of things to increase adoption.

Photo of Matt Rodda Matt Rodda Labour, Reading East

Q If you do not mind, I will ask a brief supplementary question. Those points all sound very valid, but they may apply to the whole country. Are there specific measures that you would suggest the Government ought to be considering for urban areas?

Suleman Alli:

In urban areas, where people do not necessarily have a driveway and perhaps live in flats, they have to have provision of charge points on the street for on-the-go charging and destination charging—at railway stations, supermarkets and so on. In urban areas you would need to identify those locations—car parks and so on—that have the space to provide destination charging. In that case, it would probably have to be rapid charging to provide the charge that you would need.

Robert Evans:

We would be very keen as an industry to work more closely with the DNOs for the roll-out of the charge points, but also the grid reinforcement needed to get charge points in strategic city locations. For example, London, with UK Power Networks, has provided support that has effectively created locations where the power is available for rapid chargers to be deployed. The same is happening in other Go Ultra Low cities. We would like to have a partnership approach whereby we could work with the DNOs in particular cities to make sure that we could get infrastructure in strategic locations. [Interruption.]

Given that there is now a Division, I think we can let you go, because it would be unfair to keep you. We will start straightaway in 10 minutes with our new set of witnesses. Thank you.

Sitting suspended for a Division in the House.