Energy Retail & Electric Vehicles Service June 2018

Transcription

1 Energy Retail & Electric Vehicles Service June

2 Jacob Briggs Analyst About the author Jacob is an analyst working on the domestic retail market, producing competitor and market intelligence reports. At Cornwall Insight Jacob has: Produced monthly and quarterly domestic supplier insight service Leads on our quaretly Domestic Supplier Market Share Survey Created bespoke market insight for Major Big Six suppliers Energy Retail & Electric Vehicles Service (EREV) Market Research and Intelligence Over recent years we have seen the market for electric vehicles (EVs) rapidly develop, creating opportunities and challenges for network companies and retail energy suppliers. As the roll-out of EVs progresses, there will be a range of retail interfaces, metering specifications, network connection and charging, and system operation concerns. These challenges will be variously offset depending on the concurrent adoption of technologies including energy storage, V2G charging, and automation software. This report addresses developments from the perspective of domestic energy retail, covering emerging and potential retail propositions, the routes to market arising, and the implications of regulation and policy. It also profiles the main technologies and actors alongside the commercial strategies by which they are coming to market. A particular focus is placed on the activities of and links between energy suppliers, vehicle manufacturers and infrastructure providers. Designed for Network operators Suppliers There are around 17,000 public EV chargepoints in the UK at May 2018, alongside around 90,000 domestic and workplace chargers. Jacob several years experience in community development with public and sector and NGOs. Flexibility providers Investors and manufacturers Industry analysts, academics and think tanks Areas of focus Routes to market Supplier strategies Key competitors Key benefits Understand opportunities arising from electric vehicles in the retail energy space Keep track of key participant activity around electric vehicles with in-depth profiles on their activities Monitor changing policy and regulation surrounding this area of the market To explore our other services

3 The service consists of biannually updated competitor profiles, supported by key developments by company in the intervening quarters. Outputs & Methodology The focus of the EREV service is on the activities of and links between energy suppliers, vehicle manufacturers and infrastructure provide. This quarterly report addresses developments from the perspective of domestic energy retailers, covering emerging and potential propositions, routes to market, and the implications of regulation and policy on their electric vehicle business models and the supporting infrastructure. Structure of the report: GB Market Overview latest developments in the roll-out of EVs and associated charging behaviour. Also how people are using the available infrastructure Policy and Regulation how key EV and energy policy and regulation is shaping the commercial opportunities around EVs Opportunities the prospects presented by the EV rollout around energy supply, charging provision, and service delivery Routes to market How are companies building capabilities in the EV market and how are they acquiring customers Threats What challenges does the growth in EVs present to energy retailers, what are some of the risks to EVs and related propositions in GB EVs are already re-shaping the domestic energy market, we expect them to transform it. Robert Buckley, Head of Retail and Relationship Development, Cornwall Insight Figure 1: Report contents Source: Cornwall Insight

4 Whilst the roll-out of EVs provides opportunities to energy retailers, it could also allow non-energy actors to develop propositions that enter the energy supply space Example section from the report Summary EVs present a range of opportunities to a variety of players from across different sectors. In electricity this includes, suppliers and retailers, aggregators establishing V2G and DSR services and Chargepoint operators running public networks. But the reach extends into the automotive industry who supply the core technology in the form of the EVs. Within domestic energy retail, the charging of EVs represents a complimentary service to traditional supply, with a perceived specialism in this emerging market also beginning to constitute a strong and new branding strategy. Meanwhile, establishment and operation of public charging networks offers an opportunity for suppliers to gain a foothold in an adjacent Figure 2: Cornwall Insight Trend Tracker space, where their current scale use of existing infrastructure potentially offers a competitive advantage. Opportunities For energy retailers, EVs present several principle opportunities: The provision of additional electricity demand volume that EV charging brings The sale of adjacent products and services, such as EV charging infrastructure, or on-site generation and storage The development of integrated service propositions, with energy supply as a component of a broader lifestyle offering in which EVs are integral In summary, these represent the opportunity for additional revenue streams and reduced customer churn. Furthermore, EVs also present companies the opportunity to significantly deepen their interactions and resultant relationship with the customer. This emerges from the additional services and customer value that EVs can offer around Balancing services, vehicle-to-home and home energy management services, and tailored tariffs. Routes to market Competitors both within and beyond energy retail are pursuing several different routes in search of potential benefits from the EV market. These progress from limited third-party partnerships to corporate acquisitions and in-house development. Whilst the partnership model offers rapid deployment and lower investment requirement, it risks seeing the supplier cede the customer relationship to the partner. Acquisitions and in-house development entails greater capital requirements and carries the associated risks of sunk costs and stranded assets. However, it also presents suppliers with the opportunity to own the customer relationship and secure access to the long value chain associated with EVs. Threats The growth of EVs carries the potential for increased competitive threat from other established energy suppliers that are able to develop dedicated EV offerings. Suppliers that establish effective propositions early are well-placed to secure a potenailly lucrative section of the market. Of potentially greater consequence, the rollout of EVs brings with it the opportunity for significant competition to emerge from non-energy actors such as vehicle manufacturers and charging service providers. These actors, particularly vehicle manufacturers, could offer bundled services which include energy supply and charging infrastructure at the point of EV purchase. As these companies develop an interest in energy supply and services as has been seen from a number of firms such as Nissan and BMW then energy supply could become a secondary but complimentary product within these integrated offerings. These threats specifcally impact the potential benefits that arise from EVs for energy suppliers by: Limiting the market for companies that do not have a broad EV offering Bringing greater competition around bundled products and services, with suppliers potentially poorly placed in the current EV customer journey to secure a route to market for their energy propositions as part of this bundle Source: Cornwall Insight June 2018 Limiting the ability to lock customers into energy deeply integrated lifestyle packages

5 About us We bring innovation and differentiated capabilities that help you create value, deliver business outcomes and improve performance. Most importantly we ensure that you receive An impartial view our opinions are based on facts, never biased or influenced by others An expert view our analysis leverages the collective expertise of our team in comprehensive research, insight and training An integrated view our research and insight integrates every aspect of the market to best cover an increasingly complex energy world Market intelligence Publications Consultancy Events & Training Market Research and Intelligence Domestic Market Share Survey Our quarterly survey tracks the number of accounts held by fuel type (electricity/gas/dual fuel) for each supplier in the domestic market. All suppliers with more than 250,000 energy accounts are reported in full, with a regional breakdown of accounts by PES area for each fuel type. Small suppliers are included in the national assessments with banded figures for electricity and gas. Domestic Tariff Pack A track of changes in tariffs over the last month, including a summary report and excel sheet. The report outlines changes in the cheapest tariffs by supplier, cheapest tariffs by region, regional pricing strategies, wholesale price movements, collective switches, exclusive deals and a series of profiles by supplier Domestic Supplier Insight Service This pack keeps you up to date with the latest news in domestic supplier activity, including marketing and branding, financial performance, service, key news and strategic moves. This includes a quarterly reference pack with in-depth profiles by supplier, supported by a streamlined monthly update of the most important news Domestic Market Metrics report The Domestic Market Metrics Pack provides a monthly round-up of all key statistics in the domestic market in one place, including switching and customer satisfaction Training and events Domestic Energy Supplier Forum A monthly forum for small and medium suppliers to discuss issues relating to regulatory and policy developments. The forum is chaired by Ed Reed, Associate Director and Adam Boorman, Regulatory Consultant and has around attendees from the domestic supply sector. Each monthly session covers a variety of topical issues including those requested by attendees. The forum usually includes an external visitor each month, allowing you to keep up to date with the wider industry, including Energy UK, Ofgem, BEIS and Citizens Advice Commercials of Energy Retailing The GB energy retail sector has undergone profound changes over recent years, with record entry into the market and new business models emerging. Our new Commercials of Energy Retailing course provides a step by step guide on how suppliers scope, enter and operate in this complex and increasingly competitive market. The course will also highlight recent entry case studies, how supplier look to acquire customers and the future of the market with the introduction of Smart Meters and new technologies Publications Energy: is a critical point in the transformation of UK energy; the vision to achieve this is emerging. We know the basic outline and where we want to get to but overlaying the solutions of today on the challenges of tomorrow will not work. We need to think about what we will want for or energy system in 2030 and design the future model to deliver that vision. Energy:2030, which is published monthly will provide you with the news and insight from the GB and elsewhere that will help you navigate the future

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