Growing electric vehicle adoption seen creating $2 bln opportunity for utilities, study says

Utilities could make billions of dollars in the fast-growing electric vehicle (EV) market by bundling services for consumers, market research firm Accenture concluded this month.

Accenture Strategy determined that utilities could stand to make as much as $1.7 trillion by 2040 by providing low-margin electricity to the high-margin EV consumer market. Additionally, utilities could also add $250 billion by providing and bundling services such as remote charging apps, integrated home-EV energy management, payment processing and even financing for EVs, the firm concluded in its study Utilities: Lead the Change in eMobility.

“As the market takes shape, utilities are actively exploring their potential roles,” the report said. “We believe winners will charge ahead by investing smartly, tapping their trusted customer relationships, and partnering with others to provide bundled, differentiated and meaningful eMobiliy experiences.”

The firm anticipates EV usage will grow to 10 million vehicles by 2025 and surpass conventional vehicles by 2040 as more consumers recognize the financial benefits of EV ownership, the report said. Auto manufacturers are also shifting their investments toward developing EVs.

“The real economic benefit of EV ownership materializes over time, as the costs per mile are driven lower than for conventional vehicles,” the report said.

With more than 80 percent of consumers expected to charge their EVs at home, the power sector’s advantages of knowing consumers’ consumption patterns, home charging abilities and payment preferences can enable utilities to develop tools that benefit consumers and power companies alike, the report asserted.

Utilities can also align with partners such as car manufacturers, ride-sharing companies and charge point operators to develop a platform approach to service EV consumers.

Utilities should also make appropriate investments that enable consumers to switch to EVs smoothly and simplify ownership, especially since many EV consumers will want to have charging options not only at home but also at public charging stations, according to the report.

“There is tremendous value potential in the eMobility market, but utilities need to act now. Armed with a deep understanding of the energy market and its rules and regulations, and trusted customer and supplier relationships, utilities that invest smartly and deliver targeted offerings will thrive in this market,” Accenture Strategy managing director Greg Bolino said.

The report outlined four areas where financial opportunities could present themselves to utilities seeking to develop eMobility applications. By 2040, commodity sales with the generation and transmission and distribution systems and with retail energy supply have an estimated value of $1.7 trillion, while public and private charging stations have a value of $400 billion.

“Selling kilowatt-hours in the EV market is a natural extension for utilities. Some are already strengthening their core commodity business by introducing innovative time-of-use tariffs for EV owners,” the report said.

Bundled EV and battery financing, coupled with bundled payment and customer services and public charging point operations could have a value of $250 billion, while $100 billion could come from utilities’ optimizing their generation and retail portfolios and their transmission and distribution systems. Accenture Strategy developed the estimated funding levels.

“There is an opportunity for utilities to actively use EV charging to balance supply and demand–and optimize grid and portfolio performance–much as they do to accomodate wind or solar energy sources,” the report said.

“Alternatively, focusing on creating a more flexible grid for e Mobility would enable utilities to better manage network congestion, reduce grid stabilization costs and optimize wholesale/retail portfolio spend,” the report said.

Accenture Strategy developed the study by using geographic level scenario modeling and surveying 6,000 consumers between August and October 2018. The consumers lived in France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, the United Kingdom and the United States.