Former Tesco chief executive, Sir Terry Leahy, has offered energy managers pitching projects to their board some advice: Keep it simple.
Speaking at the launch of a new range of smart EV chargers from Myenergi, in which he is an investor, Leahy noted that the most effective ways of cutting carbon are often the most straightforward. Literally.
“Supermarkets are the second largest consumer of energy in the country. But you can massively reduce the amount of energy they consume just by keeping pipes straight,” he said. “It is amazing how much energy is expended just pushing fluids around bends.”
Much of what brings about sustainability “is just good business practice,” said Leahy. “A lot of it is just conservation of resources and I have never seen an example of good conservation that damages the bottom line.”
In fact, the opposite is true, “it adds directly to the bottom line.”
While Tesco has made massive improvements in efficiency and investments in technology, Leahy said new technology does not always deliver to expectations and “can be quite unreliable”.
That was one of the reasons he was decided to invest in Myenergi. Its chargers and technology maximise use of solar and only draw from the grid when required, or when told to, automatically picking the cheapest times.
“I was very drawn to the product. It uses something that may otherwise be wasted and instead uses home energy to heat water or charge the car. That is a very practical solution to potentially wasted home generation.”
Equally important, he said, “is the fact that it works.”
Picking winners with those characteristics is something energy managers pitching to boards should use as a guiding principle, Leahy told The Energyst.
“It always has to be about payback. Conservation drops straight through to the bottom line, because whatever that is, it means you are not wasting anything.
“But it is also about communicating simply and effectively that it can be done, and that you are the person who can do it. Because as soon you bring in complexity and uncertainty, it is too easy for people to put it to one side and move on to something else.”
Petrol stations under threat?
Leahy is also involved in traditional transport fuels, chairing the executive committee of the board at the Motor Fuel Group, the UK’s largest independent forecourt operator with around 1,000 petrol stations.
The group “wants to put in a network of chargers, but it is incredibly hard,” he said. “Even the big players are struggling” in terms of understanding which technologies to deploy.
“Traditional chargers are too slow, superfast chargers are very expensive … there’s not really a clear industry standard and I think that is why people are finding it difficult,” he said. “There is still a lack of certainty around what is the right technology to choose.”
Despite the complexity, and the fact that supermarkets and pub chains are mobilising on charging infrastructure, Leahy believes traditional petrol stations will remain major players as transport pivots to electricity.
“You can see [competition arriving from other sources], but it is a very expensive business, so it is more likely to be the specialists [that dominate],” he said.
Forecourts “will become retail destinations – and they already are,” said Leahy. Moreover, “there is a huge fleet of petrol and diesel vehicles and they will be around for a long time”.
“But [petrol stations] do need to become a network for charging.”
Chicken and EV
While investment is pouring into electric vehicles and infrastructure, the UK EV market today remains tiny, with around 200,000 plug-in cars and vans on the road. What would encourage more people to buy EVs?
“The price has got to come down,” said Leahy. “The technology also has to progress. There is a lot of range anxiety and a lack of trust between the [manufacturers’] quoted range and actual range, and that is a challenge for the market.”
To drive down price requires volume manufacturing. Traditional manufacturers are stepping up – with VW announcing this month it will invest €30bn in EVs over the next five years.
But existing electric vehicles are not coming to the UK in sufficient numbers, suggested Fiona Howarth, chief executive at Octopus Electric Vehicles.
“Availability is the biggest challenge, you have to wait months from order to delivery,” she said.
Speaking alongside Leahy at the Myenergi event (Octopus Energy’s EV tariff rewards owners for smart charging), Howarth believes manufacturers are sending cars to geographies with the best policies, citing Norway, China and California.
She hopes UK policymakers can better align rhetoric with incentives to expedite decarbonisation of transport and improve air quality.
Vehicle to grid?
Despite volume constraints, Howarth said UK businesses are starting to integrate energy, transport and sustainability strategies – and believes smart charging and vehicle to grid technology will help the UK decarbonise at lowest cost (the company is involved in UK Power Network’s EV fleet trial, which also includes Uber and Centrica).
Leahy agrees, though he said the incentives for people to cede control of charging have to right.
“It is important that there is competition in the grid so that people can be rewarded for providing that [flexibility], which will be needed as power generation becomes greener,” said Leahy.
“There must be sufficient incentives for people [to help balance power grids with their cars]. That is important – to make sure it is worth people’s while.”