19 Oct 17

Oil companies add electric charging to their forecourts

The world’s major oil companies are changing their business plans to ensure they stay in pole position when it comes to powering the vehicles of the future.

As the automotive world slowly turns its back on petrol and diesel and adopts zero emission power, so oil giants like Shell, BP and Total are moving into battery recharging.

Energy consultancy Wood Mackenzie this week issued a new report, The Rise and Fall of Black Gold, that forecasts transport demand for oil will flat-line around 2030, due to the rise of electric vehicles.

Iain Mowat, senior research analyst, Wood Mackenzie, said, “By 2040 we forecast that battery-electric vehicles will make up about half of all cars sales in Europe and account for one in five cars on European roads. This could displace about 20% of world fuel demand from passenger cars.”

Globally, transport accounts for 60 million barrels per day of oil, the lion’s share of the 96 million barrels per day consumed worldwide, so a serious decline in demand from the sector would leave a large hole on oil company balance sheets unless it can be filled with revenue from other markets.

Bloomberg New Energy Finance forecasts that the size of that hole to be 8 million barrels per day by 2040, more than the current combined production of Iran and Iraq. In July, OPEC, the Organization of Petroleum Exporting Countries, raised its 2040 electric vehicle fleet prediction to 266 million, from 46 million a year ago. And BP has increased its forecast to 100 million EVs on the road by 2035, a 40% rise compared to a year ago.

Workplace not service stations

The move of the oil majors into electric vehicle recharging makes solid commercial sense, although the focus of their attention is on the domestic and business recharging opportunities, rather than their service stations. The lengthy time involved in recharging electric vehicles means most of the power-up will be done at home or at the workplace, rather than on the forecourt.

This week Shell announced the acquisition of New Motion, a Dutch company that specialises in electric vehicle recharging. NewMotion operates more than 30,000 private electric charge points for businesses and homes in the Netherlands, Germany, France and the UK. It also provides its customers with access to a network of more than 50,000 public charge points across 25 European countries, serving more than 100,000 registered charge cards.

The acquisition by Shell will give a boost to NewMotion’s mission to turn more parking spaces into charging stations.

Matthew Tipper, Shell’s vice president for new fuels, said, “This move provides customers the flexibility to charge their electric vehicles at home, work and on the go.”

He added that Shell is committed to giving customers a range of refueling choices in the coming decades, as drivetrains develop from fossil fuel to electric power. The company is also rolling out Shell Recharge, a rapid electric charging service on its forecourts, although it still takes 30 minutes for a meaningful recharge. Ten Shell Recharge points have been opened in London, and the service will soon roll out in the Netherlands, too.

Back in August, Reuters reported that BP was in talks with electric vehicle manufacturers about partnering to offer battery re-charging docks at its global network of fuel service stations.

Clean gas

A parallel move to add different sources of energy to its offering saw Total buy PitPoint, a company involved in biogas, hydrogen and electric vehicle charging points for road transport, with a network of about 100 natural gas filling stations.

Patrick Pouyanné, chairman and chief executive officer of Total, said the acquisition was, “part of Total’s strategy to expand its low-carbon businesses.” 

Authored by: Jonathan Manning