In 2017, the UK government announced a ban on the sale of new petrol and diesel cars from 2040. By 2050, their aim is that almost every vehicle on UK roads should be zero emissions.
The almost undisputed solution is the rollout of electric vehicles (EVs). EVs are becoming increasingly popular in the UK and worldwide, and it is expected that EV sales will outstrip traditional petrol and diesel vehicle sales by 2030. However, there is a long way to go – in 2017, the UK ranked fourth worldwide by market share but still only 1.7% of all new car and van sales were EVs.
One of the barriers to achieving deployment of EVs on the scale envisaged is the lack of charging infrastructure in place nationwide. Several charging points have sprung up, but both public and private charging facilities will need to be greatly expanded to ensure the UK EV market can grow in line with expectations. There is some funding available at national and local government level, but it will fall on the shoulders of the private sector to provide both the investment and innovation to drive the deployment of charging infrastructure. There are a number of factors that those developing charging points and other charging solutions should consider:
Currently, the dominant models for EV charging points fall under one of the following categories:
5 to 10 hours
Super Rapid or Ultra Rapid
20 minutes or less
Domestic connections of 3kW or 7kW single-phase connections are currently the primary charging type used by EV owners. Such charging points will have typical charge times of 10 hours or 5 hours respectively. There are a number of competing technologies on the market at the time of writing, but broadly speaking achieving faster charging (which can be as little as 15-20 minutes) requires a three-phase power supply. Charging at the fastest speeds – essential for the utility and flexibility consumers will require to make a switch away from petrol or diesel engines – can require connections with capacity of over 100kW.
The ability for Distribution Network Operators (DNOs) to connect such points to the network will be challenged by available capacity on their networks. It may be necessary for developers to pay for reinforcement works to achieve connections with higher capacity – this can be prohibitive, especially where the location is only suitable for a small number of charging points.
Charging point models currently include (a) ‘standalone’ installations where the land is leased or owned directly by the charging point owner, and (b) models where charging points are installed by the charging point owner under a license arrangement on land owned or leased by third parties (e.g. in supermarket car parks or service stations).
The nature of land rights required will be dependent on a number of factors, but there are important legal distinctions between a lease and license which should be considered in terms of bankability, risk and cost.
Further to this, a developer may seek to combine charging points with other technologies to maximise potential revenue streams and to mitigate the cost of grid reinforcement – for example, by co-locating with solar panels or battery storage facilities. In such cases, any option for lease will need to be drafted to allow for such additional developments (whether intended at the time of construction of the charging points, or further down the line), including that any differing use classes are considered. Conversely, existing charging installations may wish to retrofit such technologies – again, they will need to make sure that their lease allows for such development without the need to go back to the landlord.
Land rights for connections to the charging point from the electricity grid are well understood in the market, the requirements of DNOs in terms of wayleaves and easements for the construction and installation of electricity cabling and substations generally are clear and in line with market standards. EV charging point connections should be simpler in many respects – EV charging points are likely to be near to existing grid connections where there are car parks, service stations or business premises.
That said, where reinforcement or additional connections are needed to supply charging points and support their capacities, in addition to the reinforcements and connection costs themselves, a developer should consider early the likely cost of obtaining relevant easements, wayleaves and access rights. Landowners and their agents are much more alive now to the potential value of such rights, and should be contacted early in order to obtain the appropriate rights.
Another issue to consider when installing and operating an EV charging point is planning permission. The Town and Country Planning Order 2011 (SI 2011 2056) introduced permitted development rights for EV charging points in public and private car parks but planning permission may be required for charging points installed elsewhere.
Several local authorities have introduced an obligation on developers to include EV charging points on new developments and the Governments ‘Road to Zero’ strategy has made clear the intention to make it an obligation to include charging point infrastructure in all new homes.
The electricity supply licence regime applies to the supply of all electricity in the UK, including the sale of electricity through a charging point. Failing to comply with the supply licence provisions is a criminal offence. In practice, there are exemptions which may be applicable to avoid the need to a supply licence where EV charging points are located. The available exemptions will depend on the nature of the infrastructure set up, however the rules are complex and any business models, supply arrangements (and the documents recording this) should be carefully considered to ensure that an exemption applies and a licence is not required.
The Alternative Fuels Infrastructure Regulations 2017 which came into force on 9 October 2017. These regulations put in place standards for sockets and vehicle connectors, impose requirements for intelligent metering and require operators to make EV charging points accessible to the public on an open and non-discriminatory basis. There are civil penalties in place if these requirements are not met.
The requirements which could be put in place under the Automated and Electric Vehicles Act 2018 (AEVA 2018) will also need to be observed. These will deal with issues around access, functionality and the information which will need to be provided to the consumer by those offering public charging points. Part 2 of the of the AEVA 2018 gives the Government powers to create multiple regulations to deal with the installation and operation of EV charging points as the UK EV market expands and the number of charging points increase. Such powers include the ability to introduce regulations to ensure that all EVs can charge at any charging point and introduce requirements on how operators provide access to charging points. We are yet to see how these powers will be used in practice, but flexibility may be required from operators as the industry develops.
Consumer law will be a new area for many participants in the energy industry moving into EVs and charging points. A fee for the use of a charging point has to be fair, easily and clearly comparable, transparent and non-discriminatory. This will necessitate business models for charging points factoring in consumer pricing. Further, operators of charging points will need to comply with the various consumer laws applying to various aspects of their business, including relating to any online or app-based sales, customer services provisions and so on.
The deployment of charging infrastructure for EVs represents a big opportunity for those in the industry in coming years, but is not without challenges. Taking legal advice early is essential to mitigate the risk of various overlapping regulatory regimes – electricity supply, consumer laws and EV specific regulations, for example – but there will continue to be an element of political exposure for developers and operators that will need to be considered in longer-term plans. Getting the other legal rights over more predictable areas (such as land rights, planning and grid connections) right at this stage, building in flexibility where possible, can help make sure installations remain viable and fundable in years to come.