New vehicle technology - Is the energy source for your fleet manageable?

The UK Government has recently announced further funding to accelerate the availability of public accessible electric vehicle (EV) recharging points.

This will now see another roadblock reduced or eliminated in relation to EV usage as business users. unable to have access to a private charging point will be less disadvantaged¹.

Will this announcement be a gamechanger in the adoption of EVs?

The provision of EVs for business use is being influenced by two factors:

1. Employee requests resulting from personal taxation benefits;
2. Businesses expending their environmental credentials thus enabling achievement of business corporate social responsibility (CSR) objectives.

EV manufacturers are moving production towards offering this type of vehicle. Historically the supply and availability of a fossil fuel (normally in the form of petroleum or a heavy oil - more commonly known as diesel) has been relatively plentiful and available.

If the vehicle provided is a full electric model, (i.e. the only way the vehicle’s propulsion batteries can be recharged is if they are connected to an electricity supply), then the user is reliant on being able to find and safely connect the vehicle to an appropriate re-charging point, ideally capable of providing fast or rapid vehicle recharging capability².

For the vehicle provider, the installation and management of recharge points at domestic locations can present challenges such as safe use and the appropriate siting of the system. This can be made more difficult by the fact that many domestic dwellings (including flats and other locations that do not have off street parking areas) will be challenged to provide suitable charge points capable of providing an electrical connection without compromising the safety of other road users and possibly members of the public.

In the case of a company vehicle such as a car or van, although charging locations are available, moving a vehicle from a domestic address to a suitable charging point may affect planned journeys. The charging period although reasonably rapid (with smaller EV’S capable of being rapid charged to 80% of battery capacity in around 30 minutes) can fluctuate depending on the availability of a suitable charging point.

Therefore, the announcement by the government is another enabler in the introduction of EVs in the business sector, so where’s the risk?

The worst-case scenario is that driver behaviours could deteriorate or be influenced when travelling because although more charging points will become available, availability could be uncertain and difficult to predict to a point whereby recharging could take an unknown period of time in a preconceived journey plan resulting in the driver endeavouring to make up time.

Forward planning journey management and driver behaviour monitoring will become important elements of risk management.

Employers may need to review if previous agreements with employees to take vehicles home remains the correct operating model for their fleet as to guarantee charging, it could be pertinent for vehicles to be based back at business premises where recharging can be provided and monitored.

Taking this approach could present issues associated with space, power supply constraints and increased static accumulation risk.

For larger vehicles such as buses, the supply of electricity in the volumes required to recharge fleets overnight (although within a controlled environment) can present issues with supply capacity. Significant capital outlay and time may be required to evaluate if the electrical supply and distribution systems are upgradable and can be upgraded in time for planned fleet deployment.

How can this risk be managed?

Mitigation for supply capacity risk can be undertaken by the deployment of electrical energy storage systems, effectively large batteries installed in depots to enable electricity to be obtained from the grid during off peak periods and stored. This can then be used to supplement the available electrical supply meeting overnight demand. The systems can therefore be used to provide a buffer stock of energy should supply be disrupted although control and operation of this technology will require effective management.

The most significant risk is ensuring a vehicle can be recharged safely from an undisrupted and suitably sized charging system to a level that will not prevent travel and operations being compromised when the vehicle is next needed.

The commercial vehicle sector is showing considerable interest in the use of either hydrogen or biogas as a form of vehicle propulsion with significant levels of investment provided from various schemes such as Jive2 (Joint initiative for hydrogen vehicles across Europe)³.

Both systems provide refuelling operations similar to the use of fossil fuels, in terms of refuelling time with a supply of either hydrogen or gas stored in bulk at a depot and supplied to the vehicles as needed in a similar way to diesel.

Key risks include the operational reliability of the dispensing system, which by nature of the gases are more complicated when controlling temperature change during dispensation and the inherent high pressures contained within the system.

Both hydrogen and gas currently differ in terms of bulk availability and the maturity of the supply chain.

In the case of hydrogen, although supply chain is developing, there is a significant risk in ensuring the supply is undisrupted, depot storage capacity is appropriate, the frequency of replenishment is workable and the gas is available in a form that meets “green” credentials.

Businesses changing to using zero emission vehicles should ensure they have assessed all the risks associated with the introduction of this technology both strategically and operationally and have in place appropriate business continuity planning, which may be supported by careful evaluation and design of business interruption cover.

Willis Towers Watson continue to provide support through the delivery of focussed risk workshops commencing a process of identifying and implementing risk controls specifically considering the introduction of new green vehicle propulsion technology.

Please contact us to discuss our risk workshop solutions.