“Ohme was born on the energy side, so we were always aware of price and price volatility and what it might be like in the future,” says David Watson, CEO of Ohme.
“We always had one eye on what the system would look like, well, more than one eye, actually, it was the vision. We imagined a system that will go like that [become more volatile].”
Unless you have been fortunate enough to reside under a rock for the last six months, you will be aware that Europe — and Britain in particular — is in the midst of an acute energy crisis.
Petrol prices have skyrocketed in the last few months, for example. According to the RAC Foundation, on 1 March, a litre in Britain would set you back £151.16, by the end of the month, it had topped £163. Today, it costs in excess of £178.
Electricity has been affected, as well. Energy tariffs for almost all consumers have nearly doubled since the start of the year and those price rises are affecting EV drivers, in particular.
“There was one period in lockdown where there was an abundance of electricity on the grid,” says Watson.
“There was so much sun and wind that prices went negative and loads of drivers were paid to charge — the first time it had ever happened. We had some engaged early adopters who were really keen to tell everyone that they were paying £2.50 to fill their car up. We said at the time, you could drive up-and-down the country and get paid two bucks.”
All that, of course, has changed. But there is a potential solution on-hand.
On 30 June, new smart charger regulations — confusingly called The Electric Vehicles (Smart Charge Points) Regulations 2021 — will come into effect and mandate (amongst other things) that all new EV charge points must be able to send and receive information to respond to signals to increase the rate or time at which electricity flows through the charge point.
In effect, charging in Britain is about to become truly smart and, whilst Watson and Ohme are ready for the changes, the same cannot be said of all charge point manufacturers.
Supply and Demand
“The grid has to be balanced at every second,” explains Watson.
“The amount of energy produced has to be equal to the same that’s consumed every second during the day. There used to be a story when everybody during the break time of Coronation Street would go and turn on their kettle and you would get a big spike.”
The same apocryphal tale has been applied to halftime in televised England football matches — as soon as the referee blows the whistle, the nation has decamped from the sofa to make a cup of tea, causing a huge surge in demand for electricity.
Electric cars, could replicate the problem on a larger scale. As everyone arrives or comes home from work, they plug their car and, inadvertently, create a huge demand for electricity. The new smart charger regulations aim to stop this from happening by judging when energy is cheapest and only choosing to top up batteries then.
“If there are peaks in tariffs, whether it’s midnight or quarter past midnight, they don’t want all the chargers going on at the same time, so there are randomised 10-minute delays” explains Watson.
“So anywhere in that 10-minute period, your chargers come on. Let’s say you’ve got 100,000 chargers and they were all on the same energy tariff, when you get to midnight, one would come on at five seconds past midnight, another would come on at 20 seconds past, and another at one minute past. All of them would be spread over 10 minutes which would allow the system to respond, rather than creating an instantaneous power spike.”
If this seems incredibly precise, it should. As the electricity grid has to be balanced in output and input from second to second, ensuring that all the electric car chargers in the UK don’t suddenly on all at once is essential.
But, that assumes that every car in the UK is using a smart charger compliant with the new regulations.
Local Versus Global
“Companies like ours that came later, we had to differentiate ourselves by creating a much more connected experience,” says Watson.
“We work with network operators to help them make sure that the local networks don’t blow up. We’re working with the National Grid on CrowdFlex, which is looking at enhancing consumer flexibility to make sure that they help balance the grid.”
For Watson, this focus on the grid is natural. Born in Cork and splitting his time between his hometown and London, he co-founded impact investing company Temporis in 2010 with business partner Derry Guy to benefit the environment.
Seven years later, he founded Ohme with Guy, when researching clean energy projects and saw an opportunity to adjust demand to meet supply using electric cars.
“For the last three years, we have been at the forefront of seeing EVs as an opportunity because they’re plugged in most of the time when they’re at home and they can be used to buy energy when there’s too much wind on the grid.
“We could see that balancing the grid was an important point and there were periods when energy was really abundant and cheap. When we started Ohme, it was all about unlocking those cheaper and lower CO2 periods.”
However, while Ohme focused on software and delivering an integrated end-to-end software platform to ensure maximum CO2 and cost savings, other companies took a different approach.
“Let’s say you were an international charge point make and the UK isn’t you’re home market. You might say ‘Well, is it worth our while to make that change [to the new smart regs], to increase the spec?’ You have to decide whether you’re going to put the resources together to actually be able to implement that now.
“It’s not a short-term project to just make yourself ready for the new smart regs. There’s firmware, backend development, and app development.”
Similarly, Watson says there are UK-based organisations that are buying components and rebranding chargers from international providers offering a standard hardware platform.
“We started off with a proposition of the connected user and then imagined a grid where prices were quite volatile. For us to implement these regulations was relatively straightforward. We control the software and the hardware. We’ve always been at the forefront of integration with the most innovative tariffs that, at the moment, can save you up to £1,000 versus the standard tariff.
“If you’ve made quite a lot of money selling, let’s say, generation one hardware and you had a market-leading position, you wouldn’t necessarily be focused on building innovative tech to differentiate yourself.”
While Ohme is ready for the new smart charger regulations, not all operators are.
“It was relatively easy for us, but the system is changing quite quickly and I think the system needs to be smart. You have much more volatility in the system this year than you’ve had in years gone by because of the natural gas shortage and the Ukraine crisis.
“With bills going so high, we need to try harder and the system needs to move quickly to be able to capture those lower prices to try and bring bills down for everyone.”
For a long time, conventional wisdom held that electric cars would not only be better for the planet but would also be better for drivers’ wallets. However, it’s clear that in today’s climate of uncertainty, that might not be the case for everyone.
The smart charger regulations are certainly a step in the right direction — but only if drivers have one.
