ELECTRIC CARS:Energy minister Eamon Ryan has aid there are exciting opportunities for new businesses with the arrival of electric vehicles. But what are they, asks PADDY COMYN

YOU PULL up and plug-in. It takes 25 minutes to recharge your car at a quick-charge point: what to do? Eat, read, rest, shop? And what about tapping that unused power when your car is parked at night? How about selling it back to the ESB? Aside from revolutionising the motoring world, the advent of electric cars is likely to have major implications in a multitude of areas, from retail and the restaurant trade to power storage.

We are a few short months away from the arrival of the first mass-produced, mainstream electric vehicles (EVs) on Ireland’s shores. The Nissan Leaf will go on sale in early 2011 at a price of €29,995, including a €5,000 grant provided by the Government. The ESB has started to roll out the first charging points around the country to charge these new cars, both on the street and in the driveways of the early adopters. But what opportunities exist for business in Ireland as a result of this new technology?

Minister for Communications, Energy and Natural Resources Eamon Ryan recently outlined his vision for how businesses could develop on the coat-tails of electric vehicles. “If you are a garage or a hotel near the motorway or the road network, you’ll want to put in a charging point – because very quickly we will be using a mobile phone application and an addition to the satellite navigation on your electric vehicle telling drivers where the next free charging point is, and even what you can have for lunch while you are having your car charged up. So I am looking forward to, not only the ESB putting in charging points, but a whole range of other institutions and businesses availing of the opportunity that is going to exist.”

The plan is to provide not only infrastructure, but also technical support. Ryan believes Ireland’s pioneering lead in electric car introduction will offer a great opportunity to develop the back-end information technology systems others will adopt. We could create the template for electric cars that other countries would copy. “We should look to get all the information technology, systems technology, process management and other spin-off benefits developed here first so we can sell [them] off to the rest of the world. That is the Government’s idea and intention,” he says.

His views are supported by Dan Illet, founder of Greenbang sustainability research, which supplies industry insight and analysis into the clean technology and sustainability sector. He sees many layers to the business opportunities that will emerge as a result of electric vehicles.

“Electric cars are the sexy part of what is happening in the change to the grid and the way that we do things with energy and movement,” he says. “The grid is being updated at a massive level; it is being digitalised, so that you can monitor and measure everything in real time. The first companies popping up as a result of this are the metering companies. Smart metering companies are about to go huge. We reckon that by 2020, the market in Europe for smart metering could be worth $25 billion (around €19.4 billion) and that is just for putting meters out there.”

Car manufacturers understand that battery technology is vital to the success of this new technology. Indeed, it is perhaps the battery firms themselves that hold all the power.

“The grid isn’t very good at storing energy, so battery technology is the holy grail of all renewable energy systems.” says Illet. “Electric cars will be developing batteries first. There is a lot of money going into their development because, once you crack it for electric cars, you can use these batteries for other purposes.”

Battery manufacturers know that, if they get the technology right in cars, they will be able to move outside of this into the infrastructure – and that, according to Illet, is a huge market. “It could be worth billions of dollars, because it will fit into absolutely every single thing we do as human beings.”

Olivier Paturet, general manager of the Nissan Europe zero-emission business unit, agrees. For Nissan, the decision to produce their own batteries was born out of economic necessity.

Paturet says the charging infrastructure field has been the most active. “Manufacturers of home chargers, public chargers and quick chargers have been created throughout Europe. Soon there will be another wave, concerning the installation and maintenance of these units. Further upstream, new solutions of software system integration are being created to make sure the supply of energy is aligned with the demand from EV charging infrastructure.”

But what is it like for businesses actively working in the sector? Carra is a Howth-based firm involved in the area of traffic management. Previous projects include the Dublin Port Tunnel, the M50 barrier-free tolling systems and installing toll booths on the M6 and M7. It is currently installing the first of the electric car charging points for the ESB. Three years ago, it started working with Electromotive, which installed the first electric car charging points in London.

“We installed the first electric car charging point in Grange Building Supplies in March of this year, followed very quickly by the first three the ESB installed this year in Dublin,” says managing director Niall Doonan. “We installed charging points in Intel recently and are adding charging points in Cavan and Galway. The ESB is about to tender for 1,500 on-street and 2,000 domestic chargers. We are also doing back-end work on an iPhone application, developed in-house, which we are hoping Elektromotive will take up for European-wide distribution.”

Doonan shows us how the iPhone application will work and demonstrates how Carra will be able to monitor the use of all the charging points. “We can talk to the charging stations and, using the iPhone application. We can find out where the nearest charging station is. You will also have the facility to use your mobile phone to access the charging station. This will all be subject to the requirements needed.”

Carra currently employs 10 people but the company is hoping to expand, should the technology take off. Having already supplied the initial charging points, it would be in a position to supply to anyone wanting to boost their business by offering a charging point on their premises.

So what advice is there for businesses likely to set up as a result of this new technology? Prof Pat Gibbons is Jefferson Smurfit professor of corporate planning at the Smurfit School of Business.

“We are at a point [where our] consideration of how we use energy goes beyond an individual’s carbon footprint. Our use of energy creates huge potential,” he says.

“The evolution of battery technology is of paramount importance. A lot of research and development will go into battery technology and this is the critical technology. A lot of research and development opportunities exist in this area.”

Gibbons sees an opportunity for car sharing and believes people are likely to consider new ways of acquiring transport, such as rental and leasing.

"When people begin to factor in the cost of ownership, they will begin to consider new [options] ," he says. "People in Ireland loved owning their cars and, more recently, owning their houses, but people are taking a bath in home ownership at the moment. The true costs are starting to hit home."

It will, according to Gibbons, be down to public acceptance of the technology. "There is merit in converting the bus and taxi fleet, even as a demonstration of the technology. Consumer acceptance would be much greater if people felt they could pop into a taxi and it would get them from A to B. I think there is a reluctance on the part of the consumer [to embrace] the technology."

Gibbons thinks there won't be many opportunities when it comes to utilities, as existing utility companies will be hard to compete against and will be well positioned for this technology's arrival. He is also hesitant to encourage businesses to invest heavily in things like charging points just yet.

"I think it needs to happen at the same pace as consumer acceptance of the cars. Front-ending the delivery of the energy is fine, but you would need to see this acceptance: that is the barrier. I think it would be risky enough. We would need to see consumers being persuaded and there isn't a lot of that."

Evidence from Spain would appear to back up Gibbons' thoughts. There, just 15 electric vehicles have been sold in the first year of their government-backed initiative, way short of the end-of-year target of 2,000.

It has been pretty difficult for some businesses to promote electric vehicles. David Mullen from Electric Vehicles Ireland imports Smith Electric Vehicles – commercial vans and trucks. His business has suffered from the recession and what he believes is a hesitancy by governments to invest in the technology for their own fleets.

"We have been selling to the city councils, some of the utility owners and some private companies. The take-up hasn't really been sufficient so far."

The biggest problem Mullen has is the price of vehicles and the fact that HGV vehicle sales have fallen. "Government bodies have not led by example and bought electric vehicles – the money simply isn't there," he says.

Fine Gael spokesman on energy, Simon Coveney, thinks the Government is to be commended for its efforts so far to encourage green business, but feels that more could be done.

"If I was in the Minister's position, I would be sitting down with the likes of An Post and ensuring they are among the first to adopt the technology," he says. "There needs to be more done to involve state companies and local authorities."

Illet thinks governments fail to understand some elements of the potential for electric car business. "Governments rarely understand the investment problems businesses have and they rarely give them the support they need. Grant schemes are available but they are mostly around research and development," he says.

"If you look at the iPhone, it has quality information and multiple uses for around €40 per month, while a car can cost around €400 per month. An electric car is going to be more expensive to buy and the buying model is different."

"The business model and how cars are sold could change dramatically. You will still have to buy a car the old fashioned way but the electric car could spark a new business model."

Many commentators agree that the traditional model of buying a car outright will be flawed with the electric car because it is likely that the battery technology will change so quickly.

"After one year of ownership, we would expect EV residual values to be above the segment average expressed in terms of values," explains Andy Carroll, managing director at car valuation bible, Glass's. "But if the battery is owned rather than leased, and without the appropriate warranty, the value of the typical EV will then fall dramatically until the vehicle is five years old, at which point the car will have a trade value little more than 10 per cent of the list price."

It is expected that different car manufacturers will adopt different approaches to how they sell their electric vehicles, with Nissan planning to sell their Leaf outright and Renault examining the possibility of leasing the battery on their Fluence EV. Cars might no longer be something that you own outright, but something you use, cutting out the risks of depreciation as you simply pay for usage.

Either way, the next 12 months will reveal a lot for new businesses in Ireland – and existing ones. Whether Ireland truly does become a leader in this new area will be down to consumer acceptance of the technology.