By Joanna Gaudini, Marketing Executive & Dr. Rishabh Ghotge, Cenex NL
In this blog, I’m joined by Dr Rishabh Ghotge, an engineer who has worked at Cenex NL in the Netherlands for around two years in the energy and infrastructure department. Before Cenex, he completed his PhD at the Delft University of Technology in charging systems, including energy modelling and vehicle-to-grid. He was also involved in setting up a small pilot site at his university campus. At Cenex, he now works almost exclusively with HGVs.
I met Dr Ghotge when he spoke at the Cenex Expo in September as part of a panel led by Mike Nakrani. Below is the interview I conducted with him.
Joanna: What do you think are some of the biggest challenges that the decarbonisation industry in general needs to overcome?
Rishabh: Simply, it’s a combination of the availability of vehicles on the market, the costs for vehicle financing, charging equipment, and charging in public locations, to name a few. Also, it comes down to acceptance; some fleet managers and their drivers have trouble adapting to this new change. And lastly, grid access is a rising concern. These are the biggest issues within the industry at the moment.
Joanna: Why do you think that your work at Cenex regarding TCO (total cost of ownership) is so important? Is this one of the main barriers that fleet managers need to overcome when they make this change?
Rishabh: It is one of the main questions that clients have when they look at electrification. Typically, fleet operations run on narrow margins, meaning they’re very cost sensitive; therefore, for them to successfully electrify, they need to understand the technology and costs of electrification before they can transition to integrating EVs into their operations.
It’s typically the smaller companies that struggle to access thise information, and it’s quite difficult for them to make business or financial decisions around technology that they’re not familiar with. So, as a consultant at Cenex, we get a lot of questions around this, and a lot of them tend to be around the TCO.
Cash flow can be a challenge for these smaller companies. These vehicles are expensive, and there’s a lot of investment needed, especially if they need to upgrade a depot.
Even if the TCO is lower over the lifetime, they may not necessarily have the resources to invest at any given point in time and they require a financing partner or similar support.
Joanna: Do you think that fleet managers are aware of this available support? And is there enough of it?
Rishabh: I think there is quite a lot of support and help. So, for example, in the Netherlands, an organisation representing the logistics sector called Topsector Logistiek has made tools available for fleet managers to use. The National Centre for Charging Infrastructures has tools as well, and additionally, European projects fund work like ours to help create and make these tools widely available.
They’re publicised to some degree, and there is quite a lot of outreach, but there is also a limit to the scope of the market that it is reaching.
To some extent, the TCO guys sometimes talk to each other more than they end up speaking to fleet managers. Also, because fleet managers have a full-time job so finding the time to access information and use tools is complicated and takes time.
Joanna: And now touching on the Netherlands. As a country, where do you think it is on the scale of electrification? How does it compare to the UK? Are there some aspects that are further ahead or behind compared to the UK?
Rishabh: In some aspects, it’s further ahead. For example, in the share of buses which are electrified, I think the Netherlands is around 17% of all buses, and the UK is around 10%. In terms of zero-emission zones, the Netherlands is leading; this has been pushed into 16 Dutch cities so far, more than the UK.
In terms of financing, I think the UK is more innovative in terms of market offerings. We see this with several private financing offers for UK fleets to make the transition. There are more private players getting into financing, and I think the UK does lead in this.
In terms of truck electrification, I’m not sure of the exact numbers. I know there’s been a big boom in the 3.5 to 12 tonne category in the Netherlands, especially this year, because of the zero-emission zone, and I doubt that the UK would electrify this sector as quickly, unless there’s a kind of structured policy around it.
Maybe in terms of long-haul trucking, I think both countries are very new to it. The ZEHID programme is very strong, and at the same time, in the Netherlands, we’ve got the Living Lab of Heavy Duty Charging for trucking. A couple of months back, they had their first report with the first lessons learnt.
Therefore, I think both countries are taking their first steps in this, and there’s a lot to learn from each other as well.
Joanna: What are the transferable lessons between the two countries?
One thing that the Netherlands is strong on is the grid capacity maps. Right now, if you have a plan to electrify your depot and you’re in a certain part of the country, you can just go to the website and see if there’s great availability in your region or not. Then it’s clear if it’s worth making the application; this is something that I believe the UK doesn’t have yet.
On the other hand, I recently attended the ZEHID talk at the Cenex expo, and I found that what they’ve been talking about is to transition from first-come, first-serve to get a grid connection to first-ready first-serve and that’s been a long issue in the Netherlands as well. So, with grid congestion, it is really one of the national topics as a kind of main blocker of electrification.
The uncertainty linked with when you will get the grid connection, even after you’ve made an application, has been a long-standing complaint and they’ve not really figured it out. Before, it was first come first serve in the sense that if you make an application with several applicants ahead of you in the queue. But there may be large wind farms in a remote part of the country ahead of you in the queue and you won’t get your connection until they do. That’s quite complicated, and then it tends to delay all the projects down the line.
And in the UK, with the new system, if your project is ready to be connected, you are then shifted up the priority lists. That seems to be working quite well, and I think the Dutch would learn a lot by adopting this.
Joanna: Do you think that EU policymakers and governments are doing enough to push for this change or do you think they could be doing more?
Rishabh: I think overall EU policy has been quite coordinated, and it helps that they’re making the ambition super clear. This has been particularly helpful with the original equipment manufacturers because it helps to make the transition at the manufacturing level too. But there is less business clarity when they allow lobbyists to change the targets and create an atmosphere of uncertainty. The response to that is “hang on, why electrify now” and “why not wait until the technology is better or when there are better financing options?”
I think that part is challenging, the shifting of the goal posts. The second thing is that larger companies tend to be very sensitive to EU legislation. Once the EU passes something, each country transcribes it into national legislation and that’s a process that takes about three to four years. Large companies move into action even before new regulations are transcribed into national legislation, However, smaller companies tend to be slower, so they may not find out about the change in EU legislation until after it’s transcribed into national legislation. So that puts them three to four years behind, and by the time they respond and take actions, it may be five years later.
This creates a large difference between the large companies that have the resources and the smaller players. It’s the smaller companies that tend to get left behind.
Joanna: And for my final question, if you were to give a piece of advice to a fleet manager or a company director who wants to start, what would you suggest?
Rishabh:
- Understand your fleet data very well; it doesn’t matter whether you’re using free tools or going to a consultant. Knowing where your vehicles are going, how much grid connection you have, mission types, and charging availability are all important data points to know.
- Look for financial subsidies. There’s a lot of stuff out there, and if you’re making decisions there, there’s a lot of financial help available
Many thanks to Dr. Rishabh Ghotge from Cenex Netherlands for partaking in this interview, it was great to get his understanding on the importance of TCO, as well as the differences between the UK and the Netherlands, and the current industry problems that are faced.
If you’d like to get in contact with Dr Ghotge, please contact him through: @rishabh.ghotge@cenexgroup.nl
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