Locations
Belgium, France, Germany, Ireland, Italy, Netherlands, Spain, United Kingdom
New market entry
A number of commercial organisations in the alternative fuel vehicle market are keen to deploy products and services internationally, to give customers confidence about using electric and other types of green(er) vehicles anywhere in the world, and to help boost interoperability of vehicles and charging points.
But the complicated patchwork of regulations governing alternative fuel vehicle infrastructure provision across jurisdictions, even within the EU, means parties entering any new market should seek proper guidance on which stakeholders they need to meet, particularly the key regulatory authorities.
Due to the division of competences in some jurisdictions (e.g. Belgium), this is not as simple as it might appear to a company that has rolled out a successful project in another jurisdiction.
Some providers can get delayed by pursuing wrong/circuitous routes to securing necessary approvals and licences (or applying for licences that are not needed), resulting in loss of opportunity, unnecessary expense and potential run-ins with regulators.
New opportunities for the flexibility market
One emerging commercial trend that deserves emphasis is the link between EVs/charging infrastructure and new opportunities in the flexibility market.
Electricity flexibility service providers (FSPs) are starting to view the 'flexibility pool' created by EV charging as a platform to offer new kinds of services.
By ascertaining the level of flex in the system through monitoring charging behaviour, this flexibility can be aggregated to reduce grid stress and congestion, eliminating the need for expensive grid upgrades and preventing utilities from having to buy power from other energy providers at high-demand prices – i.e., flexibility can monetised to reduce energy costs and improve capacity balancing.
This potentially opens up a whole new market segment for grid operators and FSPs, who have traditionally been more geared towards balancing services. This applies to a greater or lesser extent in all markets under consideration in Fieldfisher's Greenification of Road Transport report.
Emerging contractual and liability issues in respect of charging/refuelling point installation/operation
It is becoming increasingly clear that long-term, standard form contracts between landowners/site operators and charging point operators (CPOs) are often unsuitable for the rapid pace of change in policy, legislation and commercial reality governing EVs and alternative fuel vehicle charging.
Recent experience shows that contracts with (previously typical) 15-20 year terms have proved unsatisfactory for both sides after just a few years of the contract term, following new developments and changes in commercial direction.
While there is no way of anticipating all future circumstances and how things may need to change, contracting parties can avoid issues escalating into full-blown disputes by paying close attention to drafting and the flexibility of contract terms.
Potential disputes between CPOs and landowners
At the time of writing (June 2022), we have not seen many specific disputes or enforcement measures in relation to EVs or other types of alternative-fuelled transport in any of Fieldfisher's European jurisdictions so far, but these will come.
In the UK, there have been clashes, including between some of the biggest CPOs and key landowners on the UK road network, but these have not escalated into full-blown litigation.
In other (similarly) densely populated countries, like the Netherlands, conflicts could arise between owners/operators of existing subsurface infrastructure (pipelines, cables etc.) and those seeking to install charging/refuelling infrastructure for alternative fuel vehicles (primarily electricity and hydrogen), if new projects threaten to interfere with incumbent ones.
How this area develops will depend partly on the adaptability of national planning/consenting frameworks and the cost/level of funding available for moving/upgrading existing infrastructure.
Where CPOs share infrastructure with other users, they may find themselves liable if something goes wrong with their charging points and this affects supply to other users. Conversely, CPOs may have to deal with the fall-out from problems caused by another user of the local infrastructure that have a knock-on effect on their charging points.
Negotiating with DNOs regarding capacity/supply/infrastructure upgrades
Grid capacity
Generally speaking across Fieldfisher's European jurisdictions, DNOs are confident that local grids will be able to cope with the demands of additional EV charging capacity.
This tends to rest on the assumption that the grid will be progressively reinforced every year, in line with most European governments' policies to bolster the capacity and resilience of electrical infrastructure.
Paying for reinforcement
Ensuring fairness in how the costs of reinforcement are borne is a potentially contentious issue, and one that CPOs may start to push their local DNOs/energy regulators on.
One criticism that has been levelled at the way the market works in the UK, for example, is that some of the larger, more advanced CPOs are 'land grabbing' – i.e., ensuring they obtain the first connection at a site, which the local substation can cope with without needing to be reinforced.
Any subsequent CPOs or other grid users who come in to offer alternative charging/other services may find that the substation needs reinforcing, and may be expected to pay for the necessary upgrades.
Those with deep pockets may be happy to invest in new/upgraded substations to ensure their own security of supply, but this excludes smaller operators and reduces competition.
While the UK system incentivises 'land grabbing', this is less of an issue in other European countries, which are more open and transparent about grid access.
DNOs vs IDNOs
It is important to remember that it is not just the overarching DNO (in the UK these are typically regional operators) that can be approached about connections – there are also the independent DNOs (IDNOs), which are licenced by the national energy regulator (in the UK's case, Ofgem) and are responsible for the operation and maintenance of smaller local grids.
IDNOs may also be approached about connection agreements and may offer more attractive terms than the main DNO.
DNO delays
If a CPO enters a contract with a third party for the installation of charging points, both parties should consider what happens if the DNO delays the works.
DNOs are generally reluctant to commit to binding delivery times, so risk needs to be allocated accordingly with clear agreements regarding what will trigger entitlement to compensation, extra time, etc.
Deferring capacity issues
Governments are trying to avoid overloading the grid by introducing measures that incentivise off-peak charging, but realistically these (if they succeed) are only temporary solutions that do not make the capacity issue go away.
In the UK, one of the aims of the Smart Charging Regulations is to try to encourage EV charging to take place during periods of slack in the system to avoid peaks in demand, particularly with residential and workplace charging.
Fostering competition
How different jurisdictions foster competition and decide on competition issues is an area that all commercial entities in the alternative fuel transport and related infrastructure sector will be watching closely.
In the UK
In 2021, the UK's Competition and Markets Authority (CMA) announced it would not enforce the exclusive rights of motorway service station owner-operators to provide EV charging, and that third party CPOs have the right to install charging points at these service stations.
A number of commercial organisations in the alternative fuel vehicle market are keen to deploy products and services internationally, to give customers confidence about using electric and other types of green(er) vehicles anywhere in the world, and to help boost interoperability of vehicles and charging points.
But the complicated patchwork of regulations governing alternative fuel vehicle infrastructure provision across jurisdictions, even within the EU, means parties entering any new market should seek proper guidance on which stakeholders they need to meet, particularly the key regulatory authorities.
Due to the division of competences in some jurisdictions (e.g. Belgium), this is not as simple as it might appear to a company that has rolled out a successful project in another jurisdiction.
Some providers can get delayed by pursuing wrong/circuitous routes to securing necessary approvals and licences (or applying for licences that are not needed), resulting in loss of opportunity, unnecessary expense and potential run-ins with regulators.
New opportunities for the flexibility market
One emerging commercial trend that deserves emphasis is the link between EVs/charging infrastructure and new opportunities in the flexibility market.
Electricity flexibility service providers (FSPs) are starting to view the 'flexibility pool' created by EV charging as a platform to offer new kinds of services.
By ascertaining the level of flex in the system through monitoring charging behaviour, this flexibility can be aggregated to reduce grid stress and congestion, eliminating the need for expensive grid upgrades and preventing utilities from having to buy power from other energy providers at high-demand prices – i.e., flexibility can monetised to reduce energy costs and improve capacity balancing.
This potentially opens up a whole new market segment for grid operators and FSPs, who have traditionally been more geared towards balancing services. This applies to a greater or lesser extent in all markets under consideration in Fieldfisher's Greenification of Road Transport report.
Emerging contractual and liability issues in respect of charging/refuelling point installation/operation
It is becoming increasingly clear that long-term, standard form contracts between landowners/site operators and charging point operators (CPOs) are often unsuitable for the rapid pace of change in policy, legislation and commercial reality governing EVs and alternative fuel vehicle charging.
Recent experience shows that contracts with (previously typical) 15-20 year terms have proved unsatisfactory for both sides after just a few years of the contract term, following new developments and changes in commercial direction.
While there is no way of anticipating all future circumstances and how things may need to change, contracting parties can avoid issues escalating into full-blown disputes by paying close attention to drafting and the flexibility of contract terms.
Potential disputes between CPOs and landowners
At the time of writing (June 2022), we have not seen many specific disputes or enforcement measures in relation to EVs or other types of alternative-fuelled transport in any of Fieldfisher's European jurisdictions so far, but these will come.
In the UK, there have been clashes, including between some of the biggest CPOs and key landowners on the UK road network, but these have not escalated into full-blown litigation.
In other (similarly) densely populated countries, like the Netherlands, conflicts could arise between owners/operators of existing subsurface infrastructure (pipelines, cables etc.) and those seeking to install charging/refuelling infrastructure for alternative fuel vehicles (primarily electricity and hydrogen), if new projects threaten to interfere with incumbent ones.
How this area develops will depend partly on the adaptability of national planning/consenting frameworks and the cost/level of funding available for moving/upgrading existing infrastructure.
Where CPOs share infrastructure with other users, they may find themselves liable if something goes wrong with their charging points and this affects supply to other users. Conversely, CPOs may have to deal with the fall-out from problems caused by another user of the local infrastructure that have a knock-on effect on their charging points.
Negotiating with DNOs regarding capacity/supply/infrastructure upgrades
Grid capacity
Generally speaking across Fieldfisher's European jurisdictions, DNOs are confident that local grids will be able to cope with the demands of additional EV charging capacity.
This tends to rest on the assumption that the grid will be progressively reinforced every year, in line with most European governments' policies to bolster the capacity and resilience of electrical infrastructure.
Paying for reinforcement
Ensuring fairness in how the costs of reinforcement are borne is a potentially contentious issue, and one that CPOs may start to push their local DNOs/energy regulators on.
One criticism that has been levelled at the way the market works in the UK, for example, is that some of the larger, more advanced CPOs are 'land grabbing' – i.e., ensuring they obtain the first connection at a site, which the local substation can cope with without needing to be reinforced.
Any subsequent CPOs or other grid users who come in to offer alternative charging/other services may find that the substation needs reinforcing, and may be expected to pay for the necessary upgrades.
Those with deep pockets may be happy to invest in new/upgraded substations to ensure their own security of supply, but this excludes smaller operators and reduces competition.
While the UK system incentivises 'land grabbing', this is less of an issue in other European countries, which are more open and transparent about grid access.
DNOs vs IDNOs
It is important to remember that it is not just the overarching DNO (in the UK these are typically regional operators) that can be approached about connections – there are also the independent DNOs (IDNOs), which are licenced by the national energy regulator (in the UK's case, Ofgem) and are responsible for the operation and maintenance of smaller local grids.
IDNOs may also be approached about connection agreements and may offer more attractive terms than the main DNO.
DNO delays
If a CPO enters a contract with a third party for the installation of charging points, both parties should consider what happens if the DNO delays the works.
DNOs are generally reluctant to commit to binding delivery times, so risk needs to be allocated accordingly with clear agreements regarding what will trigger entitlement to compensation, extra time, etc.
Deferring capacity issues
Governments are trying to avoid overloading the grid by introducing measures that incentivise off-peak charging, but realistically these (if they succeed) are only temporary solutions that do not make the capacity issue go away.
In the UK, one of the aims of the Smart Charging Regulations is to try to encourage EV charging to take place during periods of slack in the system to avoid peaks in demand, particularly with residential and workplace charging.
Fostering competition
How different jurisdictions foster competition and decide on competition issues is an area that all commercial entities in the alternative fuel transport and related infrastructure sector will be watching closely.
In the UK
In 2021, the UK's Competition and Markets Authority (CMA) announced it would not enforce the exclusive rights of motorway service station owner-operators to provide EV charging, and that third party CPOs have the right to install charging points at these service stations.
Following the launch of its investigation in July 2021, the CMA secured legally-binding commitments from Gridserve, which owns The Electric Highway – a major CPO in the UK – in this respect. Gridserve has exclusive rights covering approximately two thirds of the Motorway Service Areas (MSAs) in the UK, and has agreed:
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Not to enforce exclusive rights in contracts with Extra, MOTO or Roadchef (three major UK MSA operators), after November 2026 (reducing the length of exclusive rights in contracts with MOTO by around two years and Roadchef by around four years; the contract with Extra is due to end in 2026);
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Not to enforce exclusive rights at any Extra, MOTO or Roadchef sites that are granted funding under the UK government’s Rapid Charging Fund (RCF). This means that, in such cases, competitor CPOs will be allowed to install chargepoints regardless of the exclusivity in The Electric Highway’s contracts; and
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Each of the MSAs – Extra, MOTO and Roadchef – and Gridserve have also promised not to take any action that would undermine these commitments.
The CMA has also written an open letter, reminding the sector of its obligation to comply with competition law in relation to EV charging arrangements.
In the EU
To date, there have not been any notable similar decisions by competition regulators in respect of CPO competition at EU level.
Any such intervention is likely to start with a market study at EU level to assess any roadblocks caused by unfair competition. Long-locked exclusive installation of EV charging point contracts are likely to be the focus of antitrust enforcers.
At individual jurisdictional level, however, there have been some developments. For example, France's national competition regulator, the Autorité de la concurrence, last year approved (with legal advice from Fieldfisher's Paris competition team) the creation of the 'GMOB joint venture', by a consortium of companies (AGI, EDF PEI, Genak and SAFO) to provide EV charging points in Guadeloupe and, in a second phase, in Martinique and French Guiana.
This was the French competition regulator's first decision in respect of EV charging and has been framed as an opportunity to 'study' the market for EV operation, as it assesses how to regulate this area in the future.
Data privacy in charging networks
Another developing area that organisations involved in alternative fuel vehicles will need to be mindful of is data protection.
To support interoperability and tailor charging provision to user behaviour, more personal data will be collected and shared across charging networks (for example, location, time and duration of charging).
Suitable protections will need to be built into charging networks, to protect user personal data to comply with existing data privacy laws and potentially new regulations as well.
Charging networks will also likely want to collect significant amounts of non-personal data (such as energy dispensed, charging port ID number, the amount of money spent on charging sessions and pricing).
EU efforts to encourage sharing of such non-personal data (set out in the proposed EU Data Act) may force these data sets to be made available to all EU market players (at the time of writing, the UK does not have any plans to replicate the EU Data Act).
This article was written to accompany some of the issues raised during Fieldfisher's recent webinar on the Greenification of Road Transport – A regulatory guide to the future of clean mobility in Europe. For more information on any of these issues or a topic not covered here/in our report, please contact the author from the relevant jurisdiction.
In the EU
To date, there have not been any notable similar decisions by competition regulators in respect of CPO competition at EU level.
Any such intervention is likely to start with a market study at EU level to assess any roadblocks caused by unfair competition. Long-locked exclusive installation of EV charging point contracts are likely to be the focus of antitrust enforcers.
At individual jurisdictional level, however, there have been some developments. For example, France's national competition regulator, the Autorité de la concurrence, last year approved (with legal advice from Fieldfisher's Paris competition team) the creation of the 'GMOB joint venture', by a consortium of companies (AGI, EDF PEI, Genak and SAFO) to provide EV charging points in Guadeloupe and, in a second phase, in Martinique and French Guiana.
This was the French competition regulator's first decision in respect of EV charging and has been framed as an opportunity to 'study' the market for EV operation, as it assesses how to regulate this area in the future.
Data privacy in charging networks
Another developing area that organisations involved in alternative fuel vehicles will need to be mindful of is data protection.
To support interoperability and tailor charging provision to user behaviour, more personal data will be collected and shared across charging networks (for example, location, time and duration of charging).
Suitable protections will need to be built into charging networks, to protect user personal data to comply with existing data privacy laws and potentially new regulations as well.
Charging networks will also likely want to collect significant amounts of non-personal data (such as energy dispensed, charging port ID number, the amount of money spent on charging sessions and pricing).
EU efforts to encourage sharing of such non-personal data (set out in the proposed EU Data Act) may force these data sets to be made available to all EU market players (at the time of writing, the UK does not have any plans to replicate the EU Data Act).
This article was written to accompany some of the issues raised during Fieldfisher's recent webinar on the Greenification of Road Transport – A regulatory guide to the future of clean mobility in Europe. For more information on any of these issues or a topic not covered here/in our report, please contact the author from the relevant jurisdiction.
