East European energy firms charge into EV market

Petrol dd Ljubljana

06/12/2018 07:00

* GreenWay has biggest fast-charging network in region
    * CEZ and MOL both planning to roll out rival networks
    * EV car sales expected to jump from 2020 

    By Michael Kahn
    PRAGUE, Dec 6 (Reuters) - For trips near their village in
western Poland, Jacek Balcer and his wife zip around in their
electric cars. But when they want to travel further afield they
know it's time to bring out their diesel van or risk being
stranded.
    "If you want to go big distances in Poland you often can't
find a charging station," said Jacek. "It is still impossible."
    It's a similar story in other central and eastern European
countries in the EU but with such a small number of electric
vehicles (EVs) on the road, building charging networks hasn't
been a priority for governments.
    But that's all set to change. The number of EVs in the
region of 100 million people stretching from Poland in the north
to Bulgaria in the south is expected to surge when tighter
European Union emissions rules come into force in 2020.
    The biggest network of fast-charging stations in the region
is run by privately-held GreenWay https://greenwaypolska.pl/en
with 112 in Poland and Slovakia. But with the EU now aiming for
a 35 percent cut in car emissions by 2030, some of the region's
biggest energy companies are muscling into the market.
 urn:newsml:reuters.com:*:nL8N1WP1DN
    CEZ  CEZP.PR  in the Czech Republic and MOL  MOLB.BU  in
Hungary say they are planning to expand networks of
fast-charging stations across the region.
    "This is where the electricity and energy business is
moving," said Tomas Chmelik, head of clean technologies at CEZ,
central Europe's largest listed company. "If we do not invest,
somebody else will and it's a logical extension out of the
traditional business into a new business."
    Chmelik estimates that by 2020 there will be about 10,000
EVs on Czech roads and up to 250,000 by 2030. CEZ aims to more
than double the number of fast-charging stations it operates to
over 150 by the end of 2019.
    CEZ plans to spend about 1 billion Czech crowns ($44
million) over the next 10 years to achieve this - with about
half coming from subsidies to build a network of 50 kilowatts
(kW) fast chargers able to handle CHAdeMO https://www.chademo.com
 and CCS standards.
    
    FIRST MOVERS
    While weather and battery capacity are factors, fast
chargers of up to 50 kW can typically provide power for a range
of 150 km in 30 minutes while ultra-fast charging stations of up
to 150 kW can do the job in 10 minutes, according to GreenWay. 
    CEZ will focus on its home market before expanding in
countries where it already operates, including Poland, Slovakia,
Bulgaria, Romania and Hungary. It could also look for
acquisitions to grow faster, Chmelik said. 
    "We will logically look at countries where we are already
active," he said. "Utilities are looking to build networks over
the long run and I expect the market to get consolidated in the
next five years.
    Power utilities, tech start-ups and oil companies are all
fighting to establish themselves as dominant players in the
business. Swiss bank UBS estimates $360 billion will need to be
spent over the next eight years to build a global charging
infrastructure to keep pace with electric car sales. 
    Yet as companies bet on electric cars, there's a risk
governments in central and eastern Europe will move slowly to
jump-start a market that lags many western European countries.
    In Poland - a nation of 40 million and eastern Europe's
biggest economy - there are just 2,981 plug-in vehicles,
according to EV-volumes.com http://www.ev-volumes.com, a Swedish
company that compiles data on the EV industry.
    Yet Poland has targeted electro-mobility as an important
part of its economic strategy and set a target of 1 million
electric cars by 2025.
    There are 3,128 EVs in Hungary and 2,473 in the Czech
Republic but Europe's market leader, Norway, has 239,000 and
Germany 198,000. Hungary has a target of 30,000 by 2020.
    "The prize is becoming the first mover," said Ivan
Kondratenko, an analyst covering electric mobility at Frost &
Sullivan https://ww2.frost.com in Warsaw. "Eventually there will
be an uptake of electric cars in CEE so they want to have the
infrastructure ready to accommodate these customers."
    "If they invest now in the future there will be less
problems with potential revenues, or losing out on additional
revenues."
    
    EXPANSION PLANS
    Hungarian oil and gas company MOL has begun shifting its
strategy to prepare for less demand for fossil fuels over the
next decade, said Peter Ratatics, who leads the company's
consumer services business.
    MOL plans to invest up to 30 million euros ($34 million) by
the end of 2020 to build a network of up to 700 charging
stations in Hungary, Romania, Croatia, Slovenia, Slovakia and
the Czech Republic, he said.
    The investment could generate roughly 10 percent to 15
percent of the company's traditional retail business in the next
10 years and up to 50 percent by 2040, Ratatics said. In 2018
its retail division is expected to generate $420 million.
    "We came to the conclusion that because of changing
regulation and customer behaviour the fossil fuel market will
change over the next decade," he said. "This will have a
significant impact on MOL's traditional oil and gas business."
    "We are now trying not just to start building up the
electric charging stations but also the knowledge of how the
e-mobility business is taking shape."
    MOL, along with Germany's E.ON  EONGn.DE , Croatia's HEP,
Slovenia's Petrol  PETG.LJ , BMW  BMWG.DE  and Nissan's  7201.T 
Hungarian unit, is also part of an EU-subsidised project to
build 252 fast and ultra-fast charging stations in the Czech
Republic, Slovakia, Hungary, Croatia, Slovenia and Romania.
    Smaller players such as Greenway are also looking to use EU
subsidies to continue to expand and win market share.
    With CEZ and MOL starting in their home markets and Polish
companies such as Orlen just gearing up, Greenway plans to have
630 charging stations in place in Poland by 2020 with another
230 in Slovakia and elsewhere in the region.
    The company, which is already building its first ultra-fast
charging stations, will target the Czech Republic and Balkans
next, said founder Peter Badik. 
    GreenWay began installing road-side chargers in 2015 and its
Slovak entity is a member of a consortium working on a regional
project led by Austria's Verbund  VERB.VI .
    "At the moment the pie is big enough for everyone," Badik
said. "It's a market which lacks many strong competitors and
there is a lot of possibility to grow in a very big market as
the region catches up with western Europe."
   ($1 = 22.8770 Czech crowns)
   ($1 = 0.8818 euros)

 (Additional reporting by Anna Koper in Warsaw; editing by David
Clarke)
 ((michael.kahn@thomsonreuters.com; +420 224 190 443; Reuters
Messaging: michael.kahn.thomsonreuters.com@reuters.net))