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Timing of external events can go for or against you. After my last blog highlighted the ongoing battle for owning EV charging and energy management in the home, Nissan’s launch of a solar offering in the UK was perfectly timed as I sat down to write about how automotive companies are edging into what some utilities will consider to be their own territory.
Some see Nissan’s work with V2G, storage and second life batteries as primarily learning and positioning exercises, helping them better understand these topics and link themselves to renewable energy for the benefit of their core business: selling cars. But the launch of their solar offering means that it’s becoming harder and harder to have a high level of confidence in this view.
At one level, there is nothing particularly new or exciting about this proposition. Photovoltaics is highly commoditised, with points of differentiation (across Europe) now focussed on self-consumption and links to connected homes. Both from a physical perspective (for example, linking timing of operation of electric water heating to the solar panel) and a commercial one (such as E.ON’s Solar Cloud proposition). However, I believe there’s another, more interesting way of looking at Nissan’s latest move.
In our energy storage and connected home research, we’ve recently developed an overview of the battlefield for managing energy flows in the home. It’s a complex picture. On one side, there are companies coming from strong starting positions who are seeking to extend their reach, developing sophisticated (and some not-so-sophisticated) home energy management systems. They include traditional electricity retailers and battery and inverter manufacturers. On the other side of the conflict, there are connected home specialists or nimble start-ups such as Sonnen and tiko who are moving quickly. Now they are being joined by new entrants from the automotive industry, with both new (Tesla) and established (Nissan) showing ambitions.
The automotive companies may not have strong capabilities in electricity markets, but they have a couple of sources of technical advantage in this battle. They can potentially make double use of the inverter electronics required for both PV and vehicle to home / grid. And they could also have knowledge of the battery state of charge that others – such as a utility or aggregator – may not be able to access.
Technical capability and the ability to unlock electricity system flexibility values will be vital weapons in this war. But the winning armies will not necessarily be those with the best technology. The critical questions will be marketing ones, such as proposition, brand and channel. For example:
I was talking to one car manufacturer this week who challenged my characterisation of a battlefield, hoping that partnerships between, for example, a utility and car manufacturer would prevail over head to head competition. Now of course, I’m sure that we’ll see some of both. In partnerships, discussions over how value is shared will be challenging and be influenced by the capability established by each company.
But I wouldn’t discount more aggressive, independent plays. Piecing together Nissan’s actions, it’s possible to make a strong argument that they are seeking to extend their reach beyond cars and into energy in the home and beyond. The quality of their execution will, to a certain extent, determine just successful they are. It’s very hard, at the moment, to predict the final outcome. But they are gradually putting in place some initial building blocks: second life batteries, V2G leadership, home energy management, and now solar. Applying the learnings from these foundational steps and maintaining the long term strategic focus that we so often see from Japanese companies, could just help them win the war in the end.
Our research on the Electric Vehicle – Electricity interface is probing and exploring these and many other associated issues. You can find out more by joining our webinar on the 8th February, visiting www.delta-ee.com/EVs, or getting in touch.
Jon has over fifteen years experience in the decentralised energy and low carbon sectors. A founding director of Delta-ee, he leads our work with utilities, helping them develop decentralised energy and low carbon strategies and tactics. Jon’s expertise spans the decentralised energy space, with a particular interest in microgeneration, low carbon strategies and the integration of decentralised resources into energy systems. Previously Jon worked for Platts, managing E Source’s distributed energy research, and the UK’s Energy Saving Trust.
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