Interview with Kristian Handberg, Project Manager – Low Emission Vehicles, Sustainable & Active Transport Branch, Policy & Communications Division, Department of Transport, Australia.

How is the Victoria government doing in terms of making EVs part of everyday traffic?

Directly, the Vic government trial has effectively doubled the EV population on Victorian roads. That said, the total Victorian EV population would be less than 100 vehicles, making them rare birds indeed.

Indirectly, the trial is making EVs a viable option for Victorian motorists. Over 600 Victorians have had the opportunity to sample EV technology first hand through the test drive events we've run. According to our driver surveys, the number of people who would drive an EV as their regular car rose from 44 to 70 percent as a result of their test drive experience.

What were the main goals behind the Vic Trial?

The trial objective is the make Victoria an EV friendly place, through improved awareness, understanding and acceptance of EV technology. This may seem simplistic, but by way of example, “improved understanding” is being delivered through learnings relating to the realities of installing EV charging solutions in homes, or on the grid impacts arising from a more detailed understanding of the Victorian EV market adoption patterns.

What is the latest update on the trial?

It is on track in terms of vehicle and charging infrastructure delivery into households and fleets. The delivery of public charging infrastructure is slightly behind where we thought we'd be by now, but identifying the issues that have delayed the rollout are in themselves part of what the trial all about. As a result of these learnings, potential solutions have been identified that are being tested for the benefit of future market development. And with a large number of strongly engaged project participants from across the emerging EV market, the trial is exceeding expectations in terms of addressing market barriers and coordination issues.

How does the Victorian initiative rate in comparison to similar projects internationally?

In terms of vehicles and infrastructure, the Vic trial is significant but not a stand-out internationally. By way of example, the “big daddy” of trials worldwide is being run in the U.S. with around 8,000 vehicles taking part. The Vic Trial is, however, notable in being a market model rather than proprietary. In plain English, this means we've got multiple providers from each level of the EV market, each delivering their own technology and business model. The benefits of this approach are many – it providers a level playing field for all market participants rather than creating a position of market power at the outset, it avoids conclusions relating to the entire market being drawn from the experiences provided by a single technology or business model, and it allows market coordination issues to be identified and addressed. It does, however, create a significant administrative overhead in terms of delivery and complexity, so it's not without its costs.

How important is government support?

If the industry is to be believed, government support is critical for future EV market success. With specific reference to the trial, the Vic government is playing the role of “honest broker” in the formative stages of the market development. This allows the market participants to test and refine their business models in a relatively low cost/risk operating environment. And in taking a coordinated approach with the delivery of policy and technical standards development initiatives, the government is taking a key role in promoting a safe, efficient rollout of a resilient EV market.

What is your vision for this industry?

EV industry development will be driven on the supply side by the regulatory influence of increasingly stringent vehicle CO2 emissions standards, and on the demand side by oil price increases and battery price reductions. In the face of these influences nearly all vehicle manufacturers are making significant R&D investments in EV technology, driving innovation that will deliver improved performance at reduced cost. Innovative business models for battery financing and charging infrastructure provision will also improve the competitive position of the technology. The “tipping point” for the industry will arrive when the payback in terms of EV operating costs against the purchase price penalty is delivered within the first 5 years of ownership, which according to our economic modelling will occur by 2020.

What surprises you about this industry?

In looking at the motives and values of our household participants, our original suspicions that the “first mover” market would be the environmentally aware have been challenged. In our experience, the pull of new technology has been a stronger determinant of EV interest. And in looking at the opinions of those who have driven the vehicles, the strongest selling point seems to be performance – particularly acceleration. By this logic, the early market may be driven by those who become initially interested in the technology, and are then sold by the performance.

What are your expectations of the Australia/New Zealand Smart Utilities event?

Speaking as someone still very much on the learning curve when it comes to electricity networks, I'm hoping to gain better insights into the challenges the utilities face and the strategies that are being pursued to deal with them. EVs represent a mix of both risk and opportunity for the network operators, so it will also be interesting to gauge perceptions of this. As there has been only a small amount of exposure to EVs since the last event, speculation may still be the defining theme. I'll be trying to assess how much effort is being invested in improved understanding of likely EV costs and benefits, and the appetite for heightened engagement in the space.

Anything you want to add?

It'd be great to hear an Australian utility announce a strategic plan for EVs along the lines of what's being done by DTE Energy in Michigan or PG&E in California. I'd give it maybe another 2 to 3 years, but maybe I'll be proven wrong...

Kristian Handberg will chair and present sessions during the Electric Vehicles Infrastructure track at Smart Utilities Australia & New Zealand 2011. For more information, see www.smartutilities-ausnz.com