Expanding Charging Networks with Melanie Lane, Shell Recharge

best year yet. On this show, we're going to continue with the interviews that I do with Bienny f analyists, asking them about their research and what they're learning about the energy transition, but we're also going to be baxing in even more external interviews where Bienny of analysts speak with external guests that are in the industries that we cover today. We're going to kick off the new year with just that an external guest, the CEO of Shell

Recharge Solutions Europe, Melanie Lane. On today's show, she'll be discussing some of the biggest challenges and of course opportunities facing the rollout of electric vehicle charging over the next few years. Electrifying transport is a critical way to reduce submissions to meet climate goals. So what if anything, is holding the industry back, and is there enough renewable energy supply to meet demand? And how are consumers and the e V industry dealing with range anxiety. Today's interview is

conducted by Colin mccarricker. He's the head of Advanced Transport at bienn e F. Please note that BIENNEF does not provide investment or strategy advice, and our full disclaimer is at the very end of the show. But now let's hear Colin and Melanie's conversation about e V charging. Thanks for joining everyone. I'm Colin mccarricker and I run the Transport Automotive coverage at Bloomberg any F and today I'm joined by Melanie Lane. Melanieer, the CEO of Shell Rechards

Solutions in Europe. Shell Recharge was previously New Motion, which was founded over a decade ago in the Netherlands and then acquired by Shell in Since then, the company has been expanding its presence in the charging market, including acquiring green lots in North America. The company's footprint now includes access to a roaming network of nearly four thousand locations

across Europe. You're coming up to three years in the role, but you've been at Shell for more than twenty years in other parts of the business, including running the UK retail business, US the aviation business across Europe and various other rules. Welcome to the podcast, Melanie, Thank you so much. Great to be here, Great to have you here. So I want to jump in with something that might be a difficult question, but we may as well start with

some difficult things. First, electric mobility is really taking off around the world. So we've seen EV sales go from a few percent one to three in a lot of market. We're expecting them to hit about of global vehicle sales this year. That's battery electrics and plug and hybrids combined. But that's on this really rapid acceleration trajectory. And I guess my question is can charging infrastructure keep hop with what's happening or will it be what slows down this

EV adoption story. I mean, it's such a fascinating question, isn't it. Because I often say that we are trying to do in this EV space in what less than five years, what it took nearly a century to do in the world of hydrocarbons. So the effort require to achieve the targets sort of being set at a global level as well as at a country level, if massive, and I think that's what makes is such an exciting

industry to be a part of. If we think then about the infrastructure specifically, there's there are lots of things that have to come together in order for those targets to to be realized. But if we just think about the infrastructure specific gram an ad minute, absolute infrastructure is going to have to match the level of growth that

you just describe. We're talking so the end of all goods to see there were more than thirty three thousand electric vehicle charging points across the UK, which I mean already was thirty percent more than the time the same time the year before, and there's a target to have three hundred thousand by twenty thirty and then a huge amount of investment going into that. The trick is how to bring that to life. And I think the experience

that we're seeing is it's actually really complicated. And it's really complicated because you are building out a new ecosystem and in order to get that infrastructure up and running. It's not jumped to we're going to buy a charger and we're going to stick it on this piece of land.

It's about the connectivity with the grid. It's around the organizations that are managing that process, not necessarily being set up for the scale of demand, for the amount of requests that are coming through, for the work to be done that enables the kind of expansion of the fast charging network that ecosystem is still really in its infancy. Likewise, you've got global supply chain challenges as coming out the

back of COVID trick shortages, etcetera. You're seeing stressing both in the system around the vehicle and supply, but also around the supply of the hardware itself, and so secure supply chains are super important. And then there's a whole piece around the customer experience and how to make that customer experience as seamless as possible, because even if you're able to overcome your supply chain and your installation and your grid upgrade, the customers need to have a seamless

and easy experience for them. This is a big transition to make, and we see a lot of kind of anxiety from drivers in making that transition, and so as an industry, we need to come together to help them do that. So, I think and we can unpack all of these I think there's some really big pieces that we're going to need to work on across the system in order to enable that infrastructure growth to keep up with with what's needed to match that those projected number

of vehicles on the road. Yeah, you touched on this, and I think there are a lot of different moving pieces. But actually I want to come back to something you said right at the beginning of that, which is that we spend a hundred years building out the sort of hydrocarbon or more than a hundred years build up the hydrocarbon supply chain to keep vehicles moving in on the road, and we're trying to do something new with electricity in

a much shorter time frame. Let's stay on that for a minute, And how is this transition different than that in terms of building up the supply chain for hydrocarbons. Obviously, there's this timeframe element. We're trying to do it faster than we did it in the past. But are there other sort of systems level differences that you think about when you compare the way it works in a molecule based delivering molecules the gasoline or diesel to vehicles versus

an electrons based world. Is there some systems thinking there that is very different to you? And how does that look, so I think I mean even when our predecessores would have been building a hydrocarbon at the very early days of building up that system, yeah, it would have been a new system that they were designing. I think what we've got now as we transition is a number of things. And this is why I think systems thinking is so important.

You're not just replacing a piece of hardware. You're talking about an end to end supply chain for this super different and in an ideal world, you're talking about a system that can increasingly rely on sustainable power so on the go, charging at home, charging on street charging, etcetera. And thinking about cloud that end to end system is going to flex and manage what is a massive increase

in demand over the next few years. So you're building a new system, but you're also needing to build a system at scale and for peak load, and you're trying to do that very quickly. So that's kind of about the chain that you're establishing. There is other component parts.

So one is around skills and expertise, and I go back to the community may before you've got in each different market that we operate in, the grid is set up in different ways, so you have different interfaces, different entities that if you just talk about like the grid as a generic, we're talking about often national or kind of institutions that aren't necessarily used to dealing with the level of kind of commercial demand from multiple organizations, are

varying different sizes. It can be from a home all the way through to a large complex fleet depot. You don't have that capability in built into the system at the moment. Likewise, if you look at the space of installation and commissioning to get the hardware the equipment in the ground, we predict quite a big shortage actually of electricians in the short term, particularly the level of qualified electricians you need to do this kind of work again

at this kind of scale. So you've got a capability piece to the system that we need to address. You've

then got a piece around the regulatory environment. By the time we got to the end of the last century, the regulatory environment, whether you're talking about payment, calibration, quality standards and all of those things were really well bedded in and they have been built up over years experience multiple kind of sources of expertise, and here it's all nascent, it's emerging and countries across Europe are taking in some

cases consistent approaches, in some cases slightly different approaches to how they're thinking about this and quality and assurance and compliance, and so that is all kind of emerging and evolving as we go. Add to them that it's an eCos system that depends on hardware, but also it's very technology dependent. So you've got the vehicle, you've got the grid, you've got your hardware infrastructure, you've got your consumer. So you're

building out a new kind of software hardware ecosystem. And then the last piece, as I said before, is consumer behavior and they pay method role in this. So that's what I mean by systems thinking. It's not just a simple task of Okay, we're going to take out a hydrogarbment PARKERM with ever going to put chargery. Actually, you've got to think much more broadly about the system if you're going to deliver the pace of sale that we're

talking about. I'll give you an example. We discovered this really early on, this whole kind of ecosystem approach, and our response to that in Europe has been within each of the shell entities that operate in market, they have set up what we've called revolution rooms where they bring together the necessary counterparties and capabilities too finst try the

rollout of infrastructure within our own network. And when you go to those rooms that they're working in an agile way, they have outcomes every two weeks, there's reviews every quarter of the deep dives. The amount of people that we need to draw into those rooms in order to affect change the amount of capabilities, it's huge, and without bringing those people together, we wouldn't be affecting the kind of

change to the kind of pace we are. So yeah, that's what I mean about system thinking and how tall it is. That's really important because I think one of the things you mentioned there it was around how different power markets and grids are, not just in terms of the physical infrastructure, but also in terms of the regulatory set up. The different lease involved are in different countries. Each power system looks quite different than the one in

a neighboring country. It's quite a bit more different than you find in the hydrocarbon supply chain, which maybe looks a little bit more similar between countries, and then the power system does. So I think that's a really important point, is that there are very different groups of people you have to have in the room to get stuff done, and country because of how varied power markets are and

electrical grid infrastructure is in each country. And we're going to come back to this human resources question because everyone thinks of building posts, right, they think of getting enough posts in the ground, but maybe they don't think about all the pieces behind that, or the right number of people you need trained in the right way in order to do that, or the permitting requirements in order to do that. But we've jumped right into all the challenges.

I want to actually now back up a bit and say where are the brightest spot in the charging business right now? Where are you seeing the most success and what does that look like? Yeah, and I think there's a few things to highlight. So coming into lead, what was an emotion now shall recharge solutions? One of the things you can't go past is the amount of energy and innovation that is in this space right now and

working in an organization. We have more than six d people now just in Europe, and people that are bringing their talent to this space are fueled by real purpose and passion and when you combine that purpose and passion with deep papability and they're kind of the magic you can make is too, So I would really want to start with just how energizing actually it is to be at the center of what is really a generational change. And I think lots of people who work in the

industry are really motivated by that fact. We are past that tipping point. This is a sizemic change and resources are being put into making that happen. So I think for me that is a massive bright spot. I think linked to that piece on of the tipping point. I think that big organization, so your FedEx, is your dhls, your Amazon's, really are fundamental to making that energy transition happen.

The total cost of ownership has shifted for them, and you see a lot of feeling in a collaboration and thinking through again, how are we going to design their ecosystem so that they can transition effectively and quick And so when you've got organizations of that scale alongside big pieces of infrastructure so airports, our own networks, you start to see that real momentum this is going to happen. The big players really committed and really working through some

quite complex solutions to make this happen. And I think that the term piece, I would say that it's bright spot. We had people from the UK depart for Transport as well as Amsterdam City here in our office this week. We have an innovation lab and experience center that we call it, and they came and spent time just really listening and learning about what are the differences that we experienced across different markets, what are the challenges with different

hardware requirements, policy regulation. There is a real desire, I think or eye experience to learn and and collaborate, and I think that's brilliant. So I think actually there's a lot of bright spots across the landscape, and I think we should be super positive. It's not an oth question and it's just when and how fast really, so I'm quite encouraged now for a very short break stay with us.

You certainly meet a lot of people who tried any vy one five years ago and then decided to change their whole career around because they could see it was a revolution in the way people were going to get around and it changed their You talked to a lot of people who have changed their whole career trajectory going for a test ride in or something, and I always find that fascinating in the emobility community. This this real passion for the work that people are doing. You touched

on fleet there and some of the big operators. Can you comment a bit about what you're seeing on that sort of business to business or fleet market on the charging front. Yeah, absolutely, I mean more and more we are seeing large fleet owners asking for support and guidance. Again,

I can't say they word enough is collaboration. The large fleet market need partners who can provide that kind of three sixty whole ecosystem solution that they're looking for, because most of those organizations need solution and across multiple parts of the ecosystem. They need to be able to support their charging hubs with both the infrastructure that they need, the connectivity with a grid, that monitoring and operational support

to keep that infrastructure optimizing. This is the core of how they make their money, so that infrastructure absolutely has to work and give them the kind of quality outcomes they need. But they also in many cases are looking for border solutions. So what about sustainable power, what about other kind of decolbonization solutions that we can support them within other parts of their business. So this kind of three sixty total approach. They're looking for, how do their

drivers charge when they're out on the road. They're looking for or maybe my drivers need charges in the home

environment as well. So they're looking for partners who can help them solutionize across all of those different pieces, and a job really is to make all of that as simple as possible, and over time there will be all sorts of different innovations that you start to add to that, especially around optimizing power, thinking of about how we manage the demand on the grid, thinking about battery storage, solar,

et cetera. That ecosystem will continue to build out and grow. Yeah, we're definitely seeing a lot more activity on the commercial vehicle front, just in terms of sales, a lot of it mostly in the smaller vehicles of vans, and we're actually starting to see more of the big truck makers launching electric models, whether that's Volvo or Daimler or Tesla

planning to bring it semi to market. Do you see the solutions that Shell offers ending up going all the way out to like the heaviest vehicles doing really fast charging the longer route. Yeah, I'm to your point. We've actually been working with some of the brands you just mentioned with some of their vehicles actually in our knabs looking at how do you provide the infrastructure for that profile of a vehicle, we can see that do the

same thing that's really picking up. Yeah, there's something else we've been noting in the market, and when we look at a lot of the public charging networks for pass charging, we're noticing that a lot of the prices are rising,

and in some cases quite dramatically. We did some analysis just recently showing that in a lot of cases you're depending on the network and the country, it varies a fair bit, but in Europe you're often getting fast public fast charging, ending up being pretty similar in terms of cost per kilometer cost per mile driven to refueling with gasoline or petrol or diesel as well. Now, a lot of people still might do nine or more of their charging at home and very occasionally used those public chargers.

But I guess the question I want to ask is the fact that some public charging prices are rising up to the point where they're comparable with petrol or diesel on a per kilometer driven basis. Is that a problem for the market? And I guess do you think that comes back down, does its slow adoption just anything you can comment on some of those rising prices and the

dynamics it might cause. Obviously, there's a lot of volatility in the world that impact the prices throughout the system, and I wouldn't want to comment specifically on pricing or forecast or anything else. But if we just think about behavior, what we see and are quite confident with is that

a VIA option is going to continue to grow. So I think when it comes to making a switch to whether that is at a company level or whether it's an individual level, that total cost of ownership is super important, whether you're a driver or whether you're an organization. And so clearly the fact that there is a lot of volatility in the world at the moment is something that brings into sharp focus that total cost of ownership. That said, we feel very confident that the overall trajectory of EAVY

adoption is set. Will you have maybe some ups and downs or maybe a slight slow down because of a variety of factors, partly volatinity, but also for example we talked before about supply chain stability, maybe, but the overall trajectory, we think it is kind of set and that adoption is going to continue at a fast pace moving into

the future. It seems like so many things that are driving up electricity costs, some of the same things are also driving up cost of gasline and needle or pushing more energy security concerns were living for a very complex time, and I agree it's very hard to predict what happens next, but certainly we agree with you at then f that the die is a bit cast in terms of the adoption, though there are going to be some bumps in the

road on different things. Can you talk a little bit about this grid connection issue that you start to hear more about in charging infrastructure. Can you get enough grid connection capacity, can you get it done fast enough? Can you get them in the right places where you want to put chargers? Just anything you can comment on that side of the equation of getting all these things hooked up to the grid. So I think again a difference by market. So certainly, if you look across your the

processes the different government ecocistants have in place vary. If you look at the Netherlands, the penetration of on street charging is far ahead of many other markets. For example, there are indeed differences in the maturity of different countries different cities in getting the infrastructure set up and run, particularly in the public domain. And I think if you look at the Netherlands, for example, the penetration of on street parking is far in excess of many other countries

or or the UK, and so there are differences. But as a general rule, as you see the level of demand growing, whether that is from the pieces of infrastructure so like depot hubs for example, or whether it's on street or whether it's even individual homes and communities, all of that needs to be channel through a set of let's call it grid operators to be just generical use of terminology across Europe, and we need to make sure that the permitcing process is the resourcing and the requirements

are made as simple as possible. So I'll give you an example. If you're trying to provide sufficient level of power to a highway site, for example, because you need to put in a number of false charges, you need a greater amount of powered pacity going into that site.

In order to get that set up. You might have a ten monthly time in order to get the approvals needed both from the commercial entity that's investing in the hardware, the landlord that owns the property the hardware being installed on, as well as the permit providers on the grid side.

That can take months, literally months, And so if you extrapolate that from kind of one site across multiple networks, across multiple markets, we need a significant shift in resourcing and ways of working and how we think about the system to get that infrastructure not just in place, put up and running. We're going to need some changes there. I think this is one of the issues that seems

to be coming up in multiple places. And I guess the thing I'm always wondering about is do the costs go up as we add more and more charging points or do they go down? Most things, as we do more of them, the costs go down. But getting a grid capacity, maybe some of the easy spots get tapped out and then you get the harder spots. Is there any trend you can comment on there? Are the cost of getting new sites connected, permitted connected to the grid, Is that going up or down or staying the same,

or any dynamics you can comment on there. So I think there's a few things packed into that. If you take a part the different pieces got hardware, which is a piece hardware over time will undoubtedly become more commoditized. There will be more suppliers. Understanding of how to produce high quality, consistent hardware will increase as experience increases, so you know, over time hardware will likely become more cost competitive.

We talked before about label installation, capability and color, level of engineering resources that you need to facilitate this level of change. That's going to be another driver of cost, and that will again be about supplied month, right, So do we have sufficient capacity in order to do all the work that's required or is that a bottle neck. There's a bottle neck across the industry, then that will

also be a factor. Certainly at a general level, these are big investments sort of being made and will take multiple years to pay back, and so I think both governments and private organization already trying to think differently about those investment cases and how to make the case for that early investment, recognizing that it's going to take some time to fully pay back. And I think, yeah, that's

what I was talking before about. We need to think creatively about the business models about how we work together in that ecosystem. To make sure there are the right incentives to go as fast as possible. Yeah, And are there any big policy levers you're watching that you think might accelerate that, or whether that's in the UK or in the rest of Europe, is there any thing on

the policy front you're watching carefully now? Yeah, there's a few pieces I think regulations around smart charging and so the ability so as you roll out that ecosystem, whether it's a business ago or at home, the ability for smart charging to help manage that demand on the grid is an increasing area of policy focused. There will likely be more requirements on the public charge points, specifically aimed at kind of ease of use, contact less payment, consistent

protocols across the network. That's a sign of a maturing industry. And obviously there's a lot of discussion around the relationship between the consumer the car, which is a piece of technology in its own right, and the charging infrastructure and how data is moved and owned and shared between those entities. So that's another area of interest and focus with policymakers.

And then I think lastly there's a piece around just consistency, and when I say consistency around both consumer and also quality. So again you've got a big growth market, lots of new suppliers trying to meet consuming e It's in slightly different ways, and the necessarily there will need to be some standardization around what good looks like, what quality and

what standards would we expect across that networks. So I think there are some specific areas of policy that we look at and we would expect to continue to evolve into a probability would be the other obvious one across

networks and across countries. That's really helpful sort of smart charging either use and then a relationship between the car, the consumer and the charging infrastructure and the flow of data, and also that sort of consistency and quality perspective across all of it at all of the areas you're watching on the policy front. Now for a very short break, stay with us. If you had one request to policymakers or to other stakeholders in the charging infrastructure or emobility business,

what would that request be. I think the request would be twofold, would be collaboration and working with us within the right time frames to deliver the vision that I

think we're all as firing to deliver. I think there is there are real pockets of expertise and knowledge across the industry, but it is still nascent, and to build out the right policy frameworks is going to take really listening and learning from those pockets of expertise to make sure that the policy frameworks that developed are robust and are sustainable for the long term and don't inadvertently create

barriers to scale into growth. I think that's really helpful, and that's certainly a common thread across what you've been saying, is that they need to get everyone together to to ensure you're doing things both effectively and efficiently given the time frames that we're trying to do this transition on. I have one last question. Well, we talked on it earlier about the kind of passion and drive that is

common amongst the community of people working around themobility. Do you have any reflections on that coming from other parts of Shell. Is there something Shall Recharge can learn from the rest of the broader Shell business and vice versa. Is there something that the broader Shell business can learn

from Shell Recharge. This is one of the most motivating parts of what I do, and I have such a strong belief in the power of the big and the small coming together and being able to leverage respective strengths.

I think when you're looking at what Shell has deep experience and expertise in you're talking about brand, you're talking about deep supply chain expertise, delivery, deep relationships with customers all across the world backed by real customer insight, strong relationships with regulators, and the ability to drive change and transformation in complex systems at scale. But that's what Shell has grown up doing over the last hundred years, and that is what this industry needs. At the same time,

have acquired a number of smaller entities. We're one of them, and they bring a lot of kind of purpose driven these as So people have joined these companies for a reason. It's not for a job. It's because they believe, even an outcome, they believe in the purpose and I think

that kind of energy is super motivating. I think we are bringing tech product capabilities and agile ways of working that have been far easier to instill in a small organization where you're working on a kind of daily, weekly, bi weekly sprint basis to deliver outcomes much faster, then

sometimes it's possible. Right, it's a large, big, corporate enterprise, and so if you can marry those two things together at I think it's a super powerful combination and it's one of the things that is probably the most exciting about the role that I do at the moment. That

is really exciting now. And definitely the idea of being able to move at the gale with the support of a big organization behind you while still maintaining some of that dynamism is certainly a big part of what needed to get things from going accelerating as they need to do. Thank you so much, Mal, It's been great to speak to you today. Thanks so much for coming on the program and talking to us about the outlook for charging infrastructure and you're roll within it and what you're happening

in the next few years. Thank you, Thank you. Today's episode of Switched On was edited by Rex Warner of gray Stoke Media. Bloomberg an f A is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute, nor should it be construed as investment advice, investment recommendations, or recommendation as to an investment or other strategy. Bloomberg an e F should not be considered as information

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