As electric increases in popularity, what will happen to the forecourt in the next decade?
We speak to Gordon Balmer, Commercial Manager of the Petrol Retailers Association to see what the future holds.
What does the move to EVs mean for the fuel station as we know it?
Well, it means an opportunity, because these vehicles will still need to get energy of some sort, and we've been very good at adapting our business model to cater for demand, whether it be fuel or other items such as convenience retail.
So is alternative fuel or retail the biggest opportunity for stations?
There are estimates that 50% of the people that visit forecourts don't come for fuel, and they come to do convenience shopping, a car wash, inflate their tyres and all the other things as well, so it's not necessarily all about fuel.
Estimates suggest between 50 and 60% of people in the country don't have off street parking either, and so they would find it very difficult to charge a vehicle outside their house. So the forecourt may well serve those people, where they can shop while they get an ultra-fast charge.
So will fuel stations be turned into pure electric charging venues in the next decade?
What we've seen is an increase in the number of electric vehicles in percentage terms in new car sales. But the still-dominant vehicle on the road is a petrol vehicle, and in 2030, there still will be petrol and diesel vehicles around - it's just that you won't be able to buy a new one. However, you will be able to buy a hybrid. So there's still a lot of lifespan in terms of the demand for petrol and diesel.
One issue many sites are encountering is if they can get the correct level of power into the site in order to accommodate ultra-rapid charging. And a lot of that depends on the proximity of the site to the local substation and putting in place the power infrastructure.
That can increase the cost of delivering that service to the site, and therefore will impact on the business model of putting ultra rapid charging points in. This can run into many thousands of pounds and the decision will have to be made if it is worth the investment for a financial return that is not entirely predictable or clear at the moment.
If you spend significant sums on chargers and the technology goes a different way, or batteries last so much longer that you only need to charge at home most of the time, then that investment could be a waste.
What about hydrogen? Do you think forecourts will be re-engineered to offer it?
Hydrogen does lend itself to being stored on forecourts, and it can be dispensed into a vehicle along similar lines to the way we do it with petrol and diesel.
It will depend on the Government’s strategy on hydrogen, but the way the industry is moving is they see this more as a fuel for heavy goods vehicles and buses, and not necessarily for cars. The attractive thing for government is you could levy duty on hydrogen because it's been measured into a vehicle.
For a forecourt to deliver hydrogen, it would have to have an electrolyser on site, and lots of water, so it is actually creating the hydrogen there. But you need a lot of power to do that. Or you have cylinders of hydrogen brought in and you dispense it on site, but again, that can be fairly costly.
It's a chicken and egg situation because there is a lot of up-front investment in order to produce the hydrogen on site or to put the tank infrastructure in place. For that to happen, it would have to be driven by government policy and by subsidies.
However, if you used bunkers out on the network, you could see HGVs refuelling from hydrogen at truck stops and services as there is the space to do so, and that isn't that big a leap from what they already have.
Will there be a mix of four or five different fuel methods in many stations?
Increasingly, you will see that. But you have to look at layout, mixing electrons with hydrocarbons and the space between where you put the charging points, and where you have the petrol and diesel.
This lends itself to larger sites that have got adequate space, where you can put charging points. And the other issue is, people are used to going into a forecourt and getting their fuel and filling up and it taking around three to four minutes. If you are looking at the experience of charging, what you've got to do is park your car up and wait around, depending upon the speed of the charger and also how many vehicles are charging at the same time.
It sounds as if the petrol station as we know it will see quite a shift to offering many different services and fuels.
Yes, the future for the next 10-15 years is that many stations will offer more convenience, retail, delivery and much more besides. They are likely to become a major hub in communities which is why they are attractive to investors at the moment: in many areas forecourts are the ‘last man standing’. The bank, post office, corner shop and chemist might have gone, and so quite a lot of the services that provided by those sorts of businesses have migrated onto the forecourt. For example, one of our members in Kent has actually got a butcher’s and a fishmongers.
The fuel station is not going anywhere, because it is needed - possibly more than ever - as technologies diverge for different types of vehicles, usages and customers. They will be helping the development of alternative fuels, whether they are electric, hydrogen or synthetic, as well as catering for the many petrol and diesel cars that will still be on the road, for many years to come.
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